https://youtu.be/8n7Hm-Ru070

Hey simple passive cashflow listeners. Now on today’s podcast, we’re going to be doing a coaching call with a long time ago, investor. And we’re just going to call him Henry in this case, if you guys haven’t heard of this acronym, Henry stands for high income, not wealthy yet, but he’s certainly accredited nowadays.

 

That’s for sure. But I think he is a great role model and this particular gentleman has been a great blue  guy for us in our hui investor group. Most of our investors are in their forties and fifties, but they have younger kids finally going to college and that’s really the benefit of our mastermind group.

 

And if he were to come up to our retreats, they get access to these kinds of Henrys, these high income, not wealthy yet, guys that work for Amazon, Microsoft making a button book 50 under $150,000 out of college. And the world is at their fingertips. If they can find a way not to get caught up in the rat race, just like all the other friends.

 

But before we got to that, Just had a taxi and sat down with my guy and just wanted to go over some takeaways I had. Now if you guys want to get the full tax simple passive cashflow guy, you can go to simplepassivecashflow.com/tax. But I just want to list down a few of these takeaways that I had. So first, cash donations, $300 per person.

 

A hundred dollars per couple. Now this is important above the line. You can take up to a hundred percent of your AGI, but this goes away in the year 2022, where it goes down to 60%. So you might want to think about doing it every other year, perhaps number two here, 50% of your Beale and beverage deductions is typical.

 

But remember. In the year 2021 and 2022, it is a hundred percent. So that is going away after this year, 58 at 58 and a half cents per mile. For your mileage, number four here, equipment purchases in the year 2022. This goes away in the year 2024. Just keep that in the back of your head. So it’s been a couple of years since the fifth point here.

 

Everybody was talking about the 1031s getting killed. And I think this is the same thing that happened several years ago when we’re doing the same fire dance, but it’s just an example where there’s a bunch of games being played. And I think a lot of that kind of marketing by CPAs to get that using fear tactics free  will.

 

Clear minds typically prevail. Although I do think. In the future, it’s going to get harder to pay less tax. And that’s why you need to get on this now and understand how the games are being played. Number six here on January 1st, 2026, the tax rates will go back up as of right now.

 

They’re a little low. The 12% tax rate goes back up to 15%. The 22% tax rate goes back up to 25%. 24% tax rate goes up to 28% and I’m a person always asks why reasonable behind this is, I think this came about, Trump put this in, or this was a stimulus plan package where the tax rate would temporarily again, til 2026, all the tax brackets are brought down, maybe a few percent points across the board to give people generally some tax relief, which means well, and this is where you have to take ownership over your old plan. If the taxes are going to be going back up the next several years now is the time to be potentially jailbreaking your retirement funds or what I call leaking that out slowly.

 

Now, if you want to go over this in a quick onboarding call with me, go and sign up for the hui pipeline club at simplepassivecashflow.com/club and you get one free, quick coaching session. We can talk about this very thing. How will your taxes get impacted and how to best strategize to take your retirement funds out or check out we’ve done a couple of coaching calls on it when you do sign up for that list.

 

You do get access to all the past coaching calls too, along with the one where we’re going out today. Second to the last point here, 1099s will be reported from Zelie cash app, Venmo, PayPal go fund me. So if some of you guys were keen on the fact that all these pay apps weren’t going to be telling you to the government, what you were making, or you could get some payments in that way without paying taxes on them.

 

Shame on you. You shouldn’t do that. This might be kind of smart. But now starting this year, those apps will be sharing that information to the government for whatever it’s worth. And this probably had to do with, several years ago, they started to ask for social security numbers on LLCs. This is all part of the government getting more and more information  whether it’s right or wrong, who cares it is what it is folks. So get used to it. And the last point here, the 1040s  are due on October 15th,  2022 not in April. I don’t know why everybody thinks they’re doing April.

 

You need to file and extend in April but be like all the cool kids that just extended out to October your tax preparer will thank you in the long run. And they will be less in a rush and they might not want to just do it the easy and quick way when you do it like that, you can also see the latest tax changes in the tax code unfold through the summer months.

 

And some of these points that I made earlier today, you’ll be able to make better plans. And some people think that giving the IRS six less months to audit your file is prudent too. I don’t know if that’s fact, but look, just with being able to see what unfolds ahead of you in terms of which way the tax code goes.

 

I think that’s reason enough to, Hey man, just file it in October. Again, I think most of you guys listening out there are good little boys and girls like, oh, I first thing was, Pay our taxes and fire taxes when you’re supposed to, which you, they brainwash, you think it’s April, really that’s when you need to file.

 

But doesn’t mean when the 1041s  are actually due, which isn’t again in October. So be like the cool kids. If you need a new CPA, now’s not the time to be looking for one. Probably we want to be looking for one after the tax season. Amy, April, they’ve got most of the lay people doing their taxes at that point.

 

And then March, they’ve got to do all the LLCs and corporations at that point. So that’s a very busy time. In fact, it’s already busy for them right now and might want to start hunting, interfering in May or June. If you need  a referral shoot us an email team@simplepassivecashflow.com.  If you haven’t joined the club and checked out all the great information that we have behind the members portal, which you can only get when you sign up at simplepassivecashflow.com/club, you can join us there.

 

And, thus far we’ve raised over $130 million from investors, just like you from our group, which is crazy to think that, I’m not gonna mention the name, one of the big crowdfunding websites out there. They’ve raised about a quarter million dollars of capital, a little bit more than a half of that, which is not bad for a little website, a simple passive cashflow created several years ago in 2016, actually we started this, and if you guys are new to the whole private equity, crowdfunding syndication,  506B and 506C world, and go on Google on espn.com. The WMB amounts, a $75 million capital rate to eight growth strategy. And this is nothing new, right? This is how things are getting done in the world.  I’m not advocating for this investment. I personally wouldn’t invest in this.

 

They’re going to raise $75 million to pay for a bunch of staffing costs to push the WNBA forward again But this is just a great example of something that is right underneath our noses that happens all the time where private, wealthy individuals. will  fund a project and become part investors within this little country club deal they have going on. Again, we’re not giving any legal or financial advice or investment advice.

 

You’ve gotta be crazy to take some word or some guy from the internet  and that’s what we tell you guys to think for yourselves, right? Again, I’m not investing in the WNBA personally, but just wanted to point that out there. And if you guys like the show, please rate and review, it’s been awhile since we asked for that and enjoy the coaching call

 

 

Hey, simple passive cashflow listeners today we have our friend Will Rogers. We don’t know if that’s the exact name, but that’s the name that we’ve chosen for him today. He is a simple passive cashflow Hui OG here. So here’s this guy  when we  started the podcast we would do organic events, pop-ups and we stopped doing this because we realized whenever you put real estate on any kind of local REIA , this is when I was back in Seattle. Bunch of RIFRA comes in, you know, people who don’t have any money. And, but this one dude came in and he made, what were you getting paid originally?

 

Like 150, 200,000 at your tech job. Did you have a beard at the time? No. I grew into that. Yeah. You grew up, but yeah, you, you are like what? Just out of college, high paid salary. They call you guys HENRYs. I don’t know what the acronym is called, but high income but  not high net worth yet back then. Higher earners are not rich yet.

 

Yeah Henry we’ll just call you to change my name from Will to Henry. Got it. But net worths slightly over a million, but once you continue the story for us. So I went to school on the east coast. I graduated in 2016 and then I moved out west for a job to become a Henry. So it was working for Amazon. It was a very low starting position entry level. And I was a software engineer or programmer, those of you who are not in the tech industry. And I’ve read rich dad, poor dad because  I was probably like three weeks into my job. And I was like, man, like I spent four years prepping for this thing.

 

I don’t feel like I’m making an impact that didn’t like what I was doing. I guess I just have a low pain tolerance cause I was the only three weeks in, but yeah, I just, I read rich dad, poor dad. And then I started scouring meetup, like meetup.com, like the app. And I saw like a hundred different ways to meet up with people and talk about real estate because that’s the way I thought was a good way out.

 

Tried to do my own developments, but I wasn’t rich enough yet at all. And my income wasn’t there, the Seattle market was too high priced. So I just kept looking and failing. And finally I stumbled upon simple passive cashflow and specifically Lane. He was still here in Seattle. I think at that time he was trying to get rid of like 10 single family homes or something.

 

Henry likes the single family home. Steve. No, just kidding. It was kind of true. I mean, you, you said, Hey, you should start with a couple of single family homes. I got a few. And then you know, things make sense. We’ll move on to syndications. And I basically begged Lane to just let me jump ahead and just say, okay.

 

I get the single family home thing. I don’t want to be called at night. I don’t want to manage managers of, or properties. Can I just be in a syndication? Frankly, my net worth really wasn’t there yet. Because I had just started working. It’s just fresh out of college. The income, I think, was the only thing that really made sense, but it did take me some time to kind of nudge Lane  into letting me into a deal. We formed a relationship, got to know each other, things like that. And that was, yeah, that was 2016. So now we are here.

 

Back in that day, like their first couple years out of college. What was your top line salary? I asked this of everybody, what did you able to save like, and that’s kind of your velocity , how quickly you’re moving. How much of a cheapskate were you? You’re still kind of a cheapskate.

 

I am, I think this year is the first year that I decided to  ease up a bit. But yeah, when I first started, especially in Seattle, like these rent prices out here were completely foreign to me. I’d been in Virginia my whole life and, you know, 700 bucks a month in rent was pretty solid.

 

You get out here and rent is three grand and you’re like,  what’s going on? So I got as many roommates as I could. I actually had three roommates with me. We were living in a three bedroom and so one. Pair of roommates where it’s actually a couple and they shared a room and we divided up the rent and I paid as little as I possibly could. So I think my entry level was between, I think it was like one between 120- 150  and I think the first year I saved 78,000.

 

I beat you with my time. I was over a hundred  but, yeah, I think it makes sense. Save any money, but that’s all that really matters. Like if you’re a younger person or even if you’re older, if you can save 50 Gs a year, I mean, you’re going to get to where you want to be under a decade. I think I agree. Yeah.

 

Talk to us about, you’re hanging out with like a lot of people with a traditional mindset where. You know, a lot of computer programmer types, a lot of  ego is involved in those kinds of jobs or the way they invest. Maybe talk us through the struggles and the differences between the simple passive cashflow folks and those that peer group you’re stuck in.

 

The biggest challenge was upfront about converting. But then, you know, as any reasonable person does, they’ll look to their left and right. Maybe talk to their parents and say, Hey, is this doesn’t make sense? Things like that, but you’re right in the engineering sector, at least especially software engineering, people love optimizations, and they love thinking that they can dive in and do it themselves.

 

So it’s not uncommon for friends of mine to think of stock traders and lose an entire year’s salary just because they thought they could be, you know, a stock trader or it’s not uncommon to have friends of mine who really, just want to optimize their 401k as much as they can. And there they do a mega backdoor Roth and all these things.

 

And in my opinion, you know, they’re kind of like optimizing percentage points. So, you know, there’s not many people around me who would do something like this just because they’re busy, either micro optimizing, or they believe that they can do way better. And that stuff can get addicting and it can really feed the ego when there’s like that instant feedback.

 

Right. You make a trade and you get confirmed confirmation bias, I think. Yeah. A little dopamine hit and then he doubled down. Yeah. One of your first deals. Like we had fires and then we didn’t pay cash for like a couple of years to just kind of gummed up cash flow. But I think a lot of people, they don’t realize, like it’s kind of like a train or there’s a lot of slack, like the train might stop.

 

But things might be going well, but you don’t see that slack come out until the very end. For me, it was about visibility. Right. So if I understand that it’s recoverable and that the long-term business plan is still valid. Like who cares if, you know, as long as people don’t get hurt who cares if a couple of units burned down, if a tree falls on it things like.

 

Oh, the tree you’re in that one too. Yeah. I saw a lot of it. I mean, it’s been what, like, I don’t know, five years, six years. So it’s yeah, I’ve seen a lot of stuff. Yeah. Did I tell you on that tree one, we also had a homicide.  You sent up a news article. I wasn’t going to mention that here because that really scares people and thinks that we’re, you know, I don’t want people to think that we’re in a slump.

 

W we’re really not, but these things at scale will just happen. So, yeah, I mean, that’s why I bring it up cause we kind of stay away from the class C hairy stuff, you know, a little bit better clientele today. Personally, I think it’s a lot harder for you Lane to like manage those deals and make them happen.

 

But those are the ones with, in my opinion, like a lot of meat on them. But they’re riskier. Yeah. Are you doing any direct real estate personally these days? Because  some people will buy a few rental properties locally. That to me doesn’t make any sense, but it is what it is.

 

Right. They do it in better areas, but then they’ll go to us to outsource the hairy pain in the butt stuff with difficult tenants. And that’s the way they diversify amongst them. But the pay scale, I guess. Yeah. You need that. So Henry talks to the young Henry here. Let’s kind of build a timeline.

 

So you started this in 2016. That’s when we first met, tell us what you did and then maybe, you know, take us through the years of what you did. And maybe some of the lessons learned here. I think this is the best stage for you to kind of talk through it. And if you guys are listening to the podcast form, we have this in a YouTube channel.

 

We have the personal financial sheet up with the, the investment that you’re acquired, the cost of hoop at market value, etcetera. If you guys want to follow along in video format. I’ll probably be out of your friendly to cause you understand you’re very you have a very high EQ.

 

That is what I noticed most computer programmers, engineering types do not have that. Right. And I think from what I see of a lot of the engineers that invest with us, they’re typically not true.  You’re capable. Weller’s the technical, they’re the people who have some people’s skills, stepped in engineering sales roles,  and kind of gotten out of the trenches with that stuff.

 

But it’s just a takeaway that I’ve kind of seen from you and other engineers amongst the group. That makes sense. That’s a lucrative angle software and then software sales it was 2016. I begged Lane to get into the first deal in terms of a syndication. So basically I would be part of the limited partnership, the LP, and then Lane was part of the GP so he was responsible for bringing people into these deals. And then he was also responsible for vetting them prior to me. I mean, obviously I still have water. I’m responsible for my own money. Right. So I need to validate everything that Lane is saying and make sure things make sense, make sure the business plan is feasible.

 

I had to pick that up and learn it pretty quickly to get into that first deal. I don’t even think that first deal is displayed here, but I can’t remember what it basically is, any deals that are closed. I don’t think I put it here because the market value is now zero. The personal financial sheet is just supposed to show currently what you all said today, but I think you jumped in to a Georgia deal.

 

Maybe I think that’s it. Okay. It might’ve been, it might’ve been Joseph or I don’t know. Well, we’ll see. But anyway, regardless that was the first deal. Basically. I just saved up all the money that I could keep my expenses low. I liked the deal. I liked the performer. I was happy with the business plan.

 

It wasn’t what I liked about it. I don’t promise any stellar returns, right? I was, my, my general plan was to build up several of them. Kind of base hits, get a foundational layer down to, to replace my living expenses and then start swinging for the fences. So, you know, we can talk about that more later if we, if we need to, but that was the rinse and repeat attitude I had for at least I think the first four deals were just going to be base hits apartments.

 

Stable communities, population growth. I think I got into maybe one or two C-level deals, which I, I actually didn’t mind that our word problems, you know what I mean? Things happen, but that’s where I wanted to go. So yeah. And I see here, maybe we shouldn’t show this to folks, but like you got in at the right time, we were kind of getting started and you got in at the lower middle.

 

Done this cause we had built a relationship and I didn’t feel super comfortable with you flopping in 50, a hundred grand. But gone are those kinds of days because I’ll tell you what, it’s a crap shoot. Like, you know what I mean? This is a game of social investing both ways, right? Like I’ve met, I built a relationship with you.

 

You’ve come to Hawaii and hung out at the retreat. It’s been quite lucrative. I think both ways. Right? Investing. But sometimes when you bring in investors that under $50,000 are kind of interesting characters and you I’ve pointed this to you, right? Like, cause you’re on the fast track and you kind of get zipped by all these investors, people in their thirties, forties, and fifties.

 

I mean the way they wrap their mind in terms of investor mindset or just money scarcity, you know, ideal. Yeah. And it can, yeah, I think, I think what was important to me was understanding it from a root level, trusting you. And then understanding that all of my work was upfront, right. That’s really the key to investing in syndications.

 

Do all of your homework and then once the, once you send your money over that, that’s it, you’re an LP, right? You’re, you’re a silent partner in this. And if, if it goes bad, you didn’t do it. And so you can see here that I think I did at least a reasonable amount of homework for the Huntsville apartment. There’s one apartment listed on this sheet here where it says my acquisition or the cost to, to, to get into the deal.

 

It’s 50,000 and it says the market value today is 8,200. That’s just because we were waiting on that last little bit to trickle in. Cause that deal did finally close. So that w we, we still made a lot of money on that deal or, or more than 50,000 that I put in. But yeah, that’s, don’t, don’t think of that as like we lost 80 or 90% of the investment.

 

Yeah. And just to summarize for folks when he means, like going in on a base hit, stabilize, you know, light value add first, and then I don’t know if we kind of came up with that strategy for you to aggressively kind of move into more home runs. But then you kind of went and did some developments. Yes. So here’s the thing.

 

Lane  was kind of my foot in the door to the entire industry. And then I don’t know if he ever met any other real estate people, but people talk about it. Like people really love it. The community is pretty big and there’s not a scarcity mindset in the real estate community  that I’ve seen.

 

So, you know, talking about it, networking things I basically met other people who do what Lane does but in different areas of the world and in different asset classes and in different stages of those asset classes. I think most of you have the ability, cause you’re not married, no kids in theory, you should be able to take more risks AF but I think it’s prudent exactly what you did.

 

So I think this is a great blueprint. But then you kind of went into more of these developments where now personally, I’m kind of looking at New York development myself because New York, you got beat up, right? Like, heck this is the time to do it. Yeah. Yeah. And I, you know, I was really scared because again, like I did all my homework, I’d put the money into the development and then COVID.

 

Yeah. So we thought it was going to go bad, but then lumber skyrocketed and we had most of our places already built up. So now all of a sudden we’re looking at extremely valuable assets and yeah, I mean, I just got lucky there, I think. But it didn’t look good at the start. W what is your kind of general advice to these minds is like, well, what Ryan’s doing, or what I’m saying is like, if you’re listening to the podcasts and you really shouldn’t be using the podcast, Financial advice.

 

That’s just silly, but get in a few ducks, get in a dozen stabilized deal first then depending if you don’t have a wife or kids or spouse or whatever to worry about, and you’re, you’ve got a good stable job, then roll the dice depending where you are in terms of your mindset. Yeah. And it depends on, you know, make sure you have your emergency fund.

 

I don’t think I have that shown on this sheet. You know, make sure you have a year or two of expenses saved up. And then, you know, make sure that you’re not going to miss the money. And just, just keep like, keep working hard and keep putting money into it and, and guide the Henry’s. They can make hay now before they get married and they have to go and go to council with somebody else.

 

Who’s likely going to say no, like I got lucky, right? Like a lot of the stuff I did first was before. I got married and I got proof of concept from most of the people in our group. They’re married and they’re kind of getting started with it. So I totally sympathize, I may not have the best strategies or been through it myself or have experiences, but other people’s problems on Henry.

 

Well, no, I mean, I would say it is, but it’s also mine too. Right. I, I want to expand my network and I want to help my friends out and I want to show them the way, you know, in terms of real estate is, is a, is a really good thing. But the thing is, they only see what they want to see. So if you come to them with a pitch and you haven’t proven success, like you don’t have a proven success of, or track record, they’re going to be skeptical.

 

Right. But now if I tell some friends about this, they’re like, oh, well you gotta get me in, you know, I have like friends lining up saying, Hey, like, how can I get in? Can you connect any, this is how much I have, you know, but five years ago I was laughed at. So I see that it could be similar. For spouses or family members.

 

So let’s, you came to the retreat in 2019 and drank the Kool-Aid with everybody else. And I remember you were kind of just searching, right? Cause at that point, what was your network? Maybe half a million. It wasn’t that much. No, but you had proof of concept with this stuff at that point and you knew to take us back to that mindset where you thought you were going to be in the plans at the time.

 

And then we’ll kind of go through. The junk. So specifically you want to know specifically what you want to know, like take us through like the transition. Cause everybody hears about people who are starting off or kind of people who have already left their job, but take us back to just wasn’t too long ago that you were, I mean, you had a cushy six-figure multiple six-figure job.

Give it up. What takes us to. Oh, yeah. So basically how did I, yeah. Transition, transition into

that stage two, because basically the way that I thought of it was to get that base layer down. Right. And then once I have that base layer start taking more risks and that there are more risks in terms of real estate, but also in terms of life. So what, what, like, is it a number baseline? And it’s different for everybody.

 

It was, it was, it was a mill for me. I needed a middle one once I, once I had a mill, I left my $300,000 job and I am now, you know, I went to go make an educational product that teaches people how to get into the tech industry that took about four months. And then after that, I’m now at a small healthcare startup.

 

So you know, that salary cuts, you know, that’s everything. But it’s. It’s far more enjoyable to me. So you left, like, I don’t know. I don’t know what they call it. The big five tech companies. Exactly. Fang is typical. Yeah. Facebook, Amazon, Apple, Netflix. Google. Yeah. We don’t want to say who they are. They’ll come and find you on one of the big floors.

 

And you went from what salary? To what? After the transition. Yeah. That’s a big thing. Yeah. So this is so. Like I said, like why my safety net was so large of a million, I think it was because I knew the cut would be substantial. So my last year at my job, I made 300,000 and then I left into a, basically four or five person company to make this educational product.

 

I was actually just going to partner with them and bring my content to their educational platform. And, I had no idea what I had no idea what they were going to pay me. But we worked out a monthly kind of stipend that they would give me. And that was it. It was roughly 50,000 a month, but you know, it was only gonna take me three or four months.

 

So it wasn’t, it wasn’t close to three, 300,000 there. And then we also worked out a royalty deal that would kick in after we launched the product. And then obviously those, those monthly stipend payments with. Would go away. But yeah, I mean, that was risky to me because I mean, you know, I’ve, I, I met this guy online.

 

I literally just messaged him on LinkedIn was like, Hey, can I make a course on your platform? So it was, it was, it was a huge risk. And I didn’t know if they were solvent enough or anything like that, but just trusted them and went with it. It was a bit of a success, but now you’ve kind of, I mean, projects like that, it wasn’t going to come around.

 

But now you’ve kind of found that more long term. That’s really good. So this is a little bit more play. Yeah. So right now I’m at like the 180 mark for your salary. And then I get a half a percent of the company, so, but that’s all funny money, right? Like it’s, it’s, you know, until we get bought out or go public or.

 

Something like that. I mean, the, or leveraged buyout, you know, I mean, it, it, I’m not going to see any of that. So, basically now it’s like 15,000 a month from that place. And then I, the reason why I took this, I was actually like retired just cause like I had good monthly income from the royalty, and I had a good safety net and I don’t have many financial commitments.

 

But the opportunity, like I said, it’s just, you’re at the stage now where. You can say, why not? And you can risk something for a few months and if it doesn’t work out, just leave and then go hang out, chill and wait for the next great opportunity. So I took on this and, and now you know, I used to be like a software engineer.

 

Now I’m more of a leader across different organizations in the company, which it was that would have taken me years to do at my old job. Is it a resume builder? So I thought it would be but I, I it’s, it’s the only start-up I could find that actually has like enterprise clients that like they’re extremely early stage, but they’re already cash flowing.

 

They have enterprise clients, you know, six-figure contracts, seven figure contracts and. Crap, an existing P and L of profits or revenue. My goodness, which is, you know what I mean? Like that’s, that’s like a one in a million chance. So yeah, I’m actually extremely bullish. Yeah. So, I mean, from my point of view, it’s like your salary is a lot lower than what you should be.

 

Well, you’re kind of trading that sweat equity for a bit of asymmetric risk. This is the beauty of your situation if you take those kinds of risks. At this time. You don’t have a five $10,000 mortgage, although I don’t think you’ll ever get that in the next 10 years anyway. I hope not unless I, you know, get crazy and then lay in, you got to shout at me, it is a substantial pay cut for that asymmetrical upside.

 

In fact, my old employer did call me since I left and they asked me to come back and they wrote me an offer and. Stupid to say no, but, you know, I said, no, you know that was, that was between four and 500. So, most people listening are in the group. Would Bobby take that and just go rock on their butt and just do that for maybe five to 15 years.

 

But I think you’re a little bit of a minority in terms of your, I mean, your, your age too. I mean, much of your time too. Spear out with this type of stuff, but explain to us, like we’ve had this conversation before you have a bit of an itch, right. To kind of do something more meaningful. And I think this is because you’re a lot more experienced beyond your years.

 

And part of that is like, it’s not how old you are in my opinion, it’s how much time you have to think about random stuff like this. And I think that’s what financial freedom does. It gets you out of the day-to-day kind of get more philosophical. But, I mean, so you, you, I, if I recall you kind of looked at one time, Hey, why don’t I do something entrepreneurial right.

 

In the realm of real estate and then take us through that journey. Yeah. Can you refresh my memory there? I had like a hundred ideas and I got really distracted. Yeah. And I know we’ve checked in a few times in the last several years. I remember at one time, you’re like, you’re trying to buy some rental property.

 

You’re trying to do the turnkey thing or the burst. Okay. And I told you, man, you’re giving up your competitive advantage. You know, you’re pretty good at this computer thing, you know, don’t do anything other than computers. W what I didn’t understand is that you have to look at barriers to entry, right?

 

And you have to look at market knowledge and you have to look at track records. So I had a. None of those went for me when I said I wanted to go flip houses or I want to do a burn model in Seattle you know, there’s, there’s a trillion YouTube videos of that online. And, and really all you have to do is, you know, maybe you can wholesale your way there, or maybe, you know, you get an FHA loan, you put down nothing and you, you try to make it work.

 

But it still takes three to four years, I think, to actually build up what would be my equivalent current income. And so that’s an opportunity cost of at least, you know, 900, maybe. So. Yeah. I just, I think at the time I just didn’t, I disliked where I was so much that like anything sounded better. But yeah, I think that was just like where I was.

 

That was my mindset at the time was just like, okay. No matter the cost, I eventually realized that I just needed to suck it up. So, yeah. So I was thinking about this. I’ve been thinking about this for the last couple of weeks, as I always kind of ponder random things. So this concept is like being in the top 10%, 5%, 1%.

 

So like I’ve been kind of screwing around with my trust, right. Trying to find strange ways to pay off my kids when I die. One of those things is like, you know, the trust will continue to give you X amount of money to sustain a pretty decent life. But if you want the load, you have to demonstrate that you’re in the top one, five, 10% of the people that you’re doing.

 

So for example, I don’t know. What would you say in the computer programming world? I mean, you’re basically saying. We’ll give you, you know, in terms of trust, we’ll give you this monthly stipend or whatever, but, but if you want all of it, you have to prove yourself. Yeah. Okay. Or like, if you, like, for example, say you’re my kid and this is just hypothetical.

 

There’s no way I’m going to really write this into any kind of document. I’ll just break my trust. Right? If you came to the trust trustee and said like, Hey, I want to get at daddy’s trust fund and I want to do it. We would probably say, Hey, hell no, man. Like you’re like 50 percentile at best or maybe top 20.

 

Cause you’re kind of smart. Right. But then we would look at you as somehow needing to demonstrate that you’re really good at something. And the computer programmer. I don’t know. Maybe your top 10%. I don’t know. Right. But something, cause I think. When you raise kids, what? I hear a lot of people, as you’re trying to find, what is their penetration into one thing that has God given talent that they enjoy?

 

Yeah, my favorite mechanism for that is time. So, you know, you can try to plan for all these things, but like who knows what’s going to exist by that, you know, by the time they want it. So my, my favorite one and it’s not, not really a friend, but someone that I do know of. They have a trust fund ready for them at 35 and their parents cut them off at 18.

 

They made them pay for their own college. They made them, you know, pay their own way. So, basically the option is starved from 18 to 35, right. Or. Do something. And what actually happened is this person pursued what they liked. Because most of the time, people don’t want to be an artist or a musician, or they don’t want to take a risk or be entrepreneurial early, early on because they don’t want to start at 60.

 

Right. They want to focus on retirement, getting that bank roll up. So if you tell someone, Hey, you got to figure something out. I don’t care what it is, but at 35, you’ll be okay. Typically by that time they’ve settled into something that they. They’ve been, you know, 10, 12 years at it. And they’re typically pretty good.

 

They’ve done 10,000 hour. Exactly. Exactly. But what if in that case, what about if you have a situation where somebody is really smart, they’re just a little lazy and all they want to do now is wait until the 35 and we’ll smoke ganja and play the guitar. And they suck at playing guitar. How did they do that for free?

 

You know, how do they do that for free? They have to create money. So, okay. So you’re saying like totally starve them on everything until they’re 30. Yeah, then they get the mother load, you know, how they go off into the mountains somewhere and just it’s, it’s great. You know, you basically say your kid’s college, you’re taking care of your retirement’s taken care of.

 

But you better do something. So the college is not paid for. Wouldn’t be paid for, so they got to work through it. They got to know how much it sucks. Yeah, I’m sure you, you, you can, you can, you know, fiddle with it in the way that you want. Yeah. Well they have, but that, if they want to go to college, you got to pay for the damn thing and make the minimum payments.

 

Therefore they have to go and trade time for money in society. Exactly. Exactly. Yeah. It’s kind of a form of child abuse, potentially some good. See it like that, but I think it’s a forcing function. I think 18 is too young. I think 25 is too young. I think 40 fives are too old because now they potentially have spent because here’s the thing at 352, no one really knows what they want to do at 18.

 

Most people don’t know what they want to do at 25. So by the time they’re 35, if they do have this escape hatch, and they’ve really just been miserable for the last 10 years chances are they’ll go switch. And start to do some, okay. I should have done this now. I have that opportunity. If you wait till 45 they’re 20 years into doing something they don’t like potentially.

 

Yeah, yeah. Yeah. I like it. W w w I’ll think about that a little bit more. I like the idea. I like the idea that but going back to like, so in your twenties, you got to this point where you were, I think a lot of high, high net worth entrepreneurs get, they have a little. S network, they have means, and they have a network to be able to solve problems.

 

And I remember that was one thing that stuck with me that you’ve kind of repeated again, is I have the skillset now, what problems can I solve with associate? Because money comes to people who create value and essentially solve problems. Yes. And that’s exactly right. And so I started off at websites, right?

 

Like I would optimize my company’s website. Make them the most money possible. But now I switched over to healthcare. So basically, we’re optimizing the revenue cycle of hospitals. It adds value. I’m good at it. And people know. Yeah. Do you like the fact that it, maybe you are making something a little bit easier, faster, say somebody’s life or to, ah, so we don’t, we don’t save anyone’s life and I’m kinda glad we don’t like it.

 

It gives me the opportunity to kind of breathe a little bit. We’re not making medical devices. We’re not in the operating room where we’re not telling doctors what to do. We’re not making any recommendations like that. We are using machines. But it’s, it’s really just after everything is said and done after the patient has either checked out, right.

 

Like, or died. How do you get paid by the insurance company or the government? If, if that was the program that is under. And so we make sure that that happens quickly. Got it, got it. So investing wise, switching back to there, what is the, what is the game. Are you good? Are you taking more risks or, I mean, between the job versus investing, which one are you getting more risk tolerant towards or what’s your game plan investing minds?

 

This is, you know, this is part of partly why I wanted to take the call with you. I don’t know, you know, I have my base. I am doing something that I like. I think it could be lucrative enough for me to get to the next level net worth wise. But yeah, I don’t know. My most recent investment was like a fund.

 

Right. And it was a 20 pref and they just made subdivisions. Why? Because I wanted to make sure of my royalty income. That, you know, at least this would pad it a little bit. But beyond that, like, I don’t know. I don’t know, like I’m, I’m probably, you know, if I quit tomorrow, I’d probably still be able to fall back on like a hundred grand a year.

 

So, that’s enough for me. So I don’t, I don’t know what’s next. There are a lot of people in the group that are between five to $10 million networks. They are maybe a couple of decades older than. There were, you know, like the, not, not a kind of employee part of the business, but actually the entrepreneur that started it and they’re exiting or they’re at the point of exiting.

 

What I would recommend is again, come over to the retreat and then, you know, you’re good at drinking beers, interacting with people. I’m a fly on the wall. Right. I think that’s a good way to do it. You know, being the younger guy, it’s good to kind of just be in the flat in the wall, find valuable ways you can add value to these more guys with a little bit more experience with stuff.

 

I mean I’m part of more entrepreneurial groups where you gotta pay to get in. I mean, I would recommend finding those groups locally and then just getting around like high performers, successful people that make not 50 grand a year, but $500,000. Okay. You’re a leader of leaders, I would say, I mean, what’s five, 10 grand to kind of join a group like that, you know, more entrepreneurs.

 

Yeah. And that was, yeah, that, that, that makes sense. I think here, here’s kind of my point with that is like, let’s say I do go to the retreat. And I meet these people. They’re exiting, you know, most of these people. Or Don may, maybe they do want to go for round two, but most, most entrepreneurs that I’ve met that have an exit, you know, they’re, they’re at least recovering for a couple of years.

 

So do you think they’d be ready for some young gun like me to come up and say, Hey, you know, how can I add value to your current situation? Maybe we could do this or that. Do you think that what we received adds value right away, but like, I mean, just to start the relationship, but then maybe check in once in a while, but like, Maybe it’s different.

 

Maybe there’s a paradigm here between the people that, you know, that are kind of exited. Like a lot of those guys are in very asymmetric types of businesses, right. Tech stuff. Right. You know, like I think that’s where you come from. Where I come from, the people who are successful entrepreneurs, they built up really boring non tech businesses.

 

Right. They grinded it away and they just built it. And for them, they know that they can do it again. We’re subconsciously, I think the tech entrepreneurs, like you gotta love it. Lucky people just hit the lottery, basically. Yeah. So it’s different, right? And the smart people who are in tech that hit the lottery with that stuff, go buy a $5 million house in Bellevue Washington, and just hide out for the rest of their life and just hope that they don’t spend all their money.

 

But the entrepreneurs that I see a lot, the guys who have the boring businesses, they have so much like business building. That it’d be a shame for them not to use it and they enjoy the rush. So they would be a lot more inclined to jump back right into the pool. That’s who I’m looking for. And you’re right.

 

I don’t have that network, like I know people who got rich on Bitcoin or invested in GameStop or, you know what I mean? And, and now they’re, they’re fine. But you’re right. They retreat. So. Yeah. I don’t know. I don’t know people who already, I don’t know a lot of people, I know one person that comes to mind, but beyond that, like the network is pretty.

 

Yeah. So like, I mean, of course you’re kind of feeling people out feeling, figuring out where they are and the pecking order, but then you also need to identify, is this somebody who kind of built this slowly? You know, it’s just like a blue collar investment. You buy a stabilized asset and you force appreciation slowly over time, you know, rent, average rents go up $5 every month.

 

You know, sometimes it goes backwards $3, but it kind of powers forward. As opposed to that, that one, that the lucky lottery winner, which is going to know. I think the key that you said is the boring business. I love being bored. Like if I, if I broke down what our business actually does, like where I’m, where I’m currently working, you know, probably half the people listening would fall asleep.

 

But that’s where I want to be. I don’t want to be in an ultra exciting area because it’s probably saturated. Probably has people in it who will get really rich and then probably didn’t learn very much. You probably know people like this. Gamblers, right. Or, you know, I can go to Vegas with your friends.

 

You always have that one friend who doesn’t know what the hell is doing and he’ll, he’ll win really big. And then he might say like, I have this system, you know, it’s all about the system. I’ve heard the system, I’ve heard the system with stocks. You know, I’ve heard of the system of gambling with Yeah. Land flipping, right. You know, there’s, they, they feel like they have a system and they’re gamblers, but the people who you’re looking for, the people who like, not here’s my system, I just think every day I make my business a little bit better to either increase income minus expenses.

 

Yeah. So two different mindsets and the fallacy, I think for the gamblers that they start to associate the wind. With themselves, right? The self confirming bias versus the I, at the end of the day, you want to do something just like any worker, right? Any low-level salary worker, they want to do a good job is what I believe and no different than yourself.

 

You want to do a good job and be rewarded with the results. It’s the, it’s the cycle. You are a high performer in life and that’s what you want. And therefore that’s, I think that’s why you like to grow a business. It’s very similar. I don’t know if you’d like to grow gardens, like plant vegetables. My grandfather, he was a botanist, but that’s the closest, if I’ve ever come, I think you might really enjoy that.

 

Right. You plant it and you’d go walk away. You come back in a couple of weeks, month, and you have some vegetables. If, if that’s the case like that will confirm my. My analysis, if you like, I’ll get a vegetable garden on the roof there. Yeah. That’s Washington. I can’t grow very much here. Oh yeah. Yeah. You have to hit it when the time is right in the summertime.

 

Right. But I mean, that’s, to me, like, what’s your China, like you’re a young guy, right? Like you gotta find something that feeds this dopamine. Like you’re addicted to this, this thing. And I seem like the people that do. They’re just looking around for problems, the way to kind of go about solving problems.

 

I mean, a lot of them like, we’ll look into like, oh, let me go start a realtor thing. Because they like real estate. Probably not the best thing. Right. Because you’re giving up your advantage. But I guess identity, some people, their advantages building, hiring people, building systems. I don’t know if that’s your thing and you’re more technical.

 

Well, that is my thing, actually, like I think I used to be software. I wasn’t actually a great software engineer. But I think I am good at hiring the right people and getting a system down to, to operate a business. Yeah. You can know, that’s, that’s your, maybe your 10%, your top 10% in that category for your competition feel okay.

 

Gotcha. But if that’s the case, then I guess you could do anything, you know, at that point, right. It’s the people portion of building, building organizations.But yeah, I mean, I think that’s, I mean, is that what you’re kind of pondering these days, trying to find that next vegetable garden or that next thing to make it? I like the vegetable garden I’m in now with, with my work, at least I would like advice and expertise on where to grow. I think because my mindset for the past five years has been like, get the base layer income.

 

You know, get, get, get passive income, get all that going. I don’t think more passive income is going to move the needle for me, honestly. I don’t know. I mean, like, even if I double or triple my net worth that probably won’t move the needle for me, you know, I probably need to attend to X and, and I, I know how to do that with a business sense, right.

 

Because I can go work at startups, peek behind the curtains and, and help them out. But I don’t know how to do that. As an investor, here’s an idea. So this is, you know, what a lot of music musicians will do, or like YouTube stars will do if they realize that their fire burns out pretty quick. Right?

 

For a lot of this stuff, it’s the, not for long league, like the NFL. So what they do is they empower others, they become like a producer for some other young pers startup. And maybe for you, it’s like, maybe you could create your own incubator. If you enjoy empowering others, then. If you’d like the people’s stuff you get off on that type of stuff, that might be a good way to kind of keep things going.

 

That’s a good idea. It’s funny. You mentioned that I wanted to, like, I did not want to, but I explored that a little bit. I even bought some office space. But I just haven’t had time to set it up. Yeah. At the end of the day, I think most people will agree with passive cash flow, not a big motivator. It’s not going to change your life very much.

 

And with the G six plane, just out of grasp of even the best of us, if you can find something that helps people. I mean, that’s what I, I mean, civil, passive cash flow, essentially that right. I’ve kind of luckily stepped into this thing where we help people. And then they’re like, you know, they, it’s kind of a game changer for most people and then what they do after that, you know, that’s up to them, what they do with it.

 

You know, there’s, if there’s some way you can use your skillset to help people, that’s bridged the gap, doing a little quicker than what used to do, then you might enjoy and get enrichment off that just helping other people, empowering other people. That’s very common.

 

And that, that may be why I enjoy my current role. So well, cause I, I do, I just, I report to the CEO and I just help them as much as I can, like get where he wants to go. But I do think you have a good point there about scaling that out even, and perhaps making an incubator. But I do think I still need to kind of have a track record before that.

 

Sure. You have a lot of time to do that, but I mean, if you can’t think of anything else, then we’ll then just give your money to some charity. Right. But I think when you do that, you don’t get, as you don’t get leverage and we love it. We’re real sandbars. We’d love each other. Leverage and it doesn’t compound, you know, it doesn’t, it doesn’t like to bring people together to work toward like, you know it.

 

It’s not compatible. Yeah. It’s a night. That’s like a nice firework show. One time I checked and it’s cool. But I think a rotary does this, right? The rotary has a lot of affluent people in it. They’re in that mode to get back. They could just give money, but they’ve, they use the leverage. They leverage the relationships of the group and then their problem solving skills to bolt and make a bigger impact into the community.

 

I mean, I’m not going to go. I mean, I’m not going to go do habitat for humanity. I don’t know how to build anything either. The only reason I would go for like a workout, but I just see that as your community, right. I don’t know, you’ve grown something basically from the ground. I wouldn’t even say basically from the ground up, right?

 

Like this is yours. It was just you and me and six other guys who came a long time ago. So you have that. And I want that it could be through a business. It could be through an investment. It could be through an incubator, but I think you’re right. I think that’s where I need to focus.

 

Henry. That’s such a trying to build. I hadn’t recalled. But anything else you’re pondering these days? No, we covered it. Thank you.

 

Well, I’m sure you’ll have more questions in the future. And thanks for being a part of the group. You’re always a lot of fun. So folks joined the group as kind of eclectic folks. We got Brian L Henry here who is kind of the younger guy in the group.  I think the one thing that’s common, even for the 50, 60, some 70 year olds, Very eclectic group.

 

Like alternatives to thinkers, people who’ve gotten it off the beaten path. So if you guys like these types of calls you guys are already kind of in the community reach out, let me know, and that we can make up a fake name for you. Henry is already taken and Mike’s been probably used two or three times at this point, but thanks for listening guys. See you guys next time.