Tag: proTip

How Sneaky are Timeshares?

https://youtu.be/aFO0l_rVDy8

And just so that we can pinpoint it because every time people ask me why I’m a real estate investor, I it’s time share. I’m like, dude, that’s not, you’re not an investor. You just got suckered into a deal, but I can never explain. I can’t explain to myself. I just walk up upset and frustrated my understanding it’s because.

When people buy a timeshare, they not only is it expensive. And when you figure out the cost of ownership that you do, like a life cycle cost analysis, it doesn’t start a good deal. But also you get into these nasty arrangements where you have annual maintenance fee, and then you have a termination fee since like negative equity.

If you can explain that a little bit, it’s ultimately a timeshare was once sold as an embed. And there was a resell market now because of Airbnb. VRVO the internet consumer confidence in being able to plan a trip short notice and having a condo with accommodation, similar to the timeshares where you have a kitchen and space, there’s just no, you know, resale market for it.

That’s gone. So, what you have is it’s basically a prepayment of vacations and it can be really quality vacations. I actually believe there can be some value in the ownerships. If you use them now, getting back your original upfront investment that’s as you’re speaking. With auto purchases that certainly buying resale would be much more advantageous.

You don’t have that 30 grand or whatever to recoup from the upfront. It can be a good value. I always tell people at our seminars or whatever, don’t feel bad, 10 million homes in America owned timeshares. And, or you bought this because you wanted to spend time with the people that you love and a beautiful place.

Right? If it gave you those good memories, you probably wouldn’t trade those for the money. That being said, it’s really not a good investment because at this point you can jump online, make reservations for anywhere in the world for this weekend and pay less than what the maintenance fee .

Timeshares w/ Alexandra Olson

https://youtu.be/IvBJDK9LB68

Hey , simple passive cashflow listeners. Today, we are going to talk about giving up your time, share, why they’re not the best of investments and what the process is to unload them. And I personally am always looking to take advantage of a distress. Seller, whether it’s an apartment building or I’ve interested in these timeshares to buy, but not from the the first buyer, but the second owner.

I’ll get into this and this kind of goes into the whole hobby lately. I’ve been having buying cars lately I’ve been realizing it’s not the greatest to buy a car new, all this, because of that, you take that big gut punch as you drive it off the lot. But as you, if you pick up a one to two year old car, you ride that decay curve down and then you sell it at some point before the warranties expire or shortly thereafter of you can capture a low cost of ownership.

And it’s very counterintuitive to the course. But as we’ve seen through the first two or 300 podcasts, passive cashflow land things normally are, but yeah. Why don’t you introduce Aleksandra Olson, who is from. The you guys want to check this out on your computer to give up my time, share.com, but welcome Alexandria.

Thank you so much for having me. Yeah. So I’m from give up my timeshare. We help people to get out of their timeshares. And we also, of course always sourcing a buyer for that, seller that is distressed, that wants to get out whose kids don’t want their ownership. yes, we are uniting sellers and buyers.

Some of them are taking over ourself and that’s our business. Friends don’t let friends buy timeshare. That’s a pretty kind of a crummy investment. It’s scabbing how they do things, right? You see them here in Hawaii and every time I go on vacation, you got like people handing out flyers and like trying to trick people into talking to them, especially at Las Vegas, by these timeshares. Let’s go through the process. So young couple, they get that booze loaded, the buying this thing up. How does somebody really end their time share? What’s the process like? First of all, if there is no mortgage on the property so it’s free and clear the maintenance fees are current.

Then it comes down to a matter of finding a new owner. There’ve been a lot of scams that have emerged about trying to help people say, Oh, we were frauded in the purchase or, all these different things. But what it really comes down to is this is deeded ownership. This is real estate. So you do need to find a new buyer just as you can’t walk in the street and declare, I don’t want this home anymore.

The property tax, bill and HOA fees and things are still gonna find you whether or not you’ve declared that to the world. It’s the same with a timeshare. It is a deed and you need to find a new buyer and that’s really the trouble is that the resell market has diminished incredibly in the last five to 10 years, just because of the different travel options that have emerged.

And just so that we can pinpoint it because every time people ask me why do you. I’m a real estate investor. I have a time share. I’m like, dude, that’s not, you’re not an investor. You just got suckered into a deal, but I can never explain. I can’t explain to myself. I just walk up upset and frustrated.

My understanding it’s because when people buy a timeshare, they not only is it an expensive and when you figure out the cost of ownership that you do, like a life cycle cost analysis, it doesn’t start a good deal. But also you get into these nasty arrangements where you have

annual maintenance fee. And then like you have a termination fee since they like negative equity. If you can explain that a little bit. Sure. It’s ultimately a timeshare was once sold as an investment and there was a resell market now because of Airbnb. VRVO the internet. Consumer confidence and being able to plan a trip short notice and having a condo, with accommodation, similar to the timeshares where you have a kitchen and space, there’s just no resale market for it.

That’s gone away. So what you have is it’s basically a prepayment of vacations and it can be really quality vacations. I, I actually believe there can be some value in the ownerships if you use them. Now getting back your original upfront investment that’s, as you’re speaking to them, With auto purchases certainly buying resale would be, much more advantageous.

You don’t have that 30 grand or whatever to recoup from the upfront. It can be a good value. I always tell people at our seminars or whatever, don’t feel bad. 10 million homes in America owned timeshares. And, you bought this because you wanted to spend time with the people that you love and a beautiful place.

And if it gave you those good memories, you probably wouldn’t trade those for the money. That being said, It’s really, not a good investment because at this point, and you can jump online, make reservations for anywhere in the world for this weekend and pay less than what the maintenance fee is.

In most cases. And that’s a bash on timeshares that much, but I got a buddy. See he bought him because it forces him to go on a vacation. If not, they never go on it. And, for. For kind of higher net worth families that are very tightly personality workaholics. It needs stuff like that.

Absolutely. If it ends up being the catalyst to create memories with the people you love. That’s awesome. And that is a great reason to look at owning one. Really, for probably most of your viewers, the maintenance fee annually is nominal, but if it does, force that commitment to doing the trip and knowing, okay, we have a week we’re going to do every year as a family.

Then it comes down to just picking something that’s going to offer the most flexibility and sometimes value. Isn’t the most important thing. But the economics have shifted, like you said, right? Because people can just go on Airbnb VRVO et cetera. Just book it. And it’s not like hotels, they don’t have availability.

Let me show you. You have to pay 600 bucks a night care on Hawaii, but there’s no lack of, I. Right. And, at the same time, like doing so many vacation rentals with timeshares, I definitely see that, if you are willing to understand the system, there’s no learning curve on the internet, that kind of thing.

Actually, most times your owners are older. Rather than young couples, it’s typically retired couples that now want to go and travel. They want to provide trips to their families. It’s not to say that young families don’t buy it, but more commonly the consumer’s kind of a baby boomer type. Just less educated on, what’s a good purchase and they just don’t have lack of information.

They just don’t care. I don’t work the system, so many ownerships that we take over, we’re able to get good value out of, book weeks in Hawaii for the equivalent of about a thousand dollars of costs. You’ve got to know where to click online and have the patience to do that.

What’s the process, somebody wants to sell their timeshare and then we’ll skip over to, I think most of us. Don’t really want, we want to buy timeshares from these distress buyers or sellers get into that at the end, but what’s the process if somebody wants to unload it, so if they want out of it what they would do is I recommend that everyone first contact your resource, see if they’ll let you out for free. That does happen on occasion, usually with, higher end brand so explore that option first, plus, you want to know that, you didn’t go and pay someone to get out of it when you could’ve gotten out of it for free through the developer.

That would be step one. If that’s not the case, then you know, you need to go through a company that can secure a buyer for you. And I would encourage everyone to be very careful and not pay anyone up front. And I’m sure that your viewers are certainly a little more savvy than many of the people that have fallen victim to the scams.

But in general, don’t pay anyone upfront. If a client comes to us, all we’re going to need is the deed. A copy of the deed. If they have it copy of their IDs, copy of a recent maintenance fee bill, we can then price it out. We use a calculator, so we already have pricing preset for every resort in the world.

And get them a quote within minutes, and if they want to move forward, we send them an e-sign contract open escrow and it follows a normal real estate process. So we’re never paid until the close of escrow and we don’t even collect payment. It all goes through the title company. So it’s a very secure transaction and.

A guaranteed one. If we are not able to secure a buyer on our own, then we’re going to transfer it into our own name and turn it into vacation rental. It’s a guaranteed quick process. And what our clients are looking at is, Hey, we don’t use this thing. We’re paying for it every year anyway. And then, it’s going up at six to 10% a year.

We’re just throwing money away. Let’s, basically stop the bleeding . So what’s the normal commission structure like, with real estate. No deals. It’s 6% is usually the commission. And then how does it, what’s the normal range, to keep in mind.

 

 

Are you asking, what do we charge? Two, three to five years of maintenance fees is a good rule of thumb. The exception, there are some outliers to that which would be resorts that have very high transfer fees or require prepayment of two or three years of maintenance fees. Something like that.

I do have a webinar on our website that explains why we have to charge in the first place, all the scams to watch out for, if you’re just starting to explore how to get out of a timeshare and really covers the entire process. Yeah. What’s one of the better ones. The less nasty wants to get up and what are like the worst.

Okay. Probably the simplest would be a straightforward deeded week what’s happened over the last 10 years in the industry is a lot of resorts have moved to a, trust-based like it’s a real estate trust where they now, upgrade all the inventory into that trust. And it’s.

It’s points that the client is using collateralized by, this real estate trust. Those are a little more difficult because it’s basically a membership and you have to have the resort approval before you can transfer your title. So I am always like that, I think. Yeah. Disney your diamonds, your Wyndham’s, the big players.

And I prefer to deal with. Straight deeded, old legacy properties where someone owns week 42 and unit 10 that’s, always the quickest and easiest transaction that being said we’re familiar with and pride ourselves on being the best in the world at, getting through the process with whatever property it is.

That’s, how we’ve built. Our whole business model is around not getting paid until we’ve completed the transaction. And it has, of course encouraged us to be the best at getting it done. I’m not too familiar with timeshares. Normally they cost, what about 50 grand in cash in the beginning?

You can’t finance it, right? Average is about 20,000, you can finance usually at about 18%., and then they’re putting in 20 grand, the maintenance fees are about how much for a year is very typical. Okay. So for me to dump my 20 grand timeshare that I might have access to what, five, 10 days out of the year or something, correct?

Yeah. Typically seven days a year is what that will get you. I would have to pay maybe five grand to dump it and then get the 20 grand back or be a little bit more. There will be no getting the 20 grand back. And that’s the hard pill to swallow is that this is not an investment that, has any return other than in memories.

So if you used it had some good times great. But whether or not you use it, you’re paying for it forever. And there is no one on the other side, that’s going to pay for this repeat at this point. Okay. So what if I want to buy one of these things? How much could I buy one of those four? There are thousands of timeshares online for free?

Is that available on your guys’ website? Or how would I get for this? Yeah. This is actually never really come up in this kind of a setting. We don’t advertise it in that way. We do actually use like a shared Google sheet that will list all of the available bums on. So I guess the thing would be if someone had interests that was, listening to this, or, I can certainly send you.

Thanks for that. And we have seen, over the last few years, some nice portfolios be sold or, taken over by larger vacation rental companies. And if you want to work at, you can do well. You can make 10, 20% above the maintenance fees on these ownerships and sometimes much more.

It’s just a matter of, a lot of times, our owners don’t want to become an expert on vacation rental to deal with their one week a year. Now, if you’re doing like we do where you have a whole bunch of them and you’re making a business out of it. Yeah. Of course you can do well. And we are happy to give them away if there’s interest.

Our business model is, to get paid for getting someone out of it. We don’t worry about trying to money, reselling them. If I wanted to stock something here in Hawaii, just use an example like that, that somebody had previously paid 20 grand for maybe paying five grand a year. How much would I have to pay to acquire something like that for myself?

Oh, for free actually paying rather than the buyer in these transactions. And that’s what can be, a little confused. It’s so unusual, right? There’s not many things where you pay to sell it. And it could be like, not want to have it makes me not want to have it now. It’s like a, it’s like a monkey on your shoulder that you get for free.

And now you have that monkey. There are certain ones that, can be a good value. And if you’re going to use them great, we get a lot of Hawaii inventory. It’s a specific week, in a specific unit, if you’re going to go and use it, to pay 800, a thousand dollars for a week in a condo on the beach in Hawaii is amazing.

I don’t know. It’s just that these folks might live in Nebraska and aren’t wanting to fly far because of COVID now. And they’re looking at, Hey, we didn’t go the last couple of years anyway. And we paid, let’s just dump the thing. Yeah, I’ll definitely get on that list and I’ll be stocking it a little bit.

Cause I’m like one of those people that I need that motivation to actually spend money. If not, I just keep it in my bank or so it might be good for folks like myself with our listeners. Sure. To make a commitment, to doing something, With your loved ones at a specific time of year that you can plan around.

If that’s something that is of interest, we’re happy to, give you any of the ownerships that our clients are trying to unload. Anything else that you think listeners would be interested or you get very commonly asked on this topic that you think need mess. Probably, the biggest thing that I always want to communicate is to be very careful.

Unfortunately, the timeshare industry is not very regulated. Especially on the exit side of the industry, getting people out there are almost no regulations. And so there are a lot of scams, any kind of situation where you’re, bringing money to a transaction. Having to pay up front. If it’s not a legitimate title company, just stay away from it.

There are unfortunately a lot of bad players in this space. And I would just caution anyone to, do a little background research, look someone up on BBB, make sure they don’t have attorney general complaints because there’s very few out there that don’t. Yeah anybody can get on BBB.

I’m on there. I have an a plus rating, but just joking. But yeah, if you guys want our reach out to Alexandria, you can go to give up my timeshare.com. Yes. Any other, that’s probably the best way to get ahold of you guys the best way or a quick Google search, Alexandra timeshare, I’ll pop up, watch our webinars that will give you a lot of background information.

Feel free to reach out. If you are wanting to, have access to what properties are we in loading right now, we can definitely hook you up if you want to step in as a buyer. Or if you have one that you want to get out of then definitely start with watching the webinar and reaching out.

And I’d love to chat with you about it. Hey guys. So if Hey, no shame. If you bought a time share, we all make mistakes in the past. Luckily you can unload this monkey off your shoulder to somebody else be a, this means, if you guys have any friends or family members that need this information, feel free to pass this along a little hint, hint in there for you.

But Hey, if you get rid of that $5,000 a year payment, right? That’s a rental property of four years, or if it’s another syndication deal I think once you realize that there’s this alternative investing world out there, you start to look around the house in the points and the couches money all around.

You start to look to really deploy that money and you got a lot of dead Basie equity or Astro going out the door, one of these timeshares and you do the math, right? If you’re investing, making 10, 20% returns on your buddy with a tax advantage basis, Who cares about a $500 hotel timeshare that you get access to five times a year.

You could probably go like baller status and the Maltese for a thousand dollars a night, right? With the cash that you have in cash is King cash gives you freedom. Timeshares. You’re just stuck in that arrangement, but thanks for listening guys. Make sure you join the investor clubs and we’ll pass the cashflow.com/club.

All right. We’re back guys. Now it’s time for a little real talk with Alexandria as my personal questions here, which I use my podcast to ask my selfishly questions. All so if I’m thinking about buying like a Lonnie, just use that as the example, which is the Disney berserk here at Walker.

I got to pay the annual maintenance fees, which is like five grand a year for something like that once. Oh no, probably about 1200, a hundred while. So 12 pay 1200. And that gives me access to the property for how many nights a year you think, it will depend on this time of year, what week it is, what size unit, but around, a thousand to $1,200 for a week, pretty much anywhere in the world.

Okay. And of course I live here in Hawaii, so it’s the same season every freaking day out of the year. And I live here. So that would be ideal. So maybe I’m just trying to get a price for a day in my head, so is that five days? I find with doing the vacation rentals, we end up averaging around 80 to a hundred a night for what our cost is to make a reservation.

Okay. But this Alani thing is really exp, to stay there is like $600 I could think is a complete rip off. I’d never do that, but that’s what they charge. So that’s $1,200. Basis, they can charge $50,000 up front for a week at a place like Aillani because, then it’s all about the, Oh over the next seven to 10 years, you’re going to break even, on, because you’re only paying a thousand a year and, so you’re saying if I pay like my maintenance fee of a couple of grand, for that one, maybe. I would be able to stay there for five nights or something like that. So an average night of 200 bucks. Yes. It would be unusual in timeshare to ever even average paying $200 a night for somewhere.

Okay. That I can do. Cause I have to take these quarterly break out to do like personal goals and stuff like that and family stuff. This would actually work to that, yeah. And if know when you’re going to be doing those breaks, for the planner, for someone who’s organized plans ahead and schedules and is fine planning a year out, two years out, time’s just going to work very well for, that’s just not how people plan travel typically anymore.

And that’s where, there’s been this imbalance where about 80% of timeshare owners want out of their ownership. Yeah. And for you guys, listen, this is where it’s important to like the imbalance, right? So many people in California, Hawaii, Seattle, New York, they all think the buy their house.

This is why I see do the complete opposite. The imbalance. There’s so many desperate landlords out there that would love to rent their house for two to three grand to somebody like you guys. That’s where you guys make money on the Delta, just like in this circumstance. Cool. I’ll I’m going to try this out and, maybe update you guys on a future show.

Jan Miller – Paying off Student Loans

Today’s podcasts are going to be talking about paying off student debt and give you a little bit insight if for a lot of you guys are, have that stupid debt or more importantly, I guess if you got kids that you want to send to college, one of these days now colleges and everything, but I think a lot of us are parents.

I’m a parent myself, want to give our kids a leg up in that category. Been a dad here for about a couple of weeks. You don’t quite see the bags under my eyes . We’re past the first three-day period where we uh, yeah. Punched in the face and you realize you’re not going to sleep for awhile.

But now two weeks in, I know what to expect and it’s kinda like losing the first game of the playoffs and a know how things are gonna work. That’s where we are at today, but things are good. Things are good here.

For those you guys have young kids or expectant, new mothers or fathers, check out the infoPage@simplepassivecashflow.com slash baby got a lot of parenting advice. Shouldn’t you focus? And got a little shopping list there. You probably don’t need all that stuff in that shopping less. We were fortunate enough to get a lot of hand-me-downs for a lot of things from other people barely bought any clothes since everybody dumped their old baby clothes on us.

The only things we had to buy were, I could probably count on one hand, Chris. All these baby carriers, know what this stuff is for quite honesty, we don’t have to buy a lot of this stuff and our strategy is the buy it use.

Most parents are freaked out and they don’t want to buy you stuff, but, I do it where it makes sense. And I like to go to a north shore. See what the cool baby things are, then check it out at Facebook marketplace or Craig’s as well. I stay away from Craigslist these days.

Cause they’re a bunch of weirdos on there. I like to be able to vet the people that I’m buying from. But yeah, we bought one of those snooze cribs from Facebook marketplace magically rocks your kid to sleep with an app. It also, you strap up and there’s a steep on their face.

And then I got one of those that pneumonia and not one of those fancy baby strollers that makes you look really cool on Facebook marketplace for like half price. Other than that, yeah. We got very fortunate that a lot of cook gave us a lot of this stuff as my kid squirms in my arms here.

But, think two weeks into it to this and fun or see. It gives you another why you’re filling up all this passive cashflow, and really start to build that legacy right after all. It’s not that hard to get financially independent, look that passive cashflow, most of our clients do it in a decade or less, the bigger ideas of what do you do after that.

And how you build that, see, and I think that’s where the next chapter is full passive tasks. It’s going to be a headache. It stays as we’ve been having a lot of conversations about this and our after hours of our family office, a Honda mastermind breakout groups where, this is where a lot of the conversations go a lot more of these soft topics that how to simply just pay off your student loans or where to get the best rates on the Heliox.

For example.

But yeah, just wanted to let you guys know I’m alive and well. Babies. Well, Mom as well, and check out those baby tips@simplepasacastle.com slash baby. And enjoy the podcasts.

Hello, simple passive cashflow listeners. Today, we are going to talk about student loan, forgiveness programs, how do you pay off your student loans? The best way a lot of us unfortunately, or fortunately went to college for way too long and saddled with all this student loan debt. Now I am I was born in the 1980s and I was lucky enough to have a good job and I paid mines all off personally.

But some of the kids out there, man, I feel sorry for you guys. Cause it’s a Hutch several hundred thousand dollars, at least, especially a lot of dentists guys and doctor guys out there. So this podcast is going to be for you. We have a young Miller who is a student loan consultant and we’re going to be talking all about student loan.

Tips and tricks. How do you pay it off? What’s the best way, Yon once you give us some background on how you got started doing all this. Yeah, sure. I actually started working directly for several different loan servicers back in 1997. I worked for Nelnet and fed loan servicing, and also worked on the private side for discover financial and Citibank

and saw the student loan world from every point of view on, I worked in 11 different departments during that time. My career eventually went into the brokerage industry as an investment advisor at Morgan Stanley and financial planner and advisor there. But all the while helping people on the side with student loans, everybody, I knew Mike dentist might.

Brother-in-law whoever they all had student loan debt. And so I would help and eventually started helping people on a more professional level. While I was working at Morgan Stanley, not for Morgan Stanley, but on the side. And eventually the demand got so big that I retired from work and Stanley in 2010.

And made it my sole focus. I’ve been an advocate for borrowers for student loans since for the last 20, some 22, 23 years. And I’ve been at a professional capacity doing as my sole focus since 2010. And yeah, I’ve just been helping borrowers manage it, using my financial background, understanding and conjunction with the student loan expertise and knowledge of how the system works.

Both from an administrative level all the way up through the regulatory level, as well as just the practical level of how to apply that to your student loan repayment. That’s what I’ve been doing for the last decade. A little bit of backstory here. Why are we talking about this subject?

I was asking you guys in the community. If you guys want to join our Facebook group, let me know. And we’ll add you to that private group, what are the problems you guys are facing out there as high paid professionals, looking to invest your money?

And this definitely came up as one of them. I always asked you guys, who are you working with right out there. That’s the power of our community. And if you want to join the group, go to simple passive cashflow.com/club. Or if you want to join the inner circle, that’s what the incubator and the mastermind are for.

Your name came up beyond I got to admit a couple other guys names came up too, but I didn’t want to work with them because they wouldn’t return my phone call. I want to talk to the principal, right? Like I don’t, there’s a lot of people who do this, if you Google it, there’s a lot of people that spend a lot of paid advertising on this stuff and have very pretty websites.

Not saying that yours isn’t good, look, this is just my brand. So this is simple passive cashflow brand. I always go off of value, right? Like I’m not going to go to a CPA that charges me 10 30 grand that do my taxes. That’s ridiculous. Nor am I going to go to like H and R block or do it on triple taxes for goodness sake.

I’m looking for value and think Yon fits this this category here of somebody who. Offers a very good service and charges a fair price for it. Why don’t you let’s go over like a typical client? Cause I think. And the one we were talking about earlier and what is it exactly that you do with them?

Again, if you’re going to hire me in to justify my fees, I’m going to need to provide a pretty significant return on investment. Of course. So as result and because of my background, majority of my clients are professionals who have six figure debt. What’s your debt rises about one and 200,000 so forth. Every decision you make impact your total cost of that repayment by huge factors, tens and tens, if not hundreds of thousands of dollars between the two. When that happens to make sure that you get the best, repayment experience you often will reach out to a borrower, reach out to an expert

and again, one of the ways that I run my businesses, I’m looking out for the borrower. So I’m going to design a plan or repayment strategy. That’s best for them. Not best for. The actual loan, servicer or lender. When you see advertisements for sofa they’re gonna obviously want you to refinance that loan, but a majority of the time, that’s not the best option for the borrower, just because you can get a lower interest rate.

Doesn’t mean it’s the best solution for you. And we need to evaluate all of those solutions. And make sure they make sense with your financial objectives. My job is to look at all of the variables , what are those techniques, if we can, I know you mentioned there were like three of them.

You can go through them one by one. There are basically four major repayment solutions there’s private student loan refinance with a private lender. We’re basically forfeit all your federal program benefits and you refinance at hopefully a better interest rate. Otherwise it doesn’t make sense doing it, but of course you may have a higher payment because it’s a shorter term.

Typically lenders will offer you a lower interest rate, but they’ll on the condition that you can afford the payment. That will create a seven or 10 or 12 or 15 year term instead of the 20 year terms sometimes associated with student loans. And there’s also if you work for non-profit of course public service loan forgiveness is its own juggernaut is very nuanced and complicated and understanding how that program works and whether it’s worth pursuing and its reliability.

Those are all issues that come up. That would be the second one. The third thing would be to, if you don’t qualify for the nonprofit forgiveness, you public service loan, forgiveness, or government agency work then you can also in some circumstances that make sense to do the income driven plans, which are either 20 or 25 years long, all the way through to the end until you received the forgiveness there.

Or another solution would be the fourth option would be. Payment targeting or unorthodox method putting some of the loans at a zero payment and accelerating your payments on higher rate loans that type of thing, or making your student loan or payment work around your other debt or other financial obligations.

There can sometimes be a mixture of several different of those strategies at once, but refinance public service, loan, forgiveness, income driven plans, and. Payment targeting are the four major solutions. And then how to incorporate that into your own financial objectives. That’s of course the more complicated.

And then of course, for a lot of us that work time is more valuable than money. You guys do all the paperwork and just tell me where to send, help with execution. It’s not just, Hey, and this is what I found early on doing this for 23 years. Now I can tell you how to do it. And about half the people I talked to.

especially physicians, where they all they educate themselves on how it works. So they have an understanding they talked to all the other residents and they have an idea of how to enroll in the program and so forth. They don’t need help with that. And then you just need the finer details worked out, and then they can do it on their own, the other half of the time.

It’s just too much of a mess for them to deal with and they want to hire somebody to help them. Not only. No what to do, but the execution, how to do it and help doing it so I can prepare and submit all the paperwork for them. So that the only thing they need to do are make payments and I’ll take care of everything else.

And they’ll always be able to contact me and talk with me if they need to. It depends on where you are, what your needs are, a lot of people would prefer to have hand-holding through the whole process. Before we dig into this more, my full philosophy on, people come to me, should I pay off my student debt?

Yeah, you shouldn’t right. You should invest. That’s why, if we’re living the simple, passive cashflow thing, so we can make returns at 10, 20, possibly 30% in a turnkey rental. Go look at the rate of return. You can make it simple, passive cashflow.com/returns. Or I break down a simple, just turnkey rental, how you’re making money, four ways, mortgage paid down, tax benefits, appreciation of property, which, I guess you could say that’s getting lucky and then of course cashflow,

okay, we’re going to pay off the debt as slow as we can. So to optimize our liquidity going through our investments, but how do we do this smart with these other strategies? , cashflow is the hidden gem in the income driven and forgiveness programs, that a lot of people don’t significantly pay attention to. If you refinance your loan, let’s say you have $500,000 in debt at 7%. And if you refinance that loan, you’re looking at a five or $6,000 a month payment. Even if your interest rate is cut in half that’s gonna eat up a lot of your cash flow each month.

You may not even be able to afford that or want to afford it. Do you have family? What other obligations do you have? What’s your cost of living? You live in San Francisco or in rural Alabama, these. All factor in the decision making, but the cash flow is huge. You can use that for other financial objectives, especially like with my dentist who usually don’t work for nonprofits, massive debt all the way up to a million dollars in debt.

And they’ll tell me, Jan, if I can Lord this payment, I can use the extra cash flow to build my business mill practices and expand my business so that my return of investment might double every month, in that circumstance, which. For extreme certain situations.

It doesn’t make sense to accelerate a payment on an 8% loan or refinance it and save a little bit of interest when you can benefit so much from investing that extra cash flow. Those are all considerations for sure.

That’s why started this podcast.

There’s so much bad financial advice out there. Pay down your debts. It depends, right? If you’re bad at your handling your money, just spend it like a bozo then yeah. You should go pay off your debts. But if you’re a responsible person, I think most people that are listening to podcasts educating themselves.

So you fall on the other side of the coin on this and, check out my article about that. It’s simple, passive cashflow.com/debt. But yeah, I, to me, the best strategy is pay down the student loans or your mortgages as slow as possible because it’s a pretty low interest rate and invest the money otherwise basically interest rate arbitration, right?

Just what the banks do. They lend out at this rate and they go invest it in this much and they make money on the spread. It’s not, you’re responsible, your grandma, your grandpa, your mom, your dad probably thought otherwise, but amen. If you want to get what other people don’t, you got to do different things, right?

Yeah. And even the psychology of the borrower comes into play. Some people can’t psychologically watch their balance grow. When they’re paying less than the amount of interest screw in each month and they’ll send me Jan, I know what you’re saying. I’ll save hundreds of thousands.

I’m doing the income driven plans or what have you. I just can’t watch grow. Okay. That’s fine. As long as you’re making an informed decision, but that’s a part of it. And again, every situation is a snowflake. I always tell people, if you hear a one size fits all solution, it’s wrong.

Everybody’s needs a very, a detailed assessment especially when you have six figure plus debt to determine what’s the best solution for you. Do you qualify for the program? That doesn’t necessarily mean you should do it. That has to be looked into. And add onto that, like even like investing in rental properties or syndications, for some of these younger dentists, like I tell them you’re an entrepreneur, your liquidity and money.

Certainly shouldn’t be going into paying off your student loans and maybe it shouldn’t even be going to investments, but putting that money into marketing or into improving your operation as a dentist practice is probably your highest and best use. And it always comes back to it. What’s your highest and best use for your time and also your money or liquidity in this case.

Let’s dig into this, like this common one. Someone comes to me and they’re like, this is stomach who doesn’t listen to podcasts, not simple, passive cashflow. They’re not investing. They’re just investing in their normal retail investments, mutual funds. And they’re like, oh I like look at, I did.

I reconsolidate all my loans through a sofa company or whatnot. And it’s a lower interest rates. It’s a lower payment. How was that? Not a losing situation. What are the negatives of just of going down, just blindly going to these websites, you see them all the time and just lowering your interest rate and lowering your monthly payments.

What is the side that we’re not seeing here? One of the first things I look at is if refinance makes sense for you and if it does, it’s a simple solution. You don’t have to deal with all the federal records and programs and paperwork or hire somebody like me to help with that.

You just pay it later a traditional loan because I refinance so fire and Laurel road or common bond or whatever those companies They’ll call a student loan. The product is a student loan, but really it’s just a loan. You’ll a bank. It’s just a personal loan. That’s all it is. And at whatever terms they give you.

So you’re going to forfeit all of your federal regulations and protections. You’re going to, and the safety net that they provide you’re going to forfeit the flexibility that federal repayment has once you agree to those terms and unless you are able to refinance it and in a better terms later, You’re stuck with them as long as it is at that company.

I would say a majority of the time, the payment does not lower when you refinance. So even if you lower the interest rate that does not ensure that your payment’s going to be lower. In fact, the payment usually goes up because typically lenders will tell you we’ll give you a 3.0% fixed rate on a seven year term.

If you are on a 25 year term before that, or an income driven plan more typical to student loans, especially after federal consolidation then your payment’s going to go way up, despite the fact that you get a lower interest rate. Jan my understanding of student loans is, it’s a government loan and you’re switching over to more of a privacy of private loan where you don’t have those government protections. But I thought that. It’s, everybody talks about how the forgiveness of student loans is not permissible, right?

Like a mortgage is, but what are some of those protections, if it not for that, what protections somebody giving up by, making a deal with one of the private lenders, like in this case? With federal student loans, they cancel upon death. Immediately after loans. So if it’s a federal loan that’s a given a hundred percent of the time.

If you’re looking at a private loan that might not necessarily be the case. So the devil’s in the details, right? These guys might be signing on a lower interest rate and a lower payment. Which is the same tricks that the car lenders use, but they may be signing up their kids and grandchildren or whatever to pay this debt off eventually.

Yeah. There’s a little bit of a risk there. And then of course the, flexibility. What if there’s no guarantees? What if, for example, a crazy pandemic comes along. And causes you to lose your job and your income goes way down. If you have a private loan, you’re going to be very limited on what you can do to lower that payment with a federal loan it’s going to be easy you’re going to get built up first, just like those you guys would Fannie Mae Freddie Mac loans, and you think you’re all clever by getting these portfolio loans.

That is a huge safety net. I have, for example, I have a physician client who have for over a decade and she was in a car accident and she could no longer operate. So now she’s a teacher at a university and her income has went down. From, three or $400,000 a year to $80,000 a year.

That changes her financial outlook and her strategy for repayment on her large student loan debt completely because her loans are still in the federal system. She had several options and manageable ones. But the private loans are not necessarily, you may have to pay or default in the story and you may have to do harsh things like negotiate settlements after you’ve defaulted and no one wants to do that.

Those are protections, a lot of my clients, they have like several hundred thousand dollars in their infinite banking or they might have, nice parents with deep pockets, like they’re good. So they might as well do it and get the lower rate and. They’re good, right?

It’s in a way self-insuring themselves. . Yeah, exactly. If you’ve got the deep pockets and like I’ll tell my ER docs and I’m just using to say I have so many doctors as clients, ER, docs usually work for contracting groups or physicians or hospitalist groups, and they don’t directly work for the hospital as a result.

They don’t qualify for public service loan forgiveness. Typically they’ll have. Three years of residency, and then I’ll jump right in as an attending. And they’ll have usually their income is maybe 300, two 5,300 and their debt is 250 to 300. In which case refinance makes more sense for them because the income driven plans wouldn’t really lower the payment that much anyways.

And they might as well just accelerate the payment and paid off. They can afford it. So when your debt to income is strong, Then refinance is more often a solution, but if you’re upside down, which is Mary common, 80% of the people call me or don’t call us, they have problems, that’s right. Exactly.

I’m like the mechanic for expensive cars, and they come in with a problem and usually they owe more than they make. And because of that the refinances, not as It’s greatest solution for them in most cases. In my search for this doing a little studying on this topic, I don’t have any student loans personally.

But just doing some research. I found what this, I don’t know if this is a scam or whatnot, but like some guys are like, they found the company to create an LLC for them. That is set up as a nonprofit. So they can pay themselves via this nonprofit so they can qualify for the tenure student forgiveness thing.

Have you heard of this thing? What’s your thoughts? Yeah. And I’ve been asked over the years, Jan, I don’t work for a nonprofit. What if I own my own nonprofit or I create a nonprofit. And technically as long as it’s structured so that you are an employee of that nonprofit. Then you do that will technically qualify.

It’s interesting because not enough people have been eligible for forgiveness yet for to see how the auditing process works with those specific borrowers. But technically it is possible. It’s a risk though, right? I think so. I always tell people, if you’re gonna do it anyways.

Sure. You might as well shoot for the forgiveness, but if you’re going to open a nonprofit. Just so you can get the forgiveness, then that’s risky because you’re opening yourself up there’s some gray areas in the regulations there in regards to owning your own. Non-profit.

It could cause problems when you actually applied for the forgiveness when they audited. And I seen like the set, one of these things up, it’s not cheap. Definitely not something I personally recommend, if you’re going to if you’re going to do it anyways.

Sure. But if you’re doing it just for the student loan forgiveness, then it’s probably not as good. It’s just an example. There’s so much random stuff out there in terms of the financial world. And yet it makes sense. We’re always looking for the loopholes, to me, the intention is not there.

That’s why I’m like, yeah, that’s a black hat tactic. I agree. Are there any other techniques that you would think that people should know about that maybe they wouldn’t have known otherwise that you’ve been using for some of your clients? I think that one of the biggest things is understanding.

A very complicated subject whether or not to file separately or jointly to exclude the spouse’s income, whether you need to do that how your spouse, if you get married, it’s going to impact the program is a very complicated program because if your spouse has a significant income and doesn’t have any student loan debt than , their income is going to increase your payment dramatically.

It might even just qualify you for the program, but if your spouse has student loan debt and you can prorate the payment the other thing is if you need to exclude your spouse’s income, but your spouse has an escort or something like that, where they have huge expense write-offs that could be very costly to file separately.

Which is sometimes necessary to exclude this as income. And then add into the fact, what do you live in a common property state? , all these things make a massive difference in Filing your taxes and how much the forgiveness program is going to benefit you and whether or not you should pursue it.

If you are married or you planning on getting married in the middle of one of the income driven or forgiveness programs, definitely find out all the nuances of how that works and how it’s going to apply to you. And probably again, you want to talk to somebody like me to help you sort that out because it’s complicated, but that’s the first thing.

That I would say you want it to take into consideration, you’re opening up a can of worms. Cause then I would say probably like at least a lot of people in my mastermind group, the dentists, the doctors that were just one single income, we’re using that spouse to qualify for a real estate professional status.

We can use passive losses to offset active income. Yeah, worms there, it is a can of worms. I always tell people that. I should charge married couples five times as much as I can charge individuals because I don’t, but I should, because their situation’s always more complicated, especially when situations like that arise.

And you got one situation where one spouse is qualifies for public service, loan, forgiveness, and the other doesn’t. So how do you file then whichever creates the largest payment or the most forgiveness, or, you’re always want to look at total costs over time. It’s, everything’s gotta be evaluated, gotta crunch the numbers to really determine what the best solution is.

And that’s I’m growing up. I used to be super cheap and try and do everything myself and trying to learn everything myself. And now all I do is I build up a network and I ask other people who’ve done this before. Who the heck did they work with? And then that’s how I find guys like yourself.

Here’s a perfect example. As we were talking earlier, my wife’s a teacher and she’s been working like 10 years. So I was like, Googling the Publix or forgiveness thing. I don’t think she has that much loans. It’d be like 10 or 20 grand. Something, definitely could pay it off, but I want to do it smart, but it’s man, what a pain?

I got all these forms. I got to learn about it. It’s like government stuff. Can you figure out how, like far to stay apart from each other when you wear a mask when you don’t? I dunno. It’s just so good to using and I’m getting to a point where I’m like, all right, timer’s more valuable than money pay the man, get it done.

Don’t screw around. My days of just trying to do this all by myself are over. And I think if you’re listening out there and you’re making under a hundred grand a year, Your net worth is under a quarter million. Cool. That’s what these podcasts are for. Everything’s on my website for free.

Go ahead and learn it all by herself. But that’s why people sign up for the group coaching, or services like this, because time is more valuable than money. What is your highest and best use for a lot of my guys, it’s like it’s doing an extra surgery on the weekend, picking up extra shifts.

That’s screwing around with some Burr by rent, rehab, nonsense that thought of the kids talk about all the time. I’m glad I found you because I don’t want to do that paperwork. And if I can spend 500 bucks to just get it done that’s what I’m going to do. Yeah. No, I don’t. I don’t blame you.

, you mentioned before, there’s a lot of resources out there, but. There’s a lot of debt relief agencies, which were more like call centers. Yeah. And they’re really good at that called content marketing internet nonsense. Really just write bogus articles just to get the SEO, the search engine optimization, right?

. They’re not student loan experts. I have to tell you. They have a business model and a lot of them want a slang unit income-driven plans or, they’re not really looking out for what’s best for you individually. They’re looking to sell a model on how they can lower your payment or what have you.

And I always tell people, if you’re betting student loan experts to get help, number one, have they worked in the industry? Number two, do they have a actual, real financial credentials? And number three, when you talk with them, you can always tell when somebody knows. What the heck they’re talking about, are they trying to sell you on something, or is it more like a meeting you’re having with the financial planner accountant what it should more resemble somebody who’s has your best interest in mind and is not trying to sell you products, , I don’t sell people insurance or try and get people into an annuity. That’s your long lost college friend as far. Exactly. These are, another piece of advice I can give people who are looking for help is you can tell when you talk to the person, if they know what the heck they’re talking about, and they have your best interest in mind, not their own.

Like a lot of internet influencers, bloggers, podcasts, they all have the affiliate links to these loan consolidator things. You don’t know who to trust. And that’s why I always tell people, build your own network. Of other people you trust organically, not influencers, not people with podcast, land or blogs.

And then find the right consultants to work with and pay the consultant. On an hourly basis or where they don’t really have a skin in the game again, that’s the whole problem with the financial planners, right? They’re just here to sell you stuff.

They don’t know what they’re doing. That’s why I have a job. That’s exactly what I’d say about student loans. Same thing you just said. The reason I have a job is because of the loan servicers. Are poorly trained and the reps would frankly rather be on Instagram than talking to you about your student loans and you can’t talk to a bank, they don’t know anything about it.

Your school knows how to get you into debt. They don’t know how to get you out. They don’t really, they understand less than they realize, especially financial aid. They’re just clerks. Financial planners don’t know anything about student loans or they’ve had a diet Coke version of training of it, but they are not real experts on it.

It leaves us niche open for me that just developed itself where. I already had the background and I just put it into use to help people. What about you help people on the back end once they get into student debt. What about like people with young kids or they’re going to go away to college soon, getting the most student loans, any advice there?

It happens too, because even though my speciality is in student loan repayment, a lot of my clients are families and they’ll have kids 15 to 25 years old, and some of them are in debt. Some of them are going to college and some of them haven’t gone yet and they’ll have options to take out parent loans or the child needs to take out private loans.

That needs to be evaluated, when you’re taking out student loans, for example should I take out federal private? What are you going to school for? How much money do you expect to make when you’re finished with school? These things need to be taken in consideration. If you’re going to be a social worker take out federal loans.

You’re probably going to qualify for the forgiveness, and you’re also not gonna make that much money. So I promise you that private loan payment’s going to hurt when you enter into repayment after school on the flip side, if you only need a little bit of debt temporarily, you can get a better interest rate and plan on paying it off.

Anyways then, private loans can make sense, but if you need parent loans, there are circumstances for that, but that actually makes more sense than other things, those things it’s hard to give a general answer to that, those things do need to be evaluated. Yeah. So if any of the listeners out there, you have any best practices, let me know.

Or, if they work with anybody. This is how we build the community with the right people, not with big conglomerates who are really good at internet marketing, but guys like Jan , he geeks out on this stuff and he’s made a nice business out of it. I’m sure you enjoy doing this.

Just like how these travel hackers love which credit cards to get it’s collecting points, how you redeem the points, it’s cool. . How I built simple passive cashflow initially. Yeah. You’re passionate about it. Mainly because people have so much anxiety about it.

I often refer to myself as a student, one therapist because people call freaking out about their student loans and at the end of the call, they always feel so much better about their options and it’s a nice feeling and it’s great. And I feel like I wanted to be very few people on the planet who truly understands.

The micro and the macro picture surrounding student loans and how to apply it individually. I think it’s a rare niche that I fell into like I said I love it. Reach out to Jan and tell them you guys came from simple, passive cashflow. You want to get your contact information or website information out there for people to reach out.

Yeah. Sure. The best way to to find me is just to go to student-lone-consultant.com, which is my website. If you Google student loan consultant, I’ll be one of the top organic search results, Miller student loan consulting. Once you’re on my website, you can click to schedule an appointment.

And then I will contact you at the appointment time and I have tons of availability and the best way to get started as always with the initial consultation. From there, we can evaluate to see in what ways I can help you, in what ways you can help yourself with the loans. And I’ll be booking mind’s here to hopefully pay off that loan that my wife has.

Yeah. I already have some thoughts about that. I’ll save it for our call, just from what I’ve heard you say about it, all right. Everybody will thanks for listening. Please share this with your friends really helps us grow the show more. And if you guys are interested in the mastermind or.

Go to simple passive cashflow.com/journey. And if you’re looking to pick up the first few rental properties, remote investing, if you’re non-accredited investors, that’s what the incubators for simple, passive cashflow.com/incubator. And if you haven’t chatted before, feel free to book a call. It was looking to get to know each other a little bit better.

I ocular guys. Bye.

How Much Money Should You Start Investing in Syndications?

https://youtu.be/zuiS9q_xnDo

So another question here in one of your podcasts or investors calls you had recommended not to deploy more than $250,000 in a year. Is there any checks reason for this. I don’t remember the context of this. I think what I was getting at a lot of investors don’t need that rich debt or that book, that purple book that is the red pill of finance for a lot of people.

 

And they’re like, oh my God, I got to get out of this like crap and investing in for all my life. And they go bonkers. They’re going into all these alternative investment, private placements and syndication deals. And I’ve had people that invested half a million, million dollars at nine months. I personally am.

 

Whoa. That’s a lot of them investing because the thing is let’s heart about syndications. Anybody can put one together, right? Anybody can invest in it, but like in terms of putting them together, anybody can do it. You just pay $30,000, supposedly you can magically do it. So I say that jokingly, because. Not everybody should do it.

 

And I sure as heck am going to invest in those deals, but those sponsors, how do you determine who’s legit? It’s really hard to determine who’s legit. And if it were me, I would take the approach of putting my money in going with the minimum and seeing how it works, call me crazy. But I think that’s a prudent strategy, especially when a lot of people that come into our group, they’ve been investing in the regular 401k stuff that traditional.

 

Investing model for 10, maybe even 40 years, we have a huge range of ages in our group. Don’t throw it away on some bozo who you just met. I just, today someone just mentioned that, yeah, they lost a hundred thousand dollars investing with this other sponsor and they’re happy that they found this, but that takes some luck.

 

And I think to really feel confident to going that you’re putting your money with good stewards is to build your network with other passive investors. So that you feel comfortable knowing that other people have had good success in the past, but likely. Yeah, a lot of us and myself included, we don’t have any people who are investing in these types of options, the investments, most of the people that we associate with or go to work with, or our families or parents just invest in the traditional mainstream retail stuff.

 

So we don’t have that network. But what I’m saying is that’s why we created simple passive cashflow. So that if there is an opportunity to find like-minded individuals and you do. That’s when magic flip things happen. And if you want to stop screwing around, that’s where you joined the family office, Ohana mastermind the fault.

 

I’m just saying, but I think that’s the way into it. And maybe I slid the $250,000 in one year thing. I think maybe where that came from was like, maybe you can go onto a handful of deals in that first year with, you know, minimal investments being anywhere from 50 to a hundred thousand dollars. So you could go onto a few deals and you can sit and wait and watch, see how the sponsor performs.

 

Did they run off with your money to Mexico? They say that they’re going to do it. Quarterly distributions are when they said it was going to, so that would be the way I would do it. When I started to buy rental properties, I bought my first three in Seattle and my big first pivot point as an investor was investing site and scene.

 

In Birmingham and left Indianapolis 2012, 13, what did I do? I bought one property in Birmingham. I see how it worked. I pause for six months to a year, and then, you know what the damn thing works. So I’m loaded. I unloaded all those Seattle properties that have poor cash flow. And I went into and parlayed my money into those other investments.

 

So to me, I’m not saying that you’re going to do this, but I like the approach of getting proof of concept and then going all of that.

How to Choose the Right Financial Planner

https://youtu.be/KSar5qUV1d0

It’s not about gaming the system, the tax system, really the tax code. I’m sure you’ve heard this before, but there’s thousands of pages. This thing is a beast and I would not prefer to personally read it, but there’s only a few pages that are about how to pay tax. And the rest of this gigantic document are all ways their roadmap to not pay taxes.

And so you really need to be working with somebody who is. Knowledgeable about the tax code that really seeks to leverage it in your favor and not do unfortunately what most CPAs for common people do. And they say, Hey, let’s just defer some money and not pay tax on it this year. And that sounds like a great end of story.

If we stop there, but you still are going to pay tax in the future. So you’re just kicking the can down the road and you end up with this big tax bill, the end and especially. For your audience and myself and our audience as well at the money advantage. If you’re looking to grow your wealth and increase your income, you’re going to probably be in a higher tax bracket in the future.

And I do not want that tax bill on a higher income in a higher tax bracket. And with 19 trillion plus dollars in us debt right now, we’re in a position where if the government says, Oh, Hey, let’s go ahead and increase taxes and decrease tax brackets. So that more people are paying more taxes in the future.

I don’t have control of that, and I certainly don’t want to be at that mercy. So I don’t want to just defer tax. Which is a fancy way of saying postpone. I don’t want to just postpone taxes until the future. And that’s what a lot of times you’ll hear as a tax strategy. And it’s really not a tax strategy.

Yeah. And what you just said, just drives me crazy all the time. Most CPAs don’t have a freaking clue what they’re doing. That’s why they have that job. And that’s why I sit at home in my shorts all day long and not to say that, Hey, I’m not a CPM, not a lawyer. This is where you have to learn these strategies and you’re not going to be the ones can potentially be a little dangerous, right?

If you go overboard with these proportions, You possibly can get audited. Yeah. Reasonable salary. That doesn’t mean you’re going to say, Oh, my reasonable salary is $1 and the rest of my money is coming over without self-employment tax. That is, that’s stepping over the line and here’s the line. And you want to be working with a tax strategist that says, okay, I understand the lay of the land and the landscape.

And I’m willing to walk up to that line. But I’m not going to cross over. And that’s the piece that instead a lot of CPAs will just say, Hey, I’m just going to stay as far away from the line as possible. And that’s where a lot of money gets left on the table. And unfortunately way too many people are in that position where they say I have the best CPA in the world, and yet they’re still leaving a lot of money on the table.

So again, it is not about doing things that are illegal, that can land you in a huge amount of hot water. Absolutely would never recommend that. But what you want to do is understand how to proactively leverage the tax code. Here’s my analogy. This stuff is like doing a surgery, Rachel and I aren’t going to do surgery on ourselves, period.

We’re not even doctors. No, but we can recommend possibly. Hey, why don’t we do this? Have you heard of this other operation? And if your CPA is like any other CPA out there, they haven’t even heard of the damn thing. So maybe you have to go to first a CPA who can do that operation, but you also even good CPAs, but they’re just looking for the easy way out times than not.

They don’t want any kind of odd potential in the future, even though it is totally legit, they just want to do what’s easy. So you as the client, like I always say, you’re the boss, you’re the property manager works for you. You need to tell them what you want within reason. Same thing here. Your CPA works for you.

You need to tell them what you’re going for and need to hear them out. If not in to get a new CPA, she mean, and get to someone who, who is legit. And I can do this stuff for you, but yeah, but never do it without a CPA. You are using their recommendations. Now, what you want to do is ask yourself, is this the CPA for me?

Are they going to help take me to that next level? And a couple of questions you can say is, are they meeting with me outside of tax season? That’s just one really good, but almost indicator or a marker. Are they concerned with helping me strategize outside of just saying, okay, what did you already do?

And how can we react to what you did in your business and your real estate and your investing and all of those things, really? You want somebody who’s going to help you plan ahead so that you use the right deductions so that you apply the right things in your strategy and process so that you can take advantage of the tax code. .

Intro to Cryptocurrency w/ Bob Burnett (Part 1 of 2)

https://youtu.be/FvtMiG3R2S0

Hey, what’s up simple passive cashflow listeners. Now I wanted to announce a new project I got going on. The rich uncle YouTube channel. So those of you guys have been following me for the past several years since we started this podcast back in 2016, simple passive cashflow started off with me buying some turnkey rentals, eventually getting my portfolio to 11 and 2015, and I felt the pinch and I realized these rental properties was not the path to financial freedom.

It was the path there, which I still think non-accredited investors under quarter-million half a million should definitely go on buy a rental property. You get that experience, feel what it is to be or moat landlord, and then move off to bigger and better things as you become more of a credited investor or on the verge of.

So it’s a transition into being more of a passive LP partner, diversifying yourself over multiple deals out there where you’re just an LP partner, little to no liability, no debt in your name. You can still Chavel hack all these credit cards, which we’ll have a feature podcast on that too.

And you can also partake in the value add strategy, right? When you’re buying turnkey rentals, which you’re essentially doing is your. Just buying an asset that has little to no built in equity in there other than your down payment. And there’s no business plan to increase the revenue, therefore increase the price where these a large apartments indications, mobile home parks, et cetera.

There’s usually some business plan to force. Appreciate the asset. And maybe we’ll get lucky with some market appreciation in there too. That’s typically real estate goes up in price, but the big thing is that force appreciation. The only way you can do force appreciation is if you do it on your own, in a burst strategy.

And that is that my first premiere video on the rich uncle YouTube channel. You guys can go and check out, So a simple pass, a castle podcasts and YouTube channel. We’ll continue on this path of, as you guys grow with me to be accredited investors, but lately maybe I’m just getting old, but I see a lot of kids these days between the ages of 18 and even.

Mid to early thirties, they already haven’t gotten it together, right? Their net worth is still under a quarter million, half a million dollars. And maybe for you guys listening, maybe this would be that cool hip fun video version of simple passive cashflow for kids where they can learn about this stuff.

Learn more about those basic financial things. In this first video, which we’ll be talking about is the burst strategy. Which you can give them. A lot of these people like to do this by rent, rehab repair. I frankly think it’s a waste of time and not a really good risk adjusted return when you could just be a passive Opie partner.

But what do you do if your net worth is lower and you’re not having any connections, that’s what this video is talking all about. So share it with your kids and listen to the rich uncle as they start to become old and grumpy. In the future, but for now it’s just rich. Uncle is a YouTube channel and on today’s podcast, I’m going to be quickly going over what is a bridge debt and private equity. And I think a lot of you guys have told me, you’re frustrated about other podcasts out there. Just sustain on lane thing.

And yeah, everybody does podcasts these days. They’re easy to be honest. Now, this is a sort of a sample of what’s you’re going to find in the syndication LPP course. And if you guys haven’t checked that out, please go to simple passive cashflow.com/syndication to check out the free guide the syndication.

And there’s a, be a link in there to the e-course. Now the e-course I think it costs like maybe a few hundred bucks. But it’s really good. It’s not just some lane book that just going to tell you every little thing that everybody other regurgitates over and over again, just runs through spin texts, application to regenerate the same old, a hundred page 200 page book, it’s going to tell you the secrets of what syndicators are doing out there to trick you guys into going into whatever deal. Not saying it’s a bad deal, but I think it’s just good to be aware of these things. And today’s podcast talking about. Private equity and bridge check is going to be a sample of what you’re going to find in the e-course, which I think it would , take most people 10 to 15 hours to go through the entire course.

But with that said, here is the content.

Hey, simple passive cashflow listeners. Today, we are going to be talking to Bob Burnett chairman and co-founder to be systems, but he is going to be catching us up to speed on this Bitcoin crypto craze that has been happening. It’s going to be a little bit of review, but a lot of new concepts and good ideas that when I first saw his presentation.

Really helped the whole thesis around inflation and investing in just real hard assets and maybe Bitcoin might be wonderful, but welcome Bob. Appreciate you coming on and doing this for those of you to sing on the podcast I would encourage you later on to come over to the website and the YouTube channel to catch up.

We’re going to have a full presentation on this. If you guys know PowerPoint slides going to have a lot of good hemorrhages that we’re going to be referring to. You guys can also check out our crypto page. It’s simple, pass a castle.com/crypto and join our community too. We have also a lot of discussions on crypto with the group.

But yep. Bob let’s let’s educate the folks. All right. Hey, thank you lane. I appreciate the chance to talk to you again and especially to your viewers and listeners today. And frankly, anytime I get a chance to talk about this topic I do so because not only is this for me, one of the greatest financial opportunities for people, but it’s something that.

I believe in passionately from the perspective of freeing people and creating a quality around the world. And I think nothing represses people more than mismanagement of money or corruption of money. And I come from that spot when I speak with people almost from an evangelical perspective, sometimes I like to say, So as you said, for those of you watching on YouTube, you see the title of this as a freedom and money.

And that’s the perspective that I come from as I talked to you today. And one of the first things I like to do when I speak with people and lean on, I’ve already talked a little bit. But I’ll pose this question, to, Julaine for the benefit of the users, which is, if you think about where crypto is having its largest impact, do you have a couple of guesses as to where that is?

And Where is it? Yeah, I’m going to give away the slides here. Cause I know what the answer is. Here’s where it’s happening, guys. Where’s the adoption of the Bitcoin and all these deals where it’s all these jacked up countries there’s turmoil within their currency.

So as a side here, Nigeria, Vietnam, Philippines, Turkey, Ru. The United States is relatively low on this list, right? Bob? Yeah. And I think that’s important from a couple perspectives. The first one is what this tells you is that, people in turbulent areas of the world are recognizing the value of cryptocurrency faster and appreciating it faster than those people.

And first of all, countries, the bottom of the list for those of you who are only listening is Japan, Germany, us. So you have these really stable countries, which actually have very low adoption rates, like four or five, 6%. And you have at the top of the list, you have Nigeria 32%. So that’s very important to remember.

So when we look at, what’s the price of Bitcoin, for instance, which we’ll talk more about later, is it. Is it a bubble? Is it about to burst? Is there no opportunity for upside in it? The answer is absolutely not. We’re just barely getting started and it’s also important. I think when you reflect on this, you might say why do we need money?

Why do we need a new form of money? What’s wrong with the dollar or the Euro? I’m going to talk to you later. I think there are some. Severe things wrong with it, but I’d say the average person doesn’t see them. And so they think, Hey, there’s no need for some new version of money, but I’ll look at these other places.

They understand it. And there’s a stat that over the last three decades, 57 countries have had their currency fail. Some of them multiple times, like Argentina Chili’s and Bob way. It’s a pretty common thing for a currency to fail. And when it fails, it generally means the people that have held their wealth in that currency.

They’re at a total loss. As you look at this if you struggle and we talk about Bitcoin is you struggle a little bit about, what’s its importance. It may be important to change your optics and say, Hey, am I looking at it just through my eyes, maybe sitting in Los Angeles, California, or Birmingham, Alabama, or some place in a first world country, or would I see it differently if I was in a logo’s Nigeria or Manila in the Philippines, maybe you’d have a different perspective.

The other thing is main my background is actually as a technologist, as an engineer. For those of you who are a little older, I used to be the chief technology officer at a company called gateway, which in the nineties, early two thousands was one of the largest PC companies in the world.

And. In that role, my job was to not only develop the products, but create the vision for the company about where we were going. And it made me a history student about technology. And what I realized through that work was that the most important inventions in the history of mankind have all been from the perspective of creating a degree of freedom.

If the invention creates freedom, then it will be revolutionary and massive and almost impossible to define the economic and social implications of that technology. Things like the cell phone, things like electricity would fall or in other words, disruptors within industries. Yeah.

And massively disruptive. You think about the automobile. It wasn’t just. The automobile, but it changed, what roads look like? It changed how people work, where they work, how far they could live from work where they went on vacation, the implications are just so numerous.

And that’s the same with crypto currency. I can sit here today and I will, and I’ll give you some of my thoughts about the future, but. I’m sure I’ll just be scratching the surface of what it really means and what the possibilities are. So just most of the people here if you were born in, let’s say the eighties or the nineties, it means that you saw the beginning of the cell phone and at the beginning of the cell phone it was just a mobile phone.

It, wasn’t the centerpiece of your life and in this thing, driving social media and the centerpiece of your financial world. You’re absolutely right lane. The other thing I’ll say about Bitcoin, because I have a little acronym it’s called privacy, inflation protection and efficiency.

I think that these things are at the fundamental tenants of what Bitcoin is providing privacy, because what’s happening in the world is we are losing even the choice to be anonymous in our financial transactions. I can’t even decide to buy a cup of coffee at Starbucks and have that be a private transaction

that ability is being taken from us. Inflation, we’re going to talk a lot about this in just a second lane and then efficiency. I’ll talk less about this later, so I’ll do it a little bit now, but when you look at things like for instance, remittance. Remittance meaning, sending money overseas.

And you look at the countries we talked about at the beginning, Nigeria, Vietnam, Philippines one common aspect of all those countries. My wife actually being Filipina and having family back there as a business factor, money is constantly being sent, from the us back to the Philippines.

And when We use the traditional bank wire system, Swift system or Western union, or places like that to send that money. It’s massively inefficient. It’s very slow. It’s very expensive. For instance, sending $200 from here to the Philippines with a service like Western union is likely to end up with the equivalent of $150 in purchasing power landing.

At the end point. Terribly inefficient, but if we use crypto currency, we can see like 98, 99% of that value move. And we can do it instantly instead of over three days or five. And that’s the trouble, right? Like these large companies like PayPal or the credit card companies, they’re all getting their share.

And the buying power that transaction between buyer and seller is being wasted loss. Exactly. And they’re able to do that because in large part it’s an oligopoly, it’s a very small group of companies who. Coordinate and control pricing in those markets. In any market, your viewers are obviously more financially astute than the average risk and reward are generally tied to each other.

If as an example, I’m going to send $200 to the Philippines. And if I show up at a bank or a Western union office and I hand $200 in cash to them, To start that transaction there essentially is no risk in that process for any of the people providing the service throughout. And I’m not denying there is some service being performed, but the risk of taking a 25% cut doesn’t make any sense.

And but that’s what happens when you have monopolies and you have oligopolies and the banking system is, probably no better example of that in the world than the banking system. Okay. We’ll talk for a second now about money and inflation and what’s kinda going on in the world and, the first thing is I’m gonna play just a very short little video clip here.

From a guy named Neel Kashkari who’s president of the federal reserve bank of Minneapolis. This is from a 60 minute interview about a month after the COVID crisis. And I think you’ll find his words. Very interesting. Can you characterize everything that the fed has done this past week as essentially flooding the system with money?

Yes, exactly. And there’s no end to your ability to do that. There is no end to our ability to do that. So very interesting quote, so it basically is saying there’s a certain amount of money out there in the world already, and we’re just going to print. As much as we want without any control, there’s no oversight.

There’s no vote by Congress. There’s no vote of the people. They’re going to print as much as they want and there’s no end to that ability. Very scary. No, what, there’s different theories on this, right? Like my thoughts. And I don’t really care too much. At the end of the day it’s going to become inflation, the reason why I invest in hard assets, but like why can America do that right?

Is it because our military, why doesn’t all the other countries just print a bunch of money too? The truth is lane. They do Canada prints it. The ECB managing the Euro, does it, the bank of Japan, does it. Bank of Japan has been doing it for since 1980, since their financial crisis there.

And as they print this money and they create debt, they create a lot of debt for the governments. Then what they have a tendency to do is repress interest rates. And as they repress those interest rates and the debt grows. They backed themselves into a corner because if they have all this debt, the us has debt somewhere just short of $30 trillion.

Now, if they increase interest rates, they’ll increase the debt burden on their own debt. And they can’t do it right. They back themselves into a corner where the natural thing is at some point, if you repress interest rates, you create certain actions you create inflation. Does, they’re trying to create inflation.

We’ll talk about that later. Their stated goal is to create inflation. At some point, You have to use increase interest rates to dampen the inflation, but they’ve lost that tool because if they increase the interest rates now they’re now their debt burden is ridiculous. It’s a very ugly circle.

And so there’s different schools of economic thought about it. But you talked about like sound money and hard assets. The Austrian school of economics is really founded on that principle. And it would say you don’t do this. If the economy is taking a hit. You have to let it take its hit and you pay the price and it will recover and self balance and everything will be okay if instead, what you do is you just keep printing money.

You’re kicking the can down the road, but the problem at the end gets worse and worse. Theoretically, I’m not actually predicting this, but theoretically you end up with the these embodied way case. Or the Venezuelan case where people are, walking around with wheelbarrows full of cash to buy a loaf of bread.

That classic example it does really happen. It’s even happened in modern days. I think because of, as you said, the U S that won’t happen too, because. At least right now is the global reserve currency that provides some insulation and encounters the hyperinflation forces. But it doesn’t mean there won’t be material inflation forces though.

And again, we’ll talk about that in a little bit. So second thing want to talk about here. This is a little privacy and just a little history lesson. There is an organization, a lot of people probably haven’t heard of it’s called the international bank of settlements.

And I think a good way to think about it is the bank of banks. So if you have the central bank of Peru and the central bank of Austria, and they want to move money between them, they need a bank in the middle of them to make that transaction. And that’s the international bank of settlements. It’s run by a fellow named Gustin Karstens.

He’s a former finance minister of Mexico. And I found this quote which was from January 1st of this year, speaking at a conference about the future of digital money, basically central bank controlled digital money which is called CBDC central bank digital currency. So I’m going to play this short quote for you here.

 

We don’t know. For example, who’s using a $100 bill today. We don’t know who is using the 1000 to date. It gives you friends with the CBDC is the central bank will have absolute control. On the rules and regulations that will determine the use of that expression of central . And also we will have the technology to enforce that those two issues are extremely important.

And that makes a huge difference with respect to what? So hopefully you were able to catch that those of you listening. He does have a little bit of an accent, but what he’s really saying is we’re at the central bank level, there’s an attempt to redefine what cash is and to do so in a way that essentially leaves no room for privacy and financial transactions anymore.

And I think that. Understanding that, a lot of critics of this will say things like don’t do anything wrong. Why should you be worried about people knowing what your financial transactions are? If you don’t do anything or you shouldn’t worry about it. And the big concern is the sex traffickers, the money launderers the drug dealers, we have to protect against those people.

And, my comment is first that. I believe, and this is a us thing that, I have a right to my privacy. And that if, unless I’m suspected of doing something, I shouldn’t be surveilled is essentially saying we are going to surveil everything and not just at the U S level, but he’s talking, this is the international bank of settlements, not the fed.

This is not even a us agency, but talking about a global oversight over this whole thing. Number one, number two, one of the. Powerful things about blockchain, but also the negative things about blockchain is that every transaction is theoretically preserved forever. So what it means is there can be a revisionist interpretation of transactions.

So today I don’t think anybody would dispute that. Filling your car with gasoline is in any way an offense and that something that you should pay a fine for, or be in prison for, but in kind of a potential dystopian future. And I’m doing this for illustrative purposes, not to scare people, but to say, what if 20 years from now global warming does take hold and that environmental concerns get bigger.

What’s to stop them at that point from going back and looking at the blockchain and saying, Hey lane, over the course of the last three decades, you’ve purchased a hundred thousand dollars worth of gasoline and you therefore created this carbon footprint. So here is a tax or a fine for having done that.

Or maybe in a real dystopian view you’ve personally ruined the environment, therefore I’m putting you in prison. So again, I’m using extreme examples for illustrative purposes, but that we never know. But things to think about yeah. Yeah. And I, again, I think what you have to do is you have to say, where is your line?

What is reasonable? And I think for a bank or a federal agency to say, Hey, we want regulations that financial transactions over a certain size or repeated at a certain level with a certain volume maybe those need to be disclosed. Fine. Okay. I understand. I’m not so libertarian or so extreme to say that should be the case.

But I think this line of saying it’s the beginning of this quote, we don’t know who’s using a hundred dollars bill today. I’m like Hey, if I want to use a hundred dollars bill, I believe that’s my right. And if I do something wrong with it, let’s say I buy cocaine with it.

Fine, arrest me for buying cocaine, but don’t use the a hundred dollar bill as the tool and upon which to do that. And these are like, this is why I don’t like politics, right? It’s like the big government spokes against this crypto currency are using this as their argument.

When in actuality, they just want to make sure they can tax people at the end of the day, or maybe there’s a few other things that I’m missing that they want, but they’re using this as the scapegoat. Yeah, I would agree with that. And again, there’s always unintended consequences, so how big is the reach?

So anyway it’s a point in time where I think we have to be very careful. Yeah. That was my big thing against the script though stuff. Yeah. I think it’s great. And I’d sure to not have to send wires off and all this type of stuff and. All these estro companies would go away and all these title companies, cause they would be tracked.

Yeah, Bitcoin, but these are some of the unintended consequences and the governments don’t want this to happen. They lose their power as the central banks and Oh yeah. May not be good to be betting against the big guys. But I don’t know. I think you’re going to get into it later, right?

There’s becoming more mainstream adoption of the big banks by the stuff that it’s hit that tipping point where it’s hit that adoption point. Yeah, absolutely. Absolutely. And I will tell you lane again, this is just one person’s opinion, but I would say the number one reason that governments want to con then you control money.

Is that. If government wants to accomplish something, let’s just say they want to build a bridge somewhere. Okay. There are two ways to pay for the bridge. Federal government let’s say, okay, they can tax people or they can print new money. Okay. So if you tax people there is. No way around it has to be fully disclosed.

People get pissed off, they stop electing their officials, right? So it’s a lot easier to print money because you say we need a hundred billion dollars to build this bridge, okay. If we just print the money and we just dilute the overall several trillion dollar money supply by a tiny bit.

We’re basically stealing the money from the people who already had the money. I use the word it’s insidious. It’s hidden. Yes. It gets the money from people, Roz them in their sleep, but people don’t know. And now the government and everybody’s yeah, inflation happened.

Do you know? It sucks for all of us, it wasn’t our fault. And people buy that storyline. Yeah. I like to call it death by a thousand paper cuts because you take a little piece every day and it’s not enough. To make it hurt. If you don’t, eventually you lose an arm. If you take a big enough paper, if you lock the whole arm off at the beginning, people are going to be pretty upset about it.

But if you take it a slice of skin every day, it’s less upsetting. Yeah. And this is what do you do about it? You buy hard assets. You don’t be a saver. The savers will be the losers. Yeah. Yeah. And see, that’s the, that’s a great point lane because to me, that is the fundamental problem with the world we have today.

That you’re absolutely right. Your community here is ahead of the game because you’re providing yourself by investing in hard assets, investing in cash, flowing assets, you provide yourself. A lot of protection against this inflation, but the sad part of it is that if you look at the wealth distribution, we have a slide on this.

If you look at the wealth distribution of low income people and high-income people, high-income, people have very little cash and a lot of assets and low income people have a lot on a percentage basis. Low-income people have a lot of cash and no assets. So when inflation occurs, it hurts the low-income people way worse than it hurts the high income people.

So it’s this whole thing about taxation. So when the president administration is doing a lot of things to raise taxes on the wealthy, that’s the way they do and to make the poor feel better, not. Fully disclosing that while they are raising taxes, they’re printing the shit out of money and hurting the poor a lot worse than the wealthy.

Yeah. It is what it is. And it’s important to be educated and know how the system works. And I know here’s something funny. We usually get takeout and I eat more than my fair share of for sure. And if my wife’s a safe or weird, yeah. I eat her food and the next coming days, I call it inflation, and I’m being a troll, but I do it because, you only got one time in the world and China’s valuable, blah, blah, blah.

But it’s true. Right? Savers are losers. People who hold onto things and don’t do anything are ultimately going to be for the future. Yeah it’s true. And part of my message here today is in the current financial system, that is absolutely true in the Bitcoin system that can change a little bit.

And in the Austrian school of thought, it can change a little bit where not that investment can’t be rewarded, but that in a true hard money savings is not penalized. They’ll put it that way. You know that, you’re not gonna get obscene wealth through savings, let’s say, but you’re also not going to get robbed.

So this is what I believe an economic system that would have that characteristic would be fair to me because I like to give an example. I have a grandson he’s nine years old and his name’s Arkin. And if I say Arkin, Come over to the house and help me clean the garage.

Okay. And let’s say I give him $20 for cleaning the garage what I want to say as his grandfather is, Hey arch, and put that money in your piggy bank and save it for college. Save it for 10 years. And when you go to college, that’s going to help pay for your college. But I can’t give him that advice today.

That by the way, that advice was given to me by my grandfather, but I can’t give it to my grandson. Why? Because if he puts $20 in a piggy bank or a savings account, he’s going to have about 12 or $14 of purchasing power, 10 years from now when he needs it. It’s ridiculous. So what it does is it forces a nine-year-old into investing.

And one thing about investing is investing always involves risk. So we can do it certainly in a way where he does not taking inordinate risk, but it doesn’t seem fair to me that a couple hours of work that he put in to help me. That labor can’t be preserved and used later in time with equivalent value that, we’re basically robbing from a nine-year-old kid.

That’s what inflation is to me, it’s robbing from a nine-year-old kid and stealing the work that he put in cleaning a garage. And I think when you think about it in that context, and then you extrapolate it and say maybe it’s robbing from somebody who worked for 40 years and put their money in

their savings account and money market funds. And now they’re trying to retire and live off of that. And I think, again your folks listening to this, you probably understand that, it’s a shame that people are taught that, but that’s what our system teaches people because they should get that money instead of in a money market or a savings account.

Should have been going into hard assets and preferably cash flowing hard assets and but that’s not what most people do. And that’s what certainly what not most people are taught. Yeah. And that’s unfortunate. But maybe you should just join your kid, steal his money. Let’s call it inflation either.

He’s going to be really smart in the future, or he’s going to be an email child and. Go down a wrong path. One of the two risks. Yeah. So anyway we will, we should probably keep this thing, moving it not not bogged down too much. What happened with Bitcoin in the last year has been.

Just unbelievable. And certainly several other cryptocurrencies have followed along, but I like to focus on Bitcoin because it’s the granddaddy, it’s a trillion dollar market cap. And I’ve been preaching about it for several years now. And, but a lot of things happened in the last year because of.

COVID and the resulting actions by central banks around the world. And as I said, in a previous slide there, basically a decade happened in a year. And so all of these things the level of quantitative easing concerns over stability of a lot of governments.

It accelerated a whole bunch of things and made the case for the Bitcoin at an unbelievable level. And one of the things we saw and you talked about this earlier lane was this dramatic change and rapid maturation of the market where Big banks, big financial institutions, JP Morgan Stanley, Deutsche bank, et cetera.

They’ve all jumped in. They all have a presence. They’re all providing services, often custodial services being the number one thing that they provide. So this concern like about, Oh, it’s a for instance, Janet Yellen us treasury secretary. Who has as pissed me off, frankly, frequently, lately, because she’s been saying things like Bitcoin, doesn’t have a function other than to help.

Money launderers and criminals. That’s really not true. And we can, because of the blockchain take a reasonable estimation of how much illegal activities going on. Most of the estimates are about one or 2% of the money in the Bitcoin world is being attributed to some sort of criminal, which is less than the U S dollar.

By the way, which is probably more like four or 5%. But nobody blames the dollar, for, to pay no attention to the man behind the curtain. Yes. Yeah. Trust us. Trust us. And we’ve had wants is always wants the best and will always want the tech. Yeah. Yeah. Yeah. Unfortunately a lot of people believe that and, but I don’t think the facts supported very well.

And just on that list, just to expand on it a little bit, not only has. Some of those big companies, but all the big payment processors, visa, MasterCard, PayPal, Venmo, just the other day. They’re all in big life insurance companies, Massachusetts mutual, New York life. They both put several hundred million dollars into Bitcoin.

We’ve got funds like Guggenheim Tesla put a billion and a half dollars in, so this is rapid acceptance across the institutional and corporate. Structures around the world and we’ll dig in a little deeper on that in a minute. I had given a speech in February of 2020 and right before COVID and at that point in time, Bitcoin was trading at about $9,500.

And. We saw a dip. It had it had a big blip on black Thursday, March 12th, recovered very quickly. And has been as high as 65,000 and now sits at 55,000. And a lot of people when they looked at this situation for instance, the gold bugs and maybe there’s some of the on here today, they’ve been dreaming about this day when the world return into this chaotic situation, whether that was a pandemic, a world war, something like that, what happened in gold would suddenly become this massively appealing asset.

Didn’t happen. That same period of time I talked about Bitcoin being up about 300% gold, only up about 20%. And this year it’s only up about 3%. It’s just kinda been middling. It really hasn’t done anything. And it’s my belief. I don’t think I can prove it nor can I think anybody disprove it.

But I think basically what has happened is. I think Bitcoin has stole all that thunder. So the trillion dollars, Bitcoin Rose almost a trillion dollars in market cap between early 20, 20, and today. And I think it stole all that from gold. And that gold is probably be in the 2020 100 range, at least if Bitcoin wasn’t there.

And I think what’s happening is that.

People are realizing that Bitcoin is superior to gold in every metric, except for history. So it’s merely a comfort factor that, gold has thousands of years of history as money, or at least as a store of value. And I’m not saying it’s bad. I don’t think it’s going to crash necessarily overnight or anything like that.

But most of the attributes that have made it appealing as money I believe are diluting. And we’re going to see it kinda middle along and probably float down to more its natural rate of what its value is as jewelry and as an industrial usage, what the gold people like to say, it’s intrinsic value. And I think we’ll find that most of its current value is in the speculative component.

Not in the intrinsic value. And this is happened with silver. For instance, silver is lost it’s positioned as money and this is where a lot of like the gold bugs. And we don’t want to mention names up there, but if you break down, love their thesises on why gold is the thing, other than the fact that they get compensated and get commissions every time you buy and you click on their link Same could be said for crypto.

And so I think we both agree with a lot of these guys’ arguments, but why not crypto? And they can’t answer it other than the fact that their website cannot get commissions off Bitcoin. Yeah. Yeah, it’s very true. And he said, I can tell you laying in that, tell your audience, I’m not here selling anything.

I’m doing it from an, like I said, purely evangelical perspective because I want the world to be a better place for my kids, for my grandkids. And I think this is not to be overly dramatic. There is a one-time chance in the history of mankind left to take control of money from governments. This is it.

I don’t believe they will ever let a Bitcoin sneak up on them again, that they were blindsided by this. They ignored it for a long period of time. And now that it’s it got really big, really fast. They didn’t see that coming. They didn’t see the adoption. Infiltrating, fortune 500 companies and major funds and big financial institutions.

And now they’re trapped. They really can’t ban it legally. There’s no way that’s going to happen, they can’t shut it off. Technically it’s too big and too widespread. They can make it maybe a little difficult, but they can’t stop it. And this is it folks, this is our chance. So if you like your fee out money, then you know, God bless you and, go for it.

But if you want the world to have a hope of having a true free, transparent non-inflationary money supply, this is it. Jump on board. Now w one of the things I’ll say here is I think people often have a hard time figuring out what Bitcoin is. So they like to compare it to things that they already see.

Is it like this stock? Is it like gold? Is it, but the problem is. It’s so many things. I think you have to really say it’s something unique in and of itself. It’s a monetary network, a decentralized monitoring and work. It’s a protocol like the internet court has a money characteristics, very strong as a store of value, some value as a medium of exchange.

It has the ability to be a unit of account. Although right now it’s, doesn’t really have a lot of that. And I think when people think about, should I put some of my net worth into it? How do I think about it? How do I evaluate it? It gets really difficult. And I think people get stuck on that.

I say that you have to think about it completely differently if you’re a trader type person, which I am not, but if you are. It’s going to be very tricky because I think a lot of the things you think you may know about what a certain trading pattern looks like, or a certain shape of a curve or a certain pattern you may see that in Bitcoin and say, Oh if this was happening in a stock, it would mean I buy or I sell, or I do this.

But don’t think that you can apply those same curves to Bitcoin. It might work one time and then be an absolute dumpster fire the next time. Bitcoin doesn’t follow those patterns and again, it’s not a company, there’s no leader, it has no head. It isn’t beholden to anybody. That’s a big thing, but the last thing I’ll say about it here is.

This is the way I look at it. I don’t measure it in dollars. So I view Bitcoin as in the merging parallel financial universe. Okay. And if I move some part of my wealth from the existing, see out universe, primarily dollar base, and I move it over into the Bitcoin universe. I don’t intend on it ever going back.

Okay. That I am not in fact I don’t like to use the expression I bought to Bitcoin. I’m more likely to say I sold my dollars and acquired Bitcoin. And that’s one thing I think people often kind of mistake when they think about money is they forget. That it’s always a two-sided transaction, whether you’re buying a house or a pack of gum, you are selling your dollars and you’re getting this other thing, whether it’s a commodity or an asset.

So if you bring that, let’s say it was an asset. When you bring that asset back to dollars you’re bringing it back into this. Scary thing. We’ve talked about inflation a little bit already. You bringing it back to this thing that is not working for you. So if you do that, you better get it somewhere else quickly because it’s a horrible store of value.

It may be, one of the worst stores of value of all time. And so anyway, this is a important part of, I think about trying to get the right mindset, to think about how Bitcoin works and and how it might fit in your world. Okay. Since I know you’ve seen most of this already lane.

There’s a predominant feeling. If I go out and I spoke last week at at Florida Gulf coast university, and I had a classroom, I had about 80 kids in the classroom and I asked all economics and business students and I asked them what’s the current rate of inflation. And every single answer I got from the audience.

Referred back to this chart for back to consumer price index or PCE. And the numbers that they came back with were 1.5, 2.1 those kinds of numbers. And then I said to them, I said in your life does the last year, does inflation feel like one and a half or 2%? And basically nobody felt that their world felt that way.

And so you have to peel back the onion a little bit and say what are they actually measuring? When the fed measures consumer price index, they’re really measuring the cost of the base and necessities of life. At best, by the way, I’ll even be kind to them. And just say, let’s say they’re just looking at the base standard of living.

They’re not looking at asset inflation, they’re not looking at luxury items. They’re not looking at aspirational items and you start looking at those things and you see a whole different picture and you realize that real inflation. Is way, way higher. My personal belief, if you blend it, it’s probably more like 10 or 12% right now.

And for those of you who can see the chart, this is a growth of the expansion of the money supply, which is up by about 30% year over year. So from a technical basis, that’s what inflation is. Inflation is expansion of the money supply. You don’t feel it’s symmetrically. It’s not like the price of apples and bread and toilet paper all went up 30% directly.

In fact, it usually inflates through hard assets. First, the things that you know, that lane talks about all the time, those are the things that see at first. So when you’re investing your money in those things, That’s great because you’re ahead of the inflation curve and you’re buying those assets with pre inflated dollars, and it might take two, three, four years for all these effects to filter through.

But some of it’s immediate in this world. I just so happen. I have a chart here just current from yesterday, lumbers up 265% gasolines up 182%. Corn is up 84%. Sugar’s up 59. Cotton’s up 54 coffees up 13. You start looking at those numbers and then, for a lot of the folks here, you look at real estate.

I know I live in Florida. Real estate prices are up 16% in Florida this year. One year and it’s, and if you’re looking at things like Miami beach properties or Naples, Florida properties are up way more, in the higher, more desirable areas. I got a direct antidote for that.

So we’re building a 200 unit apartment complex in Huntsville right now getting kick their butts with the lumber prices going on. As I said that’s inflation. It’s not the fact that the Lumber’s more expensive it’s inflation. Yeah, we’ve got contingency to cover. Cool. But how great is it going to be in the future when we finish building this thing and sell it?

Because already, just in the past, I would say a year we bought out another hundred unit out there. The cap rates have come down at least a quarter percent. We have a couple million dollars of equity in that property. And part of that is rehabbing units. I’d like to say it’s our hard work and dedication.

I would say a million out of $2 million of it. Just that one property is inflation. Yup. Rates coming down. Yup. The right side of the curve. I’m glad you’re blessed with that lane and those people doing similar projects that may be watching, God bless you.

There’s an actual name and economics for it. It’s called the effect. And the cancion effect basically says that as new money comes into the system, those closest to the money. Benefit most. And I think you would know it as those people that see new money come into the system, they have access to cheap money.

Like people you land, you have access through the banking system and you have credibility, so you can get access to money at very discounted rates that allows you to get into these assets before the effects of the inflation have rippled all the way through the system. And so you’re going to buy those assets with pre inflated dollars.

And you’re going to ride that whole thing up. You’re gonna ride that whole inflation curve and do really well. But again, the guy that unfortunately is making $12 an hour and, barely covers his rent and food every month. He’ll never get out from that.

And if what I like to say too, is the best measurement of inflation is not what it costs you to live today, but are what will it cost you to live in your dream? So if your dream is a penthouse, condo in Miami beach and a Lamborghini, and you’re 20 years old, let’s say and say how much money is it going to take for me starting at zero to get to that?

You’re gonna have to not only earn all the money, but you’re gonna have to beat inflation the whole time. Let’s say to try to get there by the time you’re 35. If that’s your goal, you’re gonna have to do something really extraordinary in high inflation times. So again, that’s partly why when I started this about.

How did the poor get repressed and oppressed it’s because of this. And another thing to remember is the dollar is the global reserve currency. So all the other currencies in the world are pegged to the dollar. So if you’re a poor person in Manila, like we talked about earlier that the gap to affluence has just gotten so massive.

Like how do you ever close it? It’s almost unattainable. Here’s just a couple other things, just to show, how inflation has changed. No. This is since 2000, average home price, up 5% price of a car up for college, up over six. We have all of those sorts of things collectible whisky and homes in the Hamptons.

We have all those things. All so we’re nearing the midway point here, folks. We’re really gonna, we’d like to, we’re going to have Bob back to finish up the conclusion, but we’re going to make this a wrap up part one here for you guys, because I got to go get my COVID shot so I can save other people’s lives in the process.

And we’ll record this in a future podcast, but thanks for coming by Bob we’ll connect next week and wrap this up and I guess for you guys listening we talked a lot about inflation, right? This is the insidious way that the government devalues your money. If you just had it where everybody else has it in their bank accounts and their assets that don’t really appreciate with the pace of inflation.

So another good reading would be going to simple passive cashflow.com/debt. I wrote an article in Forbes regarding this topic and yeah, this isn’t the stuff that our parents taught us. But certainly, hopefully it’s not the stuff that myself and Bob were going to teach our kids and hopefully you’re going to follow suit, but we’ll catch you guys next week.

 

How to Increase Tax Deductions on Single Family Homes

https://youtu.be/-TQIx5njkz4

So DIY cost sag is a platform we developed after being in the industry since 2002 and doing well over 15,000 studies. And we saw a need in the market for smaller properties under a million dollars. And whether it’s a single family, residential, duplex, quad, or triplex. We cover those, or it might also be a dentist office or any other kind of commercial property under a million.

We actually go up to $3 million, but it’s a lower cost quicker alternative. So how that works is we’ve built a modeling system and we’ll model the property. So it’s a non inspection product. It takes essentially. Five or 10 minutes to input the data you put in your credit card and you get your results instantly.

So what happens with that is you’re done and you get your results. So it is going to air conservative. And because we’re not inspecting it, there’s been a lot of talk like on bigger pockets of your folks. That’s in the bigger pockets about these solutions. We have tremendous supporters and people that question it mostly competitors, but we provide audit protection.

So in the event you’re auditing, which is very rare. But if you are audited, we are going to send an engineer out there and do a full engineering study, which we do again, we’ve done well over 15,000 a year since 2002. So we will defend you fully so you’re protected, but it’s a quick and easy solution, whether it’s a one to four family with a discount code that you’ve got through here with lane, it is, uh, $640.

That’s a wonderful word and matter. What’s a single family or quad anything in between. And if it’s under a million dollars in five plus units, it’s 1200, $1,390. That includes the audit protection is one 95 it’s insurance policy. So basically. It works great. It’s a good solution for the right situation.

Certain, there are plenty of properties that are under a million or right in that borderline that justified the full asset detail that you’d get from a cost segregation study for a future abandonment and disposition and things that depending on your purpose with the property and what your plans are with it.

I talked to folks and say, this is your best option, or this is your best option. Are you looking to maximize your depreciation and do a lot more value add? Or are you just looking for quick deductions? And an answer here, but if you’re a real estate professional or not, sometimes that makes a difference.

How valuable are these tax deductions to you for an officer? And it also takes into account, like how long are you going to put onto the property? It’s just like a turnkey rental that you’re going to dump in three years to go to syndication deals. Maybe it doesn’t make sense, but if you’re costing out maybe a little bit.

Larger property, especially in California, maybe that might be just enough to get some tax savings, to save up more money and eventually go into deals and get cost segregations there, and then sell the properties and not have to do a 10 31 exchange as I don’t like at all. But you guys can go to again, civil pass, a castle.com/cost state.

And then there’s the link there with the discount code SPC.

Tax Deductions | Single Family Home vs Apartment

https://youtu.be/z_gYhWYhf1Q

It sounds great. Right? You’re getting 10 to 15 times more deductions of first year, but there’s a cost to this. And when I do it for my large apartment buildings, I’m usually paying five grand or so on that thing to do this, to extract it out. But that requires sending out a guy on expenses to travel out there, but that’s obviously not cost effective to spend $5,000 to get $20,000 of deductions.

At 25% tax bracket, that’s a break even. So that’s where this do it. Yourself. Cost segregation product comes in, but bill, let me put you on the spot here. Why would Lane’s spend $5,000? What else am I getting it by cost? Say that somebody’s spending 600 bucks and one of these things. Isn’t getting just sitting no eyes wide open what they’re going into.

Well, there’s a huge difference. And I think on your bigger deals, if you’re spending 5,000, you’re not getting a very good study. You need to spend more than 5,000. Are there usually between five and 10? So on an apartment complex, it might be 7,506, six to eight, depending again, on the engineering that’s done.

So on a full study, we look at it and I think anybody else would look at. What are the engineering hours it’s going to take to do the work? Cause we send somebody on site. We count everything. We qualify everything and we do all the asset detail. So in a full study, you get complete asset detail, meaning all your roof deal tale, all your HVAC detail, all your straight line detail.

As well as all your short life detail, carpeting, flooring, cabinets, everything, you’ve got some, and we give a hundred page report or back to you showing out all that detail. And we go into everything, electrical breakers, no one else gets the breakers. We need things that people don’t do. So we are deeper, but everybody goes in an engineer’s pretty deep and gets all the outlets and things.

So that’s what a full study is. It’s a lot of pages. It’s a lot of research. And a lot of documentation with the guy on site here. Oh, you always see the guy inside. Yeah. You always send a guy inside an engineer. We send our own engineers. Some people would send picture takers and interviewers and stuff, but somebody all wasn’t goes on site.

That’s pretty much what happens now with DIY it’s a non inspection product. So DIY means we’re modeling. So we’re going to air conservative. So if we would’ve gotten a 25% results by going on site, we might get. 19% by the DIY because you’re not sending somebody on site. If in fact, you’re audited, though, again, as I mentioned, we will go send somebody on site and we will do that a hundred page report for you.

But what you’re going to get with DIY is a model solution, which is what a lot of the people out there do models and residuals and sampling, and they add pictures and some engineering. But what you get is a one-page report that gives you your five, seven, 15 and 27 and a half year. And then some categories of generally what it would be, and then a receipt, and then your data inputs, because some people put the date wrong, we fix it for them.

We don’t charge afraid of that. You get a very streamlined report, but that’s all the CDA cares about CPR. 100 pages they want. Five seven, 15 and 27 and a half to put on your tax return and they’re done. So that’s what DIY does. So it gives you a lower number. It’s a lot less expensive. And so that’s why it’s good for the lower value properties where maybe you can’t justify a five or $10,000 study.

How Do Sophisticated Investors Make Money?

https://youtu.be/d4y_Mj9PIVU

Just grab this out of a new Mark or recently in this models, the interest rates, which, you know, all-time lows. Once again, maybe it’s been creeping up this first quarter, but still pretty much as low as it’s ever been. And the cap rates on multi-family and that’s, this is just a general cap rate for all markets, all asset classes.

So the important thing, what I want to show here is everybody asks, when does it attempt to buy? It’s always a good time to buy when you’re trashed, but as investors, what we do is we’re basically making money on the spread between the cap rate and the interest rate. So right now, cap rates are 5.8% on average, and that the ten-year treasury as is at a 0.93 investors make money on it spread.

And then of course we apply leverage good, healthy leverage. On top of that to magnify those returns, you look what’s been happening is last few months, that’s spread between the cap rate and the interest rates is a lot bigger than normal. Some of the squeeze points of times where it wasn’t a great place to be investing was mid 2018.

As you can see by the charter that there was a bit of a squeeze there, or maybe in between 2006 and 2007, there was this, there was also squeezed there, but the times were the spread of widens. Now that’s the time to invest like mid 2012 year and right now, but that’s a year academic look of how investing works essentially.

And this is what a bank does. They go in and invest in arbitrage of money somewhere else. And they take on debt, but good debt to be able to afford onto the asset that cash flows.

What the Unemployment Rate Does Not Tell You About the Economy

https://youtu.be/4vPkhgIuZaA

The way they keep those statistics on who unemployment has been changing to make it look rosier than it really is. Yes. But I would say there’s another statistic, which is more important, which is labor force, the labor force participation rate, which is down around the 61% now. But as recently as the 1990s, early two thousands, it was around 67%.

So that’s a six and a half point. Decline or 10% decline if you think of it as a percentage of the whole, that’s a big deal. That number is the lowest. It has been since the 1970s, when women first started coming into the workforce in large numbers. Now, if you don’t have a job. But you’re not looking for a job.

You’re actually not counted as unemployed. The unemployment number we saw and yeah, declined from it was hit about 13%. Last spring came down to 10. Now it’s around a seven or so maybe slightly higher. That’s still high, but it’s a significant improvement over where it was last April, let’s say, but that’s not the number that matters.

The number that matters is labor force participation. So what’s happened is. Tens of millions of Americans have, have left the workforce there. And I’m talking to ages 25 to 54. I’m not talking about a 68 year old who wants to keep working or a teenager, or we’re not talking about disabled. There are perfectly good reasons for people not to be in the workforce.

There are always some, but we’re talking about able-bodied individuals between the ages of 25 and 54 prime working ages who have left the workforce. If you’re not. Banging on the door of the unemployment office is looking for a job. They don’t count, it was unemployed, but you’re not working and you’re not producing.

And so I look at that number because to me it’s a better gauge of economics displayed right here. So that’s just simply Google and the labor force participation. Right. Kept up by the U S Bureau of labor statistics. And is this pretty much it, this is what makes it hard, right? Because everybody hears the news headlines and we know they’re always just trying to sell use headlines, just like other talking about how collections are horrible, but I don’t see any of that issue happening.

In other words, saying that. Unemployment’s down, but is this really the way to cut through that noise? Yeah. This is a more manual chart than the unemployment rate. Again, this is the labor force participation rate. Now you notice you heard a lot of talk in the last March, April, may about the V-shaped recovery and pent up demand and all that.

And you look at that chart and look at labor force participation while you see the steep decline at the time of the pandemic. Okay. Got it. It came back. But that’s not a, the that’s like a half a B, in other words, the bounce now it’s flat and going down again. So yeah, you had a little bit of a bounce back.

That was to be expected after the, we got through the original round of lockdowns in may, in June, she had that bounce back, but then a flat line, and now it’s going down again. That’s consistent with what I said earlier, which is we’re heading back into another recession right now. Because there’s a new round of lockdowns.

You don’t need a Ph.D. to figure this out. You locked down half the economy. You’re going to get a reception. It’s as simple as that.