Blogs

If You Have an Existing WL Policy What Should You Do With It

https://www.youtube.com/watch?v=O_HE_HgsFLA

Hopefully your existing policy has no additional P lease. A lot of them that either evaluated existing policies, even. And this is where the design is so important because it’s a guardian policy. It’s a foster guardian policy. Yeah. It’s a fair product that we use heavily and it was just designing. So the other person couldn’t contribute anymore.

It was basically all based premium and he couldn’t put in Peewee. And if you can send him, reached out to me, I’m wanting teachers quickly. I can do a quickie, which of the color. But yeah, this is more than likely the guy built it. Not with the idea that you’re going to get the liquidity. Right out of it, you know, I think my wife had something like this, but we just chose to just cash it out.

Or I think Tyler, you can do like a 10 31 exchange or life insurance too. Why would you do one or the other, like the cash it out or that template? What is it called to building one for life insurance? What was that called? 1035.

Close. 

Basically, I will do a tender most of the time. I would recommend doing a 10 35 just because you don’t wait when you do the withdrawal, it becomes a taxable event.

You do the 10 35. You can reserve all that cash value, put it into a new policy. Then you’d have access to that cash value via policy. I personally, haven’t had a pretense. I still have a Prudential spot on me. It’s so small. I was about to just take the cash value and instead I’m keeping it there and I’m just taking all policy loans.

I didn’t do a 10 35, cause it didn’t make sense because it’s already paid up, but you can just access that cash value via policy loans. There you could possibly even just do a reduced paid-up exercise and reduced on your policy and you could kill the fees and maybe that may even be the better option.

Right. Good to know. If you don’t mind, I’d like to send you over what I have and have you take a look. It depends if it’s big enough, like over 25 grand or if it’s less than that might be easier just to simplify it like 125,000 dollar 401k. I mean, that’s not too much money as well just get rid of it.

Yeah. I mean, right now there’s 105,000 and cash value in there. So it’s grown to be significant. I think I just didn’t want to pay that. My wife’s slimeball.

Yeah, I hear ya. I think he’s trying to sell me on like a, another policy now. 

It’s usually the guy that you’ve never seen since college or high school, they take you out for lunch, right? Field trip, you that your kids and your family are up the creek and you don’t do this.  They’re building you up with everything that you don’t want. It’s not like they’re trying to screw you. They’re just building it the way that they were taught. And a lot of this is very counterintuitive, which is high liquidity, low death payout, which is, goes against everything that they’re taught.

And then low interest rate too, which doesn’t make sense. I’ve had these guys, they challenged me. They’re like, I thought you’re like simple passive cashflow you want returns, right? Don’t you want good returns on this? I’m like, dude, like you don’t get it. Yeah. It’s not the case.

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.

 

Value Shopping for Wine (Winespies Review)

https://youtu.be/5xtTKIeic-8

Yup. We did a big wine tasting yesterday, man. Try 30 different wines.

Hey, civil past the cashflow listeners today, we are going to be talking about wine. And not going to be talking too much about investing tax, like how we normally do this is our take a break from the hard stuff and get into some fun stuff that I know a lot of you guys are interested in myself.

We did not grow up with wine in our household. Again, a lot of us people in our community are first-generation wealth folks. We’re here building our wealth. But the reason why I brought my buddy aging crew on here from the wine spies is I don’t want to look like an idiot in front of people in the country club.

And I want to get the biggest bang for my buck, as always, we are a value seeking community out there. By the way, if you guys want to join our group, go to simple, pass a cashflow.com/club. You can check out the free eCourse there and all the educational material. Again, it’s simple, passive cashflow.com/club, but but yeah, let’s if you guys want to follow along, go to wine, spies.com poke around aging cruise website there.

But yeah, let’s unpack this for the folks, right? That’s good. We want the biggest bang for our buck. Where do we start? Everyone wants a good deal. And that’s where actually I think once buys comes in handy for somebody like you, that might want to be getting into wine, but doesn’t really know where to start.

The flash sale model lends itself really nicely to somebody that really is just trying to look for new wines that they might not necessarily be familiar with. Because what we do is we put one wine in front of you every single day and not wine because we’re selling just one wine at case. So here’s, today’s deal.

You can see, normally it’s a $79 bottle works on for $39 today. So it’s a 50% off situation, but the deal is that wine on top. Is there a little store section down below. And basically we might just have a few cases left over from a daily deal and that’ll slowly filter through there, but mostly it’s just that one on top.

And if you click on read our detailed review you can see, we have a ton of content every single day for that wine. The whole deal is that tonight and midnight wine will disappear off the site. And a lot of times it sells out even before then. It really is just a short timeframe, but because.

We are basically putting all our ships at one bet for one day, we’d have to make sure that we’re putting the best possible wine out there we can. We’re probably selecting of any wines that we get. Maybe one in one in 20, even one in 30 wines that we’re taking a look at is the one that we picked.

We have to feel very strongly about any given wine. It’s a really great place for someone that’s a newbie. But it hasn’t taken too arrogant too much wine in the past because you can just trust our pallets that we’re putting the wine in front of you that we think is good.

And then over time, once you start drinking, you’ll start to figure out, Oh, okay. Maybe I’m a big fruity Zinfandel kind of guy, or, you know what I really more just lean to the more rustic style Italian wines. This is a super Tuscan wine, for example. We’ve got some imports and we’ve got some domestics and just a great place to start.

And then if you do know about wine, we have some of the best wines in the world routinely featured on our site for truly the lowest price. You can find it in the entire world. It’s like a Groupon and living social model, you guys are in the backend negotiating with these wineries.

Break that down for us. Like how does the game played, right? That is exactly it. And we were actually one of the very first flash sale wine e-comm sites. There was wine woot and us at the very beginning, we’ve actually been around since 2007. There’s been a lot of people come and go in the intervening years and it’s been a really interesting space, but one is buys going strong, still.

It really does help to have been around for that long because it is exactly as you described, we are on the backend negotiating with a wide variety of producers distributors. The way it really does work is. We can buy directly from the producer. And in some cases actually often we are doing that and sometimes we’ll work directly a distributor and then typically this is an import, for example.

So this would be, I’ve been coming to us through a particular distributor, trying to get into a little bit of our own imports this year, which is really exciting for us. And doing some, we’re going straight to the source organizing the actual transportation and importation. So that’s a big departure for us and I’m pretty exciting, but really the way it works is, we’ve got a Rolodex of literally thousands of different vendors and there’s always some sort of reason.

Why somebody is looking to move a particular wine. A lot of times what happens is that you might be a little bit long on a certain vintage. Unlike a lot of products, which, doesn’t matter when you manufacture it, It’s the same. It’s essentially the same widget.

If you’ve got like an iPhone 12 doesn’t matter what active iPhone twelves it is. It’s an iPhone 12. If you have a 2016, the new Begley it’s Ghana, that wine is super specific. It is a unique product in that way. So when you get to the 2017 vintage It’s not as simple as, Oh, we ran out of the 2016.

We’ll just swap that out for the 2017 for you best to start all over with an entirely new skew. So there’s a whole machine in place for every single wine company sell this particular wine product. When you get to the end of a particular. Vintage of a wine. A lot of times, it’s actually a hard on the side to push that out through this entire network.

And so a lot of times very helpful for any producer or distributor. If they’ve got relatively small quantity of a particular wine left just to quickly push it out. Companies like wine spies are really helpful for them for that reason. And in a single day we can move a couple of pallets of wine and that’s, what’s really helpful.

And instead of just that last painful part, selling a few cases here or there.

I think this is what makes people like excited about this stuff is like they’re bargain hunters or deal hunters. So it’s no different than us buying an apartment complex. It was really wrong with the apartment, but the seller is a little distressed.

Thing here. And I think what a lot of folks out there I don’t know what it is. Like my wife’s out there like shopping at TJ Maxx. I think it’s just like the bargain hunting, or just finding a deal, whether it’s wine apartments, single family homes, some note. Yeah, that’s the chase. And the other thing that’s tough about wine is, you get what you pay for.

This is an $80 bottle and it definitely drinks like an $80 bottle. And so the fact that you’re able to get that wine at $40, if you’ve got the kind of habit where you’re drinking $80 bottles on a Wednesday night it’s pretty nice. If you can have that same level of quality for half the price, and I don’t blame anyone for wanting to find the best deal on that particular wine, if you’ve got a serious wine habit if you’re used to buying.

1290 $9 a bottle of Cabernet at Safeway. There’s nothing wrong with that, but you probably is. You’re probably not, it’s not as big a deal for you if it’s a couple bucks off, but if you’re seriously buying $50 Pinot noirs from Oregon once a week, then it’s nice to be able to find a good deal and wine prices.

Are you talk about that? Just. Energy about arguing hunting. There’s definitely that sense with wine then, because it’s this very unique product. That’s 2016. Peskin. You can go. There’s a site called wine searcher, which a lot of people that are into drinking wine use and there, it basically indexes all of the sales everywhere for a particular wine.

And so one of the main things that we make sure that we do is we’re at least beating the very lowest price on wine searcher for any given wine. And that’s not easy to do so people can feel pretty confident that we’re actually delivering a deal. So that’s collected Kelley blue book value for, yeah. It really is.

That’s perfectly putting it. Yeah. And it’s all about finding the deal. I just bought a car, but like I’m always, now I’m kinda like looking for another car. It’s not like I really want, I want the car I want it like a Ford Raptor, which is like this really? Yeah. I love the Raptor. That’s actually,

The one I want. Yeah. No, not yet. I, but for me it’s more fun to just negotiate for it. Like they have it out there on the lot for 75,000. I know it’s worth more 66,000. I’m just watching ’em I drive by, I, I kinda called them and I go, is it still there? You don’t have stuff, but it’s more the chase like trolling the dealership in a way slightly.

I actually go the opposite, which is your way is better. I ended up just like, all right, I really want this Corvette right now. I go by the Corvette and then it seems like I spend more time afterwards Googling prices, Encore, bets, so I can get buyer’s remorse for having spent too much money. Yeah. But that’s, it’s fun right.

At the end of the day. It was fun to you. Some people play video games, this is what would be you and I do. We do have a lot of fun doing it. Like I said, we get one, probably one out of 3,120 wines that we paste. We actually sell on the site. So that means we have to taste a lot of wines. So that’s a pretty fun part of the job.

Usually the team meets at once per week and we taste through all the wines. I was yesterday, so we ran the gauntlet. And actually we got some really good wines yesterday. Sometimes it’s pretty obvious, which the choices are. And sometimes we actually, we really have to, we’re like, Oh God, because one of the things that happens is we’ve got our whole calendar of deals since we do want it.

We’ve got about two months now. So sometimes it’s tough. You really, we really, after. Decide what we want to cancel in order to fit something else in that, that other one that we had to give up sometimes really good too. But it’s great because it really is survival of the fittest and it shows on the site we get, we have a lot of crazy good deals that,

people that know their wines can certainly appreciate. And then people that don’t, it’s just a really easy way to get into it and just take a shot on me when his wines, and actually we provide so much detail and you can see every single day, how much copy you write for every sale. And that’s really where the, the challenges.

Yeah. It has that trader Joe’s feel, oh, yeah. I can see what you’re saying. We’re actually working on a whole site redesign right now. It’s going to be bad-ass it’s going to come out probably for early August. Hope you pay those a wine tasters via salary instead of hourly, because time’s not a wasted when you’re being wasted, right?

Yeah. I mean our whole team, We definitely have a lot of fun doing what we do. So it’s a work hard play hard mentality around here, for sure. The tasting pays are not what you call the most productive days, but they’re the funniest days for chair he building. Exactly. Oh yeah.

We get some good solid team-building and at least, yeah. You guys are the experts with this. Like I hear too big. Tips, right from suppose the wine snobs, which everybody calls them, silver wine, stumped, everybody. I’m an audio file. What do you have Apple air, right? You’re not an audio file or whatever they call it.

Not a know it’s, the 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 point thing. 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 this? Yeah, it is really hard and it tastes is so subjective. 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 still very valuable for people because that.

Once you start getting into the high nineties, especially like that 98 point Dow. And especially if you start seeing that it’s got high scores from three different publications. So there you go. That’s the wine spectator to candor and Venus each giving you a 98 point score. You can be completely confident at the very least.

Even if it’s not to your taste, that is a well-made wine, there’s no flaws. And it’s in balance. So there, there are a couple things that are objective rather than subjective when it comes to wine like is it oxidized? , 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 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 a more numbers minded person, you can pretty quickly start to, cut through the BS and see where those scores are actually in value.

That being said, Yes, I use it on wine searcher and you can, this is what I like. Great. 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 quickly 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 email payments 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. You have any Cron offers you can see. Sometimes there’ll be some stuff on here, like some random retailer in the middle of Kentucky.

And if you actually, call them, 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.

You guys are listening to this on the podcast or playing around with us on the YouTube version. If you guys want to go to the YouTube channel or go to simple passive castro.com/wine, and we’ll keep this stuff. For you guys to refer to, but we were, we’re poking around wine spies.com and wines stash, searcher.com a cool 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 anyway, man, if you can drink it, it’s all good lately. I just been buying it from Costco. Just I don’t buy like fake wine because I heard that was a thing out there. But any comments on a math method? The fake wine thing, there’s really not that much money and making fake wine unless it’s a highly sought after.

Why, and that’s worth trying to counterfeit in the first place. Really there’s a lot less actual wine fraught out there than it is to be concerned about, unless you’re a very serious wine collector to spending big bucks on wine and it really matters. And then there really is wine brought out there.

There’s a big push, especially in the fine wine space. And I’m, we’re talking like, $200 bottles plus. To have a lot more consistency with any counterfeiting measures just in terms of. Buying wines that you know, are probably going to be a good deal. I think it’s true.

Costco is the biggest wine retailer in the country right now. It’s not more wine than anybody. You’re not, you’re certainly not alone at Costco my family actually comes from a wine producing family, so I can tell you on the other side of that, Costco has some serious buying power and they do what they do for everything else.

And that’s just squeeze the producer to get the lowest possible price. Yeah, there’s definitely some good deals to be had there too. I think the challenge is necessarily the selection. I do have a great selection, but you’re not going to get random, smaller lots. That kind of gets back to what we were talking to in the beginning, which was, when you’ve got only a couple hundred cases of a given wine left, As just straight up, not enough for Costco.

Costco needs to have truly massive volumes in order to even be in their system in the first place. You’re going to be missing out on a lot of smaller producers that have some random model. I like this, like Caymus Cabernet, Sauvignon. You, what are you talking about? That’s a nice water.

I know because it’s very popular, and that’s the phrase Caymus was for closers, but you. Do you guys have a brand like that? That’s more of a one that a Costco will go after and drive it down to 80 bucks, right? This kind of gets into the behind the scene stuff that you were talking about.

Most of the really big name brands are represented by distributors. And depending on the, especially those. Ultra recognizable names that everybody knows the Robert meant values in the world. There’s a lot more kind of sensitivity around the price point that it gets put out there as there’s a lot more push to make sure that whatever it’s getting on the store shelves is very close across the board.

There’s actually specific laws that govern now what a distributor technically has to make an offer available at a given price. Same to any retailer. It actually makes it quite challenging. But that’s the selling price that they’re willing to offer it to the retailer at, depending on the retailer’s model of how much margin they need to make on there, they can offer it for whatever they can offer it.

Our whole model is trying to have a higher volume on a given day. And we really do try to take very. Very slim margin and pass on maximum savings to the customer because, that’s what we’re trying to do. We’re trying to offer a great deal every day, but you guys aren’t necessarily going to have the staples, like the Caymus, the pump jacks.

I don’t know that many, like those more recognizable names that are always going to be on the wine menu at the local. The short answer is we’ve got the access to those wines. We can’t give the kind of crazy eye-popping discounts on those that we can for other wines.

They’re typically not on there, but it’s not to say that we don’t. We just, we did a Mondavi Toca loan a couple of months ago. We didn’t open it’s one this year, so yeah they’re definitely out there. It’s just again it’s harder to offer the discounts that people are used to seeing on the wine spies on those kinds of wines.

Yeah. And this is how like sick, I am like, I would rather have like the reason why I stick with this Caymus, cause I know it’s good. I would rather have a wine where I know I got true 50% off than half the best wine because that’s where I get the most enjoyment out of. If I like this type of like darker cab, what are ones that on your guys’ like your website, you would suggest, and that’s the thing. We call it out too in the marketing copy that we put together every day and let what kind of was your into, Hey, you love these kinds of crazy fruit bombs. Scroll down a little bit. I want to see that go. Rocky is probably Becca Rashi.

We do the Cabernet of that recently. That was a little bit along the lines that you’re talking about. Kina Noah, that’s a peanut, but we also, we featured a cabinet that day from them at a lot of Jones that Jones families, these labels like. I can’t even say the thing, like it’s fresh. I don’t know. But like to me, it’s man, like it’s just overwhelming, and that’s why I retreat back to what’s comfortable and the Caymus. I don’t blame you at all. I actually, to be perfectly honest with you, that’s exactly how I feel about it. So the imports, it’s a totally different world and people typically are, being with them if that’s what they’re picking up.

We have a streamline knowledgeable wine buyer, he’s agent and that guy, he’s a pro and he can tell you every single vineyard in Bordeaux, he knows exactly where it is, the famous vineyard that it’s next to and why it’s a good deal. I can’t pretend to have that level of knowledge.

I’m stick usually with the domestic, for that reason also. But. And even someone like me who has the good fortune of pasting all of these different wines on a daily basis almost, and learning a great deal about him from super knowledgeable people. It’s a bottomless well of information.

You’re never going to get to the bottom of it. So unless you’re the type of person that. Drinks at Brunello for the first time. You’re like, Oh, what is this? I love this. This is totally different than anything I ever drank. I want to drink more of it. And you start getting into it then. Yeah. I’m the same way as you, when I see an Italian label, and I’m unfamiliar with, even the classification systems that doc DOCG.

The IGT, I just throw up my hands and say here someone just pour some good wine in my glass. So cool. Yeah. Or you take it to your friends and say, this is damn good, man. Yeah, exactly. Or you just trust the wine spies, to help serve up some fingers. And we try to tell you, if we think that this is going to be a good one, if you’re in this kind of thing, that’s right. So I did my control F and I looked up cab and I found these two. So that Joan selections. Awesome. And here’s, a really good example of an actual, wine country connection. We’re right here in Santa Rosa, California actually just bought a warehouse in Petaluma and our moving our offices and warehouse

to the new location. We’re really excited to be a new resident of Petaluma, but we’re right in the center of wine country. And it really helped for things like this. This was just a completely back channel situation where we were able to get the hook up on, on a small producer and Pomerantz rivers Brown probably be most famous Napa winemaker right now.

Here’s a situation where we’ve got a wine made by TRB. It’s just that it’s really hard to get your hands across on, let alone for, any amount off. 35% offers a crazy good deal on this particular one.

So we, sometimes we work with the distributors and the boys and play a ball. And sometimes, you’re not going to find this particular wine anywhere else. So the TRB Thomas river Brown, that’s like the Caymus family or there was it like the grapes from the Jones family. He’s the actual wine maker that made that wine.

So a lot of times, especially with these superstar winemaker talents, it’s like hiring a director for your film. You can pay big money to get the big names or David get Guetta as a producer for a song. Yeah, exactly. Thank you. That’s much better. Don’t through Jack. You had Channing Tatum produce most shows, right?

They don’t do anything. It depends. So for, I spent 10 years on the production side. The crazy thing about wine is it really is made by the seller workers. I started as a cellar rat. And the 99% of the actual making of the wine making the winemaker gives you a work order and you go actually work on the wine.

But having gotten that work order and being told what to do, you would know. So you’d be surprised at how much direct impact a kind of visiting winemaker will have. Coming in tasting the wines in the barrel as they developed deciding, Oh, this needs this should be put in this much Oak.

We needed to do this blend on this. This needs this adjustment. If they can do that, tasting a panel of wines in an afternoon and just verbally telling, whoever the production winemaker is. This is what you need to do. And then getting back on his fricking jet leaving that is actually an impactful way to put their touch on it.

And the wine will be better for it. That skill of wine making is knowing, Oh, this needs 3% now back in, it’ll be so much better, okay. Did they tell you why? Rats, don’t talk to Thomas, don’t look them in the eye. Don’t look him in the eyes. Look down. Yeah. Do not address him when he let only let Barry talk to him.

Honestly some of these guys absolutely have aura of mystique around them that I would have definitely went out as a 19 year old seller at scrubbing barrel. Bungs I would have. Not really the guts to say, Hey, what’s that dominance? Yeah, that’s cool.

But it’s legit, right? Some of these guys? What they touch turns to gold? A hundred percent, man. That’s what I was trying to say is, it really is amazing how you don’t necessarily have to be there all day, quote, like working on the wine and. The wine will be so much better for that having been involved with the project.

And also you start to see, Oh, like the hallmarks of a particular wine maker. Oh, that’s wine. It’s so smooth. Well balanced, whatever it is. You’ll start to see that through their lines. Oh, this actually is like a GRB joint, yeah. So that people are gonna kinda think I’m actually know my stuff here, but they’re the Caymus folks.

I don’t know what the dude’s name is. Is it Caymus? I don’t know. I don’t care, but I think the dude went over to and he made the conundrum. Oh yeah. That’s a good jam for 20 bucks. Yeah, absolutely. And that’s it there again, people ask that’s a lot of times what happens if people aren’t super successful on a given project.

Usually they’ll sell it in and start a new thing. And a lot of times that’s successful too. Here’s Wagner. Yeah. He’s the kind of guy to where it’s like, where everything you touch is going to turn to gold, that’s also partly the business side because.

There’s, the distribution is so crucial and you’ve got a whole network across the country, and then the distributors are set up consolidated these days and they’ve got such great relationships and they know if they put the Wagner name on it, they’re going to be able to push it out. If you start a new brand, Naomi and Rachel need a location sold for a bunch of money, but he knows pretty much ahead of time that no matter what he’s gonna do, his new project is going to get a ton of press for you at time, Inc.

But more importantly, you’re going to see it over night on grocery store shelves and trying to build that momentum as a small producer, without those kinds of connections or interest from the distributors. It’s almost impossible. Yeah, they can put like McDonald’s coffee, but that’s, that’s so in our world, like we do a lot of apartments indications and there’s a lot of fund managers.

It’s the same thing. Once somebody has that track record, you have the sponsor creep and the product may not be as good, but. It also reminds me of like in the startup world. And this is why I don’t like startups. I was looking at it for quite a while, but it’s just not very good. Most of the deals suck and never make any money.

And I just don’t. I want to, I’m not happy with a batting average percent success rate, but a lot of it like the ploy. This is the dark side of startups is like the Starbucks will just pay some dude who has a long track record to just sit on their board. And now it looks like, cause social proof, this is what’s happening with a lot of these like blockchain cryptos, or now there’s like now there’s like cloud advisor on the cardboard.

A lot of these crowdfunding websites, they actually like. Some people will pay to get on their board so they can look like they’re part of the board and it helps the company website look like they have legit people. It’s totally messed up. And I’m wondering is the financial world as corrupt as these wine makers or maybe in the wine world, things are still good.

It’s not as corrupt as a financial world. Oh, no, it’s real crazy. And it’s all about relationships and if anything, it’s a super small world. It’s just really incestuous and yeah, it’s hard to break into for sure. But I think there are what we’re going to say. Oh what are like maybe top few off the top of your head?

They’re like Thomas river Brown that’s a good one, right? What are a few others? Wagner, which is the Caymus. Hi Heidi, Barrett’s green Eagle. But these in particular, I think are superstar winemakers that have really risen based on their merits and proved that they can make really good wines consistently.

I don’t necessarily think that’s the seedy underbelly of the industry so much. It’s really just even the biggest wine company in the world is Gallo. I mean they’re right here, but guess what? They’re actually an extremely well-run sophisticated operation that has great training takes care of their employees and they do really good job.

I wouldn’t begrudge them their success at all. , in terms of The challenging behind the scene seem deals. It comes down a lot more like where the wine actually goes, especially for really coveted small, lots of wines, I’m sure you’ve heard like a term allocation.

Oh, you have your allocation of a particular wine. That’s really where it starts to get. Who do you know, who are you in good standing with right now? Who’s but did you kiss recently in order to get, your hands on that good that everyone really wants?

So that part of it, it’s tough. I think if you want to talk about the startup side, I think wine spies is pretty interesting and that. The founder of the company Jason Sieber, whose agent red, by the way, we’re revealing his code name because he’s actually spending most of his time on his new venture Kayla life, which is a mass company which is a pretty cool success story.

But wine spies has been around since I was seven. And like I said, and it really was bootstrapped from the ground up and we’ve just been persistent at it. And it’s a story of. Cause simple passive cashflow agent red was the type of person who worked in the business for, years, then worked on the business for years and now is in a position where he’s able to pursue the next project while he’s got a great team of people working for him.

And he doesn’t have to spend nearly any time in the business these days at all. I think it’s just a story where , it can take real time to build a stable business model that just runs itself. And we are in huge growth mode right now. But before I came on board three years ago, he had built a pretty consistent machine that was just stable and was able to bring home, a good living.

And it really only took a couple of people helping them out to make that all work. I think that’s a great point. You brought up there. Would, it kinda reminds me of when I was looking at a lot of these startups, there was one in particular. I don’t want to call them out of the sea.

Of course, if you guys are in the family office, a Honda mastermind, which you can learn more about simple passive cashflow.com/journey, we know we. We take the filter off, right? Because this is the freebie podcast we’re talking about here, but there is this operator out there and, I’m trying to look what to invest and they did.

Let’s just say they did farm stuff. And I look on their roster of owners and operators and I’m like which guy here? You all live in New York, the heck, do you guys know about farming? Which guy actually worked the fricking fields. They have this one guy on the bottom that it’s like a small car.

I was like, is this guy a principal of a company? Or is this a consultant? And then like, that to me, when I’m looking at a deal, I want to know who the operators are. And I want to know what gives them the competitive advantage. For you guys, it’s the dude that made the company, he actually knows a thing or two about making wine.

You got to go figure, right? There’s just not another like internet company out there. Startup company, a bunch of kids who went to MIT or Berkeley took entrepreneurial, got an MBA. And now starting some random company where they don’t even like wine. They haven’t known anything about it. Yeah. Obviously it pays to have the real deal and we’ve got, so I’m from producer side and I know I’ve actually made wine myself.

Our wine buyer, he’s got 30 years of experience and I think really that there’s no shortcut there at all. So having, a very knowledgeable person, it’s the Rolodex, but also know what you’re looking at. You knowing how to read those crazy Italian labels, This absolutely crucial skillset.

We’ve got, our marketing hot shot who write some great copy that sells. And and then we’ve got an awesome team too. Behind the scenes, making it all happen. And obviously all of that is crucial, , , we don’t have any empty suits here.

And I think one of the things that helps. It’s just the company culture. Because we’re all working hard and working in it and have a ton of fun every day. And I’m just one of the things I’m most proud of the businesses we get a lot done, , we really do each other and there’s our elder does that relate to each other as human beings.

And I don’t think you’re going to find that if you’re having to report to that guy in New York who doesn’t know the thing about farming, like you say. Yeah. So you guys can check out their company, wine, spies.com. So you guys register and it’s like a daily deal a day or something like that.

Yeah. And if you’d sign up for an email list, we shoot you an email at first thing in the morning, just like letting you know what . The wine is bad day. , we’ll sell out sometimes as early in the morning and we’ve got a lot of people that genuinely just enjoy reading the emails.

I know everyone’s email box is so full and it’s hard to believe, but we’re, we will put a lot of work into the write-ups every day and pick there’s some actual, pretty fun and interesting ones. So people that are even passing into wine, they like to check it out just to see what’s out there. Now, this is more so serving for the whole white, out of our group, maybe 10% of the people live in Hawaii.

Most of the people are in the us mainland, but selfishly asking, because this is my podcast, like I’m screwed, right? Like it’s just going to hurt. There’s no shortcuts, man. I’ve got to tell you, we ship enough volume that we have access to the tier one. Hop rates for our costs on shipping and our shipping a case of wine to Hawaii costs us $110.

There’s just no way around that, , that makes it a big challenge for anybody on the islands to get that. I’m better off just going to Glasgow or going to the local. If you’re in Hawaii or the community, what it really depends on is the price point of the wines that you’re getting.

If you’re buying, if you’re buying a hundred dollars bottles, that one spice is bringing to you for 70% off and it’s 30 bucks, I’m just 12. Okay. It’s starting to make a little bit more sense. When you factor in that cost of chipping in for mainland United States, we’ve got free shipping on 12 bottles, but what we’d do is this cool locker system where , you can add one bottle at a time.

To your locker. So you don’t have to check out with 12 bottles. You can check out with just one bottle is deal and build builder case up over time. And you can have up to two lockers open at any given time and then ship them at your convenience. And that’s actually nice because no matter where you’re at, you have to sign for your wine purchase since it’s alcohol.

So people really like consolidating those shipments into one shipment. Yeah, no, that’s cool. When I travel up and do deals, I usually like to get a group of investors together. Yeah. Can you bring that? So you can set your locker up and just have it waiting and then whenever you want, we can ship it.

But I got to guess 12 bottles. Yeah. That’s the deal. It sounds daunting at first, once you start looking at all the awesome lines we offer, you’ll be like, damn it. I filled up the locker again. Yeah. So I can get 24 going at one time. Yeah. Oh, this is cool.

Yeah. And then actually technically more because you can, after you decide to have a locker chip, you can set the ship date up to a couple of weeks away, and then that clears up your locker. Okay. There’s a little bit hacking stuff you can normally when we do these investor meetings, it’s usually all a credit investors and it’s, I like smaller events.

So everybody gets to know each other better. 12 bottles is a lot, maybe a few, some of them home with it. No, I want it, but I can still pay to just ship onesy, twosies. Yeah. And also what you can do is you can fill up your locker and then you can just have a, if it’s less than 12, you can just pay to have that shift at any time.

Yeah. Yeah. And depending on where you’re shipping it, it’s not that expensive. I think California, it’s 20 bucks to ship six bottles Oh, that’s nothing. Yeah. And that’s what I like. It’s like the time savings, get, maybe some people love to go to a total food and wine and peruse the aisles, but for some people it’s like a waste of time.

They’d rather do Amazon. I really do think that the wine aisle is just one of the worst and hardest ways to try to pick what your, what line you want. There’s the all you’re limited to is the information that’s on the label right there. That’s, you can just go Google while you’re in the store, but, I don’t really think it’s a great experience.

And the fact is that you talk about the politics, earlier that is really where things get the most the most weird, I’m serious. They have, whether they’re called shelf schematics, where, the distributors are the ones that create the layout for where all the bottles are supposed to go at the various Heights and what bottles are going to be there in the first place.

And that’s where the real politics can come in is what on the grocery store shelf in the first place. So there’s a ton of stuff that you’re not going to find there that you can find almost blind. And that’s why wine online has been huge for a long time, even though. It’s hard to get to your house.

It’s still been big because the selection just so much better than when you can find at the store. Yeah. Can I ship this thing to California and haul this thing back? Like a wine meal back to Hawaii or, all of that. It’s interesting. Yeah. Good. Okay. Willing to do those types of strange things, but any other insider tips or tools?

I got one for folks I use that, that we know app. It’s cool when you buy a bottle and you’re drinking it, you can take a picture of it collecting Pokemon. Yeah, totally. That’s super helpful. The main thing that I would say if you’re just trying to learn about wine is just remember it’s super simple.

It’s just when you’re drinking the wine, just try to remember what it is. You’re drinking. So just like when you’re taking a setback. I like this. Just look at the label and just be like, okay, this is from this wine from here. And just try your best. You remember that because over time, and I don’t care about the geeky stuff, you just about what you like.

And don’t like, but the only way to really learn over time. Oh, I like have term particular appellation in Napa. I tend to like Rutherford calves. You only remember that if you did spend the time looking at it. And then also. Give a shout out to a new browser extension that we’re partnering with called CIC it’s sip PD.

And they’re working really hard. They’re probably one of the best efforts I’ve seen for our kind of recommendation engine. And so at the Chrome browser extension, you can install and they they basically can, they rate us given wine and then try to match it to your case profile.

And as it, as you use it over time, it gets to know your preferences better. And what they’re trying to do is they’re also trying to. Create overlays onto other retail partners sites. So that they’re your match, your percentage match, how likely are appears on those other sites to exempt. The team seems really smart and put together.

So I think I’m certainly wishing them the best of luck. We’re excited for the partnerships up over time. I think you’ll see the useful minutes of that grow and. And that might end up be a pretty cool way to figure out a line of products across the internet. What you like, what you don’t. Yup.

And a wine’s better with other people. So if you guys are, haven’t reached out to us shimmy emailed lane at civil passive cashflow, join our group and don’t just be a lurker on the podcasts. Get to know our community, a lot of good people here. Auto wine drinkers and whiskey drinkers, a lot of beer drinkers too.

Thanks. A lot of peoples that just are into the whole physical optimization, just water and cold pressed juices too. A lot of those guys, also all spirit spies is coming down the pike. So one of these days probably get some good bourbon on there also. Yeah, until then just straight diet of Johnny Walker blue for you guys.

All right. All right. Wine spies.com is the website. And if you guys want to watch this again, and as we add more content to this little fun sub topic on simple passive cashflow.com/wine, tell your friends and we’ll see you guys next time. On bye.

 

Tips to Increase Other Income From Real Estate

Now, another trick that folks like did you in this business inflating other income or non rental revenue, such as trash filet, additional storage fees, reserved parking or covered parking in Texas. That’s a big one for those late hailstorms money for vending machines, money from laundry machines or any type of service that may or may not be tested by the current clientele.

This has been a way to sneak deals past even the most astute, passive investors. We have understanding of underwriting, just put stuff into other income category because most people don’t look there.

August 2021 Monthly Market Update

https://youtu.be/FFi-T4045aw

Hey everybody. This is the August, 2021 monthly market update. My name is lane Coca. I run civil passive cashflow.com owner of 6,000 units plus, and we are going to go and look at what’s been happening in the news lately. That’s going to be impacting investors. If you guys. Had a chance type of comment below, say hello.

And if we if you’ve got any questions, I’ll be trying to manage the comments and answer any questions you guys have, or if you guys have any fun comments, but you haven’t yet grabbed my remote investor e-course so this whole journey I’ve been on started in 2009. When I bought my first rental, then in 2012, I started to go invest remotely in Birmingham, Atlanta, and Indianapolis.

Created this e-course because everybody was asking how to do it. And it’s all the same questions over and over again. So I created this course and I want to give it away for free so you can pick it up by shooting me an email lane at civil, passive cashflow.com and put light in the subject line.

And I will get you access to that.

All right, here we go. What’s up, Jen hee. Hello, a numbness. Facebook. Yeah. How inflation impact you? It won’t, if you’re unaware of it, if not, it’ll just rub money in your sleep, right? Because if you own a million dollars, now that million dollars is probably going to be using fifth five to 10% of its value every year.

It’s ultimately your buying power. It doesn’t matter how much money you have. It’s matter how much the value that it buys. If you guys liked this you can check out the podcast that will passive cash. It’s all about real estate investing for passive real estate investors. And then it’s house flipping wholesaling burst stuff is more passive investing for folks with good jobs.

And it’s also on the YouTube channel for those of you guys are listening in the podcast, but here we go. We want to start off with a few teaching points that people have been asking the the last month and then we’ll get into the monthly market. Now, some people have been saying Hey, I found, some peoples pitching me this deal for 12 to 20% interest rate.

And if I’m lending money on a house flip and first question I asked is like, all right how much experience do these guys have? Because likely what you’re doing is like you’re buying crappy paper. If you guys are familiar with Moody’s S and P in. Credit ratings, they fail rate lenders, right?

And in the same way you could rate the the people you invest with or a house flipper. And a lot of times what’s happening is you’ve got super newbies who still work their day jobs and are doing this as a side gig who you could probably see as effort DP. And giving people really high rates, but, unsophisticated investor will just go rate chasing, but a smart investor will want a good rate, but more importantly, to be investing in a person who is experienced and good.

So maybe that’s an eight class paper in this respect where B paper. And, but that might be more of like a, five, 600. Interest rate that might come in. I got a lot of guys that I know in a mastermind used to be a part of that they can get 5% notes all day long from investors because they have a good long track record and a really reliable it’s the people who are brand new that have to pay 15, 20% plus and beyond the, where, there’s a lot of people that will like like white label and remark it a certificate.

To sell it to unsophisticated investors and create some kind of markup. So for example, what they’ll do is they’ll get some brand new house flipper who can’t get a loan because they don’t have any track record and nobody trusts them and then they’ll go and they’ll lend the money to them and they’ll flip it around and lend money to you.

And they’ll market it as like a B class type of, or B kind of a paper grade. And they. You’ll invest and get 12%, but then they’re charging the other guy 20% on the backend because it’s a really bad investment and they’re making that big spread. I think this is as an investor, you need to know who you’re investing with to make sure that this little don’t man thing put on, because at the end of the day, you’re investing with a complete newbie.

And that’s fine if that’s your investment strategy and you’re going after the, high-risk type of stuff. At least know what you’re investing with. And yeah, there’s a lot of these types of private money or capital groups doing this type of stuff. And this is all done in the household pig world, which I’m really a big fan of anyway, be on the lookout for that.

And then also, big thing that we do with a lot of clients are taxes, right? You can invest and that’s great. Maybe make 10, 20, 30% returns in real estate, which is backed by a heart attack. But for a lot of the high net worth clients, it’s really about, protecting your income make two, three, $500 million a year from your taxes.

If you guys want to check out my personal taxes, go to simple passive cashflow.com/tax, but it’s like the athletes they get really hammered here. Bron James target woods, Anthony Davis Floyd Mayweather. I hope they have, I don’t think they have good tax representation. But it’s the healthy guys who make a lot of income, but don’t pay too much tax.

Yeah. So beyond the smart, you may make under a hundred grand or you may make under $300,000, but hopefully you pay less than 10 or 20% tax

all right. So crypto investing here, if you guys don’t. I look, I watch a lot of Reddit blogs and stuff like that. And this guy is like this little lizard looking creatures called Anan. I think it’s supposed to be a representation of some random anonymous person, average Joe, it’s, this is very typical author to another thing to be on the lookout for is somebody who invests crypto.

And loses their a month of wages. And then now they considers itself a trader and an expert crypto. I don’t claim to know anything about crypto. I do think it’s a good thing, but I don’t know. I just stick to my own lane, which is investing in real, tangible assets. You guys can learn more about simple passive cash with.com/start.

Let’s get into the month. This was a cool graphic that I found it outlined the tax strategy or taxes that citizens paid on average in different countries. And the United States is sitting at 24.5%. By the way, if you guys pay more than that, you need to get on the passive investing Shane and get away from Borden income and find a way to do rep status is all I got to say.

But these other countries pay 30 to 40%. I guess the takeaway is the United States. We don’t pay too much taxes compared to other countries. Now, somebody in one of my groups said those other countries, they have a lot of entitlement programs. The United States is the only one in this group that doesn’t have.

Government subsidized healthcare or free healthcare, like how you having Canada, but maybe that’s probably coming at some point it’s right or wrong. I don’t care. It is what it is, but, I think that my takeaway is like, you’re not taxes probably going to go up. The rest of the world does it.

America could probably bump it up a little bit more and get away with it. It’s even more so to pay attention to your taxes. If you guys need to learn more about that, go to simple passive cashflow.com/tax. All right. So what’s happening in rents? Apartment lists came up with this graphic saying that, so we look at the dotted line was the NEC the national median rent pre pandemic trend, which is just a boring cyclical.

A trend that’s just going upward, with the whole pandemic, everybody got frozen and some rents pretty much just stayed statement. But now what you’re starting to see this first two quarters of this 2021 is rents are skyrocketing. Places in Texas are going up, high single digit.

In places like Phoenix, it used to be 6%, which is still pretty high for a year, but now it’s like getting over double digits there. Different news sources report differently, but rents are going up folks. If you haven’t, if you haven’t caught on to this, you’re two quarters behind the trend already.

And a part of it is pent up demand. But this is, I think it’s good to be alive. But to be a landlord.

John Burns consulting came up with this cool infographic talking the rise of sister cities. So what’s this, the cities are, is like the coma is to Seattle. Canton, Ohio is to Cleveland. Stockton is to the east bay like Oakland. Bakersville is to Los Angeles. Tucson is to Phoenix, Colorado Springs as the Denver Fort worth is today.

Port St. Lucy is the Palm beach. Greensboro is to Durham and Philadelphia is to New York. And there’s a, just to name a few, but I guess the takeaway from here is this is another trend that’s going on the rise of the great MSA. NSA’s where you have mega cities. So I’m not to the, quite the point where Portland and Seattle or combining all in one.

But, like in Seattle and Tacoma, sure. It’s separated by 20, 30 miles depending how you get the ruler out, but it’s becoming one giant MSA and, people are clumping together in these metropolitan areas. And I guess what just thinking from an investor perspective is, like typically you can’t cash flow.

In the private markets and you typically can’t cashflow in the main headliner city, but where you find cash flow is that sister city. And I’m not saying any of these sister cities are good, but it’s just a trend to be on the lookout for, especially if you live near one of these cities and you’re just unwilling to go outside your local area, or you don’t have enough money.

So there’s really not, no, no sense to diversify yet, most accredited investors, they. Wake up to the fact that you want to be a remote investor investing in the top five markets across the country, as opposed to just staying in your regional area or where you can drive to hello, real page reports that DFW Dallas Fort worth leads.

Sean Mitchell, the man performance now, including gateway markets too. So what that means is Dallas Fort worth. Needs quarter two apartment demand, which is net increase in occupied units. So I’m just going to read this from top to the bottom. From the most to the, the bottom of the top 10 lists are Dallas Fort worth Los Angeles, orange county, Houston, Chicago, south Florida, Washington DC bay area, New York, Seattle, Atlanta, Phoenix, and Austin, Texas.

What again, what this is a report of is strong Metro level demand performance now, including gateway markets too. So one, one important thing to note here, and these are larger markets. I guess Austin is small, but I don’t know if they’re including the tertiary markets, which are those smaller markets anywhere from a quarter million to a million population.

And, Los Angeles is number two on here, but I wouldn’t invest there. There’s no cash flow. So depends on what your investment strategy is. It’s

Joint center for housing studies of Harvard university. If you guys like graphs and data and you need to follow, what’s hard, we’re doing these days. They come up with great articles. Really thought provoking. In my opinion, they got a lot of like racial stuff on a bad way, but it’s just interesting to review what the stuff that they come up with.

And so in this article or this graphic, what they’re showing is the leading indicator, free modeling activity. Second quarter of 2021. What you’re seeing here is remodeling activity coming up from the beginning of the pandemic double. Where we are today, where we were, and this rate of change has been steady over time, which makes a lot of sense.

A lot of people are remodeling like second home, make the place that you are a little bit nicer, makes sense, Adam. These guys follow a lot of lender data and. Porting here’s us properties with foreclosure filings in the first six months of 2021 hit an all time low of 65,000. I guess this makes sense because the rent moratoriums, which just got extended, by the way, I think it’s went up to September, October, and just continuing to kick the can down the road, which I think they’ll probably kick the can maybe another month or two beyond that.

But what’s good for real estate investors. Is that it steady, right? They , just like how they said, oh, we’re going to raise rates. All right. It took them like three to six years to finally do it. And it was very slow and gradual at the time. And that’s, I think that’s good for long-term prudent investors.

Again, joint center for housing studies of hard review university reports on inventories for homes for sale fell to a record low in early 2020. I, I said the Harvard guys come up with really good surveys. I just happened to pick our really obvious one. Yes. Supply is at an all time low or at an all time low, but it’s really a low, which is why residential prices are hot and everywhere.

Constant crunchy is hot. If your market is not hot, your market has a huge problem going up more than likely, but, What makes up prices is not only supply, but demand. I don’t know where demand is. We know supply is low, but it’s a question mark on demand. So what I mean by that is, is demand higher or lower than what it was now.

People with money right now, you’re white colored folks have a lot of pent up savings, or are going good for a lot of people because they can’t smell. I guess they’re starting to spend it by going on vacations and that type of stuff. A lot of the data says a lot of families on the higher end middle class and above have a lot of money.

And which makes sense why they’re buying houses due to the also the low interest rates. But I don’t know, it’s hard to measure demand. Supply is easy to measure because that’s just, days on market and how many houses are on.

So this is a graph of existing supply of homes. Again, the supply which we showed on the previous graph is going down, but this is a graph of overlaid on top of it is year over year changes in crisis, which definitely shut up starting last year, right now they’re showing it over 12%.

Yeah, which is really crazy normal historical price increases, just goes up with the pace of inflation. And typically they teach you in grade school where you’re supposed to nod your head and just accept everything that’s in. The book is supposed to be 3%, but a lot of us that are listening right now and know that’s a bunch of nonsense and it’s probably a lot higher than that because a lot of the money that’s in the stock market or pumped into the system is finding their way into the stock market, which is why prices.

I think artificially inflated and why I don’t invest in stocks, but as Facebook user says here, how inflation will impact us? It’s just going to devalue the amount of money that you have, that people who have a lot of debt, especially good debt are going to be the beneficiaries of this and eat. They think this is why a big motivation of what I do is what I do is because so many people have this completely wrong, right?

They want to pay off their debt in their mortgage and have it all paid. Which I think is silly. Like if a lot of people have maybe a million dollars of equity in their house, by the time they reached the golden years, if they took that money and put it into something like HP making eight to 10% a year, they’d be able to pay for two or three kids.

Grandchildren’s college like that, a hundred thousand dollars passive income. But they choose to just keep it locked up in their house.

yeah. Apartment list.com slash research slash category. Headless cool infographic that I have up on the screen now, or essentially rents are rising quickly. Everybody signal captain obvious. Once again, that’s the second point for cap. Th the way that I invest is primarily on the big drivers, which is economic growth and population growth.

And here is the population growth of, from a state level, of course, you always wanted to dive in on the MSA and then dive in another layer of the sub-market, but, from a high level, state level, in the big movers, in terms of populations, Are a lot of it is Texas plus 16% Utah plus 18% Colorado plus 15% Nevada plus 15% Idaho, Washington, Oregon, all double digits, North Dakota.

I understood that out. Nobody wants to live in North Dakota and there was only like 10 people living there anyway. So that went up to 60%. So there’s 12 people there. Now that’s a joke, but. Like a lot of these places like Florida, Georgia, South Carolina, multiple double digit population growth, where a lot of these are have been like low single digits, especially up in the Northeast.

I don’t know what’s going on there. The places that have remained the same or no growth is Mississippi at 0% Illinois, 0%. I think everybody knows about the struggles that Illinois.

Y I was sorry, I just had a kid a couple of months ago. I thought that was Wyoming, but I knew that Wyoming wasn’t there. That is West Virginia actually went up 3% down there. Hawaii has gone up by seven. But yeah, this is just one way of looking at your investments, investing on the trends where the population is growing up, because that’s what drives housing values and the demand for rents.

If you guys liked this, check out our accredited investor group that found that office on a mastermind currently about 75 plus members. Credit only pure passive investors. Only if you’re broke, don’t join us. If you’re interested in learning more about syndication deals, who to invest with more important, who to stay away from taxes, legal and getting to know other people on a personal level, because a lot of us are on this move from a million to $10 million net worth.

So know getting the simple passive cashflow is easy that whole time. But it’s all about, who you take the journey with and getting the best practices for more of the soft skills and the soft tactics on how do you build your family system and, surround yourself with the right people.

If you guys are not accredit investors, but I would recommend checking out the incubator, simple, passive cashflow.com/incubator. Pick up your first remote rental. But now if we’re to the end, if you guys have any questions, please pop it into the show notes,

but I’m going to go into my personal side of the story where I just talk a little bit, what I’ve been doing personally themed through 20 Robins, six personal six human needs.

The first one is growth. This has been my life last month. I just changed a lot of diapers and I don’t get much sleep. Now I totally understand why only a third of the investors or under the age of say 30, right? These are the guys who make $150,000 straight from college in their engineering jobs.

And, or, they’re the max out your 401k guys, but most of the people are older than the age of 36, 40 years, old million million, and a half dollars a net. And they have kids that are maybe five to six years or greater people who have kids from zero to six. That is what I knew before is the Bermuda triangle for anything in terms of even passive investing level active investing.

Now I know why it’s. Sucks. Yeah, it’s rewarding too at the same time, but yeah, it definitely is a time suck and energy suck and it’s hard, definitely hard to spend the time to read anything., if you guys are, that are younger than the age of kids, get your passive income now and get that stuff set up.

I was lucky by getting this all set up because I don’t know how I could do it now.

And enjoy your time out.

The second thing is how does a contribution back to society and the community? There’s a lot of people out there and you guys follow the 40, 40, 40 plan, which has worked 40 hours per week. Do that 40 years retire on 40% of what you’re struggling. All of your life with, and that’s a, the job just over broke or juggling our bills or jail operating business in mild pain and your life doesn’t really start until you stop trading your time for dollars.

So put screen around putting your money to your passive investments so you can get out of that nine to five date. Sure you might like it, but probably would want to do it a lot less. So jump on the simple passive cashflow bandwagon, and let’s have some fun, a little bit of significance here. I’m actually wrote a book folks and this isn’t going to come out until a couple of months later, I think because the one thing that is slowing me down here is I have to read it right now.

I’m doing, I have it right here. I am reading it and I’m going through it very slowly because they don’t have very much time these days and making the audio book because all you guys are too busy to read anything. who reads things these days who actually has time, unless you’re on vacation or something like that, which rarely when does that happen?

But if you guys want to get a copy of my book electronically and you want to give me a, help me out with a referral. I’ll buy you guys a book when it does come out. But I appreciate that, she meant emailLane@simplepassivecashflow.com. You guys can read it with me before everybody else gets a chance.

Some things that, everybody needs a little uncertainty and they’re highly, if not all right now, I like this kind of searching. And then we do the same thing every day. Because I have an eight year old and I’m not allowed to leave my house. If not, I’ll catch COVID or some other element and killed my daughter and I don’t want that to happen.

I am very aware that uncertainty is the spice of life. And without it, you don’t need too much of it, but it helps counteract certainty in your life. So one of the ways I’ve gotten a little uncertainty is we had a fire on one of our developers. You can’t see it too much, but on the bottom left here, supposedly the story that we’re going with too is that there was a lightning strike and it started a fire and it burnt down that whole building.

Good thing. We have insurance and $2,500 deductible. We’ll get it wrapped up. We’re actually ahead of schedule. So it won’t be too big of a deal. That’s why you have insurance, but no, that’s. Got me a little excited on a Sunday afternoon, a little bit, but overall certainty, right?

Things are being built. The value is there. If you see on the upper left hand corner, that’s a big beat we’re competing against, you’re going to kick their butt in terms of schedule. They actually started, I think half a year earlier than us, and we’re already eating them right now in terms of construction.

But our product is a lot nicer to have. Anyway, deals are cash flowing for the most part and heads and beds. Occupancy is very stable. Rents are going up. Likes is pretty good, that’s why you live the simple passive cashflow life. Fortunately I can’t see all you guys. And I think a lot of you guys are, especially in the family office group or going around the country, meeting each other, having fun.

I feel definitely a little bit of FOMO. I feel like I’m missing out a lot, but I am planning the 2022 retreat. So this is going to take place January 14 to 17 and a walk. And one thing I did was I hired an event planner, cause I’m not going to be coordinating all the little excursions by myself anymore.

I didn’t go crazy doing it. I’m a pretty good wizard at the old Google document and like coordinating that type of stuff. But this year, if you guys haven’t been on the pre-survey, please go to simple, pass to casual.com/ 2022 retreat. And please fill that out because that’s going to help me plan it even better.

And that’s going to get you guys on the pre. You get, you’re gonna get access to buy your tickets a lot sooner than everybody else and probably at a cheaper price. That’s for sure. What I learned by doing that survey is a lot of you guys are pretty jazzed about coming to Hawaii, maybe because you guys are stuck at home for an entire year of 2020, and.

It’s going to be pretty big event. I’m thinking 80 to a hundred people at the very least. And I think we’re going to cap it at that number. It’s not going to be like a stupid conference with a bunch of speakers. I’m going to be teaching about, taking money out of your 401k investing in deals.

Other soft topics that I know a lot of you guys like in the family office group, but it’s going to be more predominantly put on building relationships with other peers. Accredited investors, because in my opinion, that’s the really, the only way to find your way in this world family office clients are going to get first access to it, but then it’s, at some point we’re going to be going up to the bigger, simple, passive cashflow community.

Obviously a credit investors are going to get force excess first. But hire an event planner. So that’s fun. And it got me really excited because apparently they know what they’re doing and a lot more, they know this and a lot more than I do go figure. And they do that for this, for a living. Some fun things I found were do dads.

I found Amazon deliver stuff from whole foods and I don’t have to pay a delivery fee. If you guys haven’t found this is the big tiny. I think the bad thing is you can’t get the sale items, but I don’t like the sales stuff to me that I don’t like the chicks in games about the sale items.

I don’t really care, but they see a huge convenience and off the pier convenient for your delivery fee. So if you haven’t checked it out, check that out and that’s it. Unless anybody has any questions.

We’ll see you guys next time. Bye.

 

Don’t Buy A Fixer Upper!

https://youtu.be/6hKezp7iSa8

Guys, this is your rich uncle here today. We’re gonna be breaking down the CNBC article, talking about. Millennials having regrets. And I’m going to tell you ultimately why I don’t think people should be buying their house until their network is two times that, of the price of their home. So yeah. Let me just go down this article and kind of summarize it for you guys because life is short after all.

So they’re saying that millennials are having regrets after buying their current home. The reason why they’re having regrets is. Because you shouldn’t buy houses, you shouldn’t buy a house to live in if you’re responsible with your money and you’re able to invest it in other things that make you a lot more money.

This goes completely against what most people think out in the world. But Hey, go figure, as in many things, the things that they tell you may not necessarily be correct. I don’t live in a place that I currently own. Because I’ve been growing my money tenfold with, by investing in single-family home rentals and now apartments today.

One of the biggest things that people cited was that these folks are underestimating their costs. One of the biggest mistakes you can do is buy a fixer-upper. You hear it about it all the time? My goodness. Stop buying a fixer upper because here’s the problem folks. Yeah, you’re getting maybe a little bit less expensive than you would have bought otherwise, if it was all shiny and new and fixed up, ready to go.

But the thing is say you have to be paintings or maybe 10, $20,000 of repairs in the property that you think you’re going to do yourself. The issue with this is that you can’t finance the repair box. The biggest thing that we talk about as sophisticated investors is, putting the least amount of down to get the most amount of returns for our money.

So if you bought a $500,000 house, you put 20% down payment down. So let’s just say a hundred thousand dollars. But then now you have to, you’ve got this fixer upper. So you got to put 20 grand into it. Now you’re in the deal for one 20, when you really should have been in it for a hundred and people who don’t understand money, don’t understand a responsible use of debt.

Don’t understand what we’re talking about here. They don’t understand it. It drives me crazy. People think that they’re getting it for less. They’re really not because this is not how money works. This is not how it should. Your rich uncle does it. This is not how the wealthy do it. Guys. You guys need to stop listening to mom and dad doing it the wrong way, or all your other coworkers or friends who are thinking, don’t go into debt.

As I say before, you got differentiate bad data, good debt.

So this is what kind of stem is from underestimating. The repairs. And this is drives me crazy about mainstream articles. They always come up with this, like, all right, what should you do? And we started just lane ways, like building up your savings. Come on, give me a break. Make sure you’re thorough.

Yeah, of course, but don’t buy fixer upper skies, buy it all, ready to go or negotiate it into your contract as I’ve done the past so that the repairs get done. Prior to closing so that your lenders okay. With it in the process, and you can wrap up all those repairs that you would have had to put in.

Otherwise, again, let’s just say you had to pay $20,000, right? Cool. You just increase the price of the property, make it a $520,000 house instead. But now you, you put you finance that five 20 and now you’re out of pocket, maybe. 20% of that 20 grand, right? So $4,000 out of pocket. And then, so this is the, this is good use of money and debt.

So they also broke down. I’m going to show you this graphic, that teammate for us. So in this graphic, shows like the difference between a formal owners in general, which are like the general population and the green ones are the Greenies, the younger folks. I don’t know where they were at with these different types of aspects of the home buying process.

The people had no regrets, typically the older people, right? Because they were buying houses where the millennials are just buying houses, just to keep up with the Joneses to be, it makes no financial sense to own a house that you live in going invest the money. Heck, put it into your student loans at six, seven, 8% that you’re paying now, that’s still going to be better than putting it into your house.

I still don’t even think you should be doing that.

Every other population you can see maintenance was a big thing that we just cited there. People bought a too small of a house. See, I think this is this is just a bad data, right?

You should, for every 10% or so people who had that group, Brett. You would think that the 90% of the other ones that they bought too big of a thoughts, in my opinion, depending how the survey was designed, it should be 50 50. These are some other things that people thought of as their kind of regret for buying that big payment.

I don’t really want to get into it today, guys, but go to my room website, simple, passive castle.com/home and read my entire guide to reasons why you should, and obviously you shouldn’t buy a house to live in buying a house to live in is one of the biggest financial mistakes. I see young people making these days, you put that have to put down a large sum of money.

That you would have otherized otherwise possibly bought two, three, four, five rental properties where families are paying down your mortgage for you. That’s the difference when you own your own house, you’re working your butt to pay down the mortgage yourselves and compound that the fact that you’re going to have a much larger mortgage payment.

Now this cripples your cashflow, instead of maybe being able to save 5,000, $10,000 a year. Now you’ve shrunk that down to almost nothing at this large house payments don’t believe the nonsense that other people are saying that rent is throwing money down. The two. Sure it is. But if you have all this money that you would have sunk in there anyway, making a whole boatload of money for you at the end of the day, it’s the combined some of the two, I might be throwing a thousand dollars down the tube paying rent, but I need banking two, three, four, $5,000 a month with my rental properties that the down payment I wouldn’t have had. Otherwise, if I would have sunk it into the down payment of the property and I would also be making a lot more money to be able to accelerate by more and more rental profits.

So there isn’t a nutshell guys again. Don’t buy a primary residence until your net worth. It’s the least one to two times more than that price of the property you’re looking to get into, right? It is a financial drag on your finances. Don’t do it yet. If you guys agree with this, don’t agree. Let’s have a conversation down below in the comments.

I’ll try and answer them all. A lot of this is a lot of people get very passionate about this people. You’re like, oh, where would I live? Right where my family live own or rent something. Go find a unsophisticated landlord that thinks owning a property that where the rent of value. Racials where you take the monthly rent divided by the purchase.

Price is not greater than 1%. Actually think that’s a rental property and it’s not, it’s a bad rental property and bear on sophisticated investor. So therefore you as a tenant need to take advantage of what they do not know. So therefore you need to rent from them.

All right, guys, keep learning the good stuff from your rich uncle here, and hopefully we will get you guys to financial freedom. So take these back.

Is There Power in Bitcoin

Just a, I guess a personal question. What do you think about sweeping that money into a block fire or like how Ilan is putting it? It clean, but it’s your thoughts? I’m sure it goes against the PPM. Yeah, you’re right. In our sec offerings statement, we’d have to disclose that. I don’t know. I guess the only reason to keep cash on hand is because we may have needs payables and stuff like that, acquisitions, but it is not, I’d be a little nervous if we did that and then it wasn’t readily available when we needed it.

And so I think these sit in the bank for either in an operating account or in a money market account, and definitely not.

How Much Cash Should You Have in Order to Invest

Is there a certain percent number that you’d like to keep as cash. It’s a couple hundred dollars, $200,000. I think people will get nervous if they say, oh, where do we only have a hundred thousand dollars in the bank? Just because there’s always paid just as money comes in every day. There’s bills that come in.

And once in while almost like an emergent, Hey, we got to cover this taxes today or something like that. So there’s always typically a hundred or 200, lots of times more. And we try to manage that sometimes we’ll get significant payoffs or Oreos or significant money comes in or investments come in and it’s not readily deployed.

We sweep that money to a money market account. So we’re earning some anemic rate of interest, but at least there’s a little bit of money versus sitting in the kind of operating account where they’re earned zero. So that’s done regularly. It doesn’t add up to much, but it’s fine.

250k Net Worth Chemical Engineer Coaching Call

https://youtu.be/FcnzpGSAEXk

What’s up investors we’re going to be doing one of those coaching calls that you guys like to buy curiosity learn from other people’s mistakes. Check out all the past coaching calls on the passive investor members I think we’ve got over a couple of dozen of these calls and it’s also found in the YouTube in the coaching call section, but in the members section, which you guys can get access to by joining the club@civilpassivecashflow.com slash club, it’s free.

I arranged everybody by accredited and then crazy accredited section on. So you guys can find where you are. The guy we’re interviewing today, his net worth around $250,000. But, just like a lot of the younger guys in our group, which we have a wide range of investors here from, in Europe, 20 years old, all the way up to 60, 70 years old, Richard here, he’s not making big money yet, but he’s a chemical engineer.

Those chemical engineers, I swear are the smartest engineers. AutoCall no offense to your computer science guys, his net worth wrong. Quarter of a million. Soon, this guy is going to be making some bank, cause he’s only been working for maybe a few years thus far. But he’s doing everything right.

And this is how a lot of you guys are the guys who max out your 401ks, very diligent savers. Maybe you don’t have the whole family and children thing quite yet. It’s something I’ve learning about personally these days. But you’re setting up the framework to get yourself on the path to financial freedom.

Most people come into our group and they’re already in their forties and fifties. And, but luckily they’ve, have time on their side and they’ve amassed a million, $2 billion of net worth. But this guy right here that we’re going to be interviewing today and doing the coaching call. This guy will be availing dollars network easily, late twenties, maybe early thirties.

It’s amazing. And it’s cool to see people get off the straight path. It’s subsequent around doing things like, being achievable. You guys can check all the crazy stuff I would do to save money, which I’m not super proud of, but Hey, that’s what I used to do. And I live very frugally.

Again, a lot of those cheapo tactics are@simplepassivecastle.com slash sheeple. And you know why I’m on the subject, one of the things that got me to the next level from a letter rentals to announcing a few thousand plus was joining different masterminds, actually spending money to get her on the people that took me to the next level.

That’s what the family office on a mastermind is all about. We just bought the pricing a little while ago. We continue to bump the pricing, every couple of quarters to increase the caliber of that group. We have about 70 people in there. And if you guys want to learn more about the group, because you’re tired of hanging out with broke guys or people that are investing in their 401ks and all that nonsense check us out@simplepassivecashflow.com slash journey.

And during the show.

 

Hey, simple passive cashflow today. We are going to be talking to a non accredited chemical engineer. We’re going to be doing a coaching call and guiding him on his way. But yeah. Thanks for doing this, Richard. No, thanks for having me late. I really appreciate you taking the time. Yeah. So let’s give some folks some contexts.

How old are you are? When did you graduate? Bring us back today. And then all of these financial profiles everybody’s situation is different, but I’ll be honest. Nobody’s really a special snowflake. Everybody follows the same five to 10 categories, but tell us a little bit about yourself.

I graduated in may of 2017 with a degree in chemical engineering and I moved to Houston shortly thereafter, where I’ve been working as at a chemical plant the last three and a half years. So I’m 27. Just about to turn 22. And I was introduced to financial independence about two years ago, two and a half years ago by my friend, Jared.

And then I went down the rabbit hole and decided real estate was the way I was going to go. So I’m currently living in a house act, which is a duplex in Houston. I have the one side printed out and then I have a room for rent in my unit, but I currently do not have one. And then I recently in July just purchased those second real estate property.

And I did a successful Burr and basically only left in the financing charges with that property. And so that one’s a pretty successful first hard money loan as well as a refinance. Richard’s a example of a younger guy. His net worth is under a runner on a quarter million bucks. But I would say your in fact, it’s just that you’re pretty connected.

The right people, your buddy, Jared knows another guy that knew me and all you guys are all like each financial independence retire early and type of guys. Sure. You guys get your stuff together. You guys will be on your way in 10 years, for sure. For those of you guys don’t know what chemical engineers are, probably the smartest engineers of the bunch, your salary hasn’t really taken off yet.

You’re still in that first scrappy job, is that I switched companies a year and a half ago, and so I got a bump up to what I would say was the market value for chemical engineers here in Houston. That’s probably about the average for a non oil and gas. But that doesn’t include a bonus this year.

We didn’t get it with the whole markets and the company being a, not the best financial spot. I’m eligible for up to a 20% bonus. When that kicks in, like that could be a significant bump to my salary. Where do you think your ceiling is five years? Five years at this company. I don’t think it would be too much higher.

I could probably see it again. Closer to a hundred at that point without making us promotion up. But it’s a pretty small company. The one benefit I really is it has a good work-life balance compared to a lot of other . Got it. And that’s probably, you got that from your buddies, right on all three trio is you guys are all about quality of life instead of just making a whole bunch of money and spending it for briskly.

Yes. And and right now I’m able to actually work from home. So that’s been saving me a significant amount of money on gas and just all around time. Yeah. So sometimes I look at this in a different order , if you guys are checking out the podcast, go to my YouTube channel, we have the personal financial sheet, but in the upper right-hand quadrant, you have the net worth.

That’s where I take a peak at first, again, about a quarter million dollars net worth. And then we look at how he’s making money on a month to month basis, about $7,000 of salary coming in. But in if he had a bonus, that’d probably be up a little bit. But then I look at use as a cash, which is his expenses.

And there’s a whole bunch of you guys out of the bay area. Who you are that make over 200, $300,000 shit. You’re only able to save about the same of as it’s a rigid here. The thing that we don’t really care about is this net cash flow. That’s all your income minus all your expenses.

And he said, he’s probably able to save maybe 30 to 40 grand per year. That’s pretty good, man. Keep doing that maybe four or five, four years. That’ll definitely start climbing up over 50,000. If you keep buying assets, that would be income.

 

If you’re a guy making over 200 grand a year and you’re not saving 40 grand, at least you got to take the belt somewhere. There’s something going on. I was just talking to a guy yesterday. I made up laugh because it’s I got five kids. It’s okay, that makes sense.

I will say I do have the benefit. I’m unmarried and I do not have any children at this time, so yeah. So you’ve owned some real estate before. Talk to us about how you picked that up. One of these is a house hat the first one that I inquired back in March of 2019 was a house hack.

It’s a duplex townhouse connected units. And the one side’s been rented out from the day I purchased it within an older lady and her son lives there. And that basically covers all of my HOA fees, the taxes and insurance on the property. And so then if I don’t have a roommate, then I’m basically just paying a mortgage and interest in principle, which would be cheaper than, and rent for the size of property that I’ve got.

I’ve had a little bit of difficulty getting roommates. The area’s a little farther than the energy corridor, which is where I was hoping to get younger. College-aged students who wanted to intern or take work duties there, but I haven’t seen as much interest it’s a little bit farther, but.

To hang out with. Yeah, exactly. I did have a roommate for roughly six months of the first year. And then I had one that moved in March of this past year and immediately lost her job afterwards. And so she left and I haven’t been able to fill it since COVID hit. Yeah, that’s cool, man.

But I would say at five, 10 years, you probably don’t want to do that type of stuff. Are you looking to move out or what’s the next month or so about another single family home to here. Yeah, so this one was a, I would say a home run for me. I bought it in July from a wholesaler, used hard money on the deal.

Basically bought it at one 15, put $39,000 into it. And it praised at 2 25. And so I was able to refund it. At a 30, 70% loan to value with a 3.625 interest rate. So it’ll cashflow roughly what like 130 bucks a month. And it ends up being I’m trying to remember the number. It was like a 12% return on equity, plus a, like a F I ended up with you include the debt.

Capital appreciation or the forced equity. I ended up with a 413% return on my investment. So we look at it in terms of that’s all nice and find a Debby after the smoke clears. But what is the, I don’t really pay attention to, oh, it’s cash flow. It seems counterintuitive because we’re all about simple passive cash flow, but I’m assuming your cash flowing on it.

But we look at the net equity here, how much debt equity is sitting in there. And it’s not too much. You could probably pull some of that out or re leverage, but I think this is a good foundation to keep building more and more. And you’ll see in the next two, three years, this will definitely peak over a hundred, this particular property, but. What’s the plan with the house hack. The plan is I eventually want to move out. And so I’m currently looking for another property that I could house back. So I’m looking for a one that’s closer to the center of the city and one that I could live in, like an ADU or a garage apartment, and then get a single family loan on.

Yeah, it’s just a rambling man making money as he moves around town. That’s awesome. Do it now while you’re younger. Yeah, exactly. One thing I would say if you had a little bit of equity in there, like it’d be 60 or grand or more, or maybe you’re there. See, before you move out, maybe try and be leverage the property, squeeze all that out.

As an owner, occupied property, the freight before you moved. Yeah, just a squeeze that lemon right before you lose that opportunity. But right now it may not be worth it, the payload origination fees or that probably not. And honestly, the neighborhood’s a little rougher than I thought it was going to be when I bought it.

And so I’m not sure how long I intend to hold this property. If I can move out and potentially sell this one, I would look, I would probably look to do that before refinancing it. Yeah. What is your thoughts on this whole birth thing? Is it just, are you going to keep doing that in a few years or something you’re going to grow up?

Oh, when your network gets over a certain point? I think I would probably after a while, I’d want to get into more of a passive side, but it’s just at where I’m at to shell out 50,000 in cash. It takes me a very long time to save up for that. And so then I’m doing a deal every year and a half at the, really the earliest.

Yeah. Right now it’s taking you what about 12 to 15 months to save up 50 grand right now. And then that would be a significant portion of my network into one deal that I’m just handed off the money to. But talk to your buddies a lot. Yeah, exactly. So this was my first one doing like a major rehab.

And so I actually didn’t mind the rehab process. I found a really good contractor. He’s really honest. And like he found some things he did not charge me or he finished in the timeline. So with the current job that I have in the flexible hours it’s not that big of a deal. If I need to take an afternoon off and go look at it.

The property or go out there and do my checks on all the repairs. So for me in the time being it’s actually probably the best use is to try and use the burn method to generate equity. Cause it’s, once you have the equity, it’s easier to find cashflow than to take the cashflow and create equity. Yeah. You got to start a fire right now.

You’re just trying to get a spark boy with the burgers. But I would say. Richard’s different than the average person. He’s got a couple things going on for him. Number one, he’s local to the area. So he’s able to do it. He’s not some guy out at California, Hawaii for a property in Kansas city for goodness sake.

And secondly, Richard’s a smart dude. He’s a freaking chemical engineer. He’s in like the contractor, the builder, kind of role. It’s not just some it guy that is trying to manage remote work. So that’s another reason why I’m successful at doing this. Yeah, I definitely would’ve said it would’ve been, it would’ve been very challenging to do that project if I wasn’t in the area and being able to drive out there and check on things and just do the proper due diligence, I would have had to put a lot of trust in them.

If I wasn’t doing it locally. And also one thing with the Houston market is there’s a wider variance in the prices. You can find some pretty inexpensive houses and then you can find some really expensive houses. And so it really benefits the bird because you can generate a significant amount of equity, but it’s harder to cashflow, I would say in Houston, single family houses, but you’re doing what you can work with, right?

Like you’re you just happen to live in Houston and move around. What’s your geographic blends? I definitely like the warmer area, but I’m not D definitely tied to Houston area. I’d be open to other markets or other areas I used to, I grew up in Illinois, so I’m from the Midwest. So we’re going to look at your deposit, your sick, your security deposit, or your savings deposit, checking account.

You’ve got it scattered around. We don’t really talk about this type of stuff, but what’s with chase bank, man, I get into a credit union. No, so the, I just had the chase bank from when I went to college. And so I had a couple of those accounts open and so I just opened a second one when I started saving for my rental property, but look into there’s some savings accounts.

That gives you like two to 3%. They’re called a rewards checking accounts. And I did this for years. Like you have to do like an annoying 12 debit transactions per month, then log in and do these statements. And I would do this for years where I would go to the gas station and call my stupid debit card 12 times.

Oh really? He was incredible waste of time. Back then the interest rates are a little bit higher. Three to 6%. Okay. Jess, I was doing that for 10 years and I just decided like a few months ago I was going to stop doing that stupid stuff. But for you, every little bit counts. Yeah.

I was getting 2% on the discover account. That’s where I had most of my money before I bought the bird property. But I had issues with the payment system. They didn’t, they stopped letting me use Zelle. And then also with that, the interest rate dropped from two and a quarter down to 0.6. Yeah. You gotta play around with it.

Cause like you can also do like little 1 cent PayPal transaction. Yeah. Or another novel is doing a Venmo sometimes fill out about info to debit transactions, but it all, it’s all over the place. You just have to do it 12 times and see if they give you the higher interest rate, but nothing, the old going to the gas station, pumping gas for 36 cents every single time.

But you can’t do that more than three or four times in a roll, if not on the phone, call on your cell phone and say that. That’s happening. So I don’t know, man, I am telling you to waste a lot of time, but I feel like you liked that type of stuff. So whatever floats your boat or there’s commodity direct is another bank account that gives you 1% or 0.6%.

That one you don’t have to play stupid games. Okay. Co-morbidity Comenity and there’s new folks. Is BlueVine is what I’ve been using for business checking accounts. And now it gives you a Dick 1% and that one, you don’t have to do any stupid 12 transactions per month. Okay. So try those two.

But chase is nice because you can wire stuff. Yeah, don’t do that. The Wells Fargo one, like I’d signed up because they gave like a $400 sign on bonus if you hooked up a direct deposit and stuff like that. Yeah. I know. It’s all the time wasters.

Yeah. Okay. You got some term-life it’s this pretty small. Yeah, that was one. My parents took out on me when I was a infant. Yeah.

You’re screwing around with Bitcoin and ground floor is like the startup. Yeah. So the, so it’s like hard money loans. They let you do a very small dollar amount. So with that, like three, just under four grand, I’m invested in roughly 300 different loans. So it’s pretty diversified. And I’ve been getting a 10.8.

Interest on my money. Is that pretty secure or what’s your thoughts on that? So far so good. I haven’t had there’s I’ve I think we’ve lost money on three of the loans that I’ve done so far. And so I started out and basically what I do is that every time I get paid, I put 50 bucks into it.

And then I’m just rolling any money that I’ve made. So I’ve made roughly like 300 bucks over the last like year or so. Okay. I’m looking at the website now. So like they, they diversify it for you over a whole bunch of people. No. So you invest in the individual loans, but they have a very low minimum investment.

So you can invest in a loan as a little as $10. What do you, what’s your increments? How do you break it up? So I just do $10 on all the loans. And now I’m starting to get the point where I. I’ve been putting it in every loan that they basically have. And then I’m starting to get to the point where I’m putting $20 in.

Are you, if I move, sorry, go ahead. Are you cherry picking like the better paper because they grade on a, B and C, so I tend to start with the, and that’s how they also do the interest rates. So I typically am just putting it in mostly the C and D, which is 11%. Normally or higher. But but when I first started, I was just putting them in everything.

And I had just as many loans that like were in category a default as I did in category D. So I figured I’d go with a slightly higher interest rate. Yeah. It looks cool. If I were to do this, I would go to more than a and B type of graded paper. What’s the rate for what’s the rate for AP. So the lowest they’ll go is like 6.4, but like they’ll have A’s that go up to seven and a half.

And then BS will be from like seven and a half to nine. And then CS there’ll be anywhere from nine and a half to 11. And then anything higher than 11 D yeah. Occasionally you’ll see a year and a half, but that they get up to 17, but that’s the highest I’ve seen. That’s cool. I, what I don’t like about these crowdfunding websites is like the broker dealer, the guy administrating, all this stuff is making a huge cut, like huge.

So they’re taking a lot of of the profits on these types of deals. So like for example, if a B class node is giving you 6%, it really should be paying out 8%. A quarter of the profits, but yeah, if you can diversify at school and it’s probably fun too. I bet it’s why you’re doing it to this.

Yeah. I started doing this when I, when I first got into financial independence, like I was like all gung ho. I made an offer on a property and it, I didn’t end up getting it. And so I didn’t have anything and I had to, re-sign a lease for another 12 months. And so at that point I was like I’m not going to be able to buy a house anytime soon.

And so I started doing this as a way to earn some extra money and I’ve just kept going it over the last couple of years. Yeah.

They do have an IRA form. So if you wanted to invest through an IRA, you’re able to do that as well. The downside interest is all ordinary income, right? It’s yeah. It’s interest income. Yeah. But you’re doing also HP, which gives the 10%. What, why do you do grout for, is it just for diversification or you want a better rate or what’s the motivation?

It was just I’d started ground four before I was able to invest in HP. So I wasn’t able to, Jared told me about the 2015 fund, but it was already closed. And so then I waited until they did the 2018, the HP servicing one. But HP probably gives you a better rate than there be glass paper. Yes. Why are you still thinking Ron Flor out of curiosity?

It was just more habit. And also I hadn’t seen the returns realistically from HP. It’s all one company. So I didn’t, it was just more of one partnership if something goes wrong. Yeah, no that’s yeah, that’s good. Yeah. Should I just say diversification, even though it’s a lower rate.

Yeah. Way we do it. I would say the only thing is just as your life gets more complicated and your net worth goes up some better to simplify it. But yeah, you’re learning a lot during doing all these little things. That’s all I did it. I did a whole bunch of stuff that I wasted my time. And Laura, on the topic of wasting time.

What about trade lines is going around with that? I have not. I looked into it a little bit, but I was. A little risky. I don’t know. It seems a little different. I don’t want to get a car consoled. I swear by it, man. You’re making a lot, like you got 11 grand and this type of random stuff that’s comes out to a thousand dollars a year.

Give me a break, man. If you have a credit card, you can make that in yeah. You could probably make that in a year, which just has one credit card with okay. I do have a decent amount of roughly 50,000 in credit card. You need to have the car older than a couple of years.

The longer, the better that’s the jail. I think I’ll be coming up on two years coming up, January timeframe for several of my cards. Yeah. So if you guys want to make, I made tea, I make 10 grand a year during that silly hobby trade nights. If you guys are listening, check out the I-Corps simple, passive cashflow.com/trade lines.

There’s a way to be safe about doing it. But yeah, just, I would say, just learn about it, but that’d be a great way that you could make another five to 10 right there. And that’s big for you, right? Because every year you’re making 30 grand that augments your savings 20%. Yes. And then you got some, your deferred comp TRPs here.

Are you contributing any more money to your retirement 401ks? So not to the 401k or the IRA, the Roth IRA. I’ve only, I still contribute a little bit to the HSA every single year. And I also get a company match, so I come January, I’ll get a thousand dollar bonus just for have an HSA. And then my, the current pension is I have no control over that.

The 5% interest rate on the current balance is what I do. Yeah. Awesome man. Got it. You’re on the right people that think the stuff is garbage. One thing that’s nice about the fidelity, the 401k, they were at my firm, my older, my old company. So I have access to all those funds if I needed to. So in the back of my head, I keep that as a true emergency.

If I lost my job and I needed to keep things running, that’s what I keep that in there. Cool. Cool, great strategy. Most people are there listening. I would say 80% of them are still on the fence. So withdrawing from their 401k because we’ve all been brainwashed. Yeah. Maybe if there’s any kind of words of encouragement there or epiphany that you saw that ultimately made you, I know you had the right people around you that kind of took the poach.

You bought the truck. Yeah. It’s definitely hard turning down the match and what I really stopped was when I switched companies and I just didn’t sign up for the next one. And that was how I jumped off. But it’s definitely not easy. Like I really had to commit to the real estate at that point.

So what is your current company’s match now? So they will do one-to-one up to 600. And my previous one would do a 6% on the first eight. So they would do one-to-one on the first floor and then half on the next floor. Yeah, I was talking to that guy yesterday. Boeing does one, one for one up to 8%, but I was still like do the math man.

It doesn’t make sense. You’ll cross over probably a few years ahead. If you just asked the money, I grew up pasture yourself. And it just depends on what you’re limited on. Yeah. And I’m okay. Like doing the match too, but once you moved jobs, get it out. But that’s another problem. People stay at their jobs a long time, which is pretty rare these days.

Yeah. Cause that was one of the things I did look at doing if they offered in-service rollovers, but both companies I had didn’t offer. Okay. Are you guys, a lot of the younger guys that you guys hop around jobs so much that yeah. Just put it in, get vested and then pull it right back. And we changed companies.

Yeah. And that’s part of the reason too. That was an easier decision at my new company. You don’t, you’re not fully vested on the match for five years. So I was like, I don’t even know if I’ll be here for five years. And so to me putting it in and possibly getting 20% of the match, wasn’t worth it. What are you?

So you said, great idea. If you guys haven’t picked up on that is he’s using this money as its emergency savings account, but what are you, what do you have this stuff sitting in? Oh, index once. Okay. Like a Greek Vanguard 500 type of thing. Yeah. Different mix of whichever one they offer. So yeah. Why not do a money market?

What was your thought process? Or like a, something way more conservative or semi-conservative.

I still it’s. I just left it in. Cause 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 on. Yeah. It’s keep it on red mentality. Just let it ride. Yeah. Significance. No, that makes sense. Makes sense. And also these are all logical and with my mindset too, I’m not going to ever run my bank.

Zero, like really low to invest at 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. Yeah. And all this stuff for you. Like I’m getting really nitpicky because you’re not working with too much.

But this is the foundation for when you get over a half a million, then you won’t really care about all this stuff, at the year to tweak this, maybe think about it. 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 semi to get it. Number two, your tax bracket is probably a lot lower today. So you want to pay your taxes on it today, Dave, in the future, number three, where this country is going, taxes are going to be going way up.

Okay. What a lot of people don’t realize is number four, get 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 syndications to get of the simple, passive cashflow gravy train, which is all about lowering your W2 activity, come and paying little to no taxes.

And you don’t get that opportunity to do that. Yeah. You’ve got to get real estate professional status at 750 hours, but 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 broth, cause you already paid a tax on it.

So it’s not really that big of a deal. And at least take out the contributions not the gains. Cause you take out the contributions. You don’t need to pay the penalty on that 10% penalty. Oh, okay. 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.

Yeah. But if you have to increase it, we’ll then put money into your 401k via the match. Let’s work backwards. How much of emergency savings do you want to have? You have 37 grand right now, realistically. So the pension is like illiquid, so I wouldn’t be able to get that.

So I have roughly 30,000 in there. I would want at least probably 20,000, because that would give me roughly nine months of if I lost my job and I had just made an investment. Okay, cool. And that number everybody’s different. You’re basically picking that number out of the sky, but let’s go with that. You want about 20 grand in there?

What I would do, I’m sure. More than half of this is contributions. I’ll take that out now. And then maybe in the next six months you replenish, maybe even before the end of the year, you do a catch up a deposit into your 401k and get that match to replenish that, whatever you take out of here and put back in here.

Okay. And then this. I would just get rid of it. Just cash it out. Cause it’s trying to simplify things too, right? At the same time. Yeah, no. So I had actually used, so I had opened that one when I was co-oping to start investing when I was still in college and I actually pulled out the original contribution for the down payment on the first property.

So all of that money is gains, have zero basis. Yeah, I would just get rid of it. It’s just, you don’t need another stupid letter showing up in your mailbox every month, every quarter, simplify life. Of course, I’m telling you to do this because you’ve already shown proof of concept for what you’re doing.

Most guys are still at stage one, but you’ve I feel a little bit more comfortable pushing you in closer to the edge, but you got to decide what you want to do, but that’s a good point. And then student loans. Lucky you don’t have too much of it, but tell us a little bit, like where you started off with Ben and your strategy to get to this point.

Yeah. So a little bit 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 me. Extremely well, I was getting 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’d 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 it had been paying down my car loan. Yeah, man, like what’s life without a nice car,

a guy getting the financial independence. So yeah. So 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 going to just going to make the minimum payment on all of these loans was my plan and then take the extra cash and invest it.

Yeah. I never liked the cars. So you get a nice car. I would say, are you a car guy or is it, it was just, I didn’t want to always have the crappy car. And so I yeah. A bunch of my friends got nicer cars and that I wanted to keep up with the Joneses and it was a mistake, but I honestly think it was good because it prevented me from buying too much house on the first property.

Cause I could have gone to the bank and said, Hey, I just have a student loan payment of 150 bucks. And they would’ve given me a loan for, I don’t know how much, if you’re a car guy. Lease is what I say. Cause he be getting a new car next year probably, or this year. Another reason why not all people talk about it, but the reason I do that is write it off to the whole thing, these payments, as opposed to doing this silly 50 cents.

So yeah, I don’t do the mileage personally because I don’t drive that much. So it’s 50 cents a mile. It’s like worth it to me. Cause I don’t drive anywhere. I don’t sit on traffic, but you might, but know when you get, if you’re a car guy lease. Okay. Yeah. I’m definitely not a car guy. This is more of a, I wanted to keep up with the Joneses.

So that was my one main mistake. Not stay single the rest of your life kind of guy. Yeah. So I, my, my plan is to just keep the car cause it’s a decent car and yeah. Run it until the wheels fall off. So yeah. Yeah. But these student loans, they’re so low to, you said you paid off some of the higher ones and it’s such a small amount in a logically.

You just keep paying it off. But at some point, just knocking it ahead just to simplify your life too. Yeah. There’s a lot of this. It’s just finding a balance to pitcher your highest and best uses. This stuff. Yeah. Not screwing around with acorns or doing full transactions on your debit card. Exactly. And I realized that too, with that property, it was a little bit scary going through and taking out the roughly 13% interest rate loan to do all the work. But once it worked out, like it was oh, that was all it was. And I’m just looking for the next. Yeah. And that’s where trade line comes in.

Right? Two trade lines is like five, 10 grand a year. For a little effort, I think that’s going to be a big thing for you to help them speed this up. That definitely can get you up to probably about a house every nine months to that. So this is how I see your started progressing. You just keep buying a few more of these, add a few more properties on citizens, real estate or.

Spreadsheet. And then probably that I’ll take you out a few years and then maybe you dabble in some syndications or maybe you really like this stuff. But I’m suspecting, you’re probably going to be a lot more busy at your job somewhere on your five and 10 in your career. They expect you to take management roles.

Which you may, I don’t know. What’s your thoughts on that? Are you going to take that progression tracker? Yeah. I’m planning on being out of there by that point. So yeah. It’s not your gig. Yeah. I think I’d want to go find something else to do by the time. So five years I’d be 32. That’s what I’m trying to figure out a way to do it by then.

Yeah. That’s a, you just have to find a balance in life, right? I’m sure you’ll make a little bit more than seven grand a month and that’s all you really need. You can keep driving to all these, but if you want like event later, you’re going to have to level up. Yeah.

But is plenty getting into their net worth of 200, 200 grand is the hardest part. I feel like it’s just now you’re on the track. Probably net worthwhile, just you’ll see a half a million probably in the next three years. Again. Yeah. And if I could do a one or two more burrs, like I would easily be there at that point.

Yeah. Then maybe two to three to get up to a million. And then you’re off to the races after that point. Yeah. And for example, I would say about a hundred thousand of that was within the last four months, just between my salary and then completing the Burr. I generated $70,000 in equity on the Burr alone.

So I basically made my year’s worth of salary. By doing that one project. Yeah. Why would you want to take a manager role, that deal. Exactly. Rather do some straight lights. Yeah, I guess I got to check out your course a little bit more, but yeah. Any other questions or anything you want to talk about?

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 so 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 in, into the lake. No, this is this 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.

Then just jump 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 didn’t even invest their money in it. They just, I don’t know what the heck they’re going off of.

A referral is great, but it’s not as good as like a real referral where somebody is actually investing money with. I got hurt a couple of times where investing with that silver level referral. The 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 Rio or whatever. Yeah, no, and actually one of my, my, the person I use as an accountability partner, he referred me to a property manager and so he’s 30 and he has 30 properties of his own and he manages now 50 properties all with his own company.

And so that’s who I’m using. So I treat him as a pseudo mentor as well with how he viewed the bird. But that’s, I think, you’re different than most guys, your ability to do these burgers. Number one, you’re a smart engineer. It’s not, I think that’s not most people and you’re local too.

So at some, it’s probably a grind for you to do this. And so at that point, it’s to get your friends to stop doing this at some point you’re the one who’s going to dictate. But maybe, I don’t know. I don’t get the sense of that. Like you, this doesn’t really get your blood going. It’s not fun.

I don’t see you doing this for a super long time. Yeah, no, I can see. And I tend to find myself I get really focused on a certain area for a couple years and then I’ll get bored with it and then want to move onto the next. Yeah. So let me ask you this. If it’s not your career, And it’s not flipping a lot of houses to inflate your ego.

What do you want to do in five to 10, 10 years when you’re financially free and you have $6,000 of passive income rolling in every year? Yes. I definitely want to figure out a way to fix the education system. So I, cause I would have been a teacher if I didn’t do engineering or teaching paid would engineering paid, but I definitely think our school systems could use an overhaul and figuring out a way and doing a proof of concept.

The being financially independent would give me the time freedom and the resources to figure out how to do that. Teach financial financial education or just some other subject or, other subject, but it would have it would definitely be more of a life. Stuff, not so starting a business entrepreneurs, like using the science, using the math in real world situations, just not a math problem to figure out how to do it.

So I’m not, I don’t have it quite lined out exactly what I want to do or how it would work. But I definitely would, I think our school system severely limits. The growth of a lot of people and you have to do a lot of unlearning once you graduate. Yeah. Fortunately the people teaching it are products of the system.

And yeah, and I’m not blaming the teachers. They’re like, they’re doing their best and they sacrifice a lot. And so I just, it’s hard to teach what you don’t know. So yeah. I’ve tried to go back to some of the local high schools here at my old high school and let’s see if they will.

Somebody to teach this stuff, but they just look at me dumbfounded thing. Are they thinking I’m trying to sell life insurance or something like that. But I’ll let you know how that goes, but I’m not having very much luck on my side, even though I’d like to, I’d like to write the right, the wrong in the world, just like yourself.

But I don’t know. It’s frustrating. And people need it yet. People are. Open-minded to it. And I’m getting to a point where I’m just tired of it all. Just like whatever guys, numbers, speak for themselves. And that’s what that net worth line is not to get sound egotistic, but it’s that’s the score, right?

Who’s figured it out. Who has the best ideas on how do you build a career, how to use the money to grow your network. That’s not everything. That’s just not how the system works. You’ve got to go to school. You got to go get an education degree. That’s what they want. That’s the sound system still.

Yeah. So now that, and then it’s just helping other people. So giving back, whether it’s supporting people in disaster situations or being able to do things that you couldn’t like, that’s what, financial freedom would give me the ability to do that, where it’s more difficult at the time.

Yeah, it’s just going to have to make more money. And so the, money opens doors, I think, if you can brand yourself with the right authority, which you have to pay for, it can open up those doors where you get the authority to help out people in that manner to get past the gatekeepers.

Yeah. I’ll let you know, man, trying to figure it out.

All right. Appreciate it, Richard. If you guys want to do these and participate out there into the free world join our investor clubs, it’s simple. Passive cashflow.com/club. , we’ll see you guys next time. Thank you.