Tag: Mindset

Confession… At What Point Did I Feel Enough Was Enough?

What’s up folks? Now on today’s video podcast, wherever you’re watching this a little bit of a confession. So I guess the story starts off, was talking to one of my buddies and we’re talking about another guy who, we always talk about some of the people that are the next level above us that kind of keep things in perspective and learn what the strategies and the path to follow.

As we’re all on this, road of, leading a private equity front and bringing passive investors along with us like you guys, and. , the story that came up was like, this guy that we’re talking about who was high up there and they just wholesale it commercial property for a $3 million profit and there was no feeling there. When, no feeling there, the guy didn’t really care and he made that confession to my buddy. And we both joked and laughed man, that’s a lot of money, right? To just just show up here in your bank account. And number one, how cool it would be to be there and how messed up it is. But then really started to think to myself and this is what I’m talking about now, which is, at some point, we’re not so far off from that maybe I shouldn’t be putting out this on the internet or out there in the world.

The other day I was investing and the deal cashed out and I got a couple hundred thousand dollars just dropped into my account and I’m like where did this come from? I knew I’m not super oblivious, but it’s hard when you have 80 to a hundred, K one s and different things I’m in and I’m I can remember not too long ago when.

Getting, $20,000, $15,000 from that one deal. I did, meant a lot. And it was, we would celebrate and, it was a big thing. I would actually. Just you’re taking a vacation, you anticipate the buildup prior to that and it’s and then you see it drop in your account.

In this case, I don’t even remember the damn thing was coming and I just came and went and I actually forgot about until, again, me and my buddy were talking about the story and I started to self reflect And I can even think a little bit before that, right? I think a lot of investors, are in these shoes right now where you’re going to your work every day.

And I’m wearing like my, my prisoner wine shirt, , outta respect, because I was there one time too, right? I would save my money and, every month they would go up maybe a few thousand, $5,000 a month, and at the end of the year, I would have enough money for, I, when I first started a turnkey rental, which I don’t know why any credit investor would own those things.

That’s eventually was became, $50,000 minimum to go into a deal and then eventually, was the seed money as earnest money into my larger commercial assets as a general partner. Like that money would build up slowly over time. And this is why today I, I don’t.

Feel that taking lightly, taking money from investors. Cuz I know 50, a hundred thousand dollars for most people, even for a lot of our accredit investors, that’s the lifeblood of one year. That’s the heart, sweat, and tear of 360 something days out of the year where you’re saving money and yeah, you’re buying things here, there creating experiences, but You know that, that money that kind of builds up and, within our family office group, I can reflect having these discussions where, now we’re writing these checks of a hundred, 150,000 into this deal. That deal, it, it seems a little bit like monopoly play money a little bit. And we always talk about how is it.

We knew the value of the dollar, but it’s hard for the kids to pick up on the real value of it. But, I guess that’s another topic to be discussed in the future. But I guess what I’m saying is money when you start to extend on that hockey stick, you start to become really desensitized to it.

And, it makes me a little sad in a bit like,  the happiest times for me was when, that deal panned out and we, I got this big lump sum of money and I would, open up a hundred dollars bottle of wine. Maybe today I’ve got a couple of $250 bottles of wine. Like I got the Caymus special re reserve and I’ve got.

Stag sleep Cast 23, which I haven’t drunken those yet. I don’t think I’ve drank more than $300 bottle of wine yet. I have ’em, but at this point, when a deal goes full cycle, that’s what, I just do a hundred dollars bottle. You, it’s my limit. But like I can see I guess wine is a great example of something that.

It builds and builds something that yeah, you pay for value, but at some point you have that diminishing returns concept coming up and it keeps going and going and it is just from a dollar’s perspective, the price of these extravagant things or lifestyle, it keeps going up and up and maybe that’s a great way to run a business of high net worth people buying these high end things.

But like from the user’s perspective, like I don’t get that, like that jolt. I don’t get. Excitement. The buildup, like I said, with this money dropping in my account haphazardly of course I’m gonna take that money and go put it into my infinite banking, and which you’ll see later on this year, our credit investor banking a little bit different.

Life insured mechanism for cash reserves for myself to, backstop the opportunities that I am going through and dealing with these days. The takeaway. Take your money and hide it from yourself so you don’t spend the damn thing. Because even myself, like a person who has good money, values and systems, I gotta hide it from myself too, no different than anybody else or somebody in the beginning levels of personal finance.

That’s another segue there, but I think it’s the point that I’m trying to make here you’re building up this money and the zeros just keep adding and adding. So I totally understood when, in the story where this guy makes this huge windfall and he doesn’t feel it, and how a sad thing it is, and I don’t have an answer yet.

I just wanted to share this kind of predicament or. Speaking first world problem, of course, but this is, I think where the solution is in the future is, finding things that you know, bring you joy. The smaller things that may or may not cost money. . I think you guys maybe get the gist of what I’m talking about, or, appreciate the small things, appreciate the small wins that are on the way, or at least enjoy this journey despite how many zeros or lack of zeros you have, whether it’s your first deal or I think what I’m speaking to are the people who are in multiple deals, and you’re on the rails in terms of this quicker path to financial freedom.

Better deals in alternative assets that don’t go up and down in the economy. The tax benefits, the infinite banking, when you come, all these three strategies together, you’re on this rail, this railroad that tracks that gets you a lot faster. And at that point I tell a lot of people just relax and enjoy the ride.

You’re on cruise control. You’re on the moving escalator. Yeah, you can go a little bit faster, you’re gonna get there in heck, a lot of less time than you. So otherwise, would you previously thought or much more exceeded your expectations?

There was a comment that kind of, this all came about this morning to me and I wanted to just capture this for you guys. Comment came through on investors said pretty high net worth investor said that you. . People think that when you become wealthy, all your problems just go away.

And I do think that’s true in, as we reflect on what I’ve this kind of what transpired, however, let me look at my response here. Yeah. As p Diddy, puff Daddy, however you call it, mace, Harlem World said More money, more problems. Yes. Different problems. And I guess what I’m talking about essentially here is

desensitization, I dunno if I’m saying that word right, but of desensitization of wins and celebrations along with the way, and if that’s the kind of their point system in life, then what a sad thing that Azure net worth grows that you don’t. The jolt or the joy from these types of events along the timeline.

However, if you are still trying to get on this moving escalator, don’t just think more money, more problems as a poo thing. You guys gotta get more money because one thing I know is. Creates more opportunities and allows you to have the freedom again bold, that word freedom to do what you want, with whom you want, et cetera, et cetera.

And ultimately to free you up to maybe you’re doing this, gonna just do the same damn thing you’re doing now, whether it’s playing doctor or maybe as an engineer in a great part of a team, working for great people, doing some cool stuff that allows you to. without having to worry of, being fired or, having to just go somewhere else and take a cut and pay.

Do it not for the money. . And it also buys not $20 crappy wine. And oh, by the way, we are unrolling out the the new private label. So for those you guys who refer friends and family, that’s gonna be a little perk of that it’s actually like a hundred, $140 bottle that we have for those folks.

So it’s not just a piece of garbage wine. I wouldn’t put that out there and put, wouldn’t put the simple passive cash flow name on it, and it’s gonna be branded under the off market.

We’re talking about more money, more problems still buys you freedom, better options to do what you want, with whom you want, et cetera, et cetera. I think that, something I said before is, money isn’t everything.

but it sure makes a life a lot easier, in certain respect. But there is definitely a diminishing return side, and I definitely see that. There’s articles written about the $75,000 a year rule. Who knows what that is? With inflation, it’s probably like $120,000 right now, but, What I see it as more like I see most of the investors out there, it’s like somewhere around 20 to $40,000 of passive income every month is enough.

Which is why I always say if you backwards engineer it, At that point, four to 5 million net worth is that sweet spot number, which we try and guide, get, guide you guys towards. And if you guys need, have any help with that, that’s what our inner circle community, the fum is all about There.

But anyway, that’s the confession today. Now I might get some hate mail here. If you have any strong opinions on this drop us an email or put a comment into the YouTube channel box. I’ll try to answer it. And if you don’t and you think I’m an a-hole and you know this pompous person with W first world problems, then that’s fine too, but I guess the reason why I wanted to bring this up is, like I help a lot of people who where was I was, buying rental properties, getting, your non-accredited investor status, getting to accredited investor status, and of course our big wheelhouse is get, moving you past that.

and, for the people who are still in the trenches, cuz they still talk to some of you guys from time to time, you guys do join the club. We can’t really work with you. I share like the remote rental e-course and resources that I would do at the time and a lot of this is just.

Staying the course and living time. This is not an altcoin kind of thing. This is not like investing in Tesla that goes up and down. And man, what a life to live if you’re doing that, I think there’s more important things to be stressing about over that ticker or playing the Osage, sticking your head in the ground with that.

But that’s another video of course. Like that. What I see from people, they, a lot of you guys out there, you guys are good, hardworking folks out there and you’re on this path. And especially when you implement all these strategies is like, what I see is relax, chill out.

And I get it where the stress comes from. Until you’re there, you’re still running. and it’s totally a admirable, makes total sense, right? Don’t let the turtle behind you catch up to you the, with the turtles and the hair analogy. But if you’re going to, if they’re not racing the turtle, and it’s just a race with yourself and you’re going to get there and be the winner and beat your alternative self.

Who is investing in stocks, bonds, mutual funds, random cryptos that pop up here or. . And you’re gonna get there in a third of the time, then enjoy the things that are happening today. Maybe you have younger kids. I try to be more and more present. I catch myself too, right? Like I, I’m always working and stuff like that.

But, those are, I think those are the things that, the things that really bring you joy where the, the big windfalls. Yeah. We’ll celebrate it. But I’m telling you, you’ll get desensitized to that and you’re just gonna write another check to invest more and it’s just gonna keep going.

That if you take my experience it’s just a kind of a game of diminishing returns. And there’s something else. I haven’t really figured it out yet. I have a feeling what it is. , there, there has to be something out there that kind of just brings you joy and that you are finally allowed to really focus on.

And I think this is where, you have like monks and like people who are very low net worth that are very happy they figured it out. But again, there has to be a nice little sweet spot in here, right? You can be a millionaire and be very conscious and appreciative of the small things. , but having your net worth keep growing.

And I think that’s the why, the reason you guys listen to this channel and at least that’s my goal and that’s what I’m trying to help you guys. Not only grow your financial wellbeing, but also the other softer side of this is, it’s taking more of a holistic approach. But anyway, if you guys like this type of, UY selfie stuff or you have any other comments, let us. And we will see you guys on the next video.

How to Monetize Your Passion & Thrive

What’s up, podcast listeners? Now the changes are gonna be coming down the pipeline. For those of you guys who really like those monthly update reports, we are going to be stopping those. I’m sorry. Apparently people’s attention spans are super short these days. So what I’m gonna be doing on a weekly basis on the podcast is doing more of a really quick.

Five articles that I think pertain to real estate investors or investors in general for you guys. Add my commentary. So you’re gonna start to hear these podcasts on a weekly basis throughout the year. If you don’t like it, you can fast forward through it and then skip to the normal, routinely simple, passive casual flow, regular podcasts.

But that’s what’s gonna be coming down in the pipeline in 2023. If any other suggestions you guys have, what do you. What do you guys don’t like? Please let me know. T sensible passive cash flow.com. If you haven’t yet joined our investor club, what are you guys doing? We’re starting to make the first monthly payouts of 1% every month or 12% on annual basis which is structured around our pre equity plus fund or PET fund for short, which is essentially a debt fund, right?

It’s I think it’s the kind of the prudent strategy today. With interest rates sky high, where they’re at, it’s just hard to make deals, pencil, and I, quite frankly, I don’t know how people are making deals work. Actually. I do know how a lot of these newer operators who are trying to build a name for themselves and actually given the opportunity with all the big smart money like us who have over 1.2 billion of assets and ownership.

We’re sitting on the sideline. A lot of these newer people are willing to take chances and getting deals done. At this point in time for our investor group, I feel like the preferred equity approach, which is the debt side, is a little bit more of a prudent strategy at this point in time.

I saw yesterday that apparently inflation went down a little bit to 7% off the highs of nine. Good news. It seems like the Fed increasing interest rates is, seems to be working and, they just announced a half a percent bump instead of a 0.75 bump. So hopefully we’re seeing a light at the end of the tunnel.

. I’m still anticipating maybe at the summertime things really get going, you still gotta get your money moving, right? I’d say if you got several hundred thousand dollars of debt equity in your home, get that out as a HELOC put into infinite banking. Make money there.

And then also put it into something that is making you a nice, high single digit yield to arbitrage off that. For now or if you find great deals out there, put it in there too, but, , right? What are we talking today? Chris is gonna be on this show. A lot of our investors these days are more accredited investors, guys who not really care if they take gas from Costco, right?

And save 10 cents, 20 cents a gallon there. Or screwing around with, credit card hacking, all this type of stuff. Because why? Because after a certain point when your network gets passed, a million, $2 million, all these small ball types of things is really just burning up time and you start to realize time is more important to you than a lot of the cheaper things that I personally used to do, which I have a list at sy paso cash flow.com/cheapo if you guys wanna read that during the the Christmas break here.

Like what do you do when you’re trying to find that passion, but you also wanna align it with taxes for that combo. And this is, this podcast today is more for people around a million, million and a half net worth or less. Trying to find that passion, trying to find that EK guy and what is EK guy?

Something that you love to do, what the world needs, what you can be paid for, and what you’re good at. And this is very different than, something that you love. That you can’t really monetize, like pottery or some random hobby or golf for an example. What we’re talking about are things that you can monetize because the world needs it.

And I’m not saying money is the most important thing, but in our world, the way it works is you. When you create value for other people, you are typically reward with money. So it’s indicative of, or byproduct of one or the two. But this concept of Iki guy a lot of people I talk to these days are high paid.

Professionals, they make multiple six figures. . And sometimes it’s I hate to be a jerk man, but you’re probably better off staying at that high paid job, at least till you can hit your passive cash flow number of 10, 20, $30,000 a month and then just shut off the engines and, go garden and play golf from there.

For some people, they wanna take the approach of, and they’re really unhappy what they’re doing and for those of the people you. We have these calls, they may suggest, taking money outta retirement earlier than later and more aggressively. And there’s some other tax strategies to mitigate that in the meantime, but they just don’t like what they’re doing for work.

And this may be you guys out there and maybe this is a ponder this like how much more can you work at a job that, yeah, you pay get, you get paid pretty well, but you don’t really enjoy. And maybe that there’s some way you can find this concept of icky guy with some other side gig or hobby. That said, most of the people that listen out there are not business owners.

They, you guys don’t have any business aptitude. They’ll be one of, don’t wanna be offensive, but I just want to, state the office. Most people who start businesses don’t make any money and they don’t get anywhere. And, I guess what I’m saying is as I think of raising my own children, I, I think a lot of people say, yeah, you need to be entrepreneur.

You need to be, not be a another government or byproduct of the education system and work in a big company. , but I’ll be the first one to tell you. As a business owner, most people cannot run successful businesses. They don’t have the aptitude for it, and they don’t get lucky with some kind of traction out there.

They don’t, the business doesn’t sell anything. It doesn’t get going. There’s no traction. I think I’ve been blessed to create this simple passive cash flow podcast back in 2016. A lot of you guys seem to like it. But I consider myself very lucky to be in this position. We’ve hired staff to help me amplify the message, but most people never get to that point.

Just look at all like the spinoff of podcasts and YouTube channels these days. So I’m not saying that, don’t go after your dreams, but it’s gonna be no different. The message I send to my kids, which is, yeah, you can have your dreams, but By, you need luck for it to get traction.

But for consider the traditional path of going to school, studying hard, going to college, and working in a J O B, nothing’s wrong with a j o b. If you can save 25, a hundred thousand dollars a year to put to rental properties or syndications and implement these simple strategies that we identify for higher net worth, higher paid and accredited investors to acceler.

To financial freedom. And what we’re gonna be talking about today is this kind of concept of guy. Chris calls it the divine genius. How can you also find something that you like? Can you can maybe monetize it on the side and get a little bit of tax benefit side action there, right?

If you have a hobby that you turn into business and run through a lot of your personal expenses to it. That’s what we’re talking about today. And So again, thank you all for listening to the show this past year, and if you’ve been listening, in years prior, really appreciate it.

It’s allowed our group to, I think raise over 160, 170 plus million dollars that you guys have entrusted to us to purchase, well over a billion dollars of assets that we judiciously run on your guys’ behalf. And although the group has gotten. Still wanna get to know you guys, if you guys, we haven’t had that onboarding call, please book a call.

I’d like to see how I can help you guys out. That’s really what I enjoy. That’s my personal guy. I enjoy connecting with people on a one-off base and setting them straight. After that, you gotta join the mastermind group. I just don’t have time for, everybody and, hand out free advice.

But, if I can give somebody a quick 10, 15 minutes and compress learning cycles and putting ’em in the right path, that’s really what I see as like my gift to the world, or my divine genius as Chris calls it. But hopefully we’ll see you guys in Hawaii next month, January 13th to the 16th.

It’s not too late to sign up. We’ll probably be increasing the prices very early in January as we lock in our headcount, as I gotta pay the bill for all the cool events we’re gonna be doing and the great food and some other surprises. So if you that’s interest to you guys, go to simplepassivecashflow.com/2023retreat. And if not, thank you very much. And here is the show. 

Today, we got Chris miles is going to talk about monetizing your divine genius myself. And that sounds a little bit to the normal, simple, passive castle listener. But trust me, this is going to be saving you on taxes at the end of we’ll come around full circle, but how’s it going?

That’s awesome. Wayne, how you been, man? Chris was on the podcast way back when, in August, 2016, we had to go back. That was podcast number 21. And I can truly say that Chris is a good friend of mine, and there’s a little bit of like show, business, podcasting, etiquette, where like he call everybody your friend.

But, and then maybe if you’ve met the guy before you call them like a good friend, but I’ll call you a true. I don’t know what that means, but that’s awesome. It means we’ve talked since then over the last three years. Yeah. We’ve talked at least twice. No. We actually talked pretty routinely, so we’ve done a bunch of work together

so today we wanted to do a podcast on finding your divine genius. And yeah. Why don’t you what does that mean to you, Chris? When you work with. Our divine genius is what is it we can bring uniquely to the table that no one else can. What is it that we can really bring to the world?

So combining our talents, our passions, or our values or mission and everything that combines us being who we are, the best version of who we are and using that to deliver the greatest amount of value to. That’s basically the easiest way to describe it. So I describe it, the same thing, but in a different term eeky guy, which is combining like four things, right?

I think a lot of us have heard this term combined with the three things it’s find out what you’re good at, find out what your passions are. And then something that you can make money with the fourth and final ingredient, which unites the. The power Rangers creating the Zuora on or whatever that thing was, is the, is it good for the world?

So I think you look at like my website and your kind of platform. It’s we’re both good at talking about money and we’re obviously very passionate about. And you know what, there’s ways we can monetize it. And I’ve been starting that group coaching mastermind I was telling you about, and then it’s good for the world.

It’s getting people financially free and getting them outside of the wall street garbage. Yeah. That’s amazing. Another example is like the guy who likes to make pottery, so he’s like good at it. He’s passionate about it. But it sure as heck doesn’t make money. No icky guy, right?

No. So a lot of this is like trying to find a hot. So that you can make some money, but also at a means to write off taxes too, right? Yeah. Everybody talks about do what you love and the money will follow. They’ll tell you that kind of stuff, but the truth is that there’s a lot of people that love to do stuff, but there’s a lot of broke, passionate people out there, passion doesn’t pay the bills alone.

And so it, to me, like I revamped the phrase to be, do what you love that others love you doing. And then the money can follow. And I’d say can, because it doesn’t necessarily mean it will, because you could be awesome. What you do. You could be very passionate about it. You love it.

Others love you doing it, but if you can’t, if you don’t have the right business sense, if you don’t know how to actually monetize it right, or don’t know how to market it, or those kinds of things, you could actually end up not making any money. You could be this really, this alone genius.

I was lonely genius. And we definitely want to be there. And so that’s where, yeah. If you can find something that you love to do regardless of the money and you’re great at it. And people, it solves some sort of problem for people, even if it’s, it doesn’t have to be like a massive world problem, like solving world hunger.

It can just be like something that actually really entertains. There’s, if you ever watched, like America’s got talent, you can see that show up sometimes. Yeah, it might bring on tons of magicians or tons of comedians, but, there’s the guys like Piff the magic dragon. How many communities, come out on stage and a big dragon outfit, like it’s just, it’s just goofy, but it’s unique. It’s something that we remember.

And so finding your own unique twist to things, and then, actually doing that’s where there’s some real, that’s a real secret to creating more money or at least. Since a lot of us are professionals and a lot of engineers and going to make money too. And I don’t know where I got this phrase from, I think it was from you, but. The phrase that really sticks with me is people who create value our reward or reward with money. Yeah. The oldest form of value created.

Yeah. Yeah. So I’m always like, people who to buy and sell stuff on eBay or Amazon and like to do all this arbitrage stuff that creating value, you’re not creating like tangible value. It’s like gimmick. And we all know what happens. Gimmicks eventually go. I know, you’ve talked about this with like multilevel marketing in the past, if you want to expand on that.

Yeah. It never marketing too. Definitely that, that comes up a lot because, for example, it never marketing. They always say, Hey, just do what the leader does and just do it the same way they do it. And so you get a lot of these copycats out there that just don’t work. And you were never meant to be a copy, and it’s kinda like you ever seen the movie multiplicity with Michael Keaton where he clones. I think it was from like late nineties, early two thousands. I can’t remember. But in that movie, he clones himself to do more. The clones got jealous because they’re like, Hey, we’re doing the work while the original guy is, he’s just out there playing, so let’s make our own clone so that, the clones got together and made their own clone.

So it’s like a copy of a copy. And the guy was like, totally, an idiot, so their copy of the copy. They’re like, you know how you get the original, you make a copy and then you make another copy of the copy. It gets less, less pronounced, the ink gets faded. It’s kinda like that.

And that’s kinda what happens to people with business. Even people that are like trying to be coaches out there or whatever, or network marketing, they try to imitate these people. The problem is you’re not them. You can’t be the best at being somebody else. You can only be the best at being. And so finding your own unique flavor to things unique way of doing stuff, that’s really the trick.

And when you start to really own that, and I know, because I used to be the guy that would try to imitate certain behaviors or marketing type things or sales strategies or whatever it would be. And people would say, ah, weird, or like I wouldn’t be comfortable being a.

Like in, in front of a room, so I try to be polished for example, are too polished. And then eventually I just stopped. I stopped caring, I just said, I don’t care. Like I’m just going to do my thing and I’ll do it, do the best I can. And the funny thing is that’s when people start to warm up to me the most, and more people are attracted to me, in fact, better people that are a better fit for me when I’m consulting or when I’m helping people out, whether it be on the insurance side or wherever it might be that people just match it up perfectly.

And that’s because if you are who you are. The right. People show up the right team, the right people to come to support you. And it just makes it a lot more fun. Yeah. And I think you also told me about this. You’re into numerology at one time. I don’t know if you still are. And I was kinda like really but then I started to think of audits.

You got to figure out what, how you are and that’s how you got to create your business or operate out of. Yeah. I don’t know much about numerology really. There’s a thing that I use, like human design. That’s pretty cool. Combines like astrology with some other things too, which I’m normally would be.

Okay. That’s bull crap, but I actually found out that one actually really worked for me. And among many things. So like finding your strengths, if you’re trying to find talents or strengths I used to be a sociology major, so it was all about running tests. Test the measuring and trying to figure out like, finding different things about people and group behavior and things like that.

And so tests I’ve used, like Myers-Briggs, a personality tests. I’ve used the Colby, a index, which is it’s pretty good. That’s more of like how you operate type of test. It’s similar to disc. Some people might use disc. I know Tony Robbins has that on his website for free. So Colby, you gotta to pay 50 bucks for, disc is free on.

There’s things like that out there. Human design, I’ve actually used that one a lot. That one’s helped me a ton on knowing how I should be working and operating, so for example, some people are not meant to just go hardcore, right? Like only a third of the population should be doing, being the type of people of say, got to make it happen.

Like those kind of people. Sometimes there’s different ways of making it happen that are actually more productive for you, depending on who you are. And then another one too, that I do is it actually an easy exercise that anybody can do is what I call a strengths feedback, exercise.

And so what you do is you basically just email or call, you can call people, you can email or text people and just ask them, say, Hey, what are like the top three or four things about me that you think make me different or make me unique, or maybe things you can count on me. Or ask me three words, that come to mind. You make it simple. I’m sorry. Say again. What are three words that come to mind when you think of. Yeah, you can just say words. I always like to have them expound on it because sometimes people have different meanings to words. And so what you might interpret their word to me might be completely different how they describe it.

So if they give you words, have them expound on a little bit, so they can tell you what that really means to them. And that’s money. Like for example, I had a lot of people that do. Yeah. Even though I didn’t feel it at the time I did this back in 2007, I think it was. And they would say things like, yeah, I see like a leader or I see you as a teacher or even your different teacher.

Cause you’re entertaining work. You teach things very simply. Or, you’d like to use like multimedia with your teaching, which I really like, or things like that. Or people would say yeah, you’re loyal almost to a fault, talking about, personal relationships and stuff.

And they would just bring up all these things. And eventually when people would all say some of the same stuff in the economic sense, I call that get a clue because they’re all saying the same thing. And in fact, you have to have people have known you your whole life. You can seriously ask people.

Maybe we’ve known you for a few months, just their first impressions. And it’s amazing that people that might’ve changed your diapers right back in the day might be the same, might say some of the same things as someone who just met you a few months ago, I’d say. And that’s how, like everybody else sees genius, but you usually don’t see it cause you just live with it day to day.

It’s just part of who you are. But for them, they see it and they think, wow, that’d be so cool if I could do that. Or yeah, when you do this, it just, it blows my mind. And so that’s just money right there. If you can find even some of that, that can give you a good step in the right. So another one is like StrengthsFinder 2.0, Pete laundry.

We’ll talk about that book. Is that kind of aligned with the other Colby strengths finder, exercise and human design where the Google terms people can look at? Absolutely. Yeah. All of those things can be great contributors. I really don’t think there’s anything bad about trying anything that helps you understand more who you are.

So that’s step one, find your strengths and talents. And then next thing is figure out what your passions are, right? Yeah. So I do, what’s called a passions test, it’s not mine. I don’t remember who came up with it, but basically to say, find out things that you are passionate about, make a list.

It could be like 10 to 15 different. And then start to rank them, start to find out like, what’s number one, number two and that kind of thing. And I’ll tell you, in fact, it’s interesting because I’ve had people tell me before they say, you know what, Chris, I’m not really like super passionate.

I don’t get really excited. Like I had a guy from Alaska that told me that he’s I don’t get excited about anything. And I known him just enough to say, yeah, you don’t get excited. Like you don’t get like all hyped up. I’m not a hype-y guy. So I asked him, I said is there anything that fires you up, like ticks you off or pisses you off?

That’s yeah, exactly. And he had a whole list of that. So we, we started going down that route. He’s oh yeah. Politics, or my family. It’s okay, we’ll go deeper. What about your family? Like, why just, I’m really protective of them. I’m really like, it’s important to me to prioritize them okay, all right, now we’re getting somewhere and know, get a bigger list than just saying, what are you excited about?

But yeah, just doing that and then going through and just ranking, I was like, what’s the one that’s if I had to choose between two and I used just compare two at a time, it’s almost like a, I call it my M and M game. When I was a kid, this kind of a weird when I was like around 11, 12 years old, I would take two m&ms and I would smash them to get.

And I would see who would be the winner. It’s it’s almost like moral combat, smash together. The ones the winner goes against the next Eminem and smashes and whoever wins at the end, that’s the ultimate champion. And I was always rooting for green because I love green, and and that’s kinda what I do with this list.

I’ll say, all right. Number one to number two on this list of 10 or 15, if I had to choose one, which 1:00 AM I more past? All right, we’ll keep it. Number one. Number one on compared to number three, which one I’m more passionate about? I think number three, wins. Number three, to number four, number three, number five.

Whoever wins. You just keep going through that list. And that one that wins out is the number one. And then just do the same thing for number two. You take that one off the list, and then you start doing that comparison again, and you can come up with easily, like three to five strong passions that you have.

Naked started saying, all right, how did this with my talents and my passions combined together and work together, trying to find global problems or, things, problems to solve. Cause that’s people pay to solve problems. Yeah. And that’s usually the next thing I’ll do is I’ll start making a list of what are things that I hear people complain about that maybe either I would want to solve?

I think I have. Or, maybe it’s just something you just think would be cool to solve. You may not know the solution, but maybe you have to bring your own unique flavor or twist to it. And that’s really, the point is all right, with these things, I am passionate about what are they, that kind of thing.

So most of the people listening are high-paid professionals. They’ve likely got kids busy life. What are some Epiphanes you’ve seen come up through this process that maybe might resonate with somebody. Kinda inspire them to do these exercises because I think a lot of people are like, I’m just too busy.

I might, I make 200 K at my job. I don’t need the side hustle stuff. Yeah, but that’s not the point. The point is the, punch through the object and find out some kind of passion, that makes you have money and you can write off some stuff. Exactly. So that’s the key is if you truly were trying to worry about the money too quickly in this process, You actually end up falling flat on your face, right?

Cause it can happen very naturally. And so the best thing you can do, especially for. Is find ways to apply these strengths and these passions to different places that you’re in, right? Whether it be in the workplace at home with your family or kids if you volunteer, do community stuff with your neighbors, strangers on the street, and try out using some of these things, if it’s just like I’m going to use one strength or here’s a passion on my bill tie in.

So give an example like for me, I remember when I was stock coaching back in the mid two thousands. I wasn’t like I wasn’t hired because I was the most brilliant trader they hired me because I was a good coach. So they said we’ll train you the way we want you to be trained, wants you to teach these people, but we’re hiring you mostly because you have good coaching skills.

So already, I was like the handicap kid they weren’t expecting much enemy. And so I started to do that and I pick up and learn things. And one of those people, I just pick up on certain things, especially financial concepts really easily. And so I picked up on it. I was like, okay, cool.

And then I started perfect on it. And you know what, these guys, they did this, maybe we can make this a little bit more effective here. And then I started to tiny passions because I was getting bored. I was doing a good job, but it was and so when I would teach them about trading stocks and options, there will always be like this flexibility.

There always be out of the 16 sessions I would do with people. There’ll be about seven or eight that you can just be flexible with, follow up on their trades, keep them accountable. And that would be the time I would take the opportunity to go teach something different or something more maybe about economics or something like that.

And we would have such fun conversations talking about that. Cause they would be intrigued. They’re like, oh, this is cool stuff. I like it. Some people call it inner market analysis, but I would just talk about that kind of thing. And they would have so much fun with it. That what was interesting out of 60 coaches, I was like ranked number two with the positive feedback, I would have been number one, but there was a guy who was coaching, double the clients as me.

So he got technically more positive feedback than I got. But for percentage wise I probably had the highest positive. And and it was funny because I was the guy that predicted not to make it right. So that was a big thing there. Other things I’ve learned too is I remember, learning about being a leader and a teacher, and I have a mission statement that says, through powerful conversations and faithfulness, I establish higher standards of service, perseverance, and stewardship to create happy fruitful.

Basically my whole thing is about raising the bar. That’s kinda, my thing is raising the standard, raising the bar, just take it to that next level. That’s kinda like my whole life mission in general. And by the way, mission statements do help a lot sometimes in this case. And I remember, I was volunteering at my church and then they asked me, they said, Hey, can you take care of the two year olds?

And I’m like yeah. I could teach the adults. I’m a good teacher. I’m a good leader. Like, how do we teach the adults? No, we need help with. Like, how am I supposed to be a leader and a teacher to two year olds? And then it dawned on me after a little while I was like, wait, I may not be able to teach by word, but I can get on my hands and knees and interact with them, and play with them.

And I did. And the cool thing is that pretty soon they started responding. And even after I was done volunteering my time there, a lot of them would come up to me when all the parents come pick them up, they would just put their arms up. Like they want me to hold them, that was pretty cool, even though there’s other women there who are much better caregivers than I was right.

Naturally while it was women would just sit there and gossip, I would actually be there and involved with the kids and create that connection. That’s just the name of feud. That’s just a normal life, but I understand, I take all those same things and I applied my business too. I still connect and do things with people in business.

I teach a lot and in fact, I am a teacher. That’s the thing. Get me to retire, which I’ve been financially independent twice in my life. Each of those times I could retire. I don’t, because I have this passion that I want to keep teaching and help people take it to that next level to not be mediocre, just like you teach on the show.

And so those are the things you can start integrating and naturally money just follows. It’s really easy, especially if you start to figure out and hone in really what is your genus and just focus on. So you seen a lot of epiphanies happen and when you’re coaching folks, what are some examples of those that you’ve seen?

Like just people may not make resonate with another working professional. Yeah. I had somebody, I got a few examples. I had a guy, for example, he was a. Okay. I’ll actually I’ll use a woman cause she’s she was actually worked in the it field. So I figured if you got some working professionals, get somebody in it.

We did some of this process with her and she was really passionate, actually. Not about doing tech stuff. She was really passionate about the healing side of things. Like really helping people emotionally heal naturally because she had experiences too. And by the way, one of the coolest things you could ever do, if you’re ever going into the role of trying to provide value or teach something or help people through.

Is do something that you overcame yourself, right? Like for me, one of the biggest things that helped me create help people create more cashflow is that I went through a recession where I went over a million dollars in debt. And I had to avoid filing for bankruptcy. So all those kinds of things and the things I learned going through all that crap is the very things that help my own clients free up 100, over a hundred million dollars of cashflow over the last nine years.

Because you have to figure out the strategies behind that. Yeah. Cause people kept telling me, I want people to hire me, but they kept telling me why can’t find the money. I’m like I can find the money. Not telling them, Hey, I’m broke right now. This is back during the recession, right?

Hey, I’m broke. I had to find money. So I bet you, your situation is better than mine. So your should be easy for me, and that’s how it happened. With this woman, like her thing was healing of the emotional healing stuff. She’d gone through a lot in her childhood and had to work through that as an adult to function.

And so she started do that kind of stuff and she just had a find. Modality, the nice thing that kind of matched up with her. And even when she found it still, as she did it, she morphed it a little bit and try something a little bit different. And she brought maybe this little thing in for healing and this and that.

And we came her own thing. And so pretty soon, even though she’s doing still working it, like she’s still, an it manager at her work making a good six figure income on the side. The thing that actually gets her fired up is that she’s doing this. And she has a side business, a side hustle.

So she does like coaching or like basically like like healing, coaching, like a energy healing type stuff. Reiki you’ve heard of Reiki that kind of thing with magnets and things like that. So she does exactly. Yeah. I don’t know how she does it. She does, but it’s pretty cool.

It’s kinda like a chiropractor I knew in Denver that she it’s seriously not touching it, but she just do this like down people’s backs and they’re like, oh, I feel so good. I’m like she didn’t touch you. What would the heck did she do to you? And I was too scared to try it myself, another person that a good example is the guy out in Washington state.

He really loves. Working with kids like specifically teenagers, and he was working a job full time and he was coaching a baseball team during the summers, like as teenager baseball team, it wasn’t a high school team. It was like the city league type thing. But they would go to state or even interstate championships and win, or at least play and get runner up.

He was really, they were a really good team. In fact, they would perform better than the high school team would do with those samples. And so we, he asked me, he’s okay, Chris, I got to figure out how to make money with this so I can do what I love. And after some time we try to figure it out.

It actually got really hard and we’re like, and I asked his wife, I said, how was he during baseball season? And she said, oh he’s so happy. He’s like on cloud nine. And I tell you the guy’s just energetic. And I’m like, okay, cool. Do we necessarily have to make money? Doing baseball.

You know what if we just said, this is like your outlet to just fire you up, that keeps you doing. Cause you got a job that’s flexible enough that he could take off work and do and will do what he wants. So why don’t we just keep doing that? And they’re like, oh, that takes so much pressure off. Funny enough. A couple years later, he got offered a position with the varsity team. I think you start with JV. And then he got moved up to varsity. He started coaching and making money anyways. And that, that, that path came. He just did something he just enjoyed and his whole thing, wasn’t just winning baseball.

His thing was teaching these teenagers, these young men to become real men to become productive citizens. That was his whole passion had baseball was just an outlet, but the passion was training these youth to become real men. And so I met and that’s what he’s done. And now they actually, I, the last I saw they’re doing like couples, marriage type counseling stuff.

I don’t know what the heck they’re doing now, but it’s cool to see the evolution of the last decade, how it takes them. And now they’re making money. In other ways, anything more for the introverts out there, maybe just with a, making some kind of arts and crafts or musical.

Instrument. Sure could. I’ll tell you if you’re a handyman right now and you live anywhere near me, you’re hired, there’s seriously, like there’s a lot of needs out there. And I’ll tell you, these handyman do not have personal skills, like people skills or not their thing.

There’s lots of things you can do. I know the person that’s there. She’s not very, she’s definitely not a person. You try to strike up conversation with because it’s just not, it’s not going to go anywhere. She’s just an introvert and that’s fine. There’s also things you can do to, even if you want to be in business, you want all the tax write-offs like we talked about at the beginning of the show.

The thing is you could also be a partner because what if you’re the person that’s just perfect being like the COO, right? Maybe you’re the person that’s best on the backend while somebody else is better to be the front man of the front line. But you’re the person on the back to make sure that it actually works or that, things are being fulfilled on.

So there’s a lot of roles you can do and play in and make great money and you can even be in business, but not have to be the face. That’s not real. That’s not required at all. All right. The book, the E-Myth by Michael Gerber comes to mind. There’s the visionary, the operator, like the CEO, like you said, and then there’s all kinds of technicians in businesses.

You need those three characters in every business and you may be just good at sales or you may be good at just making baking or whatever. Yeah. But the link up with those other people is the key. Yeah, that’s right. That’s the thing. You don’t have to be in an alone. It’s kinda if you’ve ever watched YouTube videos of the piano, guys, you ever seen those guys, right?

They take, they do cover songs. And they, and especially, you’ll see, the piano player, John Schmidt, and then you see Steven that’s the cellist. And and that’s, it’s funny because I remember seeing John Schmidt around here locally in Utah, because that’s where these guys are from.

And I remember seeing him be up there and I was like, I don’t even know who that guy is. I just know he’s performing. He was just the piano player and he could play upside down and do all that kind of stuff. But he didn’t really get popular until he started bringing on other people. So he started bringing on like the cellist that brought in a whole new thing and they did, Viva Lavita and love story.

Taylor, swift and Coldplay. They did a little mesh up that that got millions and millions of views. And then they just kept going and they had camera guy. Other people to help support that. And now, these guys go perform and they sell out stadiums and stuff. I mean that just all, these are your guys that were talented individually, but bringing them together that teamwork, that’s the thing that allowed them all to shine together.

They were better synergistically together than they were apart in something. I I was listening to Tim Ferriss’ podcast to stay. He said something pretty cool. He said you don’t need to be the top 1% of 1%. Like Michael Jordan, all you gotta do is figure out like three things that you’re in the top 10% in that here’s the key.

It’s people aren’t good at that. Typically like for example everybody can speak a foreign language, right? Yeah. And it’s no big deal. It’s a commodity, $20 an hour person. But you combine that with two other things that people aren’t good at and Kaboom. There you get now you’ve got a niche.

Yeah, exactly. That’s thing I was gonna say too, is when you blend it all together, think of that we’re in the financial space. And the cool thing is and remember my wife has also the financial space too. And I remember she saying yeah, I guess we’re in competition with each other.

This is before we dated or anything. So I guess we’re in competition with each other. I’m like, no, we’re not because you can’t compete with me. I’m sorry, but you can’t do it. I do. And then to save it. I also said on the flip side, I also can’t do what you do either. So that’s the beautiful thing.

Cause we were both serving the same market, but we were two very different ways of approaching it. Lane, you and we hit some of the same spots sometimes, but we’re two very different people and we have our own unique flavor, our own unique recipe that goes with it. And when you start combining these things to get.

That’s what makes it cool. It’s like my friend who’s he’s one of the, he’s a very popular actor out there. He’s always like a supporting actor. He’s also really funny, even though he’s always in dramas, he always, he’s always typecast as being like a general or a police officer or something.

But he’s a hilarious guy and he would always try to do things to mix it up. Whenever he would do auditions, he would try to do something different. And even when he would be on his own, just to practice on the side, he would say, tons of people have eaten raisins, but how many people have eaten raisins out of a freezer?

How many people have done that? And wait, let’s take it another step. Let’s take raisins down a garden hose into my mouth, out of the freezer. I bet you nobody’s done that before. So he’s having his friend put, raises down there, trying to feed it out of the hose and they’re cracking up so badly.

They came to hardly do it. Or he would go to his auditions, you put maple syrup in his shoes, so people would be like, wow, it’s sounds like pancakes. What’s going on? Like that’s the kind of thing. If you mix it up a little bit and just put your own flavor and twist, that’s the thing it’s I don’t worry about competition.

I know that doing what I do best, no one can imitate it. Even when people try to imitate my stuff and teach my stuff. A lot of times they’ll regurgitate it. It’s just not the same. It’s like a copy. And so that’s the thing is you don’t worry about people ripping off so much because if you know that it’s you’re the innovator of what you do best other people will just have to follow suit with whatever you’re doing.

They can’t create, they have to do their own. I call that the idea that when I look at successful people, that’s usually their contrasting binary strengths, like dirt, no Vince ski seven foot, or, but he can pop threes on a guy that can bench press three 15, but he’s a, I can do walking hand. Or the financial planner. Who’s pretty cool. And funny and charming at the same time.

Those are things they get paid. So if you could combine certain talents with another secondary talent or tertiary talent, then Kaboom. Yeah. I’ll give you another example of, if say you decided to go in the place where maybe you have to put yourself out there, like you’re going to start a business.

Maybe you’re going to go into marketing yourself and things like that. I found some really cool tricks with finding your marketing voice of. Cause, for example a lot of times people will ask me and maybe lane you’ve been asked this too. They’re like, oh, that’s so cool. You have a podcast.

Maybe I should do a podcast too. I don’t know if you get asked that, but I get people ask me that all the time, like maybe I should do a podcast. And and I was like maybe not. Cause it may not be your thing. And so when I do that, like a lot of times I’ll get, people will say what is that thing?

And some people have natural tendency towards certain areas. So there’s really three areas you can look at for a marketing voice. One is course your words, two could be your face or, how you show up and then three could be like your content, right? Like your writings, blogs, things like that.

And a lot of times you get people and you’ve probably seen this two lane, like being out there. There’s some people that just amazing on video. And sometimes it helps course if it’s like a beautiful woman or a good looking guy, or sometimes just really charismatic, like they just they’re just lit up.

They’re the kind of people when you, when they walk into a room, people like, wait, who is that? Like they just grab your attention. They could be doing nothing but walking. But somehow they grab your attends. Those people shouldn’t be worried about doing a podcast or if they do maybe doing like a visual podcast Navy, but for the most part, it might be, what can we do to get them more on video, get them more seen.

They can be more on stages. There’s things like that. Like I actually love being on stages, but I realized for myself, my voice is more like the second one, which is more of an audible voice. And I learned this at a really out of experience because I had. That would reach out. They would hear my podcasts or hearing me on other podcasts even, and they would reach out and remember they talked to my sales manager and let’s say, my sales manager would say why are we talking?

They say, I don’t know. I just really like Chris. I just trust them when I hear his voice. And so I just want to know what the heck is. And so I did a horrible, such a horrible job selling myself. People even know what I did. But they were, but it was such a way that my voice that they would trust it, they’re like I don’t know.

Like I just feel like I should work with them. What does he do? Whatever it is, I’ll do it. And that got me to realize, wait, why am I spend all this time trying to do videos and trying to get on tons of stages when really my voice can be it. And so from that point, that’s when I started doing a podcast as well.

That’s why I created the Chris miles money show five years ago was, Hey, I’m already doing, it’s already working. And that’s why I got an EO fire. It was actually that’s when it hit me. It was like, oh, these people just heard me. And it was enough. And build that relationship. And so for me, I use audio like crazy, but videos are hardly ever.

And the content, I’m not big on content. Some people are just better writing than they are speaking or anything. I don’t know if you’ve ever met the author that you’ve loved the writings and then you meet them in person, you think, oh, wow. That was awkward. Or shall you hear them speak on stage?

And they’re just not the same. I think Michael Gerber, guy’s pretty horrible on podcasts. People say, and they’re like, oh, that guy’s bombed. But he writes these books, like the email. Yeah, it’s you almost want to say, yeah, just go back to writing your books. It’s cool. It’s good.

Just write your books and it’s great. You’re right. Like it’s, it’s a book that’s changed so many business owners lives, and that’s somebody who doesn’t necessarily have to get up on stages seriously. Like he could just do it through his books and get other people on a stage.

If he wants to do that, get somebody else to sell his system, or maybe he just shows up to say hi, and then he walks off, that kind of thing. But. Really, those people, John Maxwell, I know he’s pretty decent on stage from what I’ve heard, that guy, he’s pumped out.

I don’t know how many hundreds of books, and, but we all know him just because of his books. Not necessarily because of his speaking or because of any podcasts he does. It’s just purely the writings. All right. So another while you’re saying that a couple other No, I’ve met a guy through all these calls that I have.

You guys can still book a call with me and chat if we haven’t chatted before. But I hear all these side gigs. One of them was like the, he does voiceovers and animation likes doing that. He just does puts it up on Fiverr. Another guy he does like wedding. He does like the MC for weddings.

He’s a, more of an introvert. I think he’s an engineer too. He says, like people need to get up and part, I need that leader to get them going. So he just steps out of his shell and does it yeah, the, those are great ways to make an extra five, 10 grand a year, and then you can go that into turnkey rental.

That’s yeah. Great. And that’s a cool economic engine you can create because we can generate more money, more income, fast without money in which a business and delivering value for people does. That’s, that just accelerates all your goals. You’re trying to hit when you’re trying to do real estate stuff.

Yeah. A lot of people like to do the silly travel hacking stuff which I thought it was silly until you can pair that with trade lines. If you guys want to check that out, civil pass, a casual.com/trade lines and yeah, I’m making like 10, 20 grand a year doing that little site. So exactly. But yeah, Chris, you want to give folks your contact information to get ahold of you and.

And if they want to continue this thought process with you and maybe do some coaching about, finding the site. Yeah, for sure. Yeah. If you’re trying to find that side hustle and especially trying to get out of the side hustle or make your side hustle your main hustle, right?

Yeah, like the best way to contact me is either one. You can go through my website, money ripples.com. You can message me through there. Also, you can actually follow my podcast, the Chris miles money show. I’ve got several episodes regarding monetize your divine genius. Think different things about, business that can help you grow that plus others on, on personal development, on money and things like that too.

Yeah. A lot of things for free on there and, but she got a pay to play after a certain point and get Chris’s valuable time later on, but it’s probably worth. thanks for joining us, Chris. And we’ll see you guys next time.

 

[ NOT FOR PODCAST For letter cover]

They were better synergistically together than they were apart in something. I I was listening to Tim Ferriss’ podcast to stay. He said something pretty cool. He said you don’t need to be the top 1% of 1%. Like Michael Jordan, all you gotta do is figure out like three things that you’re in the top 10% in that here’s the key.

It’s people aren’t good at that. Typically like for example everybody can speak a foreign language, right? Yeah. And it’s no big deal. It’s a commodity, $20 an hour person. But you combine that with two other things that people aren’t good at and Kaboom. There you get now you’ve got a niche.

Yeah, exactly. That’s thing I was gonna say too, is when you blend it all together, think of that we’re in the financial space. And the cool thing is and remember my wife has also the financial space too. And I remember she saying yeah, I guess we’re in competition with each other.

This is before we dated or anything. So I guess we’re in competition with each other. I’m like, no, we’re not because you can’t compete with me. I’m sorry, but you can’t do it. I do. And then to save it. I also said on the flip side, I also can’t do what you do either. So that’s the beautiful thing.

Cause we were both serving the same market, but we were two very different ways of approaching it. Lane, you and we hit some of the same spots sometimes, but we’re two very different people and we have our own unique flavor, our own unique recipe that goes with it. And when you start combining these things to get.

That’s what makes it cool. It’s like my friend who’s he’s one of the, he’s a very popular actor out there. He’s always like a supporting actor. He’s also really funny, even though he’s always in dramas, he always, he’s always typecast as being like a general or a police officer or something.

Pruning your rentals + Outsouring debt with Enrich Author Todd Miller

https://youtu.be/6miTMi4nClw

Now on this podcast, you’re going to be hearing me interview an author that wrote about, enriched about building wealth over time.  There were a few things in this interview that I clashed over. Here’s the thing, like a lot of these authors, it’s nothing to take much to write a book these days. I’ve done it. You guys can check it out and on Amazon and it ends up an Amazon bestseller. Thank you to those of you guys who dropped in on it. The title is the Journey to Simple Passive Cashflow and you can check that on Amazon by the way, but, I think the thing that we’re clashing on is, this guy was saying, you should file these properties and pay them all down, which is a very logical strategy for most people.

 

But again, you never want to be like most people, cause that’s typically maybe not the best way of doing things, And I’ve been trying to distill this down to different thought processes. Is it debt? Is it more loan to value? If you guys didn’t listen to me, some of my rants on this. Loan to value is some arbitrary number. To me, what it comes down to this year, debt, service, coverage ratio, what are your monthly payments to pay the debt service and what is your cash flow?

 

And if you want to go, how the professionals do, what the banks do when they underwrite our deals, they want to see that 1.25. you’re dead surfaces, a hundred dollars. They want to see $125 of cash flow coming in. So that there’s a bit of a margin there. Now you can artificially create that debt, service coverage higher by putting more down payment on which do you guys know?

 

That’s not what sophisticated investors do. They put the least amounts to get that cash flow and that returns as high as they can, but keeping that debt, service coverage ratio, right at that optimal point at around like 1.1, 1.25, I think that’s, one could argue that it’s better to be higher, you give up some of those returns.

 

So that’s where you are as an investor. And personally, I’ve been on this journey where I was big on tertiary markets, Which have higher caps. Now the problem with higher caps and the reason why they’re higher caps is they’re not as staple locations to invest in. I probably  was one to say that I’ll never invest in Hawaii or California because of the low caps.

 

And, they don’t cash flow in cash flow is what you need in a case of recession to hold onto the asset. But yeah. The good thing about those kinds of markets like New York, Chicago, Miami, Hawaii, Seattle, and all of California is that it’s a very stable place, people want to live there and you have to look at both sides of the argument there.

 

So where I’m thinking as you’re new, as your net worth grows over $5- $10 million. Now you start to get away from the tertiary markets. For sure, it gets to more the secondary and the primary market, probably with the primary markets overall, which is why I probably still won’t invest there at this point in my life.

 

And my journey is because there’s just so much competition in most areas. There’s so much, dump on sophisticated money in Hawaii, Seattle, LA, Where they’re just people just buying properties, reporting on it too, for legacy that those are the kind of people that push up the pricing. And that’s a second layer to this. No, there’s a few things to be thinking about. And I think this is where, you really need a network and this is all we tell people, Hey, if you’re stuck, if you’re tired of just dealing with people who just don’t understand investing on this level, join the family office, Ohana mastermind group of, or details in that go to simplepassivecashflow.com/journey.

 

And before we get going into today’s interview with this author, I had a question. It seems like a lot of the investors are worried about interest rates coming up  and I think yes, it does really impact the numbers. If you’re a buy, hold and pray type of investor. And I was a buy, hold and pray type of investor from 2009 to 2015, when I was just buying these little single family home turnkeys. if you guys want to go download the analyzer at simplepassivecastle.com/analyzer, you can download the spreadsheet and you play around with the numbers. you change the interest rates from 4.5% to 5% or maybe five and a quarter. And you’ll see that cash flow drop, maybe you’re at $300 and it drops to seventy-five bucks by making that one little move on the spreadsheet, and I think most of our investors understand this sensitivity analysis when interest rates do make these bigger jumps. 

 

But, this is why I’ve personally gravitated towards value-added types of real estate as we all know wealth comes to those who create value and value can be in the form of many things. And, but ultimately the bottom line in real estate, and how much net operating income does a property produce or in the business world, increasing your Vita. Now, when you are increasing. The value add or the, when your value adds a property, increasing  rents per se, and you’re increasing that net operating income. It makes the interest rate that holding costs less of an important factor to use in an extreme case, like a house flipper. House flippers  don’t care what he’s paying for his debt service; the good ones will, they’ll be able to cherry pick lazy investor money at 8%, maybe 10%. 

 

Beware, If you’re one of those people who take on, lend money to house flippers, and you’re getting 15, 20%, you’re likely going through a middle man who’s selling your basic linear money through an unproven party. That’s why you’re getting paid so much but that’s a side note. I don’t want to invest in private money notes. I don’t invest with people who are less than five, $10 million net worth these days. Just net worth is a level of sophistication, in my opinion, these days for me. That’s just the class of paper that you’re buying, Because when you have those higher rates of return, even if you’re collateralized with the house flipping project, it doesn’t matter. But I digress. So getting back to my point, these house flippers, they really don’t care what they pay for their cost of, 10%, 20%.

 

It doesn’t matter because they’re buying a property say for 300, you’re putting in a hundred grand in and they’re flipping it 4, 5, 600, maybe even more so that holding cost is, maybe on the scale of 10, 20, $30,000, if in that six month project per se. So that’s an extreme case, And when they’re holding onto a property for one to five years That interest doesn’t really matter. Yes. It piles up. And it’s part of, you can definitely see it in your monthly P and L’s, but if you’re value adding that piece of property, whether that’s a home  flip in that house with burst case where their value adding at 200 grand, you can see how that Brittany trumps that holding costs, maybe even a tenfold.

 

Now, I like the approach of going into stabilized assets where there’s existing cash flow. No light to moderate value add and nothing crazy. definitely I would be on the less on the side of the spectrum of that house flipper, where they’re going after huge amounts of value add, and they could care less about the interest rates, still not to that extreme, but still this my point is that the interest rates don’t really matter as much when you’re doing value. If you don’t trust me, go look at how much money is built up through the routine equity, the net operating income divided by the cap rate in the beginning of the project, and to presume cap net operating income at the end of the project, divided by the prevailing cap rate and the difference of the money made.

 

And then see how much the debt service compares to that. And I think what you’ll see in most value add projects is the carrying costs of the interest costs. Sure. it’s hurting your monthly P and L and your cash flows, but it is a very small relation to the bigger gain. I would say these days, even with a lot of light value add projects, the majority of the money, let’s just call it two thirds, is coming from the retained equity, build up the value, add pop at the end, as opposed to the cash flow. I think back in the day, maybe like 2015, I was seeing deals like in Memphis, which are tertiary markets that I don’t want to invest in which garbage areas, but they have high cash flow and really not as much value add in a separate project because. The location sucks, let’s just call it that in those cases, you would see deals where maybe half of the returns were coming through cash flow, or maybe a little bit more and the smaller portion.

 

So a large portion is coming to routine equity through the years. But, I think that’s why some investors who haven’t caught onto this concept, they feel. Okay. These investors are a little capital area. They’re still doing stuff in the face of all these industries. but when you really look at the numbers again, what is the routine equity portion versus the cashflow portion?

 

You start to realize. Yeah,  who cares about paying a little bit more on interest payments because that’s nothing compared to the end goal of, unfortunately you have to wait maybe several years to realize that. For newer investors, lower net worth investors. They may not feel comfortable with it, but as we always tell investors,  you need to start acting like an accredited investor and more, which is more of a long term for license credit investors who don’t really care what is happening on a monthly, quarterly, or even annual basis.

 

They look at things more on a two, three year time horizon or three to five years. So they zoom out. And when you look on that side, when you’re looking from those lens, Now you’re looking at more, they care more about what is their equity, how’s their net growing over time, as opposed to are they getting their monthly cash flow so they can pay the bills because affluent people, wealthy people accredited plus investors, they got their bills.

 

Take care of, they’ve got that cash flow already. If you’ve got that bass. So their primary concern is, of course, keeping their money, which is why they invest in real estate because it holds its value. And it goes up with the pace of inflation. But they like it because they can add value, and they can realize these huge racks of big gains, but they gotta wait for it. But, I think that’s a difference between, less sophisticated investors who really enjoy getting those monthly paychecks from the rent checks, from their tenants, and all that type of stuff to more of a sophisticated investor who is able to zoom out the little detach, but really compare the two investment strategies on a longer time horizon. 

 

But yeah, I’m pretty confident interest rates will come up a little bit more, but, I think things will subside and that is why we’re taking a little bit of a break. And especially because we’re seeing a lot of newbies getting into real estate and investments and apartments and like the other day I saw like a deal going up for like 120,000 a unit.

 

And the pitch deck was saying, they’re going to value adding it to you. It’s 200,000. I’m like, dude, that’s not going to happen. And that’s the kind of the stuff that’s happening all the time makes me think,  maybe the king of the door has closed, or it’s, just operate what we got.

 

But then again, like you always got to do something, I think that’s the mistake is to, yeah. Especially coming from new investors  who haven’t done Jack or at any point is they’re always looking for that excuse not to do anything. And I think that’s the one thing that inflation has really illustrated to a lot of folks, myself included, that you just can’t stick your money in the bank account, doing nothing.

 

Now the next level up is putting it into an infinite banking plan, making 5% tax-free. I think that’s better than nothing. And I think as somebody who’s pretty conservative, I think that’s the next great option. If you don’t know what infinite banking is, check out our free. I think it’s like a three hour eCourse at simplepassivecashflow.com/banking. you got to sign up to get access to that e-course but there’s a little info page for you guys to read up on the concept, but, enjoy the show guys. And if you guys have any other questions, please submit it over and we’ll see you next time. 

 

Today, we have the author of Enriched, Todd Miller. We’ll be talking about various topics surrounding wealth, time, money and meaning, but Todd, why don’t you quickly go over your step journey towards financial independence from the beginning.

 

Hi Lane, sure. Happy to do that. And it’s really a pleasure for me. Be a part of this community and to be here with you this afternoon, by professional background, I am an entertainment executive. I’ve worked for an, in Hollywood for half of my life and my career rocked and I actually did not realize the importance of creating and accelerating financial security.

 

Until years into the career. When I had successfully reached the proverbial corner office and was miserable and I was handicapped by my financial insecurity. And that’s when I recognized that financial security is foundational and most people think of it as the end point. The ultimate prize for a long and perhaps even punishing me professional path.

 

And to me, it’s the starting point. And the sooner a professional can accelerate financial security, the more and the quicker and better that one can scaffold a life of meaning and importance and relevance and enrichment, which is ultimately where everyone wants to be. I retired about two years ago and don’t look back. 

 

What is it that you can look back on that kind of pushed you over the edge and pissed you off? Or what was that thing? People always have that thing that they could point to. I think we have to back up and I’ve been obsessed with the work-life equation and how to maximize that equation, really for twenty-five decades.

 

And I would say that my whole journey with optimizing work in life, that began in my final semester at Columbia business school, when I was flabbergasted, how many of my brilliant classmates seem to be making an incredibly foolish and short-term career decisions based on us, based on the size of a signing bonus.

 

In other words, choosing company A over company B because company A gives a couple more thousand dollars upfront and that is really puzzling. No, that was widespread behavior at the time. And I thought, can we be bought so easily? Am I missing something in this? And the deeper I progressed in my career with a Hollywood studio, I guess I was fortunate to have a series of events which caused me to be hyper aggressive about getting work and life to work together. 

 

And I quickly figured out the work-life balance thing and my life rocked, my career rocked and everything was going well until my priorities changed. My company also changed. And, I just found that the higher I climbed on the corporate ladder, just the more distant I felt from all the things that attracted me to the business and to the industry and to the role.

 

I guess for me, the pivotal moment was I was hoping to get fired and to receive a parachute. Yeah. So where did this idea come from? Why did you want to get fired?  I was miserable and I no longer enjoyed my work. But yet I was addicted to the paycheck. What was worse? The people or the job work that you did?

 

I would say it was the culture because of the politics. What exactly? Trying to peel back the onion here, trying to get some emotion and get, not get high level, like where we are. Look the higher you go, really the less exposed you are to the actual business. And I found that I was spending most of my day, every day, on a lot of nonsense internal issues.

 

Most of it was political issues. Just as such as territorial control. Hey, this is my responsibility, or, differently in Hollywood, there are many ambitious executives, everyone’s trying to grab a piece of the pie from someone else and jump over other people.

 

And just a lot of the days were spent in corporate in basically survival mode, trying to take down someone else, and just really just trying to score points internally, as opposed to actually advancing the business and looking at the situation that I am describing in a particular Hollywood context.

 

It’s relatable to many industries in a corporate America, whether it’s Silicon valley or wall street, that at some point in particularly at more senior positions, the political dynamics tend to outweigh and overshadow  the real business of the business, and that was what I found myself in, and I found that the company made decisions, not based on meritocracy, but really, because someone shine someone’s shoes.

 

And I was just, I became disillusioned with that situation, and that led. Increasingly that just led to a disconnect between what I wanted, and the reality of this job, but I couldn’t walk away from the job because I’ve benefited from a very hype high paycheck. And I have mouths to feed, and a family to support, and so the reality of having to grin and bear it, so to speak, that really. It really tended to overshadow everything else. And as much as I had worked on a work-life balance, because I did not have this financial security, I was not in a happy place. And so I was expecting, hoping to be fired and looking forward to the occasion.

 

A kid looks forward to Christmas. And rather than that, it was business as usual and more of the same, and I And I remember this one, it never rains in Southern California, but on this particular day in Los Angeles, it was a downpour. And I left the studio around 6:00 PM. I got in my car, I’m driving to my hotel.

 

I called my father and said, I didn’t get fired. And I was just, explosive and that’s really, it’s a very mentally unhealthy place and unhappy place to be in. And after I basically extricate myself from that very toxic situation, I then made accelerating financial security a primary priority.

 

And I was able to fast track that in a relatively short amount of time, and that changes everything, and so the point I’m trying to make to you and to this audience is that often many professionals subscribe. To the trappings of professionals. So success and career aligning, and it’s often that we don’t recognize the importance of creating financial security as quickly as possible because there’s this solution sometimes correctly, sometimes fall asleep.

 

That one has the security of a great and well Payne. But tying financial security to job security is a very risky business and particularly so for very successful professionals. And so the biggest insight that I’ve learned is to always, not depend upon, any other organizations.

 

For my livelihood. So you didn’t get fired. So what kind of transpired, cause eventually you’ve mentioned, you got to FII about five years. How did you make Pasadena. Yeah. So I took, it took several weeks after that, that horrible experience in Los Angeles for me to extricate myself from the company, but I did, I went on sabbatical which was just an incredible experience, and basically reset myself, reset my.

 

My career, my aspirations, joined another company as chief executive and began a second professional life in a business, in an industry that I truly enjoyed at the time. And so as soon as I was on that second career, I then prioritized building financial security through real estate.

 

And while all this was transpiring, I was living and working in Hong Kong. Yet I managed to build, house by house, a modest single family, real estate portfolio. In the United States. And, so I took many trips to the U S. Some of these were family trips and many people went to Disneyland while the Millers went to California and we went house hunting.

 

We left with the souvenir to have a house under contract on business trips to Los Angeles. I wouldn’t leave LA until. Had a house under contract. And so trip by trip year by year, I was able to establish this portfolio of single family homes that really created the foundation for me to achieve FYI and to no longer have to work, in order to.

 

To support my family, I got more sophisticated as I got along, but certainly the pivotal point was building that property port portfolio by remote control from Hong Kong. How many assets, average rents, average or just price a little bit. Did you do any rehab or anything? No.

 

So I very much focus on, oh, w let me take a step back. I always believe in focusing on where you want to end up and then working back to the. And generally whether it’s a financial goal, whether it’s a personal goal or a career goal, I think that’s a good process to adapt. And so my objective in building this property portfolio is to build layers and layers of passive cash.

 

And I w I put a premium on passivity, which means that I want this experience to be as hassle free as possible. And as a result of that, I focused on the ideal demographic that I wanted to rent to. And then I asked myself, what kind of property would appeal to that demographic. And as a result of that thought process, I focus on middle to upper middle class, single family homes.

 

And, depending upon where you are in the country, that means different things in different places. But I started originally in Southern California and, and I completely outsource everything with respect to the actual running of these homes. Again, my goal is high pacivity and Melissa and over the rents being brought down average.

 

Yeah. So starting in Southern California, the purchase prices range because I did this over a number of years from $330,000. Ultimately to about $430,000 and the rents associated with that, range from 2200 or so to to currently about 2,600. And so it’s, and I have a number of properties that fall within that range in terms of the cash on cash yield. It has been less spectacular than other parts of the country where I now invest.

 

But the appreciation on those homes in California, and particularly at the timing of the. That’s been quite good. And so once I purchased a number of homes in California I felt that doing that, building that portfolio in California had run its course. And so I then started building a secondary portfolio in Kentucky.

 

How many houses did you get into California before you moved? So I kept at four. And then and right now they’re doing 80% on the value debt. No I am, I have a toxic relationship to debt. And we can talk about that, but I am all like, Okay. So you’re a hundred percent cash in those types of things.

 

Yeah, let’s talk about it. Most times out, I like to use as much debt as I can, as much as I cash it all. But yeah, walk me through the thought process. Wouldn’t you be able to take, you had maybe what, a $400,000 five policies. How much equity was there two mil to two in California?

 

Yeah. So the whole goal, again, you have to think about what the outcome is, what the desired outcome is. And for me, it was important to build financially. And so let’s talk about what that means. Most people think that financial security is a number, a goal, but actually financial security is an emotional state. It’s how you think about money. And for me,

 

I do not want to have it. Or have any anxieties about, about owing something to a third party. And so part of what enables me to sleep well at night is to know that I have zero down. And that helps me sleep well at night. And that is a personal choice, but I went to business school and I completely understand the financial benefits of leverage, which is why I outsource my leverage.

 

So I try to harness the benefits of leverage without that being in my book. And so in addition to these single family homes, I also invest in private placements, both equity and debt, as well as some closed end funds and all three of those financial categories, they utilize that. And if I’m doing a PE investment, I would much rather prefer.

 

That the sponsor gets institutional rates and gets the benefit of debt and have that debt on their books rather than on my books. And so through these private equity, private debt and closed in fund investments, I outsource this level. And so that’s my way of trying to harness some of the benefits of leverage without compromising, ultimately my peace of mind, which ultimately affects my financial security.

 

Yeah. And I think that’s exactly what a lot of our community does. Most of our credit investors are getting rid of their rental properties, going into private placements, that syndication circles, the key principle. Name what are your thoughts on, another reason why they do that, so they don’t get dead in their own name, but it’s also the liability, because right now, even if it’s an LLC you’re pro everybody knows right where to see you. They can look it up and they know exactly where your equity is and how much you have. What is your thought process on that side? Yeah. Yeah. And so it’s important to basically. Wrap these assets into a couple of protective layers.

 

And so one would be some kind of corporate entity, and legally that’s hard to puncture, but not impossible. And then on top of that to get some umbrella insurance, at a pretty high level. And so those are the two ways that I’ve been able to do that, to try to insulate myself. Again, going back to that demographic point that I was making, because I focus on middle to upper middle class homes.

 

That also attracts a certain kind of demographic that hopefully mitigates some potential litigation risk because I would respectfully disagree. That’s why we invest in workforce health. These, it’s not in the state of California, which is the litigation capital of the country, but also a lot of our tenants, they just are not, they just can’t muster a lawsuit.

 

And a lot of times the lawsuit it’s, whoever can power it and pay most for low legal fees. Yeah. Yeah. So I look, I have great tenants. I’m a good landlord. Most of my tenants have been with me for very long stretches of time. All of my properties are very professionally managed.

 

The management companies proactively make sure that the properties are in good order, and I invest in the property. And ultimately, and I believe that if you try to conduct yourself in the right way, ultimately that’s the best that you can do. Yeah, no I would agree with that.

 

But the rental property is just one small part of the portfolio. You mentioned private placements, to what would you say would be the asset allocation X between the direct owners. Too. I like your terminology, the outsource kind of debt or the outsource asset management.

 

I, so I truly put a premium on passivity and I belong. I believe in relying on professionals who have much more specialized expertise than I have. Whether that be tax professionals or whether that be property management professionals, insurance specialists. And I essentially, after I started building these single families and after massing about a dozen single family homes, I basically hit a threshold where I said, No.

 

W when I ask myself, do I want to make this bigger? And I could very much make it bigger and I can double the number of doors, direct doors that I have, but I don’t want to create another job. I left a very high paying job. And so Y.

 

I sold them off. Yeah. Let’s hear it. Why create that? But having said that, I, I like, and maybe it’s my Asian background, where people really. Prize and respect, physical real estate. That’s why I keep the single family homes as part of the portfolio. And I would say that part of the portfolio in terms of my income, because that’s really how I measure things accounts for about 40% of my.

 

But on top of that, I then layer it with private equity, private debt. And I have a very strong position in fonts, and so overall about two thirds of my portfolio is positioned and weighted toward real estate. But I also do invest in them primarily. Muni bond funds. And that is for liquidity and for diversification, just because so much of my portfolio is otherwise committed through long-term real estate investments, whether that’s private placement or during.

 

Okay. So the rental properties are just a bit of a tip of the iceberg in a way. I’m assuming, do you ever look to sell any of them or prune the prune, that part of the portfolio a little bit? I do. In fact, I’m in the process of doing, or at least staging one cell now. I am pruning the California properties.

 

For some of the reasons that you’ve mentioned before, the properties have appreciated extremely well, but they’re just not cash flowing relative to other productive uses for. For that value, like that is contained. And you’ve got a portfolio and Kentucky, as you mentioned, are you thinking about making it more into California properties or different geographic locations?

 

So I very much believe that one should try to have a little bit of specialization, early on. When I was building my portfolio, I actually thought I’d buy a place in LA. I’ll buy a place in Seattle. And basically, every market of the day, I thought, let me buy a place.

 

But I realized that’s crazy and for a small retail individual investor, it just doesn’t make sense. I very much believe in creating some modest economies of scale, which is why for direct investments, I focused on those two geographies and on nurturing an ecosystem of trusted experts.

 

That I can completely lie on and rely on to manage them. And so I am in the process of, and this is a multi-year process of exiting my California exposures. And, I don’t think I’m going to add any more. To Kentucky, because, currently in terms of a diverse diversification perspective, I’m concerned about concentration risk.

 

And so I’m trying to figure it out. As we speak, what to do, where to basically direct that money. And I haven’t conclusively landed on, on, on that last year. And by remote control because I was locked down in Thailand, I did a 10 31 from California and I bought sight-unseen three investment homes and.

 

And I did that because I had this reliable network of professionals who I’ve worked with now for a number of years, that they could be the boots on the ground. And that enabled me to do that 10 31 and basically convert one California home into three Kentucky properties, and that’s the way the math works.

 

So still on the fence of, you’re going to sell some of the California rentals one by one slowly, but you haven’t decided yet if it’s going to go back into more California properties or a different tertiary market or secondary, it definitely will not be recycled into California.

 

And so ultimately I will Lexic California, any couple markets, you’ve thought. Yeah. So I’m looking at Birmingham. I’m actually looking at DC, which is where I am at the moment. But I am also looking at DSTs at Delaware statute, statutory trust as well as opportunity zones as an alternative to buying direct properties.

 

And so I am in a diligence process on all those options. Yeah. So this is for folks listening, like DC is definitely a primary market like California, we’re very low rent to value ratios, lower cap rates. For Todd, this is a very different situation, right? His end game scenario is not an immediate growth.

 

But that’s why you invest for low caps for security and capital preservation in those types of markets. I would say today, if you were going to do that in DC and buy these higher end homes, it wouldn’t be a bad idea to do a cost SEG before 2022, before long, lock in those losses, just bank it on an 82 84 form for now.

 

But I know it seems like you’re still undecided, whether they’re going to go, the lower Capri type of market or Birmingham, I am. And I have a few months where I have a runway for me to figure this out. Yeah. I’ve got a couple of properties in Birmingham. I’m sure. Love to unload if you’d like to buy.

 

Yeah. So Birmingham was one of the markets where I originally bought rental properties, but I’m on private placements, syndications that mostly operate at this point. Great. These are like the conversations pruning our portfolios that want to be safe, siphoning it around a little bit, never staying stagnant, but never making wholesale changes.

 

I, one year I sold two properties in Seattle, bought Knight out of state. That’s a little, wholesale change right there in line change if you hockey fans out there. But these are the, what Todd is doing is very. Prudent and if there are ways to do it right, it’s very good, it’s very incremental.

 

It’s cautious, it’s defensive, but it works. And again, I think every investor has to ask, do I want to build a business or do I want to build a financial sector? And those are two different things. And depending upon how you answer that will then dictate how you scale and structure your investments.

 

So again, Todd is the author of Enrich. What are like a couple of big takeaways from the book, just to give people a little teaser to talk. Sure. So Enrich is about creating wealth in time, money and meaning, and because I’ve been obsessed with this work-life equation for a quarter century through my research, I identified three very common and pressing goals, which tend to.

 

Just Sapp, the life out of life for professionals. And these three core challenges are financial insecurity, time, poverty, and a disconnect in priorities. And so we’ve discussed financial insecurity and how to pay a paycheck. And job security does not create financial security in terms of time poverty. This is a pervasive problem among professionals Ernst and young says that insufficient time accounts for four of the five biggest hurdles that professionals face.

 

And so the third core challenge is this perpetual disconnect between how professionals wish that they could spend their day versus how they actually spend their day. And there’s this demoralizing gap between what we wish that we could be doing. And you know how we actually live our days. And that explains the deep funk that I was in when I was working at that Hollywood studio.

 

And I was demoralized when I thought it’s fire, because just how I was spending my days didn’t relate to what was important to me at that time. And so with those three core challenges, what I encouraged. Readers of this book want to create optionality. So that work becomes a choice and not an obligation and to take control of their lives through intentionality, which is, can you give an example?

 

Of intentionality, right? Yes it’s really about being deliberate and purposeful in how you spend your time. And so a great example is, and what I encourage every listener of this podcast to do is to wake up the most. And ask yourself what will make today a great day, not a good day, not another Wednesday day, but what will make today a great day.

 

And to consider that question on our personal dimension, on a professional dimension and on a financial domain. And then with deliberateness to go about and to accomplish whatever it is that you identified that will make this day a great day. That’s what it means to live intentionally. And so goals and goal setting and goal achievement.

 

They all keep, they actually occupy about a third of. And I dive deeply into the science of goal setting and goal achievement, because it’s so important, but it’s especially important at this moment in time to take control, because one of the biggest facets of this pandemic has been a perceived loss of control.

 

Where events and situations just tend to undermine and supersede everything. And at an individual level, particularly in lockdown, we have a little control. And so at a time when the world seems out of control, it’s mighty important to take control. Where we can in our lives. And that is the power of intentionality.

 

So maybe just give us some examples of you shoot, you’ve seen people make, because I think people understand so liberally that yeah, I got a great life. How I want it today. This is the ideal. But the problem I think people run into is myself included. At some point we’re just running on autopilot and we just lack the imagination to know what those things are, right?

 

Like what, there’s a governor on a lot of us. Yes. I call that the default setting and most of us are not aware of that default setting. It sets. Usually around college time when we’re in college and when we’re in college, we’re directed toward careers. And once we start climbing the ladder, we then spend much effort climbing as fast and as high as we can.

 

Without ever surveying whether or not the ladder leans against the right wall. And part of this default setting is that we implicitly subscribe to a 40 year ultra marathon. To create some degree of financial incision of financial freedom. In other words, we embarked upon our careers in our twenties and we hope to exit if we’re lucky sometime in our sixties.

 

And then we think we’ll be able to live the life that we wish we could have been living all along. How crazy is that? But that is the default setting for which most people unconsciously operate. And so the first step is to recognize the default setting and to recognize that often the juice doesn’t justify the squeeze and then to reject.

 

That default setting, but to be able to reject the default city, you’d need to have something aspiring, something inspirational to work too. And that’s where the notion of life planning and goal setting and goal achievement come into play. Let me give you a great example. So I was in my mid twenties, a few years out of business school.

 

My life was rocking. My career was rocking. I had just paid off all my student loans and I had just spent this amazing three week holiday in Africa with my family. And life, Life was almost perfect. And I was headed back home after this amazing vacation with my family and I was in Dubai at three o’clock in the morning about to board a flight back to the real world.

 

And I asked myself though, do I just go back to more of the same. Or do I go back with some intention and some purpose because I just felt directionless. And so on a scratch piece of paper on the floor of the airport, I scribbled out very long-term aspirations that I had. And once I got back into the office, a few days later, I really looked at that scratch piece of paper, made a couple edits and those aspirations became the first iteration of a life plan.

 

And. I’ve enlarged and developed this life planning system over a number of years, but it’s now become my central operating system and the whole process about making the time to understand what you really value. To understand what your priorities are and then to identify what makes an enriched and meaningful life for you just going through that thought process and articulating a few key aspirations that in itself is a very powerful process.

 

And by the notion of. Laying out what the biggest priorities are in life and then directing your focus toward those priorities. That really is the essence of living intentionally and creating this life of time, money, and meaning, which we all aspire to. What observation there you got out of your noble setting, right?

 

On occasion, you’re able to get out of your default setting. God gave you that traction to do that little exercise. Yes. But I think more than more importantly until that moment, my goals had been, career. Get rid of all my student debt, and I had kinda, and those were modest goals, but I had knocked them all off.

 

And without some team larger for me to work toward too, it was that feeling of directionless, NUS. And yes, getting out of my comfort zone was a great catalyst to recognize. But, I think that we all need to know what we’re working toward because to paraphrase Yogi Berra, if you don’t know where you’re going, you just might not get there with the Trisha CAC. Jessica the cat said something similar, right? You don’t know where you’re going. I can’t tell you where you go, where you are. Something like that. Cool. Yeah, folks want to check out the book. Enrich is the title by Todd Miller, website enrich one-on-one dot com. But any parting words, thought, look I think that, we as investors, we as a nation have been through a traumatic experience over the past year and a half. 

 

And the partying concept that I would like to leave for your audience is do we return to normal or do we aspire to something richer and better? And I would encourage everybody to begin to incorporate the practice of intentionality in their daily lives so that we can go as individuals and as a community to a richer and better normal.

 

Well said yeah. I think most people listening, you guys have already realized that there’s something might be better out there. If not, you wouldn’t have Googled simple passive cashflow, you and haven’t downloaded a podcast. So I think a lot of you guys are heading in the right direction, but keep going on that momentum and pick up Todd’s book Enrich.

 

Again, like Todd says, you have to find something that pulls you, but you gotta figure out what the heck that is. Do the exercises. I also have you guys go to simplepassivecashflow.com/goals. There’s a little worksheet there that you guys can download. And I think we did this in 2019 and 2020.

 

I did a video tutorial. You guys can pull that on the website. I will also say that in the book that I include 11 exercises that relate to different aspects of many of the themes that we have discussed, but that really this book Enrich, goal setting goal achieved. Is such an important process to actually fulfill and create the life that we all aspire to.

 

Everybody. Thanks for listening guys. You only take this stuff so far on podcasts and books. Join the community. Simplepassivecashflow.com/club. See you guys out in real life. One of these days. And if you haven’t yet connected with me, shoot me an email at Lane@simplepassivecashflow.com. Book your onboarding call, and we’ll see you guys next week. 

Coaching Call – 4M Engineer getting started

https://youtu.be/8x2x5iJrjD4

What’s up investors? We’ve got a really cool coaching call with a little bit higher net worth investor today, 4 million. And I think it’d be good that a lot of you guys who are on the road to financial independence check out all the coaching calls and what I would recommend. And we have archived all this in our members site, which you guys can get free access to.

 

By joining the club at simplepassivecashflow.com/club. What I do is I arrange all of these coaching calls and I think there’s several dozen of them now in the archives, but we arrange them in terms of networks. If you’re a dude who’s still starting out half a million dollars in network, you start there and you work your way down.

 

If you’re already at 2 million, you start there and you work your way down and eventually you’ll find this call. 4 million net worth engineer, John. And then, it’s all part of the journey, right? One thing I will mention, I’ve talked to a lot of higher net worth investors, even those pass end games, which I define as four to $5 million net worth.

 

The reason why I call that end game is because any Bozel can invest four or $5 million and make a five, 10% of attorneys should be able to live off the bat and pass it off to your bone head kids. If you don’t teach them the right way to actually make money work for you. For money, trading time for money.

 

That’s what we don’t want. Yeah, if you guys join the club, you guys can get access to that. This simple pass a cashflow.com/club. And I’ll be out in Santo here a little bit. We’ll feed guys meet up in person, but check out all our events@simplepassivecashflow.com slash events. If you guys aren’t part of our family office group, basically these events are a chance for us to meet.

 

My self to meet you and you to beat me and get a good sense of who you are to see if you’re a good fit for the family office Ohana group, which is our inner circle. If you guys want more details on that exclusive blue go to simple passive cashflow.com/journey. But if you’re somebody out there who thinks that simple passive Castile community is the only group out there with high net worth accredited investors investing in this sort of way.

 

You’re right. There is that we are the only group. There are a lot of copy catters, but they aren’t that great in my opinion, because trust me, I’ve been there and this is why I created this group for this high caliber type of people. No. You cannot just mooch off of these pop-up events we have, right.

 

This is like your one opportunity to come and check out our community. If you really want that community, number one, go find it on your own or number two, join our family office group. Sorry, but we have always had these new investors coming in. If you take a look at the people who came through our last voyage trip, half of the people are family office Ohana clients.

 

And the other half is this revolving door, right? People will come in, they want to check out the group. They want to see if it’s all real. They want to see if I’m a real person. I get it. I would be thinking the same thing. But what happens is what most people will do is they’ll come in. They’ll like it, they’ll start investing, but they’ll need to put their head down, back in their work and make more money.

 

Eventually I would say four to five years later for most people. And if you’re $1.5 million net. You save 50 to a hundred thousand dollars to put two investments. You’re going to be financially free, probably in three to five years easily. If you implement,  going into good deals, the tax strategies, infinite banking, super simple.

 

That’s why it’s simple, passive cash flow. And at that point, after letting that time go by, let it bake in the oven for three to five years, social connections with this kind of family office ohana group is going to be what you’re looking for. And you will probably join the family office group at that time.

 

But, I think this is where, what new investors do is they try it out, they jump into some deals and then they just have to go back and work and just let this stuff simmer over time, because this is not a get rich, quick stuff that we’re doing. It’s a way to get rich slowly.

 

That takes several years to get the momentum going. I started investing in 2009. And what a lot of people don’t realize, from 2000 to 2000 or 2009 to 2015, going from zero to 11 rentals. That was just such a slow grind for me at the time. Now, things are moving a lot quicker, network. Just money too. But what people don’t realize is when you’re in that era between, non-accredited investor status to two, to $4 million net worth, it’s a slow grind. But there are ways to accelerate, which is, building a peer network, which is why we have the family office group. But anyway, enjoy the show. Hopefully we can meet in person and here we go.

 

Hey folks, we’ve got another coaching call here with John Jacob Jingleheimer Smith. His name is mine too. And John’s got about a few million dollars net worth might be four, might be five. Once you get past 2 million, you’re just trying to get to that next shelf for just four and a half, 5 million.

 

And then I feel like the next sentence is wrong 10, just cause people are like double digits, but, we’re going to go through his personal financial sheet and see what problems he’s got and cause it’s probably something that you guys have. If you guys like these, please join the investor group at simplepassivecashflow.com/club.

 

And if you guys also like these go to join our family office group, where we do this with every single member and every, all the numbers each. But it’s more of an intimate group. We only have 80 people in there now. It is a closed group. Vegas rules what’s said in the family office group stays in the family office group.

 

But John wants you to give us some context. Tell us about yourself a little bit. Sure. I live in California and am married with three kids. I’ve been one of those guys that wanted to be a millionaire at the time I was 30, wanting to hit it in stocks, not in real estate and then lost it all.

 

So I had to rebound and it took about 25 to 30 years to completely rebound. Within that time frame probably bought and sold about 13, 12 to 13 homes. I’ve kept three of them. Two of them, three of them have rentals. I don’t have any rentals anymore. I’ve gotten rid of them all. We basically liquidated so we could buy a house in California because it’s really expensive.

 

But I think it was a good move because our house has doubled in the last three years. So from that perspective, I feel like it was a pretty good investment. Yeah, same thing. I say every time I put like a $5 chip on the hardware that it disappears every time, but when I finally get it, I tell myself that was a good move.

 

You just never know. So again, it’s a gamble, just like anything else, but it paid off in this case for now. Who knows what can happen in 5, 10, 15 years? You just never know what’s gonna end up happening. I’m a W2 worker but I’m a serial entrepreneur, always looking to find out the best methods, but ultimately right now where I’m at the reason I’ve connected with Lane was the passive cash flow.

 

We have some money in our banks and I’d like to just get it to work for me a little bit better. I found a couple of investment opportunities. Some are risky but they’re paying off and they’ve been paying off in the last year and a half, two years. So that’s been good, but.

 

And it’s been a pretty good pretty good return on that per month type thing. But I’ve been really cautious and only put $10,000 into that risk. That being said, I hate paying taxes. I hate paying taxes. I, and I hate paying the government and I hate paying them off you here in town for things that they do.

 

I’ll pay for things when they’re fair and so forth. But I feel like there’s a lot of things here that are just ridiculous. And anyway, let’s talk about how we can do this legally. So paint the picture for folks, net worth 3.9 million. If you guys want to check this out on the YouTube channel, you guys can check it on the YouTube channel and follow along as we go through the.

 

Cash on hand. Let’s go through the bottom left quadrant, salary and wages about 18,000 commissions and bonuses. What do you, is this mostly you or is it your spouse? How is this? I was just me. I haven’t included my spouse stuff. She’s a teacher as well. She doesn’t really contribute to this portion of it, although she does contribute heavily because she takes care of the kids and so forth.

 

But long story short was now this money is just mine. I’ve been fortunate enough. I’m a director of engineering and, for a pretty, a great company. And they pay me well, the commissions, that’s a bonus. It’s just a bonus. I get a 15, 20% bonus every year. It’s been pretty consistent, but it’s not guaranteed.

 

All right. So you make about 20, 25,000 a month. Let’s take a peek at the expensive side. Nope. You guys spend, what about 15 grand a month? You have a family of three, right? Expensive living in California because you hang around with the Joneses to the left and the Joneses suckers, like to spend some money.

 

Huh? We don’t, we’re pretty, pretty conservative. So we, this is for sports for our kids and, club ball and that kind of stuff. So no private school. Okay. And then the day, it doesn’t matter how much you make, but it’s what should net. But still you guys are able to net about 13,000 a month, which is a hundred.

 

50 a year. So awesome. Like I think a lot of people in our group think that, the younger ones, they’re able to save 30 to $50,000 a year, the more senior folks like yourself with already assets producing income, you guys are out there, above a hundred, 150,000 a year.

 

So you can go into a couple of deals every single year. Yeah. That was my plan was to look at trying to do two homes a year is what I wanted to do. But then, I ran into you and we talked. I’ve been watching you for three years, obviously, you know that, but it’s been one of those things it’s like just pulling the trigger.

 

And one of the things that I’m trying to understand is a self-directed IRA. Do I need to create trust? How’s that? How’s the best way to invest with you? Yeah. Let’s go back there. Let me just so I want to break down the. This is 3.9 million just how it’s made up. So you’ve got a bunching, you’ve got about 10% of that in cash.

 

You’ve got about another 10 to 15% of that in various stock accounts and the 5 29. And then you got another big chunk of that in, but 800 grand in various retirement IRAs eight, just adding this up off the top of my head. That’s about half of your net worth. Whereas the other half are looking for it, the houses you got about a couple of million of equity in there.

 

Okay. So yeah, that sounds about right. Cool. Where have you started investing in deals or rentals or any non alternate? I’ve had this all year, Lane. My goal was to get into some wholesaling. We put a couple of bits on a couple of wholesales. They fell through. We never did get those.

 

I’m trying to do it with a partner. We started doing that. I knew that it was just, I just don’t want to deal with the ugly. He’s less than I am, but he’s a real estate guy. Yeah. It sounds like a classic case of, he just got lucky working with some rich guy like yourself and Greece. This is what I don’t like about doing those types of deals. You’re working with some broke guy. It’s just a matter of he’s got, he lives here in California.

 

He’s a saint, he’s with just his wife. They’ve done pretty good. He’s got two condos that he’s rented out and we just recently got this other one, We invest together. My plan was to handle the finance portion of it. And then he got the real estate license, which he just went and got his real estate license.

 

So that was the other thing that we’re trying to accomplish. But it’s John, you make this much at your day job. What are you doing dicking around with Polson? Exactly what I thought that hit the nail on the head. I do this for six months and I’m like, what am I doing? This is a waste of my time.

 

Yeah. And this is the epiphany. I think a lot of people are right? Like at the end of the day, as much as we say, we’re not trying to, we’re all chatting time for buddy. You make a good amount of money trading time at whatever this engineering direction. You do things that you’re not gonna, you’re gonna make more money doing that than taking on the risk of what are your wholesaling things.

 

Okay. But I think we’re in alignment right there. Okay. But no rental properties thus far. Okay. But no that’s but that’s good. That’s good. You said you had a bunch of these prior, right? So let me get my wealth. I think that was one of the things. Yeah. I think that’s a lot of times, that’s what I like to see.

 

I like to see people who own property too, because it checks the box. Because when you, before you start to invest in this stuff as a passive, it’s nice to know what the heck is in the black box, yeah. You mean like where you mean you don’t, can’t please people up during the holidays.

 

What the heck? It’s the slow season. No, man. People don’t really move around during the holidays, I mean at the end of the day, you wanna, you want to bring, you want to be able to be smart about your taxes and you want to invest in the right stuff. And that’s why I really like your approach, my lane, as far as passive investment, I’m probably one of those guys that wants to be that guy.

 

I just want to sit there and get 12 to 15% per year. Yeah. But you’re also an engineer and not only are you an engineer, you’re a director. So your worst analysis paralysis, what is it that’s holding you up? Cause you’ve been even stocking this thing for three years now. It’s still in business.

 

What, again, what is it? Or it might be a multitude and then let’s walk through. Yeah. So a couple of things, obviously I told you earlier, I want to be a millionaire. By the time I was 30, I was very close. I lost everything due to, stupid not having an exit plan, so to speak, not knowing anything, being stupid about, things and it took forever to come back.

 

And so then the other part of it is just trust, right? It’s really difficult to trust people, especially now that you’re at that point. And so that’s what you call it stocking, but that’s why I’ve been stocking. Here’s what I, here’s what I would do, right? Trust no one doesn’t trust me, John don’t trust me, but look what the name of the game is, or what I tried to do when I first started to do this is like you build relationships with other passive investors, other accredited people that don’t have a dog in the fight.

 

And you got to, of course you got to make sure that they’re legit a little bit. When they don’t have any kind of skin in the game, they’re not getting any referral fee for sending you over. You start to build deeper relationships with people, right? Some people, what they’ll do is they’ll come on the retreat and they’ll start just banging out questions.

 

What do you work with? What should we stay with? Has this been returning? And I think that’s the wrong way of doing it, that people see through that. And they know that you’re just out for themselves, relax, spend a day or two in Hawaii, get to know people, get to know them, build a relationship with, and then let that test stuff organically come out because people hold that stuff to the chest a lot of times, because it took them a lot of time, money and risk on their own part to get that precious information.

 

They’re not going to just give it up to some random person. But to me, that was one of the, what I did when I started to interact with people, started to build a long-term relationship. Another hack that I did is I also built relationships with the lawyers doing the paperwork, too. Some of them were working with somebody that was a little shady.

 

They probably informally took me off to do that, but that was how I went about doing it. How are you interacting or finding people of that caliber in the past? It’s really tough. It’s really tough. I’m in the process right now, trying to find a tax strategist. I’m trying to find what’s the best method I’ve known about this bank on yourself, the type of thing that you guys talked about, but I really want to talk to your guy and build that bank on your own plan where you can get money quickly to start investing into this.

 

I really want to do that. I want to also talk about re-divesting the five to nine. And getting the kids involved with, potentially, modeling or whatever, so I can give them an IRA and that kind of stuff. So I want to start planning at that level. John, don’t worry about that yet.

 

You’re going too far ahead of yourself. Those two things you mentioned are absolutely the most unimportant things for you right now, right? The order that we do this stuff is first go into deals that you don’t get your money stolen with the right people. That is the priority. Number one, because priority two is from those deals.

 

So you might make some money, hopefully you do, but you’re going to get the passive losses to play different games in your taxes. That’s where you could potentially say hundreds of thousands of dollars several years. If you’re doing a little infinite banking policy, you get your $70,000, 5 29 be directed. That’s nothing, man. Don’t waste your time on that type of stuff.

 

And I think that I can already tell this is why you’re so successful at your job, right? You’re a technical guy. You focus on things and you just grab a whole other thing. That’s right. I do. And I solve problems. I solve really difficult problems and I’m like a bulldog, once I get in there and I tear it apart, like you said, I’ve got that engineering mindset.

 

So I sit there and tear everything apart, down to its base. And then I tried to build it up, but I don’t have this background, and this is something that of the approach.  I’ve been on my own since I was 12 years old, I was a kid who lived in low-income housing. So it’s not like I had a silver spoon in my mouth.

 

And I’ve done everything by myself, but that’s the hard part right? In this financial maze. There’s a lot of noise out there such as the  self-directed IRA thing that we’ll talk about here in a little bit, but just before we go there, infinite banking, it is a classic. Sometimes in the family office group, we’ll talk about this thing for hours.

 

We’ve had literally four to five hours of calls over the quarter on this one topic. And we joke because it’s like, guys, just stop optimizing this stuff. It’s a creaking commodity at the end of the day. It works. And if you optimize it, it doesn’t move the needle for you that much.

 

So that said, for people listening, go to simple, passive cashflow.com/banking. Put your little email in there and then get the free infinite banking. E-course it’s two or three hours, I think, going through that. But Jeff didn’t go. Don’t do it yet. I know you, you’re focusing on the wrong problem right later on, when you’re in a few deals for several months, then you have the time then go back.

 

But just trust me on this. It’s not going to move the needle that much for you. I believe, you’ve done a really good job laying, I’ve been following your career kind of thing, so to speak. If you’ve earned my trust. Okay. So if I were to trust and we’re going to put in a hundred or a few hundred thousand dollars into some test investments, where are you going to get it from?

 

W what I’d like to do is I have, I just basically divested, I have an IRA that has a hundred thousand dollars in cash. I just wanted to use that directly. And move that into, that’s why we talked about self-directed IRA, because I want to move that over and use that as a hundred thousand dollars.

 

I would use this liquidity first, you have 400 grand on liquidity. You do it with that first, but that said, let’s just make believe you don’t have any liquidity. Just making the problem hard, right? Yeah. Because as somebody who sits in my checking account and I’m earning 0.1, nothing.

 

Yeah. So this is what you invest first. Okay. So let’s fast forward six months and you’ve blown through this stuff. Whereas they’re going to come from next. I think it should actually come from the non IRA stuff first.

 

And you’ve got another 400 grand really? You don’t need to make these properties art or that’s all in stock though. That money is in stock right now. I’ve been chilling in stocks lately, but again, if I sell that I’m going to be hit with a huge tax. So that’s what I’m a little concerned about.

 

Either way you are right. Whether you physically data from the IRAs to get out well, not if I do it with a trust through SD IRA at that level, then there’s, or let’s talk about this. So people, I’ve done many coaching calls like taking money out of your retirement accounts, which is what I recommend for most people, because you want to pay our taxes on this stuff today, as soon as possible and not wait until the future, when your tax bracket will go up.

 

And the general tax bracket for everybody will be going up in the future. Therefore, And you want to get your money out so that you’re complaining that you paid too much taxes or the only way you’re going to be able to do that is to, I’m not paying now though. That’s the problem, right?

 

Lane. I’m not paying any taxes because it’s just sitting there in these accounts, but you will, when you take it out. And so let’s like, it’s a two-part test. So first I look at your income. You’re already, what is your AGI about just gross income right here? My, is that what, when we take home is, maybe minus maybe 20, 30 grand usually is what it is.

 

What’s your take? No, not to take on your total income. What’s your salary and bonus? Two 15 plus 30, call it two forty five, two fifty. And then you add your spouse. She has another 50, so over 300. Okay. Okay. So unless you’re above three 30, which is the highest tax bracket. So we’ll look at the tax brackets, right? You’re slightly under that big jump from 24 to 32.

 

What I would do is I’d be freaking out a little bit every single year to take you right up to that. Or maybe overflow a little bit. No big deal. Hold on one second. There’s kids going in there. Give me one second pass. If you follow why, I mean that your AGI numbers will change here or there, but I just want to make you understand what you’re trying to do. Yeah. Okay. I’m trying to understand what you mean by AGI. So that’s an adjusted, let’s say if 1 27. It’s not 1 27. No it, yeah, they go look at your taxes and just search AGI.

 

It’s probably really dang close to 300. I don’t believe that’s the case, but we’ll look, I’ll look okay. Yeah. But for this example, let’s just assume it is. So you’re going to leak out a small amount, but like you have so much, it’ll take you, if you were to leak out 30, 40 grand per year, it’s going to take you 10 years to leak all this stuff out or not. It’s going to take you 20 years to leak all this stuff. And you explain to me what you mean by that I’m not falling in there.

 

Take it out of your retirement account. Pay the taxes, pay the penalty. Oh really? Okay. Yeah. Most people will look at, be like, oh, he said, you gotta take the penalty. Who cares? You’re a faint 10%. If you’re going to make that back in a year or two, and then it’s all gravy after that. Interesting.

 

You pay taxes on it. You’re going to have to do it one way or another either now or later. Yeah. But if you take it out, I thought, you know what the distribution is, obviously the 401k always talks about it as if you take out your minimum distributions and you’re lowering the tax rate. So I’m going to ask what they say, but I don’t know how, because you’re broken mult.

 

They’re talking about how most people broke in a few. That’s what I thought. I haven’t talked to anybody. That’s rich. That’s retired about this. Never talked to anybody about this, to be honest with you, this is the paradigm shift. But this is not that complicated. A guy certainly likes a guy like you can’t understand, right?

 

And this is where, if this is your job, you’re not looking for tax strategists. You’re looking at them in the mirror, visit your job at Fred. I know, but it’s so difficult. There’s so many things that are tax IRS codes. No, it isn’t real there. Don’t look at the tax brackets and try and estimate where your AGI is going to be at.

 

That’s how much taxes you’re going to pay and should teach glee. Do you want to bump it up or do you want to bump it down in a year? It’s not hard. What’s hard is what you do at your day job, John, that’s the hard part. This is. I just wish I could see it that way. It’s really difficult for me to understand that.

 

But for some reason, I’m just not sure that paradigm shift has not happened here. It’s just, you need practice, right? You make, let’s just say your adjusted gross income was 200 a year. So right then the prudent thing might be to take out a hundred, 150,000 every year, following the income to really get up to that, those higher tax brackets.

 

What do you mean by taking out your retirement money? Okay. Because once you go over such an ATI model, this changes every year, right? It says slightly go up every year, but I’m teaching you the principles. Yeah. Once you get up to that higher about now, you’re blowing red, right? It’s you’re paying more taxes for the dollar that you take out.

 

The key is to leak it out slowly. So you don’t go into the red, you don’t redline your engine. Some people, it’s your money. You can take it all in one year. If you want, you can say F it let’s take out all your hundred. Your AGI will balloon up to a million dollars and you’ll pay a whole bunch of it at the 50% tax rate. That just does not make sense. Yeah. That doesn’t. And I wouldn’t do it unless you were super confident.

 

You had another tax mitigation strategy and you want it to really be aggressive. But what I’m saying here is let’s be prudent. Let’s take it up to that, that, that part, where things get really rough in terms of your tax breaks. Under 330 is what you’re saying. Got it. So you take out enough to cover up.

 

So where, when I bring out enough, so let’s say 200, I bring out 130 or 125 columns. I’d pull out 125. I take that tax kid at 24% on as opposed to the other duties, taking it out at 32 plus right now, this is different for everybody. And I’m still shooting it from the tip. You’re not giving you any tax advice here, but this isn’t rocket science.

 

And we don’t know what’s going to happen in the future in terms of tax brackets, but our hunch it’s going to go up and things are in there. That’s going up, it’s going up. Trillions of dollars, it’s definitely going up, but this is just, you, we make a prudent plan. We follow it.

 

But even at this place you’re so close to that highest tax bracket already. It’s going to take you fucking forever to jail, break this stuff. So maybe you might want to be more aggressive and you might want to pop into that higher tax bracket a little bit every year,

 

but now you have the ability to ponder this right on the right thing. You know how these things work. I was almost like you would think that there’s, I’m a spreadsheet kind of guy, right? Understanding this, like I, I’m a process guy. It’s gotta be a process that we go through.

 

That’s why I liked Sankey.  I use a lucid chart every day at work to show what we’re trying to accomplish. And I think that the sand chart is very similar to what that is or a sand key, I just haven’t grasped that, but I guess I wanted to see that process of what do you do?

 

And then you can run different scenarios. It’s like the Monte Carlos, not the scenario. You do that for you, it’s very similar to that. So one of the things you’ve, and I think I’ve told you this is, Six Sigma in data is something that is very near and dear to my heart.

 

And so I would say I’m a master black belt in six Sigma methodologies, and it’s got us make sense. It’s got to have the data behind it. And so the strategies that you’re talking about actually make sense. It’s got to put it, I gotta put that down on paper to see it or play it. Let’s just walk through it.

 

Let’s play it on our head, make a few different options. And then luckily this isn’t going to, you need to make a decision now, or in the next couple of years, this is all in front of you. And you can have your subconscious mind work on this a little bit. But yeah, you’re trying to eat, trying to get this 800,000 ounce so you can invest in cash so you can get the passive losses from it.

 

Because when you invest through this type of stuff, you aren’t getting the passive loss. I see you got some crypto up here and not much. Nevermind. It’s pretty negligible just screwing around with it. So forget it. But that’s what you use the IRA money for non real estate tax event stuff like crypto, or I don’t use the IRA for non tax events and stuff.

 

No. Crypto is going to be taxed and, or like private money. That type of stuff. Non text then type of stuff. Yeah. Yeah. Obviously we’re trying to get away from that type of stuff. We’re trying to go to the passive investor, passive income plan for the active board. But, the other thing is the only other reason why there’s two reasons why I would probably prescribe a.

 

Qualified retirement plan or a self-directed IRA is if they’re already in the highest tax bracket, which I would consider you in there. You’re not like in there, like you’re making 400, $800,000 a year, but you’re in there. The second reason is if somebody already has a significant amount in their IRA, what I call a significant amount is a quarter million to half a million dollars in their IRA.

 

But you do have it here. It’s not like you’re not as bad as some of these other guys doco. Some of these other guys, their networks are like 1.5 million way less than yours. And they have a million dollars in their IRA plus, and they make a boatload of money to that’s cause that’s what though that’s what everybody tells you to do.

 

The world tells you to do, and we become puppets of the world, right? This is what you’re taught in school. Some better, some better puppets than others, right? Yeah. For you, like what I would suggest, I wouldn’t decide anything here now. Maybe try and leak out fifth, just take your stuff up to 330 or that next higher tax bracket every year.

 

But what’s that doing? That is a non-decision is still punting it for, because you have so much in there. But you have so much time to think and ponder if you’re going to con you know, increase that or stop that because, or just don’t even take money out of here just to stay frozen for now, because you have so much other investible funds, you have 400 grand here and your 400 grand a year, get that stuff deployed.

 

First, you have proof of concept with us, we are investing. What you’re investing in first to restore before you start messing around with this IRA stuff. I know you mentioned you want to get it going first, but I would say full doll,

 

because one thing is one thing I’m thinking of you have so much money here, you deployed this need to put a million dollars. This could possibly, you could retire on this if you wanted to. I still go part-time. My ultimate goal is, one of the things that we talked about was when you want to retire, my plan was to retire when I was 57, that’s four years from three years from now, almost.

 

That’s probably not in the realm of retiring with kids. No, it is. It certainly is, is it just right now? All these soldiers are not doing Jack for you right now. That is actually the stocks and bonds,  so let me just tell you that I put 120 into the stocks. I took it away from my financial advisor.

 

I took it away from my financial advisor because he was charging me $85 to do a trade and it pissed me off. So I bought some Teslas with them. I told them, buy it 300. Even though he didn’t get it until three 40 or three 50, he still charged me $80. And I was like, there’s free charges everywhere.

 

So I took it away from home and it was a hundred and 121,000. In the last three or four months, it’s gone to 3 21. So I’m doing it myself right now. And I moved it, to, to something that doesn’t cost me anything to be trading. And I’ve bought certain things like, I’m in the industry of things and I know what’s going on with a lot of different companies.

 

And I’ve invested wisely. So those, I guess my point was, it’s still getting. But even investing in, in syndications is a gamble. Let’s not worry about this yet. It’s working, it’s doing something the big priority is let’s get the, let’s get that’s up on top. Yeah.

 

I’m ready for 150, 120, $150,000 to give right there. And just and not only this is the home equity, right? The two mil equity. That’s what I’m thinking of too. That’s your lazy equity that you said you got a couple of million. Oh, yeah. In the house. Yeah, I haven’t done any. Yeah. So get a heat lock on that.

 

Start deploying that. He locked on that really? Cause I’m at 2.75 right now. It doesn’t matter. It’s not what that’s not wealthy think about. That’s what broke people think about. Interesting. So get a heat lock on the house and then do what with it makes more than like nothing. What you’re thinking in the house. It’s just going up with the pace of inflation.

 

Th this is the big, these are the rocks, right? This is all the sand right here. Worry about the rocks first. Gotcha. Interesting. Yeah, that’ll keep you busy for the next two years, so we don’t really have to mess around any of this yet. Okay.

 

So can you expand a little bit on the hilar a little bit? Yeah. So you know, you’ve got your home. What’s the market price on your house? 2.1 to 2.3. What do you owe on it? Okay, so you have about a million or so equity you’re at like around 50%. So you could probably borrow about 800 grand. I’m guessing.

 

At least 700. See that you could add that to your 400 right here, or you got at least 1.1, 1.2. If you can deploy the next day, if you want to. And that $1 million, if at 10% that’s a hundred grand right there, tax fee

 

How does the heloc work? I guess maybe I don’t understand that because then I’ll be paying if I borrow that 800, my, my payment goes up considerably, doesn’t it? Yeah. So this is a mindset thing, right? Sure. That he locked. There’s a payment associated with it, but who cares if you’re making, if you’re paying 2%, but you’re making 10 full percent at the neck, and this is the same thing that people have.

 

The same thinking with infinite banking policies, right? If I’m paying four or 5% on my infinite banking account, there are payments occurring, but you’re not supposed to worry about it because you should be making 10, 15% in the other investment. It’s just the Delta between two, it’s just a mindset thing.

 

Yeah. My mindset was to be a Strat tax strategist. I’d rather pay a tax strategist $10,000. If he saved me 10,001, if you do not, you can pay yourself 10 grand. Now. I’m just like you, this, these, this stuff, what to do at this is a hard decision, but you don’t need to make them yet. But what I’m thinking is you have so much money that you could probably just place this in your home equity, make an extra $10,000 of passive cash flow tax free every month. And you’ll be good. I think.

 

I’m not actually following what you’re saying, their lien on the home equity thing. You can take 800 grand out of your home equity and put it into deals or investments. And you can put another 300, 400 too. So that would be 1.2 million. Yeah. 1.2 at 10%. That’s 10 grand a month. Yeah. So you pay the 10 grand you get, so you actually get the 10 grand and then that actually allows you to pay the additional costs on the house that you increased. Yeah. But which is negligible. Let’s call it eight grand living. Harrison, me, John doing the engineering thing again. If you have, let me ask you.

 

Your personal finances are pretty well. We’ll go back to the summary tab. This is what’s happening. You’re still netting 13,000 a month. If I added another eight onto here now you’re netting $20,000 a month. After deploying out those funds, does that change your life? Are you still going to work?

 

What’s happening? My old plan was if I ever met in 20 to $25,000 a month, that was going to retire. That was my plan. Shoot. What are you doing? What are you going to work next week for? But that was like, so that’s my whole point, right? Like you have so much money and you’re so inefficient right now. If we just did that with you and we’ve replaced this money and then the 800 grand equity, your FYI will be close to zero gravity, zero cheat. Your network would continue to grow and you can quit your job. I don’t even need to deploy any of this stuff.

 

Is all overkill and therefore, this is what’s fun, right? Because now I’m like, all right, John, if you don’t need this stuff, I’m just going to leave it here. So you never need it. And this is what you can give your kids. You can give up an IRA, Roth IRAs, but then I’ve also had clients where their parents pass away and their parents give them an IRA or Roth IRA.

 

It’s a complete pain in the butt. Cause you got to take mandatory distributions from it. But that’s another story, like you don’t have to touch this money cause you don’t need to eat it. Leave it in the IRA. And that’s a very rare circumstance. Interesting. Okay. No, I like, I liked the idea of doing the 800.

 

So how do I go get this Wheelock? What’s the approach to do without any bank? It’s pretty much a commodity man. Yeah. I don’t know if there’s some folks in the foam or like a kind of optimize and find that one, wrap them, spear bank. I don’t know what it is. Cause I don’t get key locks personally, but you can go to whatever bank you get, whatever grade really doesn’t matter.

 

All the rates are the same and the heloc. What is the hilar actually doing? I guess I’ve not really done it yet. So the bank, okay. Your house is worth X right on the market. You don’t hold that much on it. And your bank is like, all right, yo, John we’ll lend you that based on. Yeah. And they’ll take it all day.

 

That’s an easy loan for them. That’s why the rates are so low and that’s why it’s a kind of a quantity. Okay. And then once you take that though, so now you are paying additional money on that 800 K. Yeah, but it’s pretty negligible in some easy locks. They’ll just make it like interest only, or they’ll take it from your equity from the house, which is negligible too.

 

But at that point, cause then you’re taking that money, plus let’s call it 200. So I’d like to put $200 and then they call it 200 out of this. My wife is one of those rainy day people, right? She’s oh, what happens if that’s what infinite banking comes in, but don’t worry about that yet. You got to convince my wife on this one on somebody, you know that she’s that person that is very conservative, extremely conservative. This is where I would design you a more holistic plan, which kind of takes those concerns and which isn’t as optimized, but it’s more conservative to appease those concerns. Just to get it to show one year. And then the next year, like I told her, I was going to take $10,000 into Z for, we call it.

 

And it was a crypto thing. And she’s oh, should we? I’m like, yeah. And then I’m getting 10% back per month on that. Look at the big picture. You got 800 grand in your house, not doing anything. You have 400 grand, you not doing anything cares about what you made on that $10,000.

 

The strategy we were thinking of is we were going to try to find a house that we could just fix up. We’re going to sell this one for 2 million, pay it off and then have a million dollars, and then basically live in California for free and not have to pay any payment. That was the strategy we were thinking of.

 

That was like a lot of pain. But the process though it is, and the whole process, you got, a $1.2 million house cures junk nowadays. So she doesn’t want to do that. She likes the house here. We have a pool, and that’s where you have to like straight within your own household, right?

 

Meaning you got to negotiate with some people, it sounds like maybe you just offer a pay. We’ll just keep the house and I’ll keep at least half a million dollars of equity in there. But Hey, let me try and get proof of consequence and this other stuff, maybe that’s and from their perspective, yeah.

 

It’s not going to keep the house and we stay up all the bones, the value. Yeah. Try it out. That’s not how it goes. This is great. So let me ask this question. Do you provide guidance there? How does this approach work? And this is all just let me do something real quick for you right now.

 

Just to shoot it from the hip, what I would do, they announced that I hear that your spouse has like that. What I would do. I’m going to build an infinite banking policy for her. So what I would do is I would throw in a quarter million dollars every year for six years, whether that’s on her or you probably her, cause she’s a woman and she’s cheaper than I would, yeah, I would throw it up.

 

If at banking policy we put in quarter-million dollars every single year, you max fund that thing for at least a couple of years, you only ever need to max fund it for one year. So it doesn’t decay on itself. It’s 150,250 again. Yeah. For after the five, six years there’ll be a million dollars in there, but the whole where’s that money come from.

 

That’s what she’s going to ask. So the first year is going to come from that liquidity. And maybe even the second year it was going to come with liquidity. But the whole idea is you invest through. It’s a pasture. Yes. You’re paying the fees, but the fees make sense.

 

There’s a break even point usually around your tour, five, somewhere in there. But that’s kind of your base, right? You can point to that as always being there it’s a lot more safe than these bank accounts. And then I can get rid of this term life insurance, right? These terms.

 

Yeah. Because you’re buying boat insurance way better. Yeah. You can get rid of that term, the 400 bucks a month. And then just keep the one that works. Yeah. And then does that go to both of us? How does that work with this infinite? Oh, it’s only going to go to her Uber as the policy. You can get a $5 million policy in BJU and put in one 50 each too.

 

But if you want the insurance part. It just makes sense to me. If you wouldn’t want me to yeah. Talk to the agent about that, go to the, yeah. We’ll connect you. The, but it’s just just moving forward on this, right? Like then maybe next year, 20, 22, you start investing into several deals at a hundred.

 

You get that proof of concept going, so this is going to take a long time to really deploy all this money. But by doing that big initial stuff of infinite banking, Alicia makes four or 5% tax free on that money. As opposed to not doing anything like how it is right now. Yeah. It’s true.

 

It’s literally, I’ve had this conversation with him before. It’s literally driving me nuts and it’s just. And then you invest that in the next, you keep doing that for another year and then another year. And then you’re for the most fully deployed at that point, you’re in 10 deals, you’ve got $750,000 cash value, which your friends were there.

 

Probably your cash value will go down because you start to invest that money, which is what you want to do anyway. And then that lane, so one of the questions that always comes up is, what happens if you lose your job? If I lose my job down the road, there’s always, you can get the, you can get the cash value and you should take a few days to get it back into your bank account.

 

Yeah. It’s pretty much instant liquidity. Okay, cool. And that concept is like banking from yourself. Like it’s technically not a bank, but it is, it’s almost secure, but that’s the idea, right? Your personal fault, you start investing your in, That, this is how I do things, right?

 

Like it would be irresponsible for you to listen to a guy on the internet and just take his advice, even though you understand what the heck is happening in terms of taxes, which you’re trying to do long term. And we’re trying to get to, to get this passive income portfolio. And that’s where the mastermind comes in.

 

Like now you go talk to, I’m just talking to six or seven different couples, similar backgrounds, similar income, similar networks. Yeah. There’s 80 of them, go talk to four or five of them and learn the lessons learned, have them answer, everybody has different hangups, and they can talk you through it. The more important thing is that you go through this process, and you start to build relationships with these people, because these are the people that you’re going to put your head together with, as you’re saying. Transfer that wealth to those few roadblocks that you just talked about, right?

 

When they grow up. That’s what I try and do is trick you guys into interacting with each other, to build those long-term relationships. But then, you come back six months later and you’ve talked to all these people and you’ve changed my strategy a little bit, but you’ve taken ownership over it and that’s what I want.

 

And then we go connect you with the right service, professional CPA tax attorney, lawyers to make this happen. That’s the process. Okay. I keep on getting calls left and right from the folks in Las Vegas Toby’s group. Yeah. But do the work yourself, empower yourself to have the right conversations.

 

But part of that is building relationships with other passive passenger colleagues and building your own family office. Family offices are made for people that are a hundred million dollars brighter. What y’all do, but what do you do when your net worth is one to $10 million? You need a peer group, you need to coach it together.

 

And that’s what the family office, Ohana mastermind is all about. Yeah, but that’s the procedure. Let me make sure I’m understanding. We’ve talked a little bit about things. So from a strategy standpoint, obviously you said you talked to folks in the mastermind, you’re coming to Hawaii, right? When you sign up, when is it?

 

January 14th, the 17th. I’ll be in Florida at that point from work maybe next year. But I’ll definitely come to Hawaii cause we love Hawaiian. We went there. We try to come there at least once with your points. I believe that the key is other people, right? Accredited investors, pure passive investors. That’s what you need to meet. Can you put me in contact with people here in California so we can like the trademark? No, you got to join the mastermind group, man. It’s pay to play with no outsiders only.

 

That’s how it works. Because if everybody thought that everybody knows about simple passive cash, now a lot of people loved the group. Yeah. You’ve been marketing yourself pretty well. How are you doing well, you guys like today, I don’t have to do anything other than, I spend a lot of money on Facebook ads and stuff like that. But as far as me doing any analytics, do anything, you guys tell your friends, half of all the people that come in today are referrals.

 

Guys run with the group, right? So let me make sure we’ve talked a little bit about things. So you’re saying, go look at doing a hilar and then also do the infinite banking as well. Is that what you’re saying? Yeah, but that’s what I would do if I was like looking over your shoulder, but I know that’s going to gum you up and you’re not gonna get anything done through me wrong.

 

I’ve been trying to get this money, other money, this basically, checking account and savings when I’m earning 0.1, nothing. And it’s pissing me off. I hate that. It’s just sitting there earning nothing, but I want to be taxed. I want to use that to cover my taxes and then also have a real,  it should be pissing off, man.

 

Like 400 grand at 10%. That’s 40 grand, 40 grand a year. What does that, what is 40 divided by 12, $3,000. Yeah, and this, I always use this analogy. It’s every, what is 30 days a week? That’s 300. What is 3000 divided by 3,000 bucks a day, a hundred bucks a day. Every day, you drive a little bit extra to go to Costco, to save $20 on gas, cheaper. You’re pissing away a hundred dollars every day that you don’t deploy this, but it’s worse than this.

 

You not only have this, but triple that in your home equity serves. So triple this. So it’s three more like $300 a day, six grand a month. Yeah. I don’t know. What is something you waste your time on? This is the whole thing about throwing money at the problem you got the money just haven’t transitioned to.

 

No, it has nothing to do with ambition. It’s just time, man. You don’t understand with three kids and a full-time job and it, it just wears on you. I spend, and we’ve been trying to do this real estate thing, and that was the, you bring up a really good point probably should just exit out of that.

 

Yeah. Cause we are trying to look at buying pretty homes. Just try it out, right? Not saying we’re not saying make wholesale changes right away, but this is the reason, this is the motivation that you’re not picking up having that six, $900 every day that you’re pissing away, but it’s going to be slow. You’ve been doing it. Been focusing on the wrong thing, keeping it you’re really good at keeping yourself busy.

 

Sure. It’s just understanding the right focus on this. I understand that. And if it makes sense to do it. It’s just like you said, being an engineer no, one of the worst, man, I actually, I’m very not engineered life. Natural reality. Yeah. No engineers read everything.

 

I don’t read anything as long as my lawyer that I trust as my back, I don’t read a thing. So that’s my point. I want a CPA and a lawyer that I trust and do good. That’s exactly what I want. Not out there. We’re not going to help out the average investor.

 

So how did you end up finding your team? I’m a rich uncle. I run school, pass the cash. So they found me. And my advice, my CPAs and my attorney, not, I wouldn’t say this feud, CPAs icon. I’m just in the same boat as you, right? Like I tell them what I want, signs, know what I’m doing.

 

I don’t know everything. I don’t know all the forms, that’s their job. But I’m an architect. They’re the engineers to go do this stuff. Here’s what you want to say. I want to make 10 points. I want to make 12% per month on the, no, that’s not their job. Your job is to be like, Hey, here’s what I’m trying to do.

 

Like you noticed, HCI is 300, but I want to be specific, we push this up to three 30 by taking all this stuff. This is the, what the, why I’m trying to do that. Can you look at how much passive activity losses I had? Maybe we can use some of this. We didn’t really get to the real estate professional status with you yet, but, yeah, when you joined the family office group, that’s what people are always trying to implement, especially with a spouse, being a teacher that doesn’t make that much money.

 

It’s ideal for you guys. It’s a complete no brainer, but you guys wouldn’t like that. That’s not your CPA’s job. Your job is to talk to the CPA, say, Hey, we’ve already put ourselves in this position to do real estate professional status inside quantified my siblings hours. Here’s a log book. If you need it.

 

What I would like to do is I would like to use a hundred thousand dollars passive activity losses. So I can cut to this much because of this. What do you think of it? Let’s have an educated conversation. Just like how we’ve done it here. If you’re seeing most CPAs. If they’re smart, they don’t want to work with you because of your pain. So there’s an art to this.

 

I think that was a good call. We got you down the road a little bit. I don’t want to overwhelm you too much. No, you’re not overwhelming me at all. And then there’s stuff that I’ve been talking through all the time. And I appreciate this. It’s just one of the things that really helps is trying to find what the next steps are.

 

Understanding that. So it’s this process that you talked about, right? So it took me forever to try to get all of this information here for you because it’s scattered all over the place. And so it was actually a good exercise because I had done it before differently, not on this level, so to speak, but I wanted to track it all for my wife to, in case anything ever happened, she would be able to find where all the skeletons are.

 

So to speak. Yeah, 70, 20 10 rule. Real my friend that you’ve just digged into the 10%, which is the academic stuff. The 20% is the people building relationships with other passive investors, for hackers to build relationships for passive investors, just in case he dies.

 

She knows where the 4, 5, 6 people to go to, to confer and get guidance from people don’t have any skin in the game that aren’t their CPA. That isn’t their lawyer. That, in my opinion, is the former law. If I die, my wife kinda knows who to go to, who to trust. And of course take the data points and come up with her own decision.

 

But then the other 70% is doing it, getting down the road, doing it. You’ve done the 10%, but you got to work on the 20th. So yeah. That’s the difficult part right there is it’s just carving out the time to go do that kind of stuff.

 

If it was just my wife and I’d have all the time in the world and I would totally be knocking this out apart. If you’re spending more than like a few hours in this passive investor thing a month, you’re doing incredibly wrong my friend. Really? Okay. I’d spend a few hours a week.

 

You’re doing it wrong. You’re not efficient with your time. And you’re probably not interacting with the right people. People ask like the family office group, I don’t have that much time to say all you need is four to five hours at most a month good. We designed it so that it’s for busy people exactly like you, multiple six-figures families. Yeah. So we cut the crap, we get rid of all this stuff you don’t need. Okay. All right. If you guys like this send an email to the team@simplepassivecashflow.com and we’ll see you guys next time.

May 2022 Monthly Market Update

https://youtu.be/wyjziQLaiUg

 

Hey folks. This is the monthly market update where we are going to be going through all of the important articles and packing investors these days.

 

If you haven’t yet checked out my book, the journey to simple passive cashflow, I think it’s like less than a hundred pages. It should be a pretty quick read. Go to simplepassivecashflow.com/book you can also check out the audio version where I get out loud to you. If not check it out on Amazon, buy the Kindle version there too.

 

So all these reports will be put up at simplepassivecashflow.com/investor letter that you can also go read all the old ones. Before we get through the monthly reports or different articles. One question that’s been coming up a lot is cost segregation and all this talk about bonus depreciation going away after this year, it’s not going away.

 

So bonus depreciation is just one portion of the depreciation that you get. And that is stepping down next year. So right now it’s a hundred percent next year, 80%. That’s 60, 40. I think by that time it’s like 2026 and probably they’ll extend it out is my guess. Normal depreciation, you’re seeing, isn’t a good example of regular depreciation before the bull versus the more aggressive depreciation timeline, which is coined the bonus depreciation portion.

 

So you’re seeing the difference between the depreciation, without the cost segregation or cost segregation and what you need to have more aggressively right off the investments. So you guys can take a screenshot here and take a look at it and compare it, you’re seeing how the depreciation without the cost seg.

 

In blue here on the left is a little bit more boring and then it gets a lot more spicier when you start to break things out and you’re able to write it off a lot more quickly. We have got other examples on this one I found recently, but I put it up at simplepassivecashflow.com/costseg  so the message here is, bonus appreciation is not going away.

 

Right away it’s phasing out 80% next year, 60%. Even 60% is pretty dang good. And remember, that’s just not like you get only 60% of the depreciation that you would’ve gotten. It’s just 60% of the bonus portion. The regular depreciation is still a sizable portion. But yeah, if you’re scarcely minded, just get all the bumps, depreciation won this year and invest a lot.

 

But I guess my message is don’t freak out because there’s still a lot of regular depreciation anyway. And only the bonus part, which is the add on is phasing out slowly that was, but you guys have any questions, please type it into the comments. I do read them. I am a real person here and wow.

 

Article here is a JP Morgan forms of billion dollar industrial JV fund. I like industrial, industrial is one of those asset classes that isn’t as hot as multifamily. People like multifamily because it’s very stable. People always need a place to live. I think the one knock on it, industrial is making good yields now.

 

If Amazon or one of these big players or something, there’s some kind of disruption in the marketplace, the need for warehouse kind of changes. If there’s a pandemic, we don’t use offices very often, or I was just in Seattle this past weekend and I saw the future happening.

 

So that one of those Ravion electric trucks driving around. I don’t know if they’re out. I don’t think they’re out. But, what if they just made those vehicles autonomous? To me, I think you’ve shortened the supply chain and eaten a lot less of these industrial  complexes. But whereas, multi-family is now always going to need that type of stuff because people aren’t getting any richer and they’re going to need class B and C housing, says RE business online.

 

And it’s a kind of a good feel, good way of investing because you’re going in, you’re creating a little bit higher standard of living for these kinds of lower middle-class folks, which is most people in America. Now, when most developers come in they maximize the amount of money, right?

 

There’s a lot of pain and effort and money that goes into building. You’ll be damned if you’re going to build something for class C B class, cause you’re just leaving money on the table. You always take it up to pretty much a plus class, unless you’re some kind of, into making all the money in your forum to like for the good of the world.

 

But yeah, most developers will build things for class A luxury, a class A market and exploring 20% of the total rental mark. New construction of affordable market rent units is not financially feasible today’s says the article. Also quoting the article, meaningful work for supply has rarely been added this past decade, despite the present need for workforce housing, the supply has decreased with older units being demolished to make room for class A.

 

Some of the investors always think that it’s boring walking through some of our projects because we use the same color again and again, that color is gray, GREY. Trendy colors of multi-family interior design from MHS image and news, but this is more of the class a side is their commentary.

 

And I pull creating a relaxing atmosphere, fresh living spaces, any perfect overall harmony, a lot of the natural light and finishes that put full in the outdoors. So they’re looking for more colors that calming soothing color palettes, softer materials. For example, blues and greens are widely believed to be common heating will white stands for purity completion and innocence color psychology.

 

I didn’t know I was an engineer. I don’t care about this part. So we are just going to copy what the other guys do and just keep doing it at the end. The housing news also reports top amenities for single family home renters. So they’re looking for walking trails, dog parks, green space and outdoor recreation was even more important.

 

And it was more important prior to the pandemic also, but the pandemic kind of just accelerated. Because people need to get all of that side of the house. If they can pretty much go out to places. Residents live in a home that offers space like more bedrooms, the better higher ceiling open for concept plans and also provide more room in their role.

 

Additional many are featured in our home security fence and yard attached garage and in the home storage and laundry. Gone are the days of those houses with kitchens and a weird hallway away from the living space. This gives me the shivers, or no, I’m sorry if your kitchen isn’t a hallway, but it’s just functioning obviously. Nobody really wants that. Unless you have workers for you cooking your dinner all the time and can bring it over from the back. It’s essentially like a back kitchen, but I probably don’t can’t afford that either can I. So RE business online reports that Electra  America purchases multifamily is just an example of where some of this capital is coming from.

 

And we talk a lot about Blackstone being the big behemoth, but there are all these types of smaller institutional funds like Electra that are jumping into this space here. They’re going into a 217 room hotel that is similar to micro apartments and, just as a general champion because the people they don’t really fade rather have more  than bigger.

 

These rooms range from 350 square feet to 840 square feet. Emergency rental assistance has helped them stabilize, struggling renters. So this is coming from the joint center housing studies from Harvard university. All this, we all know the federal interventions have helped to stabilize households whose balance sheets were beaten up, especially on your lower and your class B class C tenants and below.

 

For you class A people a lot of you guys are probably class A tenants or homeowners. You guys probably bolstered your cash savings cause you couldn’t just pull it off sporting events, vacation. But, for most of the people in America, which is why the need for workforce housing is so much more today, they needed this government assistance.

 

So over one fifth of lower income renters applied for rental assistance, tuning nearly half behind. So a lot of 2020, 2021, our property manager would sit down with a lot of these tenants to help them fill out performances so they could get as much government assistance as possible. That assistance ended last year.

 

But now we’re seeing a lot of it, as many things do. It takes a while for that slack to work its way through the system. Now we’re seeing a lot of evictions happening, especially in the last quarter.

 

Why net lease  cap rates continue to compress from commercial property, executive, supply chains, late expansion plans, new construction properties with credit tenants experience, greater compression. We’re talking about the single tenant net lease some more industrial and that those types of tenants not single family home  residential people these are more business.

 

Cap rates will face upward pressure as the federal reserve has forecast multiple rate hikes in 2022. And it just went up the other day. And I think people have always talked about how Shippo nets are really good because you don’t have to worry about paying for expensive things because that’s paid by your tenant.

 

The trouble with that was, the yields aren’t as great. So it’s really not good for people who are trying to grow their net worth. If you’re under $5 million, a few million dollars now net worth. At some point, it does make sense to transition into this a little bit lower risk, lower headache, especially type of investment, but, with inflation going up, it’s been a little bit nuanced that, your power as triple net owner has been going down because your sophisticated tenant will just skip town on you and be able to negotiate.

 

Especially when there’s another vacancy in the area, which kind of goes with my whole thinking. I said this on the podcast a month ago, a triple-net is more of a defensive strategy, but in times like now inflation is so high. You cannot play like a defensive strategy. You have to just go along with it. So that was just, that’s my thinking over all.

 

US renters migrate towards feeder cities and with Dallas sub bloopers of all the biggest renter magnets. So here, if you’re watching on the YouTube version, we’ve got a map here of some of the places where people are drawn to at green, Texas in the Dallas Fort worth metroplex in particular strongly attract incoming renters, along with a lot of the other sun belt states.

 

There’s some storage cafe among those just to list a few, approximately 10.4% of all of those interested in changing their residence for an out-of-state vocation chose Texas, Florida. And those, working on this chart here, top tech, Texas, top 10 cities for net migration. This is. I’m just going to read them out in order.

 

Irving, Lewisville, Dallas, Austin, Denton, Richardson, Plano, Arlington, Grand Prairie, Houston, Texas. As people work from home with a commute, no longer necessary, most cases become custom to living in fighter areas. So this takes a format native growth where people migrating within the same area increase local populations of non native growth areas, where they stop looking from one geographic area for another.

 

So that’s, it’s different. Like the non-native would be, people moving from California, going out to Phoenix, for example, whereas the native growth might be in that city, current city from one sub-market to. Millennials show up as the generation, most likely to make such moves indicating that these newly desirable destination appeal to these young families,

 

I’m going to read some of the top inbound versus outbound markets. Those would be South Dakota, may North Dakota, Illinois, that data, the inbound versus outbound. And this is my brief from out of state. Hopefully. It’s also on this chart here. If you’re interested in and get, check these videos out with, we have all the slides and even more commentary on this  at simplepassivecashflow.com/investorletter, a hot market for new multi-family construction permits.

 

This is always something to be interested in, especially when you’re an investor, it’s important to take note, where is the new supply coming online? The biggest multifamily permits coming online. Austin, Texas, Nashville, Raleigh, Denver, Seattle, Salt Lake, Orlando, Jacksonville, Charlotte, Philadelphia are in the top 10. And yeah, not to say that Austin’s on the top. So it also may mean that there’s just a lot of people or going there, like now. And if you’re in I think one thing that’s good is like newer inventory comes online. It helps your lower end because it pushes that price pressure up.

 

I’m looking at a deal right now where there just hasn’t been it’s more of a middle of the road type of property. And these flashy brands are coming in these bigger sexier brands. It’s good for those kind of mid tier, because the flasher breath will push the pressure upwards where we set it in our meeting the other day, where, you know, right now this particular property doesn’t have the confidence to push up because there is nothing, getting, setting that higher price so that this kind of speed can be translated in many different asset classes.

 

Obviously. That’s the good thing about seeing inventory coming online? The bad thing is that if you build too much of this stuff and you have too much supply on your hands, that’s where you have to weigh this with not only supply coming on, but absorption too, because if your inventory gets absorbed or people move into this new stuff, then you’re good.

 

You don’t have oversupply in your rents. Won’t decrease. So it’s just not overall. What I’m trying to say here. If you’ve missed the bullet on this phone, just because they’re building new stuff doesn’t mean that it’s going to drive prices lower because your stuff is coming online.

 

Ben says, information is held. Thank you. Then spend a lot of time on this. There are some holes at the end of this presentation, because I just didn’t have enough time for my own personal stuff this month, because I just got back from a deal hunting trip because I’m supposed to be looking at deals, not splinter on posting stupid stuff on social media.

 

See a lot of people these days, I think that’s a waste of time. Another thing. Top markets from new multi-family construction permits, or this is just continuing on this Arbor. So this is where a percent for apartment searches coming from other metros. So south San Jose Raleigh, new Orleans, Richmond, Nashville, Lewisville, Kentucky, Austin, Texas Providence, Rhode Island, San Antonio, Texas San Diego, California.

 

You already know that Amazon, Microsoft and Mehta have all made either new office demand, UNBC, convincing the Seattle area, the enforcing, the footprints, which could demand that the housing demands people always ask why don’t you guys invest in Seattle? It’s at this time, I like to go on the things that cash flow and those kinds of markets don’t really cashflow.

 

I like cash flow because cashflow keeps you in the game. Just in case there’s rough times, but yeah, I think Seattle’s a great market just like Austin is. And I think you can also say that Las Vegas is a cool archive. Firstly, like the market wouldn’t mind going there on business trips, but at this time it just doesn’t have enough to keep our heads a little bit above water in case there’s rough times.

 

I don’t know. It’s just not as appealing. I think you could make a lot of money at these kinds of markets, just like Denver and Salt Lake city. But, I think that’s something I kind of key in, on either a little bit more in depth. You guys can watch the video on your guys’ own free time to small markets and more multi-family type of, we had a question or a comment here someplace. May the fourth be with you since cap rate is being compressed, industrial. Have you seen the cap rate being progressive multifamily as well?

 

What are your thoughts of cap rate for the future of both families, especially in a pop market like Phoenix? I would say like multi-family cap rates are being lower or that industrial the less thought of an asset class. The problem with industrial is that the average person can’t really get into industrial and, that’s why I want to crack that code versus.

 

Just like office space, you need larger amounts of money to get into that business. The multifamily, you don’t need that much money and that’s what’s bad about multifamily, any like any deploying can do this type of stuff in my opinion, which is why you don’t see very many operators that haven’t been sold out to the stock market or IPO or gotten rid of big institutions stay in multifamily.

 

And that’s why, like the question does. I asked this maybe five years ago, it was like we’re all the thought, the people doing this stuff where before doing it before the recession, that ale like die and like the asteroid hit, the earth, killed all the dinosaurs. But then I found out like a lot of these guys who’ve been around for quite some time.

 

They either retire and go get a life, which I’ve talked to some people recently and I’ll plan on doing that right away. I’ll probably do this for at least another decade. They get into other asset classes that aren’t really touchable by the average bigger pockets, rural. But yeah, to answer your question, cap rates will continue to go down in my opinion on the bus. There’s some kind of disruption, slowing the market, but like my crystal ball says that there will be a slowing growth.

 

Let me make myself very clear. Slowing growth does not mean things are going to reverse, right? Rent increases will not continue to happen. It won’t go up by five, 10, 15% a year. But because it, even if it grows, it goes up 3% and 6%, 6% is amazing. That is technically slowing growth. So I say that so you don’t get all freaked out when Yahoo finance says slowing growth, this.

 

Decelerating growth. It’s decelerating now that doesn’t mean that it’s a bad thing per se. And I think that’s what the people always talk about the two and the 10 year. I don’t particularly understand that whole thing or they say you should look at the two and the three month thing on which we’ll all write in my newsletter.

 

My next email newsletter. You guys gotta be part of the email, the club, the simplepassivecashflow.com/club to get access to those it’s free and probably wouldn’t join all you guys get all these emails. You guys aren’t in the club because you just put in your first name to get all the good stuff.

 

You got to do that two minute online forum for me, but I have a little bit of a commentary coming up on that and yeah, let me know. I’m not good. And maybe it’s just better to put it into a video. So maybe you guys give me some feedback later on shoot the team and email that cast a vote. Let them know if they’d rather hear me talk for five, six minutes. That’s something versus putting it into an email.

 

But yeah, like that’s my thought on, they call me things or be two point 22, we’ll be slowing growth. Point 23 would be more slowing growth, but things are still moving along. That’s what we forecast rents to go up two to 3% every year, just with the pace of inflation, by the way, inflation might be, it might be an undershoot disinflation spend like 8%, but as long as, as long as it continues to keep pulling up,

 

But I like the higher level. If the institutional data, people are analyzing, people are saying that, we’re in for the roaring twenties, this continues for at least several more years. But the only people seeing the opposite to that I see are like the city YouTubers out there never listened to it, YouTube her out there like myself, unless he’s reading.

 

So Yardi matrix says year-over-year red growth begins slowly. Exactly. This is exactly what we’re talking about. Average US rents rose $14 in March. Time is 1642. However year over year growth dropped by 50 basis points to 14.8%. Oh no your growth dropped by 50 folks. It’s still going up.

 

An indication that rents are beginning to slow after 2020 ones record shattered performance. It reminds me of LeBron James. Five years ago, people said he’s not as good as 2009 abroad. Yeah. He’s getting old, he’s in his early, like early thirties, still kicking.

 

The article says rent growth continues to be led by population shifts to the Southeast and Southwest Miami, Orlando, Tampa, Las Vegas, Phoenix, all record asking rent increases of 23% or more in March. I was just looking at another statistic last night. Phoenix, if you measure it from like the low prior to the pandemic to now is like 38% increase in rents.

 

So multi-family data suggests that the market remains healthy through signs pointing to the netball deceleration in the markets. Deceleration does not mean going backwards over and again, I’m quoting however, economic conditions and global events contain headwinds that justify the expectations of moderation and.

 

So if you’re underwriting your deals for six to 10% in growth, it might happen. But I think that is aggressive

 

Bloomberg reports that Blackstone says alternative assets are headed to your 401k. So Blackstone, the big conglomerate, is trying to make fun. To attract wealthy individuals worldwide, it looks to leverage its track record of investing for institutional clients and boost allocation. Students funded by private banks, wealth, family offices, wealth managers, alternative investments like will see private debt and private equity.

 

We’re seeing the way to diversify and return correlated with traditional financial markets. These are one sole purview of large institutional investors, that kind of sucks, right? Only large institutions can get access to these types of stuff and non-leading and debt who don’t need assets to be particularly liquid.

 

But the creation of liquidity in search of surgical alternative markets to retail investors have brought into peel. So now just like how the full 401k opened up the average Joe to invest in stocks, bonds, mutual funds, stocks, bonds like that, and how Robin hood. The average millennial who just likes to play on his phone all day long can get into stocks.

 

I was just doing nothing the other day. I just heard these are like 17 year old kids having a Robin hood account. I don’t know if you can, I don’t know if he can have a rubber protocol or whatever, but I think it’s good. But I also think it’s obviously bad. I think it’s good because it’s good that these guys realize that they can put their money and they can.

 

When you can make money from them. So it’s been just blowing it on a Honda Civic, or Ford Mustangs, but it’s bad because they think of it as gambling and their Bible is so high mentality and they don’t really think of their money working to add value in the world. But Hey, if not, everybody’s going to create value in the world.

 

And if they, if you aren’t, then that is why Blackstone would like your money. It’s investing in alternative assets for the sheeple up there. Multi-housing news also reports Blackstone’s $12.8 billion deal to buy American campus communities. So they’re creating this real estate income trusts Brit and Blackstone property products.

 

Property partners, BPP will pay 65.47 fully per diluted share basically to get the student housing folks. And I’m not a huge fan of student housing. Here are our business reports, the student housing players, big push into build to rent markets. I think this makes a little bit more sense because the build to rent stuff is a little bit more boring, really boring.

 

And if you’re a homeowner, most people want a home that they love. It’s unique because there’s a special snowflake, but, I don’t think kids care as much, where they’re fine with everything kind of being modular. As long as it’s new, I think it is what they care about. And I think that’s why the appeal to the bill to read stuff it’s new.

 

So they’re looking to invest $1.5 billion in subdivision of rental homes in Austin, Denver, Dallas, Houston, Nashville. They’re saying that if the trend is filled by demographics, economics and the pandemic millennials, the baby boomers, the two largest population cohorts and the target residents. But then again, If you’re a millennial or baby boomer what else are you?

 

I said, they used to be a gen X thing that I thought I was in. Maybe I’m a little bit too young, but that went away and they just clumped me into millennials. So this is just writers being writers. And it just calms people into huge categories. It’s like saying, oh, you’re left. You’re right. We won’t go there.

 

But I just don’t know. I would, whenever I see them categorizing people as a bilinear baby, I think it’s just like a lazy way of trying to bifurcate the population up there. Student housing developers and investors are bullish on the outlook of emergent sector affordability challenges in the U S housing market will continue to drive demand for single-family rentals.

 

Higher interest rates could also push potential home buyers into the rental house. We’ll see how effective they are at building this stuff, because, whenever you build something new, you always try to maximize it for more class. A, like you said earlier in the webinar, it could be too expensive.

 

This is my thought. Especially with students being a little bit more price conscious. I think most people, when they think of college state, they spend money on the college first and then the, where they’re going to stay, where they’re going to live in policy. One of these books to read is an afterthought.

 

And they’re oh crap, all that, that cool built the rent stuff that I want to live in. It’s just too expensive for me. That could be a potential problem that I see. But yeah, like me personally, I don’t really like this type of investing. I think it’s just too many factors. I can’t get a good grasp on a lucrative job at different headwinds and potential pitfalls.

 

There could be. That’s why I am not really interested in that space as of yet. Multi-housing news also reports a top 10, most frequently traded multifamily assets of the past decade. And I threw this in here because this is what me and some of my partners discuss a lot of times. It’s funny because.

 

Somebody else we knew just bought this acid and it didn’t. That property just got bought and sold like three times the last five years or few years. Here are some assets of just listing, like the urban 28 and Phoenix on 88, 18 south central avenue that this thing got sold seven times since it was the old, or since the last 10 years.

 

Now, these are like the properties that I was watching a YouTube video on like Jose Bautista, the baseball player, the guy who went to four or five teams before he got good. And at the end of his career, he went to four or five teams. It is kinda like one of those arrangements, but these are the assets that, a lot of this is, has to do with somebody buying it and then the price just skyrockets.

 

And that’s what we’re seeing a lot now. Some things you bought, like one that comes to mind. I bought it for 79 grand per year. And then now I would say the comps are treating it like one 20. So it makes sense to just take the super big gain in this very short period of time under a year, it just moves on and we’ll buy, maybe two of these, that policy will do the same thing.

 

Not who cares about taxes, right? When you’re. Depending on the right things or, I mean that certainly there is low, so hot, barely anything got it. Market appreciation is different from force appreciation. Market appreciation is dumb luck. Sometimes it’s good to be lucky.

 

Real page report occupancy and bedroom units swell during the. Maybe this has to do with, more families are living in apartments these days because they’re being pushed out of the smaller single-family homes because of affordability. I dunno, I think more and more people are having fewer kids and now maybe even somebody needs a fact check on me, but maybe the need for family or the big dinners aren’t as big.

 

It depends on every sub market or on what your demographic is going through. But, predominantly one or two bedrooms, especially the one bedrooms are going to be here, your maturity and your apartment these days.

 

So it’s an efficient unit. We’re sure the studios which lost the most occupancy during the pandemic are up 200 bips in occupancy since February of 2018. Yeah. Maybe, maybe the logic there is that, people were in the efficiency unit, they’re just a single person getting started and maybe they moved in with mom and dad and, or moved in with somebody else, a roommate.

 

And then, it just popped up a little bit here in February or since February of 2020, maybe that’s just a bounce back. New York or San Francisco, they got hit hard with their rents because people didn’t want to live in the city, but, look now, it’s bouncing right back because those are just little cap markets.

 

Bull cap is not like the immature lane of 2020. It’s where I said low cap sucks. It’s more, more mature lane of 2022, where I see vocab as a sign of respect to those very secure markets. It’s a low rate of return because. It will be the most desirable place to live.

 

Do you guys like this? And if you guys are interested in building a network of your own, check out our family office on a mastermind. You can apply there at simplepassivecashflow.com/journey. Most people, they invest and they realize that they need a peer group around them. Triple is just, all these local real estate clubs and the free stuff online.

 

The unsophisticated freebie Facebook groups are just a bunch of newbies and sharks. They don’t know what the heck they’re talking about. In our family office people are big on personal relationships with, in our community. And right now we have a little bit under a hundred people. So we are getting a little bit bigger, creating a lot of different initiatives throughout the years.

 

So if you guys are interested in talking with somebody else in that room. Feel free to shoot an email over to team@simplepassivecashflow.com and go ahead and apply it. Simplepassivecashflow.com/journey.

 

But we’ll break into what I’ve been up to this month. And I didn’t fill out these slides because I just came back from New York the other day and she didn’t have time for some things.

 

Yeah. So sorry guys. What have I done for growth lately? I’m trying to look at different things. Like I said, I, at one time I thought you gotta be an idiot to invest in California, like New York, but now, like why are they low cap environments? So like Hawaii, isn’t that the one, like, why are they lower cap rate?

 

It’s a lower cap because it is less risky. The tertiary markets where you’re seeing have taps to the 6-7% range, which is two or three times higher than what you’re going to see in the vocab. But the problem there is well in a recession, those are the tertiary markets that the location sucks and nobody wants to live there.

 

That’s more riskier, like industrial, right. Industrial has better yields and multi-family, if that business were to get disrupted somehow, who knows what will happen, contribution. I just like talking with new investors. And, we, I was just in Seattle last weekend and there’s still, there’s like three investors that asked me like you do you have a recommendation for a financial planner?

 

And it’s, I said, dude, like what are you doing? Going in a financial planner for, seriously, like those guys are just, I dunno, they just don’t know what they’re doing. They’re just selling you till product. And that’s my big problem with all these wall street retail products. It just takes all your money away, but they have all these hidden fees and it’s just, it’s nice to get together.

 

And, or it’s a thought at that point where, yeah, we’re going to learn about this stuff, tax legal and what to invest with and build a little community amongst ourselves and become more sophisticated and. Than to just give her money blindly to a financial planner that just wants to walk in his nuts and click assets under management fees.

 

Significant. Yeah. I just don’t like that status post stuff of, investing for, for the sheeple, uncertainty. Yeah. I think the uncertain things that are happening in this world are like the Ukraine thing. If that continues on. Still using. I don’t know that for a fact, it just read that.

 

I won’t say that, interest rates keep going up, inflation is still there. I think at one time people thought that inflation was transitory because that’s what the government the fed said, but it kinda looks like it’s going to be here for a while. So if you have your money just sitting around, you’re losing money, but the interest rates popped up today.

 

They’re saying half a point, whoa, that’s a big jump. Normally it’s like quarter point, but half a point. But you don’t want that like a bipolar stock market that went up by 900 points of a Dow Jones and I don’t have anything in the stock market. I think it’s I think it’s silly.

 

Yeah, I’ll just say something, like that’s not saying it’s racist or anything like that, but people in like Asia, they don’t believe in the stock market. They want real hard assets, like real estate. Most of them, I would say, like they’re totally comfortable where they feel uncomfortable. If more than half of their assets are non real estate.

 

To me, I just see it like that. In America, at least, the messaging and the marketing has gotten so persuasive that people think that they need to have 80 or a hundred percent of their assets in the stock market. And I think that’s why I like traveling to different international companies. Meeting all these different types of people is so valuable that you can see these different viewpoints and get yourself out of your old paradigm that you’ve been stuck in.

 

People shouldn’t like debt too. That’s always a weird thing. So they like hard assets if they don’t want to put debt on it. So that’s where, if I think that’s wrong, that’s again, we’re all conditioned to sorts of types of things and you learn what it does. See what the numbers do, make decisions for yourself.

 

That’s what I say. And when you’re able to go up to me, the formula is going into things at cash flow, just in cases of recession that you can hold on to the asset. And how do you ensure that while you go into things that have a good debt service coverage ratio that surface penetration often has to do with how much loan to value LTV you’re holding kinda is, but really debt service coverage ratio is how banks do it.

 

That’s all the sophisticated do it. If you can’t pay your debt service, to me it may not be the best thing to put a lot of your money into, unless that it’s more of an asymmetric risk play. If it’s a relatively conservative type of asset, you’re looking at a debt service coverage ratio, 1.25, where do I get that from? That’s what all the banks require.

 

Noah says stock market grade for IRR real estate is great for cashflow. I’ve also added another layer on top of that. I do agree with that. But real estate, although allows you to not pay too much taxes with depreciation or bonus appreciation. So that’s another thing to think of too. And yeah, it’s nice to meet everybody in Seattle this past weekend.

 

We had maybe 25 people. We bought out a couple of rooms to do a, like a wine tasting. Half of them are more like family office members. We had a board meeting. I guess we’re planning  that retreat in January. We’ll likely do it in Hawaii. I’ve been doing some RFPs for Las Vegas and maybe Napa instead, but still too early to tell if you guys are interested in that annual retreat. Go to simple passive cashflow.com/club. Join there and you’ll be the first to know what we’re planning for the big get together of the year. But with that we’ll see you guys next month.

 

 

How to Add “Play” in Your Life

https://youtu.be/0u0loel4Quw

Hey simple, passive cash flow listeners. We are taking a break from the regular hard investing tax, legal podcasts, topic matter and talking a little bit about something that enriches all your guys’ souls out there. Something that I’ve been attuned to since starting the podcast actually, and getting into a lot of personal development is this aspect of play in your life.

 

You can’t pedal to the metal balls to the wall, type A personality all the time. If not, you’ll burnout and you have to infuse play into your day.

 

Today we have Mike Montague from playful humans.com. Going to be talking about how we can infuse this into our life without getting too crazy here but thanks for jumping on Mike.

 

Yeah. It’s so great to be here and I’m glad you said without getting too crazy, because there are some people in the play space. I’m not going to know any names, but they like the crazy bow ties and like the gags. And there are, they’re wearing balloons on their head or whatever, and they go a little too nuts.

 

That’s not me personally. I feel like I relate to your audience. A lot, because I’m a professional, I’m a professional sales trainer. I try to take myself seriously. And how I got here was I was trying to do the Tim Ferriss thing and just over optimize and measure and be super productive and watch my time management and analyze everything and collect that.

 

And I just found that it didn’t work for me. It works to a certain extent, but like you said, it’s really easy to get burned out and go, wait, why am I doing all this? Why am I trying to come up with all of this extra cash flow? What am I using it for? Am I just putting another comma in the bank account?

 

Or am I going to spend it someday? Yeah, what am I doing it all for? And that’s really what, where I landed on play from an adult rational perspective. Like I’m not telling you to quit your job and go be a hippie. And, to, or the Western United States on a motorcycle or something like, I want you to be productive.

 

And I found that play actually does. But all of the research shows that people that play that are happier, they’re more engaged with their life perform better. They make more money, they lose weight, they have more sex. Like it’s ridiculous. All the positive benefits of it. Yeah. Thanks for saying that. I’m glad to hear that because there are a lot of botch podcasts that I do as they look for this more, the minority of the podcasts are these more alternative topic matters, I think would enrich other, high-performing high net worth investors out there, and I’ve had really bad ones for they’re like all these woo stuff.

 

Yeah. And personally, I think a lot of this resonates with a lot of my investors. Like I’m more of a realist. I believe in personal development, but I’m not going to look at myself in the mirror and tell myself like a bunch of botches. Repeat it. Good enough. Yeah. Damn. And people like me, I don’t do that type of stuff.

 

I’m not saying it doesn’t work. Just doesn’t work for me. I don’t believe in fairytales, Easter buddies and stuff like that. But going back to your  origin. Were you always naturally able to put in this play aspect or was it, what were your early career days, your personal. That’s a great question. I think I have always been in this playful persona so when I was in school, I happened to be really gifted at computers.

 

I was designing websites in high school, which isn’t very impressive now, but in the late nineties, there weren’t that many people that could do it. I made a lot of money. I had a lot of fun designing websites, but I was like, I don’t want to be a nerd. Like I don’t want to sit in a room by myself behind a computer all day.

 

Like I want to be cool. I want to be a DJ and be on the radio and stuff. And I have more play in my life. So after college, I did my own radio station,  on the top 40 station in Kansas city here, I was Romeo on mix 93.3. And had a blast with that, but I found a couple of things happened.

 

Number one.  Sitting in a room by yourself, by  a computer all day. You tell a funny joke and nobody’s there to laugh. They’re listening in their car, their home office somewhere else. And also it pays a quarter of what computer programmers make. And so I was having a lot of fun.

 

I wasn’t feeling successful because I didn’t feel like I was growing or being a professional or getting the intellectual side of things.

 

And so I switched and I went in the opposite direction. I became a sales trainer. My dad works for a Sandler training as well, but I work for the international team now and I do sales training for companies like Uber and Thermo Fisher scientific and all kinds of large corporations and make really great money.

 

And I still get to do my entertainment thing. Get on a microphone. Whenever you’re doing stuff for other people, it starts wearing on you. You have to perform and work inside of that culture. And I’m not having as much fun. I was overworking, working long hours and also building a lot of stuff there.

 

I wrote a book and just overcharged that way. So about three years ago, I decided to reset and I was like, you know what? I need to find a foot in both worlds. I want to be a professional corporate speaker that also does entertainment and empowers people to find play. I found, at least for me in my life, when I balanced the creativity, the unknown and the the playfulness of life with the data science and the certainty and the hard work and, saving money and stuff that’s really when I’m fully engaged, that’s when I’m living my best life as I have one foot in both worlds.

 

Like I said, I’m not going to go. Crazy. Just, full of hippie playfulness, live on a commune and dance and sing all day. That’s not my thing, but I also can’t go full on programming data, measuring this, checking my Fitbit and doing a Pomodoros every hour . Were some mistakes that people normally make. If I really feel like I’m going to teach playfulness, I can’t do it like the seven steps to playfulness. Here’s what you do to check off the list because play and fun is something that is a little bit more spontaneous than that.

 

It needs some ruined space in your life. So what I like to tell people if you were already a genius at play. And in your life, you have had genius levels of creativity. You just lost it about the time you hit puberty and people started caring about other people’s opinions and you had to do things to be productive and teachers at school beat it out of.

 

Yeah. Fun looks like for you, and it’s different for everybody. I have a quiz on the website. If you want to go check that out, it’s a good place to start. Playful humans.com/quiz. There’s 10 different playful personality types. You might be an athlete. You might be a creator. You might like board games or video games, or you might like exploring and hiking, or you might.

 

Solving puzzles. There’s lots of different things. There’s even a playful personality type where you like producing parties and putting on events for other people. So producing things like this podcast and stuff is fun, but I don’t think you need to overthink it. And I don’t think you need to analyze it.

 

What I found was with most driven type A personality people it’s they need to put it on their schedule and they need to see that it’s that important. That if you don’t take an hour to play a day, you’re going to be less productive the next day that you’re going to burn out. It’s unsustainable. It’s like sleep and nutrition and everything else.

 

We look at play as one of those four things you need at least on a regular basis. If not every single day. I try to do all four of these everyday, but at least every week, I need to spend some time playing. I need to spend some time performing, using my abilities to produce to the best of my ability.

 

I need to hit pause a few times. So I do like mindfulness and meditation. I don’t think it’s the only answer, but you have to pause and rest and sleep. The other one, people miss a lot though is practice. You need to take some time to learn and get better at what you do in order to perform better the next day.

 

Professional athletes don’t just go play, live football games every single day. They spend some time practicing. And then on Sundays they perform at their best. And I think if we, as driven professionals, think about those things, we put play, practice, pause, and performance into our days. It really creates a sustainable level of energy in our life.

 

I think you’ve mentioned one thing. In the beginning of that, where you said it’s like people get to puberty and they start to feel that they’re being judged by other people. I think to me, that is what blocks most people from even doing any of this stuff in the first place. So again, I would just say, screw other people, stop worrying.

 

What other people think because gracious, you guys aren’t children anymore. You guys are adults out there. You think about old people, right? One thing you hear, like a lot of old people say is stop caring what other people think about you and just actually start living. Now, maybe people would get upset with me cause everybody gets offended these days.

 

But if you’re in your thirties, forties, fifties, you’re probably still worrying what people are thinking about you. And I’m just telling people to begin with the end in mind, just like cashflow, right? Create your cash flow streams today. Instead of doing the appreciation, accumulate theory at the end, in 30, 40 years, not going to care about Jack or what these people are thinking about you.

 

And if you’re, if you have a lot of cash flow, you’re gonna have a lot of options. You’re probably gonna lose these people behind. Anyway, it’s all the same. I don’t really talk to anybody I used to have a vehicle worker with these days. Heavens no.  If you’re not on the path to financial freedom, you don’t work out.

 

We’re probably not going to hang out. I don’t think there’s anything wrong with that. I think you got to find your tribe, right? Find people that do value those things. And the same thing goes with play, right? Maybe your spouse or the people that you hang out with don’t like doing karaoke or they don’t like running and playing sports outside or whatever.

 

We’ll find people that do. There are enough humans out there that you can find somebody that does geek out on the same thing that you geek out. I love it. Everything that you said you’re right. Kids don’t have a filter. They don’t care about the last people, anything authentically themselves at five years old.

 

And I love what you said about older people too. Run out of blanks to give, I don’t know if you curse on this podcast or not, they don’t care anymore. They’re like I don’t have any to give. I don’t care what you think I’m doing my thing. And I don’t think again, that means you have to go full on crazy.

 

What that means to me is I need to carve out some time in my day to do something that I love, because even when you’re saving all this extra cash flow or you’re planning for retirement, you might not make it to retirement. If you’re saving all of your recreation for the last 20 years of your life, you might not have the physical ability to enjoy it.

 

Or you might not even make it there. So how can we spread that into our whole life so that we’re taking out some time and it doesn’t have to be a ton, but an hour a day to build a Lego or, do a drawing there’s adult coloring books and adult Lego kits and great puzzles or online games or any sort of activity, go ride a bike or play a sport, or find something fun to do.

 

That’s just going to recharge this just for you that it’s not for anybody also who cares what they think. They don’t even need to see it. Before I left Seattle, I was working at a day job. We would go and play Frisbee every Tuesdays and Thursdays for an hour, which ended up being an hour after lunch.

 

And I’ll be honest, those couple of years. That was probably the only thing I remember about daily life. That’s the best part of it, right? Yeah. And, but it was important because we planned it. It was on the schedule every Tuesday and Thursdays. What are some other ideas or things that people do, does it have to be a hobby?

 

How can you schedule? What about some smaller ideas from micro play sessions? Yeah, I think that’s true too. A lot of people don’t know that over 60% of CEOs take play breaks during their day, they might be playing a video game on their phone or listening to music that they like, like they just need to step away and tune out and it recharges your creative energy and stuff too.

 

So it doesn’t have to be complicated. I love what you said. I think those are great tips. If you join a bowling league or a sports league of whatever you want to play, a dark night or something with your friends, all of that is going to hold you accountable to actually doing it. And you can block out that time easily.

 

If you don’t have that time. I think it’s about finding those micro moments for yourself. I think you want to give yourself probably at least 20 minutes to decompress and step away from what you’re doing, just to get your brain into that right mindset. But I would say up to an hour. Find out whatever that thing is for you.

 

If you love to make things with your hand, take a woodcarving class or look at videos online, or if you like to, use your brain to solve puzzles, go do escape rooms, or find interesting Sudoku puzzles online or whatever it happens to be. It doesn’t need to be. Crazy fun, like new year’s Eve level fun.

 

That’s not play. It’s just an engaging challenge where you’re using your whole mind, your whole body, you get into that flow state and you’re doing it just for you because you chose to not because anybody else told you, you had to, or you’re getting paid to do. I think that’s the key, right?

 

The concentration factor is off. Like it’s not something for productivity, like editing podcasts or maybe sudoku puzzles falls in that category that you could do it as play, but it may not be like a CrossFit workout. Because it’s very focused. I don’t know if you enjoy it and you’re choosing to do it right.

 

But if you’re doing CrossFit. Your spouse told you needed to lose weight or because you feel like you have to or something, or you’re getting paid to teach the class. That’s different because it’s the external, because it’s on the board and dammit, you have to do it.

 

Play is specifically freely chosen. And that’s what makes it fulfilling to you because we need moments in our day. We all have obligations. You mentioned, changing diapers, we’ve got to pay taxes, we’ve got to hit the bills. We’ve got to do all kinds of stuff for client work and other things.

 

But I think that’s part of it. The beauty part of passive cash flow, right? If it gives you that time back don’t waste it, don’t waste it watching Netflix and not engaging in tuning out of your life, do something that you’re going to remember, make a memory, do something that you choose. So that’s my big one too, about television.

 

It’s not that watching NFL football doesn’t matter. They’re playing. You’re not, you’re watching passively, right? If you go play football, throw the ball around with your friends that counts. Now you’re engaged in your life and you’re connecting with other people in your environment. Another idea I had is like podcasts, right?

 

People will listen to podcasts, not for pleasure, but for content and focus and a side note. Guys, if you guys are listening to the civil facet Castro, any podcasts for more than a year, Stop listening, please just join our community. Like this is just a marketing thing to get you to sign up for our community.

 

I’ll be honest, right? It’s the same old stuff over and over again in Mark, in podcast land, you don’t get, we don’t get nearly into the good stuff. It’s the juicy stuff. That’s all behind closed doors. And I like it, and I say that because it’s going to do something fun. Stop, like trying to fill your head with a bunch of the same old garbage over and over again.

 

Like when was the last time you listened to a song? Talking to the very minority of people out there. That’s oh, I’m not gonna listen to the radio because they said no, listen to the radio. You’re supposed to be in your automobile university. It’s just to listen to podcasts, filling your head with good stuff.

 

Yep. I’m that way. I’m definitely that way. I listen to podcasts when I run. And when I look at it, I love learning. But it does. At some point it’s become a job and it’s oh, I’m subscribed to these five podcasts. I have to listen to it by Friday. Or I feel like I’m not caught up. I didn’t get my thing in and podcasts keep getting longer and stuff and things.

 

So I’ve already shouted out Tim Ferriss, clearly I’m a fan, like a three hour show from him and Joe Rogan, that’s six hours of your life where you’re not engaged in doing it.  I don’t really listen to podcasts these days.

 

If you’re consuming media and you’re doomed to scrolling on your phone, maybe both at the same time, you’re passively living your life. And we want it the other way. We want passive income and we want to be fully engaged, actively in and enjoying it. Boring investments, but fun life.

 

Consciously choosing. I love that. Any other like quick tips or ideas to consciously infuse the play into your daily life for a weekly basis? Man, I think it really is about the choice that you said. I think people know how to do it, but if you need a role model, look at kids. When you look at a five-year-old or a ten-year-old, they know how to play, they have genius levels of creativity.

 

They will inspire you. You just got to go in and join the fund at that point. And then from there, I think you have to think about when you lost that play and why you lost. We all think that kids should go outside and play more, that they need to get more exercise. The NFL has a play 60 campaign and encourages kids to play outside for 60 minutes.

 

At what age is that? Not a good idea. Just because you graduate college, you shouldn’t move your body for 60 minutes a day anymore. You shouldn’t enjoy your life. You shouldn’t play with your friends or go outside. No, that’s your whole life at 20, at 30, at 40, at 50. At 80 or a hundred, it’s still probably important for you to get up an hour a day and play right.

 

Move your body, engage your mind to stave off Alzheimer’s and it builds muscle builds, creativity and brain connections. This is something that is vital to human success and survival. We just. Got distracted by other things in capitalism along the way. And there’s nothing wrong with it. It just shouldn’t be the only thing I don’t believe in here.

 

Yeah, once you get your contact information out there, as people want to check out the quiz, You bet the quizzes@playfulhumans.com/quiz. It’s playful humans on all the social media channels. And that’s the name of the podcast as well. Since you’re a podcast listener, go check it out again.

 

Lane said, you don’t have to listen to all of them. Don’t make it a job, but go find something that’s fun for you. For me. It’s interviewing people and getting to know cool people on how they did it. Like famous magicians in America’s got talent or mind readers or people that do like sword swallowing and juggling and all kinds of crazy different things.

 

Like how do they make a career out of that? They’re making six figures, loving their life, traveling the world and having fun. And they’re just juggling or telling jokes for a living. That, to me, is really interesting and how they’re doing that. So that’s what I dive into. Thanks guys for listening. You got a little bit different, but again, I think the action item for everybody is go out and schedule fun.

 

Maybe hopefully every day, but just micro sessions here. They’re figuring out what that is for you. And the, probably what you guys are gonna run into is, your peer group is a bunch of boring people that want to still fit in the box. But look, life’s short guys, get out there and. That’s like you’re going to die tomorrow in a way.

 

Invest for the long-term of course, probably gonna live a long time. Be those deals, infinite bank policies. Get life insurance too. If you’re maybe your peer group, you need to change your peer group up. If they’re not people who want to live the kind of life that you are, get some new friends.

 

I’ve got a joke in there. No, I think you’re going to be surprised that your friends are needed as much as you do that. If you ask them to go throw the ball in the park or go to karaoke night or an escape room or something, do a game show or play a board game night, they love it.

 

We’ve all been cooped up, man. We all need to get out of the house and play. So if they don’t you’re right. Yeah. You have a problem. If people discourage that. Man more often than not. They’re just going to be happy that you invited them. Yeah. Just tell them you’re like a therapist told you to do it, and if they laugh at you think get rid of one, not a joke in there, but half serious.

 

But thanks guys. We’ll see you guys next time.

 

 

Syndication eCourse Freebie

https://youtu.be/3hOywQBjUB0

Finally, we’re able to edit the latest Sunday cram school. I think we did on Saturday, actually. We got a bunch of investors who want to learn about syndication topics, did a bunch of FAQ’s in a presentation form, and we edited it up for you guys to listen in today’s podcasts.

Now, there are a lot of things that I had to actually edit out due to SEC reasons. If you want the full cut of it, you guys can go to simple passive cashflow.com/club. Join the database there, and we will get you a copy or you can send an email, the team@simplepassivecashflow.com with the subject line Secret Hui Message either way that works.

We’ll get this unedited version out to you guys, but just some takeaways that I’ve been seeing this week, actually this month, a lot of this came from the Hui retreat that we had recently in Hawaii, really excited about doing it next year. Not only talking about investing money, where did you get your money from?

Where do you put it? How do you protect it? Taxes, et cetera., but more about the relationships because to be seen, if you’re doing the 1, 2, 3 simple passive cashflow plan, investing in good assets where you’re cash flowing, just in case of a recession with good honest people. Secondly, you’re investing tax wise, smartly.

You’re using the passive losses effectively to possibly pay less taxes on the ordinary income side. And you’re doing a little bit infinite banking. But mostly you folks out there will make six figures. You’ll be out of the rat race in four to seven years for the most part. Some of these takeaways that I wanted just summarize for some of you folks is we talk a lot about end game getting the four or $5 million net worth because that’s a threshold where you can get to and get back into the marketable securities, the wall street crap, and just make that four or 5% return or put it into infinite banking, which is even more secure and life insurance and make that return tax free there.

If you’ve never heard about it and go to simple passive cashflow.com/banking, get the free ecourse to learn more about it. The ideas you have to get penetration and grow your equity into, more semi aggressive deal to get yourself to this sort of higher level $3, $4, $5 million net worth and at that point you can go into cruise control. Now, one of the ideas that, we talk a lot about in our family office group and in-person meeting is this concept of what do you invest in when you get to end game?

Not necessarily for equity growth or better returns, but more for stability and some people they titrate to that point slowly, right? Where in the beginning, they are going to be in rental properties, syndications to get up to a point, maybe two to 3 million, but maybe take, I don’t know, a quarter of their portfolio and slowly put it into these more end game type of investments.

Just to name a few. Just to get the wheels turning case. You’re not aware of some of these types of things still in the alternative investing space, they might be like life settlement investing, where you’re going to be buying out the life insurance product of somebody who is unfortunately going to be passing away or in a terminal illness seems very morbid, but it is one of those things that is guaranteed to happen, it’s just a matter of when.

Another investment that a lot of people talk about are triple net deals or commercial leases and this is where they say just go buy a Walgreen’s once you have a boatload of money, something I want to point out and a discussion topic that came up that I wanted to share is, maybe triple net deals aren’t the best thing to be doing at this point in time this market cycle. Right now rent increases are skyrocketing. The economy is doing pretty good. If you’re not going forward, you’re going backwards and we’ve heard this in many types of personal development, and also I’m going to extend it out to real estate.

Now, hear me out here now, triple net deals like investing in a Walgreen, any kind of type of corporate based, big corporate tenant is very, and especially when they take care of all the expenses, which is the term triple net comes from you, the landlord investor, you pass all those expenses off to the tenant.

You don’t make as much money, but it’s still pretty decent return for a very low risk. But now what you’re starting to happen, this market cycle is a lot of these very sophisticated corporate tenants they know their value and they know that inflation is going up. For a lot of them, they’re making the good business decision to just dump their leases so the landlord to go screw off.

Which may not seem like the right thing to do, but in terms of their leases, it’s totally within their contractual basis for them to do this. Combine this with the fact that you’re seeing a lot of these Walgreens and these pharmacy stores that were traditionally, one of the people who would take up these single lot kind of type of triple net ideal type of investments for high net worth families to go after.

Partly because Amazon’s coming down to town with the pharmacy stuff and just less need for brick and mortar. I’m not saying it’s going away completely, maybe not be the time for this. And this is where it’s a concept of, there’s a time to get aggressive and there’s a time to huddle. I’m trying to emulate and so I don’t see it that often, but large families, family offices, the guys that are 50, a hundred million dollars net worth.

Now these guys, sometimes you can make the argument that they have enough money where they could just live off the remains and they’re 20 something plus off swing can live off of it and they’re fine. But the ones that are being done correctly, they are still semi aggressive in the market. And what are they doing now? Are they getting more aggressive buying rental properties while the rents are going up and interest rates are still pretty low and continue down that track, or are they going into triple net deals, which is the duck and cover where there are these from a risk standpoint, there are these kind of headwinds that are fitter the commercial leases are heading into.

Now, I don’t know. But I just want the pulls it out there as a question to ask. Now, maybe you can take the standpoint that I’m just going to be very stoic, whether they’re good times or bad times, I’m going to be doing the same thing regardless.

Fine I don’t know. I’m there’s different investment philosophies out there, but I’m starting to catch on to the fact that maybe you might be very stoic and, or maybe a family offset might be very stoic in their philosophy, but still they recognize when the timing is good. There’s a time to get in. And then when there’s a time, when things are overheated, you go to a hedge strategy where you protect your tail.

Just thought I put that out there. Now that said, there’s a lot of people that listen to podcasts and just don’t have very much money and they have very little investment knowledge and are very unsophisticated, even though they listened to a gazillion podcasts. Now, if you’re out there and your net worth is less than a million dollars, I have to say that you can’t play the strategy where you can just duck and cover.

You need to get out there and you need to grow your money. Let’s just say at that, because I talked to a lot of people and they’re like, yeah, the other world’s going to end the, everything’s going up, interest rates are going to skyrocket, which by the way, that’s why you invest in real estate. When you are basically hedging that the interest rates will be going up because you’re hedged against it and protected because you will have the rents in play.

If the rents go up, the rent is essentially a way to hedge that interest rates go up because when interest rates go up, that’s indicative of a good economy and that just pretty much gets passed on unfortunately to the tenants. So there’s a lot of people that kind of say the economy is just too hot and they just use that as an excuse not to get started.

And, one way to figure out what’s real, who’s not, say, what’s your net worth. If you’re less than a million dollars I’m just going to discount your type of opinion, to be honest. But that’s just me. You guys might be different, but I just want to pose a different ideas of some things I’ve been listening to.

But with that, here is the replay of the sensored version of the syndication cram school we did. We’ll try and do another one of these in the future, but what I would really suggest for everyone of you interested in being a passive investor is get educated. Do our syndication e-course it’s a few hundred bucks, but if you definitely join up at some point, we do refund that for it.

We have a refund policy. So it’s kind of no risk type of thing. The worst thing you can do is learn something and this is where you learn all the little tricks that syndicators do, what to invest in and mort importantly what to stay away from. You can’t just go off pro forma, a pro forma mean nothing.

If the numbers that were used to assume that pro forma are all vague and overly exaggerated, and that’s what the syndication course does to get more information, go to simplepassivecashflow.com/club. And we will be sending out the uncensored version or the one with all the extra goodies, basically here for the end of the next month. Be sure to go to simple passive cashflow.com/club it’s up there and enjoy the show.

How to Calculate Your Capital Gains and Depreciation Recapture? Why Not Do 1031 Exchanges?

https://youtu.be/bUY12oylSp4

What’s up simple, passive cashflow. How is your first month going out to the job that you may or may not like? For some of you guys came down to Hawaii, drank the Kool-Aid at a whole bunch of cool people, and I’m still coming off that hive, still wearing the same shirt that I was wearing the whole weekend.

 

What’s going on?  7% inflation.  Some people will say that it’s really like 15%. If you don’t count all the changes, the last couple of decades where they call it, quote and unquote Hedonic inflation. If you take all that stuff out, really all you are talking about is 15% inflation. But either way, let’s just go with what the government tells us, because Hey, what they tell us must be right.

 

Now to put things in perspective, junk bonds, which are  essentially what they’re called junk bonds, are garbage borrowers and right now that’s being paid at a much lower rate than the pace of inflation. Let me say it again, junk bonds are making less than inflation right now, which says you better get your equity into assets that  at least keep pace with inflation.  Hopefully, you’re getting yourself into cashflowing ones. But if you got money in your home equity or rental properties, that’s just sitting there idle. The government’s taking their money in, and this is a sad thing that this is the way the government takes money from the poor or the middle class that aren’t able to get into good investments.

 

It’s the rich get richer, the poor get poorer and unfortunately, a lot of you folks drive to work or hold onto dear life, staying at home as much as possible working from home. High paid working professionals are the folks that are going to be having to pay for it. Anyway, we’re going to be talking about syndication stuff, mostly the 10 31 exchange.

 

Hopefully it’s going to help a lot of you investors out there. And remember we’re going to be sending out a secret HUI message because some of this stuff I can’t see in the podcast, for some reasons we’re going to be rolling some stuff out that is going to change that. But for now, if you want to get a hold of this 40 minutes secret HUI message, send an email that’s team@simplepassivecashflow.com before the end of the month, before we send it out, if you’re already in the club , you can join at simplepassivecashflow.com/club. You’ll be getting this video later on this month, but if not send team@simplepassivecashflow.com  subject line secret HUI message and I will be sure to get that out to you before the end of the month.  But for now, just enjoy the show.

This common question comes up quite often where they ask, Hey, can I do a 1031 exchange into a syndication deal? The answer is, yes you can, but it’s very impractical for you to do. You need to do what’s called a tenant in common or a TIC.

 

Most syndicators won’t want to touch you because it requires a lot of brain damage in terms of legal maneuvering unless you’re bringing in maybe one, two, $3 million or above it, ain’t going to happen. And I would ask why would you be wanting to do that in the first place with current bonus depreciation laws?

 

Again, my example, in 2017, I sold seven rentals and I had a quarter million dollar capital gain. It depreciates recapture, which sounds horrible, but I had maybe a few hundred thousand dollars at least some passive losses built up from going into deals prior that I just bought over and offset it one for one.

 

We’ll do a couple of examples. So this guy bought a property for under 600 grand. I don’t care what the loan is, that doesn’t matter, but they’re going to sell it for about $900,000, maybe even a million dollars. So the other question I asked is when did you buy it?

 

So we’re going to figure out what the capital gain and depreciation recapture is.  A lot of people think that they need a CPA to do this. This is a lot easier than designing a retaining wall, in my opinion. Of course, your CPA is going to need to bless the numbers at the end of the day, but this is essentially how you do it.

 

And so capital gain here, I’m just going to take $900,000 minus 600 minus some commissions in there. I’m looking at about a $250,000 capital gain but we also need to know what the depreciation recapture is and that’s why I asked the question, when did you buy it? He had it in 2012, which is about a decade ago.

 

Most residential properties depreciate over 27 years. So I’m just assuming there’s maybe a third of the weight through that depreciation. Of the $600,000 basis, maybe half of that is, I don’t know where this property has been. I’m assuming it’s a high price land area.

 

So the property improvement is lower at $300,000, let’s just say that the building improvement or less. So that’s where I came up with this depreciation recapture of 50 grand but maybe I’ll just be more conservative call it 75. So we’re looking at it. We add up the capital gain and capture, and that would be the 25 here.

 

So the goal here is get $325,000 of passive activity losses, at least. So you can wipe that out. This guy is smart. He’ll sell this property beginning part of next year so he has all of that year to build up passive activity losses. And I know in this particular case, this investor has already been investing and they probably have maybe a headstart on that.

 

Maybe they already have it already. I’m not quite sure what they’ve been investing in, maybe they went into several deals and they have already done that. I think this is found on the 82 84 form, but don’t quote me on this. Let’s go to your situation sir.  Just going through the process, maybe in the same similar fashion, what did you buy the property for originally?  Thanks for being a volunteer too.

 

Hi lane. Yeah. So my situation is that we had actually purchased this property in 2006 for 1.47 million and we’re selling it or we’re considering selling it now at the end of 2020, and somewhere between $3.7 to $4 million. We’ve done maybe about $120,000 worth of improvement in the house over that period of time. We’re just projecting out that the gain could be somewhere around 2.3, 2.4 million. 

 

So I’m going to go 4 million times 95% for 3.8  just do account first and commissions and then I’m going to subtract off a hundred grand off repairs cause supposedly that’s going to lower your basis a little bit. Let’s just call it 2.7.

 

About depreciation recapture, you’ve had this for quite a while. Let’s just call it two thirds of its service full 27 year life. Just to be simple. This is California again, or there’s this Silicon valley. Okay. Let’s just call it 600 grand is the server for life.

 

I  think you depreciated maybe two thirds of it. My math that I’m gonna be using out of the sky is 600 grand times two thirds. So that’s 396,000 let’s just call it $400,000, which appreciates recapture. So 0.4 plus 3.7 is 4.1million  of capital gain. A good problem is that my friend does a good job. That’s how investors are supposed to work right.

 

At the time we bought it, we thought we were crazy to buy something over a million dollars. But, as it turns out that it was a good investment and traditionally in the last year seems to.

 

Especially with the high end, going up more right during the pandemic. So the haves and have-nots kind of binary economy out there.

Your situation may warrant it and in my opinion so what’s bad about 1031  is when you’re going into the next deal, everybody knows you’re a sucker. They’re going to abuse you. You’re probably going to overpay by 5, 10%. If you don’t know that well, you’re probably the sucker in the room that doesn’t realize it. 

 

What if you do a dead river, is that a better strategy? 

 

All that does is essentially extend your timeline because with the 10 31 exchange, the hardest thing is the 45 days to identify the next property, which isn’t going to happen unless you’re buying the lukewarm crappy deals, where you’re not overpaying. For that example one, right? That guy was looking at $325,000 capital gains, appreciate recapture, a very different story than where you’re at. In my own opinion, I’ve seen investors invest a million dollars and get half a million plus of passive losses in a year.

 

So it’s not out of the question that somebody can deploy that money. I’ve seen people deploy two times that and get a million, $2 million of passive losses too, at the same time. But that might be a little more extreme. So if that’s the way you want to head with it you better get started now or get moving on this plan.

 

Therefore, I would say if you twisted my arm where this dotted line would be, I would say one to $2 million or greater. It might makes sense to do both, go into deals, get passive losses, to offset a portion of this 4 million depreciate gains and recapture, but it might make sense to do some of these more exotic strategies where you’re monetizing installments so it is just under scrutiny. Let’s talk about the 10 31, right? Another reason why I don’t like it is you’re putting all your eggs into one basket yet again. To me, I like the idea of having no more than 5% of your net worth to any one asset.

 

 Yeah.

 

 This is common with people with dentist practices, right? They started it with 50 grand. Now it’s worth 5 million. It’s on your scale for those people going to exit and end game monetize installments so where you push the sale 30 years into the future where the taxable burden isn’t anything, isn’t a bad way to play it.

 

I see. So you think some combination of maybe 1031 and also just investing in real estate where you can use the depreciation on those assets to offset the gain would be the best strategy? 

 

Yeah. Going back to your reverse 1031, all that does is extend your timeline out. But I think you first have to ask the question. Is this even something I want to do? Do I want to have all this liability on my hands? Do I want to take our debt out and get another property and have all my eggs in one basket? Maybe you don’t. Most people would say no. 

 

So if I were you would just keep the property and keep writing the appreciation? One option would be to just keep the property and then try to borrow money off of the property. 

 

That would be ideal in my opinion, get a heloc  or get a refinance the equity out and invest it, build up passive losses. Most people going into, on this scale would be going into a handful of deals every year at a hundred, $200,000 a piece. You’ll be passive activity losses, maybe a million, 2 million, 3 million so when you finally do sell your tax over and it’s way less.

 

I see, so you can build up. Basically use a heloc  build up, you hold a bunch of assets and then use the depreciation on those assets so when you finally sell this other property you can offset the gain. Okay, got it. 

 

Let’s just use that as strategy number one. There’s a whole bunch of combinations in the middle with a reverse or 10 31 or monetizing stock sale, or another option is a delayed sale trust, which is very similar. Where all these things are a tricky legal move where you put the asset into a trust and technically you don’t own it. You gotta do your due diligence on it but in a certain situation, it may make sense. 

 

Okay, got it.

 

Like I say, some of this stuff is like some risks for an audit and losing an audit that it may make sense to diversify yourself amongst different strategies. 

 

Let me ask these questions and maybe I can just outline what I would do. Do you want to own another property? 

 

One of the things I was thinking about doing was to diversify my real estate holdings and, right now I’m 90% invested in Silicon valley in a couple of cities and so the idea behind doing the 10 31 exchange was to see if you can take that  cash and sort of buy homes in different locations like Denver, Houston other areas that have a good combination of cashflow and appreciation. That was the strategy behind doing the 10 31 exchange. But as you point out, when you do the 10 31 you’re limited both in terms of time and in terms of  choice. That’s one of the drawbacks to doing it. 

 

But obviously  you acknowledged the drawbacks, but you’re a rich person. You can do what you want. You can buy a flying spaceship if you want. No one’s gonna say anything. You make your own decisions. Out of this $4 million bounty  do you want to take a million dollars to buy some real estate that you own directly by yourself? What was your vision for this $4 million boom? 

 

The idea was I was thinking, I have a $700,000 loan on the formula, it’s not that much. But I was thinking, take the 4 million and then buy maybe $8 million worth of real estate i n different locations, right? Diversify in all of these emerging markets. But doing that as part of a 10 31 exchange is probably very challenging because you have to know you have to have the boots on the ground.

 

You have to have connections in all these local markets. So that was the vision. This was to take the inherent wealth in the Bay area real estate and try to diversify it. Not knowing what’s going to happen in the future  in this local market. 

 

And then you become a remote landlord. It’ll work at 50%. Any idiot can cashflow it for 50% the value. Will it be a good investment? Where could you do better otherwise? Probably not, but let me be more clear. Do you have some kind of thing within you that you’re like, I want to hold on to X amount of properties by myself. I’m just trying to see where you are. 

 

I don’t have that particular vision. The only goal was can I pick this one property that has been great for appreciation over a 15 year cycle and really converted into a bunch of cashflow properties? 

 

You’re not like I want to, whether it’s a syndication in these X markets or as a passive LP partner, non managing member, or same markets, but you own a handful of properties in there. You don’t care one way or the other? 

 

Yeah I don’t care, Because my only goal is to achieve a cashflow vehicle. 

 

You mean you’re not one of these ego-driven guys that like getting off on things like owning a 16 all by themselves and like telling their friends. 

 

Thankfully not. 

 

Or maybe you learn that along the road. But I dunno if it were me, I’d kinda like to own, I see a lot of high net worth people owning like 50 units, a hundred units by themselves. But that’s a fraction of their total net worth. So just something to think about too. But that’s why I asked, I didn’t know what your vision is, like some people are like, I like the syndications. I like everything about it. What, I still want to have a quarter of my stuff in stuff I own.

 

Yeah, there’s some value to that in knowing that, Hey, this property has your name behind it, and you can know you can pass it on to your kids, which you could probably do with the syndication to the appropriate legal documents. But to me, I was just thinking, look, this is not my only house.

 

I have my primary residence and I have one other property. This particular property, how can I use it to diversify my real estate holdings throughout the country? But that may be an impractical thing to try to do in 45 days or, whatever the 10 31 exchange rule is. The other thing I was thinking about is, could you do an opportunity zone, but then at the end of that six or seven year cycle, you’re still hit with a capital gain, right?

 

With a little bit of a step up  and the basis.  

 

That’s not what I’m  not looking at. Look what you’re  doing. You’re going in as this is not your primary thing, right? You’re an amateur, no offense and you’re looking to go into these different markets and now you’re telling me you’re going to go into a crappy area that has designated opportunities. Oh, boy, this is just getting worse and worse.

 

An amateur in the hood now.  I’m just going to shoot him. Let me know what you think, but here’s what I would do. I would draw out the heloc  as much as I can and start investing, make a goal to invest a million the next six months to a year and sell this thing no earlier than January of next year.

 

That way you have that entire year to source passive losses and go into good deals, that makes sense. Now, if you’re slow, if it’s going a little bit slow, What I would do is I wouldn’t sell this property until the following year, January. So like 2023.  That way you have two entire years to build up 4 million of passive activity losses.

 

If you don’t get there, that’s no problem. You get to two and a half. That’s good enough. But you give yourself that long to make good sound decisions, spread out your capital so that when the deals finally do exit it’s not all hitting you at once and you’re in the same damn predicament that you’re in right now.

 

 I see. But if I have some liquidity now, even without the heloc , I could do some of those investments?  

 

Exactly. You got money all over the place under the couch cushion, but even better. In most cases, people don’t have too much money other than an equity in their rentals or their retirement funds. The more, the better. Like you gotta get moving on this, but you gotta make a decision first. 

 

This is really interesting. Cause I never actually ever thought  about using the passive depreciation on another property to offset the gain. I didn’t even think about that whole possibility.

 

 A couple of aha things that keep in mind, like in 2022 after this, the bonus depreciation kind of steps down 20%. But, I wouldn’t worry about it too much. It’s still pretty awesome even in 2024 beyond so this is all well within your window. Not all deals do a cost segregation and elect to do a hundred percent bonus appreciation cause it may not make sense all the time, but even with regular depreciation, pretty damn good. It’s going to chip away at this thing. 

 

That’s a really good point and I was thinking about selling this property three years ago. And at that time there was in the high twos and now the same areas towing the high threes.

 

And I was just like, at that time, I thought the high twos would be a lot and I was thinking about off loading it and then I thought about the transactional cost of selling it and what to do with the game from that. Then, having to go through this 1031 process. But now that it’s even higher then I was like, okay, let’s really think about doing it now, but now you’ve made me even rethink that.

 

What you have now is a substantial  amount of money. $2 million is nothing but four or $5 million plus of equity to be deployed elsewhere. That’s F-you money. That’s life changing money, right?  If I toss a coin and I made 500 grand, I wouldn’t care. I’d probably just keep it in there and lose it eventually. But if I made $5 million, then I’d take it out cause that changes my life significantly.  

 

Yeah. This is a great idea. Maybe this is something that I would consider then. Not selling it and then just taking the heloc  and trying to do the passive depreciation.

 

Other things to think about, not all deals are going to do cost segregation. I think I mentioned that, but trying to diversify over lots of deals. Maybe,  you just keep a million dollars back, throw in an infinite banking policy and then  you pay taxes on a million.

 

That’s not the end of the world in 2023, but maybe another thing to keep in mind and jot on your piece of paper is maybe you do some of these land conservation easements. Who the hell knows if it’s going to be around then.

 

Is that a trigger for an audit though? 

 

Oh yeah. That guy is but all the smart people do it. The smart people know who to work with. That’s why people  don’t pay that much taxes. Doctors who pay  less than 20% in taxes. They do, if you want to be like those people bring it on, there’s nothing wrong with it.

 

Just make sure that the people that you’re working with or dotting their I’s crossing their T’s, they have a healthy, legal budget. Nothing to be afraid of.  I always say like know the risk, go on eyes wide open. What you’re doing is you’re diversifying  over three strategies here, right?

 

You’re doing the cost segregation, that is all very legal at kosher. I really worry about that too much. The whole thing about going into one building that can beat up some, you can do a 10 31 exchange there too, but there’s risks with, going into the wrong investment and running it yourself as an amateur.

 

And then thirdly is like the land conservation easement, but if you’re backed into a corner with a half a million, a million dollar capital gain that you still haven’t mitigated, then, yeah, that’s the end of the world. 

 

These are really good. Is a family office thing that you have going on? Is it meant to help with situations like this? That’s what I was going to ask. 

 

Yeah. These situations are simple, right? This is the simple stuff we do all the time that you’ll learn is actually easy stuff after a while the value is with the people, right? Where do you go for those deals?  Charges change over time. But mostly, you’re at a point in your life where it’s more about the relationships with the right people. Very few people even talk about this stuff or know about it out there. I can tell already it will save you like 10 X at least what you pay for the initiation fee. 

 

Yeah, that’s what I was considering and, I think this has been a great discussion. 

 

Don’t pay it to the tax man, go and invest the money in the right places that eventually help pump the country.

 

Yeah absolutely. This is great food for thought and I really appreciate you helping me think through some of these strategies, because honestly for this sort of magnitude of the investment that I have had, I don’t have proportionally the right kind of advice. If you go to a financial advisor, like you go to a brokerage or a bank, real estate is like their blind spot. And they don’t know about all of these alternative investment strategies. 

 

They’re going to say it’s risky or it’s a scam, we’ll just say that’s because they don’t do it and that’s why they still have a job and they can’t make money off of it. 

 

 It’s very difficult, I think what service you’re providing is unique and it helps people that are in situations like this to think through what are the alternatives and what are the strategies. Then, I will definitely follow up with you and your associates in person, to figure out how I can be part of that family office.

Yeah, you guys are listening, go to simplepassivecashflow.com/journey and then apply there.

Goals, Takeaways, and Politics with Rick Blangiardi

https://youtu.be/ZldFM4_u854

What’s up folks on today’s podcast, you’re going to be hearing of an interview I did with Rick Blangiardi who is currently the mayor of Honolulu here in Hawaii. Now, the reason why I’m having him on the podcast is to me when I was interviewing him , it really made me think like this guy is like in his eighties, but there is some kind of fiery passion that still propels him forward to keep doing what he’s doing. Most people, I think they get the financial freedom or most people in our group very unlike most people out there in the world get to financial freedom pretty quickly.

Most people want five to seven years, especially if they’re already an accredited investor. We get them up to $3- $4 million net worth. At that point, they’ve reached an end game. Most of us are frugal, right? So they have enough and they they can probably live out the remainder of their days with a pretty healthy wine budget, and travel budget to do what they want.

Now, but what do you do after that? There’s a handful of folks that I’ve come across that they’ve gotten to that net worth scale, and they really want to take it to that next. Ticket to the eight figures, $10 million plus net worth. The reason behind that is just a little bit higher level of wine budget, but they also want to make an impact and money is an amplifier of what you want to be doing, or they want to have some sort of legacy.

Or again, the word impact. So Rick Blangiardi is obviously somebody kind of personifies this. And when you listen to this interview, I want you to really pay attention to, why does he do what he’s doing? It’s not for the money. It might be because of ego.

It might be because of impact, but you know what? I think this heart is in the right place and when listen to this these are the kinds of the people that I like to surround myself with, right? Not the people who just work to their 62 and quit because that was supposedly their retirement age. But the people ran through the finish line, even though they didn’t need to keep working, but they’re operating at such a high level, a high impact, and they’re making a change.

Might not be your thing, but I think once you get to yourself to a point where you’re a few million dollars net worth, I think a lot of these higher portions of the masses hierarchy of needs become something that a lot of people think about at least something I’m thinking about personally, these days too.

One of the big goals. If you guys haven’t checked out the mission, simplepassivecashflow.com/mission is to help folks like yourself to get out of the rat race by implementing, investing in good deals that cashflow . Secondly, do the right tax and legal strategies that the wealthy do that’s very different than what average people do, and also implement infinite banking as the third step. Three very simple things that I’ve found and develop the network around and build systems.

And so we have all the, e-courses go to the website, check those out. A lot of this is in a firm, very consolidated, curated curriculum. And it’s not that hard to get people to that point. This is something to think about once you get to that point, that’s going to become more of a apparent.

For now, you guys don’t care potentially, but a lot of people that listen to this podcast have very high net worth, and that’s why we have these types of interviews. At these special topics, but there’s something else that you guys want to hear in the future. Let me know, I always look for feedback, email team@simplepassivecashflow.com.

Check out the website too, we’re gonna revamping it this year, simplepassivecashflow.com.

 

 

 

This is Lane Kawaoka . You probably recognize our guests here and you’re probably thinking, what the heck are we doing interviewing Rick Blangiardi . But here he is, we’re not going to really go into too much of the issues that are currently going on.

Like we do on the simple passive cashflow podcast. We get to know the people and, whenever I’m going into deals, working with partners, we never know what’s going to happen in the future. And therefore I want to know the context of the person. We’re going get to know Rick a little bit better and yeah, thanks for coming on Rick, really appreciate it.

Welcome Lane.

I know this is a little wild card and your schedule here, but yeah, let’s see what we can do to make the most of it and I think we’re reaching up a bunch of folks like myself, who typically don’t vote and don’t care.

That’s even new to me, to be honest with you, when you say something like that, because I’ve not been a career politician I find it interesting generationally where people are at and honestly, your generation, I would think would be the most active more because there’s so much at stake.

But I find that interesting, I don’t know where the I don’t care comes from, but, because, I would tell you in my short time now making this decision, lot to be said for who’s in power and who has positions of authority. It sounds so. I don’t know. I’m not that power monger, but you know what I’m saying? When you have the authority, you can make things happen. There’s a lot of responsibility with that as well.

Let’s dive right into here and this is that Han solo moment question that made you think of star wars. So those of you guys who haven’t heard of this question before, it’s, Han solo and his buddy Chewbacca from star wars cruising the galaxy as low light smugglers.

I think cross paths, Luke and Leia and they went off on a little adventure. You probably have a few of these, but we call it bridges. I was watching another podcast with coach K and JJ Redick from duke and coach K calls these bridges, but take us to one of earlier bridges and just give us a little context of yourself.

Okay. Yeah. And there have been several of my life. I’ve thought about that. In fact when I’ve come to those crossroads, just to, and I’ll come to your question. I learned a long time ago. I don’t even know who the source is for the attribution, but it was said to me once before, and it was moments, the purpose of all education.

Is to do the things that we’re supposed to do at the time that we have to do them, whether or not we want to do them. That’s about overcoming that inertia that is coming to that crossroads and realizing, okay, I need to make a decision here. And how much do I have in front of me to make the decision that I know I should do?

And how much am I going to yield to the pushback, if you will. Okay. Because that’s the defining people ultimately become it’s those moments in time when you are willing to pivot or not pivot and, and then there you go. So I think probably the most profound one that happened to me early on, it had been several significant ones quite honestly, was when my decision to leave college football coaching.

Because I was 30 years old, had a master’s degree. I was associate head football coach at the University of Hawaii. I was a defensive coordinator. I had a guy like Dom Capers on my staff, went on to NFL fame, having been a head coach and a few other really good coaches. We were winning in those days.

Everything was right about that picture was a low aspiration from the time that I realized when I went to college, what I thought I wanted to do because the game was self, had such an impact on me. And I was doing really well with that. I was coaching all during my twenties and the only thing was wrong was, I came out of a blue collar family.

I was the first to go to college. Everybody had expectations that would do that, so I could make more money than they were earning in factories. And my father was a machinist and hardworking people but I got into a business. Everything was right about it, except it didn’t pay any money.

So in 1977, I had good position in coaching was successful coaching and I was making $15,000 a year and Larry Price, the head coach was making $25,000 a year. In fact, after Larry left, which was subsequent to my leaving, they brought in Dick Tomey at $35,000 a year. I mentioned that because Nick rollovers has just left for $15 million a year.

So maybe 40 years later, maybe if I had been able to stay there with it would have been one thing. But that aside that was a major decision for me because at 30 years old I pivoted to reinvent myself in order to stay in Hawaii and I take a mail-in coaching job. My then wife was mother of my three children, ultimately, really grown to dislike the demands of coaching.

I had very idealistic notions in those days about not only keeping my marriage intact, but also about fatherhood and what to do and coaching was very demanding. So I took a job that I really knew nothing about to sell television time and on the com that CCF tells them time said to me, Rick, if you want to work hard in this business in three years, you can make $50,000 a year.

Working hard at the age of 30 and the life I was living, wasn’t even an issue. I thought, wow, it’s the first time in all those years, even when I got out of grad school, anybody talked to me about making what seemed to be serious money at the time, and I felt a real deep compulsion to go for it. So that was probably and I have no regrets.

I’ve got a 43 year old son who’s done really well for himself and a 40 year old son has done well, it’s 35 year old daughter and my kids. But that changed my life changed my destiny.

 

 

So at the age of 35, you made that pivot. So you are a little older to start your professional career at that point, right?

Yeah. I spent my entire twenties coaching football, but here’s the deal that was a professional career. That’s what I wanted to do just to college football. Unlike today, the top 100 coaches at division one schools all make $2 million or more a year in those years. We just did it for the love of the game.

And it wasn’t all that long ago. It was four decades ago, a little bit more than that, but the bottom line is I thought that was my profession. It was everything about it was professional. So there a lot of work and everything else, it just didn’t pay anything it’s invading money. Yeah, that’s a big transition moving from one track and then going back to the bottom and another.

Yeah, Lane little did I know though that so much of what I learned. You know look, I don’t know how much you know about belief systems, but most experts will tell you, you lock them in pretty much in your twenties.

And I locked in a lot of my belief systems that were rooted in sports team, sports coaching, a lot of other things that I learned along the way. And as it turned out, even though I got into a business, I knew nothing about, I found out that a lot of that would be the foundation for me going forward on how I would lead.

They say a lot of folks in military positions, high stress positions in their twenties translate well into a long career. Would you say it was more like just grit that you had developed or if you were.

I think grit is important. I think you have to have determination. People that I’ve known them to succeed, look, you can get lucky in, in the financial markets. There’s no question and we’ve all seen that, but I don’t denigrate anybody’s success.

But the path that I’ve chosen required a lot of grit, a lot of determination and it never stopped. So I will tell you I’ve been a guy who’s been in one setting after another turnaround failing companies and that’s not some magic potion. That’s a lot of hard work and determination to succeed.

So hard work and determination, you jumped on that highway for the next decade or so.

Look I jumped on that early on. I don’t know, usually talk about myself, but in this kind of podcast, look, I went from being a grad assistant to associate fellowship coach. In five years, I went from knowing nothing about television.

And five years later, I replaced the guy that hired me and in seven years I became a general manager and then I never look back and I’ve had title after title. I’ve been president of two national broadcast companies. I’ve run major market television stations, and I can talk a lot more about it. I’ve worked at CBS in New York, but I came home 18 years ago and did some things that nobody thought were even possible starting first and foremost, we’re taking over KHNL and KGMB.

Two failing stations, the financials were there, same ownership, never one guy before ever did that turn both of those around very quickly, both in revenue performances, rating success. We make KHNL that on Fox affiliate in the country, not once, but twice after 16 straight quarters of ownership of a downward spiral went on to stay with KGMB, took it to 2007.

Sold at eight claim broke everybody. Brought everybody to their knees. The week before Christmas, 2008, we made this decision to try to build what ultimately became Hawaii news now out of a broken economy, pending FCC and DOJ approval. We merged three television stations together. We understood mobile technology and we created a 21st century multimedia company.

Okay. So I will tell you that my whole life has been about that. It’s been about starting at a bottom of working through or inheriting things that weren’t working and making them work. Before I came back, I was president of a company of Telemundo called Telemundo. Second lives of Spanish language network owned by very sophisticated players.

Sony was one and Liberty media was another new to private equity groups. They had just bought it for $500 million SAR niche in the marketplace in Hispanic broadcast, saw the trends understood what Latinos meant for in economic terms. Invested heavily lost a hundred million the first year and their very first year fired the two people brought myself and a guy named Jim McNamara and was the CEO. He stayed in Miami. I stayed in LA.

I lived on airplanes for 45 weeks a year, and we sold that at that puppy for 2.7 billion, three years later and we would have sold it for three and a half billion. Jeff ML was on record because we sold it to NBC of saying that was one of the things that came out of 9/11 was they saved nearly a billion dollars in the acquisition of Telemundo and that’s because they had private equity guys who wanted to sell and they put a deal on the table that couldn’t refuse, even though it was discounted, I’ve been involved in those kinds of things Lane, okay.

So my life and I, when I tell you I was living on planes 45 weeks building a company that’s based in LA. We had a big operation up in the Northern bay area. I have three stations, one of which we bought on my watch in Dallas, big market, just a transaction for that alone was a couple hundred million dollars was complicated plus Houston, San Antonio, Miami. I was in out of all the time where our headquarters were.

So I don’t want toPuerto Rico as our largest operation. Our second largest operation was in New York city and then Chicago, Denver. We were buying Phoenix when I left. And then when the deal was on, I was traveling post 9/11 commercially, not privately. I would wake up in Miami, work in Chicago, sleep in Houston.

Now I’m just telling you that because that’s the kind of seasoning I’ve had through my life. I came home after all of that, at that point at 25 years in the business, quite honestly, it wasn’t about the job. I came back to it because I made a decision, which is something I learned my next pivot point in my forties about alignment.

After going through some pretty toxic experiences. And I decided for me, it was on a macro basis. My alignment was where I wanted to wake up in the morning. And Hawaii had been my touchstone. I told the press where I came back in 2002. I told them that. I said, I moved to the mainland in 89. I never left Hawaii, which was true.

Not only that come back every year, but let me offer this insight. When I first left here, I went to Seattle, brought my three kids with me to run KING-TV. One of the most prestigious jobs in America and they recruited me. I had been working for them for a couple of years. They could have hired anybody.

So they offered me the job on my 43rd birthday. I was in Wyoming. I was doing a football game with Jim Lee and I got this up. If they said we’ve made it this year, they called me up to wish me happy birthday. They called me up. They told me he made a decision when I moved my family and I really didn’t want to move out of Hawaii at that point.

I really didn’t. I’ve been here since ’71. My kids were born here. They loved it here. I was doing well and television. I was proud by that point I transitioned over to KHNL and now we’re doing all youth sports. We’re making a real contribution to the community. I was doing a lot of public speaking. I was enjoying just a sense of being a real integral part of this place through sports, which was my interesting enough in my origins of my coming here in 1965 as a player, to be living like that, it all felt good.

But in that spirit of challenge there was in that crossroads, like I said, I knew all roads led to that. I had to do something. This is my second big pivot point that I really didn’t want to do, but I knew that I had to do it and I answered the bell to do that. So I didn’t know they were going to sell the company.

He brought me to turn it around three years later. We did. They sold it. Next thing I know I’m in CBS, New York, but during those three years, I’m in Seattle. Everybody always referred to me as the guy from Hawaii. It always felt good that when I went to New York, it’s a variety of this big article about, I was a guy from Seattle, but I’m not the guy from Seattle, guy from Hawaii, with this Boston accent, but I knew where my roots were, so it’s been like that.

Okay. It’s not been an easy road. It’s been really a hard road. So that’s why you bring up the subject of grit. I take a lot of pride in that. And as you get to talk about that, but nothing has ever come easy. Nobody’s ever handed me anything. Okay. Anything.

There I also hear undertone. Nothings can go your way. They sold the station. They had to be very big out. You were in that shuffle.

They bring it out. They have you report to a suite at the Four Seasons, this was in Seattle, and it was speculated that all of us would be out and see our manager. They said, Rick, there’s nothing personal. We just bought this company for million, billion dollars and we have our guy and we wish you well, here’s the HR people we’ll see you later.

It wasn’t even like getting fired. It was just part of the transition. But that led me to CBS in New York. I was at a decision then do I stay at and go? I get out of broadcast. I just left Hawaii, went up to Seattle. I spent three years in Seattle, turning that puppy around. I still have a handwritten note from the CEO.

We brought that station back from a death spiral. That’s why they hired me because they had done an employee survey and they realized they had a house of cards and they knew because it was company was founded by a woman named Dorothy Bullet and she had passed away and the previous year now it was time to look at the asset and an old board of directors.

She was 96 that she was recognized one of the top 100 women of the 20th century. She was legendary. She was 56 years old when she started television, the Northwest legendary person. Anyway, I can go off and tell you stories like that, but all of those things were these Han solo moments.

I’m going through space, if you will and life is happening and I’m trying to be as good and as aggressive as I possibly can. Not really know. Nobody offered me anything to guarantee and then just dealing with stuff. So in that regard Lane, it wasn’t too later in my late forties, I was down in Australia.

We had just sold the company. I was president of a national broadcast company, 9 TV, 27 radio and I had partners was a two year deal, was supposed to be a five-year deal. Thank God, it was only two year deal. Most toxic experience of my life. These were bad guys. I got aligned with bad guys. I’m down in Australia and I’m trying to purge if you will.

And I’m thinking about what I’m going to do next that brought a bunch of books at the time. Bill Gates wrote a book called the Road Ahead, and this is pre don’t. Think about all this happened. This was in the nineties. Think about all this already 30 years ago, they were all that’s happened since then.

And it was a real prophetic publication. He was talking about the movie, The Graduate and he referenced it in the context that it was a great movie. You’re probably too young to remember Dustin Hoffman and it was a word in there. It was an experience in there which, how Holbrook is advising this young man.

And he tells me the word is plastics Benjamin, became such a colloquial expression from this one movie line about plastics, like what you want to do with your life going to plastics. And Gates was saying in the book, if they wrote, if they redid that movie today, The word would be communications.

He was talking about that. He said, it would be that’s the word. And I was in one of those sorta youngian moments, maybe a little bit like this and thinking, gee, what did I just learn? I just went through two years of a really toxic experience with people. I’m not gonna mention anybody’s name or flat out evil.

These guys are bad guys. I couldn’t wait to get away from them and the sale of the company allowed me to do that. I’d never been in that experience before. And I thought to myself, you know what alignment I slipped into that. I let them buy me into that job. Not going to do that anymore. I’m going to pick my alignments from this point forward because I was evaluating my life at that point and think of what worked, what didn’t work and why.

When I got out of sync was what, because of the wrong alignments. And ever since that I’ve been very selfish. So I tell you my decision to come back to white post the self Telemundo, which was influenced also in my life experiences of 9/11. 9/11 impacted me in a big way. My dad died that year, but it also impacted me.

I was up close to that, but it also just resonated with me about life, a lot of circumstances. And so I was single, my kids were grown and I could make a decision for myself and so I chose my alignment was I wanted to come back and live here. I wanted to come back here and serve this place where all the experiences I had gained over those 13 years in broadcast, in my career.

And I came back to a fertile setting of having KHNL and KGMB. It was really about this place. It was really about coming back to Hawaii, which is important because that decision on that premise 18 years ago was the exact thing that hit me a year ago. When I made this decision to run from there.

It makes me think of a couple of things. When people invest a lot of money in these real estate or whatever they’re investing in, you’d get a point ’til you’re financially free. Really the freedom is doing what you want, where you want with more importantly, who you want and also when you want. Also there, you came back home and, a big issue.

That’s a lot of people realize is a lot of the pious talent leaves Hawaii, and the brain drain. They go to the mainland for how much higher paid jobs. When I came back home, I had to take a 30% pay cut. I’m like, how can anybody survive in Hawaii? But you’re obviously in a position where you could and make an impact. Take us back to the opportunity that was presented to you to come back. What did you think at the time of the impact that you could make.

Full disclosure: 25 years in the business, I just led that life that I told you, turning Telemundo around I’d run major market stations while I was on the mailer, including working at the network, I was in a lot of cities, whatever. I decided that, that was not a sustainable model because I felt like I was not connected to anything even though we were having some big success and all of that stuff that happens in that kind of mode.

But I actually wanted to come back and be athletic director through University of Hawaii. That was the year that Evan Debelle announced that he will start off with you. Your shooter said he was going to retire. 2002. So anyway, we sold Telemundo. We made the announcement come on October 11th, one month to the day, 2001, I’m going to be safe.

And then I was given the mandate as president of the company to get the deal closed. By the end of 2002 and every day earlier, it would be a creative to GE. So there was a lot of pressure and because they’re requiring partner that’s who owned NBC at that time. So that’s where I was living on airplanes and doing the things I was telling you, which is like crazy life.

And I was a lot, it was my cup runneth over, I got my fill of conference rooms and all the other things you can get through. So I wanted to come back. I thought, okay, this is a great thing. She is retiring and Dobell is the president of University of Hawaii and he’s making these noises about, he’s going to bring in, this great athletic director.

You saying all the things that really spoke to me. In fact, I was hearing from everybody in town, Rick, he’s talking about you. They wanted a business guy with media background who had connections to Hawaii, all this stuff. And I’m thinking, that’s me, he’s talking to me. . I couldn’t even get a cup of coffee with this guy.

He already knew they were going to hire him and Frazier. So I backed into the job because again, it wasn’t about the money or even the positions, everybody that I left at that time, given the success we had. But I was absolutely crazy to leave the fast lane. Okay. Because I gained a lot of recognition was on front cover of magazines and crap like that.

I could have stayed on the mainland that came back to my wanting the alignment of my wanting to live here. I could be cavalier about Manessa bills to pay and you know what? You could make some money, but let me tell you the first time you see the government take half of it.

It’s pretty eyeopening. The numbers look a lot different. Okay. And the one on the short of it is I came back because I wanted to make a difference in this community. And I really felt that circumstance was not the one that I initially wanted. I wanted to be D.A.D. at the University of Hawaii and I thought back to my roots, but I’d learned enough about television.

And this was enough of a challenge because you have precedent of nature. The fact that the businesses were failing under his ownership, I did it for that. I did to come back and try to apply everything and anything I knew about improving local television. Now I started in 1977 KGMB was the dominant station.

But, I can tell you those years, we used to be a one week delay programming or whatever and technically there wasn’t that kind of investment. I can remember early on once I started understanding the business, people always say things like how come local TV so junk will go the main road so much better.

That kind of thing from that in this last go around, I’m not just going all the awards we won and everything I can say Hawaii news now is one of the most did we go. Yeah, I wish statewide television market. And one of the more highly regarded broadcast entities.

Greg bought us a year ago, they had a hundred stations. They bought 63 Raycom. We merged into a publicly traded company of 163 stations. And Hawaii is now what right to the top of that. To me, that is a contribution to Hawaii. Just like in 84, we started doing youth sports as a contributions of Hawaii.

That was a vision that we understood that Hawaii sports. They went from the Northern tip of Kauai to the Southern tip of the Hawaii island and everywhere in between. I understood the feeling of the pride of that and what’s what we began to do on a pretty good basis. So I came back to serve at that point.

Serve a place that I had loved that I always felt strongly connected to. And that began, I didn’t know what was going to win. I didn’t know what was going to happen going forward and I’d never had a crystal ball. For me, it’s never been about trying to predict the future. It’s about how you create this over the course of 18 years.

There was one thing after another. We created some great success, so it’d be here in the broadcast business. But beyond that for the people, I heard I’m a media today. Make a comment about making profits for mainland company. For me, it was first and foremost, always about the people creating a great place to work.

Hawaii news now is the only media company, the voted best places to work five years in a row, I didn’t do it in the last year because we went through a sale. I waited five years before I tested that. And it has to be voted on by 80% of your employees and quite honestly, in news organization people are pretty cynical.

They don’t drink the Kool-Aid. Yet, we were, by our employees, they loved working there and I brought back a number of people Lane. I brought back the Lane Kawaokas. I that’s why I brought back and we got to give you a bunch of them that I hired, who were succeeding on the mainland created something they could felt they could take their career and bring it back here, even to the extent that I wasn’t able to pay them quite what they were making it on the mainland, but they prefer to be home with family and actualizing their careers.

I can give you a bunch of names there, but I’m really proud of that and they’ve all evolved. To me it was that even, and I have to be careful there because I’ve had some really great union endorsements, my folks be certified. They voted out the union that doesn’t even happen on this now because of belief in management.

So we’ve made a great place to work in which we inspired people to do their best. And I used to joke I’d say the same thing to you, as I’ve gotten older, everybody looks at. Even though you’ve already sure. I don’t know much about you have accomplished a great deal, your best is in front of you, but you need to be in a situation where it’s not just you alone doing that necessarily.

You’re going to need, at least in people who work in organizational settings, but in the kind of dynamics I was in with people who wanted to belong to an organization, cause that’s face it, in news or even sales or whatever marketing, that’s the setting. That’s the kinds of people who come into it. We made it a great place to work, but I always challenged everybody to say your best is still in front of you.

And the way we did that was I pushed innovation all the time on new ideas, more than I did improvement was just a basic expectation. We’re going to get better. We have metrics, but no, where are the new ideas? What are we doing? It’s different and better. And so people, when you talk about making work fun, get off in that kind of stuff.

And the, the log of yesterday were in there and crime created tomorrow. So right from the beginning, when we’re stepping, it’s almost, it’s interesting it was 10 years ago, because at that point, I said, we’re in the first year of the second decade, just 2012, we started October 26th 2009, when the first year, the second decade of the 24th century.

And look, what’s going on in broadcast media. And what are we going to do about? And we jumped all over mobile technology, we really on the studio, I’m on a podcast. Again, we understood all that stuff and we made it happen. It was a contribution to why was precisely why I came home. The success is that earlier on the KHNL and KGMB and those recognitions, that was all one thing. This was a significant change in the trajectory of local media in Hawaii and we’re able to accomplish that.

If you can illustrate the differences between the Telemundo years and the Hawaii years, it seemed like in the Hawaiian years you had more of like an impact where the Telemundo years you’re more of within the operations.

I got hired initially with eight stations. Three of them were negative EBITDA. Three years later, we had 11 stations. We tripled the EBITDA, the whole company. We made strategic acquisitions and all the way that we created a presence on a national landscape. When I started the consumer buying index was $80 billion in Hispanic market.

When I left three years later, it was 650 billion. What a trajectory to hit a trillion dollars. This was a high stakes game and it had that hit that trajectory. It hit that point a couple of years after I left. This was understanding the moment in time and how to capitalize on it but that was just a lot of personnel work.

To be honest with you Lane, that was a lot of people picking, I had to put general managers in place and provide the right kind of leader. In a tough place, because first of all, the Hispanic market had one big giant gorilla. This company called Univision and they were very territorial and they made it very clear as soon as we began to make some inroads.

If you leave here to go work at Telemundo, you’ll never come back here. They drew some hard lines in the sand. And so I found myself hiring general managers, like what I’ve been for a lot of years had 10 of them. They were great. think eight of them had never been GMs and just picking people who understood what was at stake, who had capabilities and skill sets and whatever.

So that was different. But that’s been the same here. When I came back. Let me tell you a story. So KGMB and KHNL were both owned by the same company MS communication. And I knew Jeff’s mine and my days from Seattle because he owned the Seattle Mariners and I was trying to work at GLL for 5% equity of his club.

I’d buy a second television station and paid with broadcast rights provided he gave us the equity. I could never make that deal happen, but I got to know. Okay. So I come back and I look at Jeff. He’s a big radio guy in KHON that 16 straight quarters of downward ratings and revenue.

16 quarters, less, less, less. In that process, they’d bought KGMB through the acquisition of we enterprises had not invested heavily in it and it was really downtrodden. They had that for two years, they had two stations in Hawaii. They’ve been operating on a temporary grant from the FCC that allowed them to maintain a duopoly, even though the FCC, one of them ultimately to divest because it was a rule violation, but nonetheless, they had it and they basically said, what do we do?

In KGMB, it should be a perspective. When I walked out in 1984 to go start what was then Kiko, which became KHNL who were doing just under 20 million a year. When I walked in 2002, she was doing under 10 million a year. So you can imagine from 84 to 2002 less than $10 million gross what I walked into.

In Hawaii over that course of time and that’s how broken the place was. I asked to be with the management team of both. They had never done it. There would, there was like resentment, KGMB and the original building over in Cape, on Kapiolani Boulevard in a P koi street was all this brand new glitzy K Joanne.

And it was like bad blood because broadcasters compete against each other. And it was like the haves and have nots so there’s a lot of bitterness. So I wanted to look at the manager. So I asked all the advantages to come day one before any of them in the station had a meeting in the conference room with the elite talent to Hilton Hawaiian village.

I told them to bring their number twos and number threes if they had it. I wanted everybody to bring whoever was, it was in charge of stuff. So sure enough about 35 or so I never really counted the exact number showed up and attention to the room was palpable. You could feel it.

And I walked in and I pretty much laid out, what it was about. I want to tell them. Yeah, cause here’s the deal, the night before I’m watching Leslie Wilcox and run Mizutani on television. I’m sitting in a hotel room and I’m watching him and they said goodbye that day they fired their general manager and they started speculating about me.

Rick Blangiardi has come back to Hawaii he’s going to run two stations at the same time. I’ve seen that a hotel listening to them speculate about my arrival. Okay. Meanwhile, I’ve got this meeting set up the very next morning for all the managers and they’re like shaking their heads and I’ve known one Alyssa this is impossible.

This can’t happen, what’s going on here, and they had people crying over the guy, they just fired and stuff, it was like, so I go in that room and I tell them pretty much, this is the way it’s gonna be. I just want to make it really clear to you that, I am come back home to retire.

Some of you may think that because it was a lot of stuff, talked about the press just coming off of incredible success. But I came back home because of my love and passion for this place and to make a difference. So let’s do think I’m going to give you a railroad to talk today about, you got to run harder, jump higher, there’s a new sheriff in town. That’s not the case.

I’m here to serve notice on what I believe and that is the reason why the stations will not be performing is it’s lacked the leadership. I’m going to challenge all of you. I’m going to tell you right now, the people who are most at risk of a men, a woman in this room, because that’s what I’m going to look at first.

If we expect to inspire performance, I want to look at who’s leading. Okay, because I don’t know how any of you got your jobs. I don’t know that these stations are both dysfunctional. They’ve been dysfunctional for quite some time. So all I can do without casting aspersions on anybody is simply tell you to me, that’s a leadership challenge.

So my first job is not about, but as I am everybody else, it’s going to be to evaluate you and whether or not you should be in that job, show me what you have. I want to see it up close in person. I’m going to get to know you. I want to watch what you do. I want to see how people respond to you. So it was with that understanding that I had a leadership challenge on my hands predetermined.

They barely but predicated on poor performance. Okay. But at the same time, there’ll be fair and I just started to tell you, probably at the end of the year, there were five people left from that group. Some of the people that we changed were internal promotions, a number of them, good people.

Yeah, that just speaks to how important leadership is. Who’s leading in the decision about who’s leading is really important and that can make a huge difference. And that quite honestly is why I chose to run for mayor made that decision in a title of my life. When I could have said, I just had a hell of a career, what am I doing?

And I’ve told people repeatedly, I made this with my heart. Maybe that’s the wrong place to point to, but it certainly wasn’t what my brain, I was driven by this as a referendum for leadership because of what’s at stake and this was pre Covid. So I made that decision based on love of place, not very much different than the decision I made in 2002, 18 years ago to come back here and make a contribution to Hawaii.

For the standpoint of where TV was at, what these properties or for that matter when I took over a broken television station in 1984, and what we then did with that with UHC sports. Now, we certainly. For that matter, even when I go to KGMB, all the things we did or the years of when I came over here, I announced I was running for mayor at the old stadium park.

And the reason why he did it cause I’m really a sentimental guy, because that was the place in 1965 that I first saw the pride of Hawaiians, local people. That’s the first time I saw it, it’s also the same setting was the first time I learned how to fight for Hawaii. I wanted to announce my mayoral candidacy in that setting because it brought me all the way back to Hawaii in a very different time in 1965.

But my life experiences over the course of that time and what I’ve tried to do here, we’ve all been to the good. And now this last chapter, this again was pre COVID, which as I said earlier, is going to redefine my entire time as mayor. But this was all about that, this was all about making a difference in a place you live, feeling connected to it.

And then quite honestly, who’s going to help run this place. I’ve made it clear to everybody that I’m not doing this alone. I’m asking for responsibility and the accountability, but I’ve said repeatedly, I’m going to try to bring in the best minds. I can possibly get people who are smart thinkers, smart doers, and who also want to be held accountable because we’re in a time right now that we’ve never seen before.

This is the most difficult setting any mayor has ever walked into it and I’ve been told that daily by a lot of people, I realize what’s at stake. It’s not just because it just functioned with heart and the mayor and what’s happening with the rail or for that matter. Anything else that you want to say, we’ve got a lot of issues here.

If you were to categorize, when you made that decision to go for a mayor, was it more of a you’re compelled by your optimistic? What kind of impact you’re able to make with the position? Or was it more, you’re frustrated at what’s happening out there? And if so, what specifically frustrating you?

That’s good question Lane, it was probably neither in a sense. This was not really ego-driven and quite honestly, when you make a decision of this consequence, it really is a certain amount of trepidation. But you feel you’re being drawn to it. There’s a sense of responsibility. That you almost can’t deny. You don’t want to turn your back on it.

Like I said earlier with silver referendum for leadership. So if I live here and I say, I love it here. I love its people. I love where I’ve been in. My life has been here. Then you come to a moment in time like that. That’s never just one thing you feel compelled to be. I could have turned my back on it easily.

For some reason, I was up there with people whispering in my ear, Rick, you got to do this well, what more do you have left to in television? You got a lot of gas in your tank. We need you to do this and so since that time that’s been gratifying because look, when we announced, I had no idea how I was going to do.

I don’t even know how many people are going to run. At one point we had 15 people running for mayor. We had three experienced politicians running. There was a lot of unknowns and uncertainties here with no guarantees, but now I find myself not only having one of the primary, but as you may or may not be aware, decidedly ahead, tuition today is election day in the polls who do everything we possibly can to make sure that we meet that.

And then some and so I have a sense of destiny about this Lane. I really do all roads have led to this and all I can possibly do from this point forward and getting elected is to apply everything in my life that I’ve learned, my love of this , place, the people that I know, you look in the challenge of all the unknowns.

I’ve said repeatedly, this is going to take collaboration at the state level. It’s going to take collaboration with the federal government, and it’s going to take collaboration with the private sector in ways that perhaps have even happened before from the standpoint of the mayor of the city and county of Honolulu.

And I intend to do all of that c ause we’re going to need a lot of help and a lot of things we’re going to go right back to what I talked to you really about innovation. We need some new ideas. There is nothing about the situation I’m walking into that says perpetuate the status quo, nothing. Now, if we see things that are working really well, I don’t have that kind of ego.

Like I’m not that person, that’s one of the things that really helped facilitate turnarounds. You don’t walk in there, which is such a classic mistake. When you take over in your number one job and feel like, okay, I’m here. It’s my signature. We have to reinvent something. No, I want to look for everything that we’re doing well and capitalize on that and stopped the things that we’re not doing well and figure out how we can do it better. That’s how you operate in turn arounds.

When you jump into the position, what is something that based on your experience? So with your skillsets and what you’ve learned throughout the years what specifically made you for this position or speaking on any issue out there that you’re a big guy exactly for that issue?

You asked me earlier about grit, for some reason I’m wired the way I’m wired my whole life. I’ve just been like that. I think it’s also a really, I really do. I’m an old team guy rooted in team. I love building teams, people around me. Watching people thrive and being a facilitator in that.

I’m looking at this job as daunting Lane, as it feels right now, given the circumstances and believe me, there’s good reasons to say that it’s a very exciting opportunity right now. Leadership is situational. There’s some real silver linings in this. I’ve talked openly about it and we’re going to try to see the best we can do.

I think the landscape is fertile right now for us to do some things that maybe hit a four year. In the group for the sake of a greater good, the challenges is significant and so I’m just drawn to that kind of thing. Why do people climb things like Mount Everest?

I’m gonna go through all this stuff with crazy things people do. It just something in you and I’ve been in just go this is in me to do.

We’ll wrap up here with the Tony Robbins question, break down a couple of things for us. First, what is the some kind of a secret or hack or any kind of ritual that you do that led to you being a high performer, high output? Basically a science achievement. And secondly, what is your secret or hack for the art of fulfillment? What keeps you motivated? What keeps you going?

Well, I’ve never taken myself too seriously going to be really candid. I would tell you I’ve been blessed, I think with a certain sense of humility and recognizing my own limitations and always trying to work over that, I learned this. You’re going to crack up since you brought up Tony Robbins. Let me bring up Barbara Walters. I’m watching, this is years ago. Barbara Walters is doing a 25th anniversary show every year for 25 years.

Once a year, she interviewed four people. They were the world’s most famous people from Kings to movie stars, celebrities, athletes, business tycoons and so now it’s in a 25th and then doing a special anniversary show and she’s being questioned about, okay, 25 years have gone and you’ve had the privilege of interviewing 100 of the world’s most fascinating, successful, not successful I’m less said that, people like that, what were the common denominators?

You saw you saw them up close in person. She said, I remember at the time I was getting dressed in a hotel room, she said, tell ya. It was two things that really popped out. One, they understood their work and they took it more seriously. But secondly, they didn’t take themselves very seriously. They understood who they were. They’re human foibles if you will. I look at my life like that. I know the impact that can have and what I do professionally, but I also understand I’m an imperfect person in many ways.

What is your secret or hack for the art of fulfillment or any other kinda mindset tricks that you use to keep yourself going?

I think you have to stay positive, from a leadership standpoint, you have to be positive. You have to understand that when you’re a leader, you have to have broad shoulders. I’m being tested right now and this negative campaign stuff that’s going on. If they’re broad shoulders and I think people look at that and look for you to fulfill that expectation. So consistency is really important, having integrity.

Appreciate your time Rick. If people want to learn more about your campaign, you want to talk your website for folks.

We have a website and everybody around me laughs all the time. It’s RickBlangiardiformayor.com. I always have to think about it cause sometimes they say friends or it’s RickBlangiardiformayor.com. I’ve enjoyed this. I know we didn’t go through all your questions, but I thank you for allowing me the opportunity too. I think because all of this was designed, I think in some ways to showcase a little bit of how I tick inside and so I chose to articulate it that way. And thank you for allowing me to do that.

Yeah. We never know what’s going to happen. People ask once you get into a deal what are you going to do when this happens? Or that happens? We don’t know if that’s going to happen. So let’s just talk about, where we are between the two years right now. Thanks for listening everybody. We’ll see you guys next time.

 

What to Do Before You or Your Parents Die – Annette Kam

https://youtu.be/kgMl_iEYiLY

Wow on today’s podcast, you’re going to be able to download a free family planning spreadsheet. Ooh, we love spreadsheets. Don’t wait You can grab that at simplepassivecashflow.com slash legacy, and it’s going to be a good one today, but before we get going a little bit recap, Christmas is over you.

Celebrate Christmas. Hopefully we’re all selling in the new year. But right now, in terms of investing things have going pretty well for investors right now that everybody knows about inflation, even the regular people out there, they know that inflation is rising. All the bolts at this point and prices on real estate is just keeps going up commercial real estate.

Hasn’t really gone on the huge frenzy that residential real estate is going. But I definitely see the second half 2023, the commercial prices will definitely be running up along what you’d like. Have you seen with the residents prices? Which means it’s not yet too late to get. As far as apartment goals everything’s going pretty well.

Rents are continuing going up. I anticipate rents that kind of slowed down a little bit, but still be increasing which has healthy,

but as much as I love and investing in apartments majority of my net worth is in that asset class. I’ve been looking around lately and you always want to look for stuff. The contrarian point of view, and what is one of those will tell us, right?

We’ll tell us, get beat up in the pandemic recession, but something I’ve been realizing is, hotels, just like short-term rentals. Everybody’s looking at short-term rentals out. Airbnb VR BL there are discretionary items. That’s something I’ve been learning a little bit of doing my due diligence on this asset class is either there’s a big difference between the two and the three star hotels.

The crappy holiday and expresses that I stayed. And for about five years, the comfort ends the maybe the semi nicer, three, four star hotels, the lore and Marriott’s those types. Those are the ones that are gonna to me, struggle in another pandemic or session, especially as people stop spending money on that of.

Something I’ve realized lately is the high-end luxury stuff. Like your four seasons in Hawaii or a Hilton in Hawaii. And it keeps saying Hawaii, because I think there’s a big difference between investing in 2, 3, 4 star hotels in the middle of a piece of junk Alabama, Kentucky, like these areas that no wonder they want to go for vacation.

Really your only reason you’re going there is because your company tells you, you got to get your butt on a plane. The go talk to some folks in the flyover states, but places like Hawaii, we always beat up on Hawaii. California is places where it’s not a really great place to invest for cashflow, but it is always going to be paradise.

And place where people will aspire to live the dream for their one week of vacation. And the people that are self selecting to going to these places are going to be going to the five or six star hotels. So started to look into buying a hotel in Hawaii, is that everybody wants to do that. What a flip trophy asset that is add that to my coffee and chocolate farm parcels,

but . I started to talk to some developers that I knew and some other folks in the industry and start to realize that if go off on this investment thesis, that I needed to stay to the high-end. So I can go into recession, proof assets that cashflow, I need to be now competing with the institutional operators, which is not going to happen.

It’s the same reason why. There were a few out there that we’ll invest in like Maine Frank computers, but now Amazon is getting into the game. All the little guys are getting blown out of the water with this type of stuff. Same thing with industrial and office space, which is why the average person can’t really get involved.

But, apartments, you can buy , smaller apartments or put together private equity group go after a 40, $50 million. But within industrial and office, you’ve got to get too much huge or scale and very similarly, and maybe to March stream case luxury five star, six star hotels, which are talking now on a magnitude of , $200 million plus, and there’s not very good financing on that.

So you’re talking about it, bigger equity in comparison to the purchase price. Another thing. These are the weird wants to don’t really think of as an investor when you’re outside of the industry. Something I’ve learned is that, developers went to making these really fancy five, six star hotels.

When you look into the PNLs of this stuff, they’re not really cash lying, or it’s not, doesn’t seem too much of a moneymaker, but what’s really, the moneymaker is selling off the timeshare. So if you’ve seen a place like Hilton wine village, there’s it was built in different phases and there was a section of it that gets sold off to the timeshares because the timeshares goes after How do I say this in a nice way, but they are the absolutely worse consumers buying that stuff. So basically you can, if you’re the hotel owner, you create a nice property, a campus, you make a couple of timeshares, you sell it and you gouge those types of unsophisticated investors, so-called investors, but we all know who the people buy timeshares.

Those are the people just get suckered into buying this stuff because they want that dream. They want to feel like an infant. But they’re really just a timeshare person with a bunch of points or whatever, but that’s the play for these large hotel operators, developers that they create the campus and they make their money on that sale of those timeshares, to the sucker buyers.

Another thing too, that I also found is a lot of these bigger brands, like the Hilton. Th these main states, if you’ve heard, they get out of it. And lot of the money is coming in is dumb institutional money. Again, like these are the people who are investing the lazy retirement funds of a lot of folks that don’t listen to this podcast.

The expectations are a lot lower and a lot of times these big hotel operators they’re just lending their brands. So really they don’t have any skin in the game. Just another example of the bigger that you get, it’s easier to not fail and you don’t really have skin in the game.

And as much as I’d love to go on and invest in a Hilton or four seasons, they don’t need private equity money. So it’s not really finding any deals in that type of work. But you can go buy a holiday Inn or just one of these Thor and hotels. But again, like I said earlier, I think there’s a lot of risk into buying that type of discretionary item in the two to four star category.

But anyway, part of this whole idea of investing in hotels and probably not going to do it, but it was just put on because the mastermind that we’re putting on in Hawaii, this next. Pretty much the final week to buy your ‘ tickets. For those of you coming out, or you’re going to have over 80 people there, I’m really excited to see you guys there.

We’re going to have a little less than half are family office, Ohana members or VIP’s, and then general admittance . So looking forward to meeting you a lot of people in person for the first time, but yeah, enjoy the show

 

 

 

 

hey simple passive cashflow listeners. Today, we are going to be talking to Annette Kam who wrote a book called Wait, Don’t Die Yet! So it’s a complete guide for all things that nobody wants to talk about before, during, and after a loved one’s passing so going to be a lot to do with legacy and estate planning.

If you guys want to check out the show notes to this, we’ll post the video of this, and also a more pertinent information surrounding this topic at simplepassivecashflow.com/legacy and before we get going, I’m going to apologize because Annette is here in Hawaii too. And she is probably going to get me to speak some pretty poor pigeon English, which tends to come up when we get together, but we’re not drinking, so won’t be too bad. But, Annette thanks for jumping on. Appreciate it.

Thank you for the invitation. I’m excited. I’m really excited to be here.

Yeah. So paint the picture for us. What did you do before you really got interested into this topic matter? What did you do for that treaded day job?

Oh, my history wise I like to go back to my history because to me, everything is not a coincidence. Okay. Back in 1968, I spent two months in the hospital with a ruptured appendix almost died, but that propelled me to become a nurse. So for the last 42 years, I was a nurse. I retired five years ago. But within this timestamp, I also came down with an illness called fibromyalgia and it was very debilitating suffered for over 10 years.

But then found this book that changed my life. Connected up with the doctor, started a nonprofit here in Hawaii reached out to the mainland and beyond. And last November, I had to pivot my whole focus in life because of what had happened to me with my in-laws passing and this is what has led me on a new mission.

So I stepped down as president of the nonprofit last November, and I wrote this book to help people realize that they think they have their affairs in order, for passing or their loved ones passing other parents past again, that is such a myth that they think as long as they have the will, the trust and all that. They’re fine. That’s really not the case, basically.

So before we unraveled some of those problems and issues that people don’t think of too much, you spent a lot of your career as a postpartum nurse and we’ve had a lot postpartum nurses or doctors in that arena on the podcast in the last several years and they give some insights into this from their dying patients. Anything before we move on any takeaways that kind of have been impactful to your life, going through that experience with so many patients?

I was a postpartum nurse I didn’t have the death and dying part as much, but I’ve seen the lights. I did an interview once and it was interesting because she said I’ve seen life coming to the world.

I’ve seen suffering because of my family had to go and now I’m helping people in death. That’s a kind of a neat psycho through to be in touch all phases of life.

All right. So let’s get into this typical example, right? So I think the most people that are listening here, mostly accredited investors may be in their thirties, forties, and fifties and they have an older parent that is dying. Most of the people listening are typically first-generation wealth folks. So a lot of our parents, they might have a million dollars now cause you know, when you’re a good saver, anybody can get to a million dollars in 70, 80, 90 years. So not talking about a huge estate being left behind, but what are you seeing as some of the pitfalls or the mistakes that people should be planning for right now? Knowing that the, this is going to happen.

If you look at the history of what I went through in my book my father-in-law was very organized. He was 99 when he passed had both of his checkbooks, your balance to the penny and 16 years before he pass you actually educated us one Sunday night when went over there

and he told us exactly where the safe was, where the key to a safe was. This work is we always trust the best directives, power of attorney he had all that stuff. So we thought when he passed and my mother-in-law told me, you take care of everything. We thought it wouldn’t be that much of a problem because he had all this paperwork, but then we found out.

It wasn’t just the paperwork that was enough. It was all the other mundane things that people just never think about. Things like the secret safe he had a secret key that he showed us. We went to get the key. Here’s a key instead of one key on a key chain there’s 20 keys on the key chain. All unabled.

So this is little things like that just makes you that’s a little harder when you follow up with somebody who passes. Just little things like that had mentioned about utility bills with the telephone company where, 10 days after my father-in-law passed, my mother-in-law’s phone broke, but online that’s the one that communication with us.

And you think it’s so simple, I just call the telephone company up. They can fix the home, but it took me three months, 29 phone calls and getting the better business bureau involved because she was not on the bill so she didn’t have the authorization, even though we have to still pay the bill, she wasn’t authorized to get it fixed.

How simple would it have been just to add on the second name and people don’t think of those little things, just little things like that and location of words, your motor vehicle registration, who’s on the registration. And how do you sell the car if your name is not on it? Yeah. So these are the things that I captured in the book.

When I started going through all this, not knowing what phone numbers to call, who to call, what to follow up on, what happened is I started making a list and I gave this list of to friends. Cause we’re all baby boomers and we all have parents that are passing or spouses that are sick actually with the age responses or sick.

And everybody, I gave this to told me you got to get this out there and that’s why I wrote the book. It was to help people to avoid going through what I went through, basically. That’s a basic premises is just getting them through. But the book itself is not just about the things you do beforehand.

It also takes you through everything to like caregiving, and a file system what to do after that, there’s even a section on transitioningif they need a carehome . What are you looking for? These are the thing that people just don’t think of, basically.

Yeah. So we’ll dive in today, the care home and the assisted living portion here in a little bit, but just to close the loop on all those, the laundry list of things that you should probably be looking for Annette’s book, we’ll get you guys access to electronic copy later.

I’ve got a laundry list of things and a Google sheet form for that we use in the family office group at simplepassivecashflow.com/legacy . But my suggestion would be, yeah. It seems really annoying for a lot of us because on the parent’s passing, like our time is very valuable, right?

We are the sandwich generation. We have to take care of the older folks’ affairs close it up but also we got the younger generation to take care of. So if the older generation could just spend granted, it takes them a long time to do this. But Hey, they have time, at that point in their life, print out the Google sheet or whatever, put it on paper for them to hand write it in.

I think everybody over a million dollar net worth should have an executive assistant scan it and then put it into your Google doc form. You don’t have mom and dad do that. But to me, that’s a best practice, but any other best practices you’ve picked up.

The book itself has my story in it and everything segues into the guide book that is a free downloadable also and people think I don’t have time to do this at all, but actually in reality, it takes maybe two weeks to fill it out because then you’re not gonna fill up the whole guidebook at once. It’s really not the pipe that you’re living through at the moment and it just has all the important information.

So you just got to tell your heirs where the information is you fill it out, basically download the guidebook, you fill it out and then you just update it once a year. I recommend using a erasable pen because things change, you’re adding properties, you’re adding more assets, you sell properties, and so these things have to be updated obviously, but it’s easily done with this guidebook that I included.

And it tells everything, basically if you have a mortgage, who’s the mortgage with, who’s your agents for insurance, it covers everything that I could possibly think of. I don’t know. It’s just a great resource, I think and I just want to help people out basically.

Checklist manifesto, because I’ve read that book fly a plane without it.

 

Here’s something that I’m not really familiar is like the parents get to that age where they can’t take care of themselves. Maybe walk us through that issue.

Yeah. I went to that with my father-in-law and then my mother-in-law actually, my father-in-law was going through your possibly passed away too soon, but then my mother-in-law got sick a little later and there’s nothing like, one thing that really pertinent is that a lot of older people once they fall, that’s the downhill trend.

She didn’t break a hip, but she did fall at one was supposed to be a short, we have since ended up being three months. And then all of a sudden you don’t realize that these rehab centers can tell you next week she’s gotta be out of here. And then what do you do? So then you have to go find out carehome or a nursing home, whatever.

And what I found out, and I was really fortunate because the social worker helped us. But what I found out is that you have to be very careful about your carehomes. You think that when you’re looking for a good care home or that you’re looking for a place that’s safe it’s clean, you have RN running a place on those activities.

But the book goes into a little bit more of that because I interview caregivers and I was really lucky because the caregiver I chose, she had been doing it for 16 years. Before I even introduce it to my mother-in-law, we had sent there, she had already gone there to interview her and find out what her favorite foods were because can you imagine going to a care home and not being able to eat the foods that you want?

In my mother-in-law’s case, all she went over, talk about tacos, burger king, Coca-Cola a hot cocoa, sushi. So if she had that once a week, she was happy.

I’m actually general partner in a deal where we’re building some assisted living and we’re building them a pod. This is on the mainland. Every pod is supposed to be like a different ethnic group. Older people that they like to live with their own ethnic kind of group, whether it’s right or wrong, it is what it is. It doesn’t matter, but they have different like food offerings.

Yeah. So the transition part is there’s a part in the book about going through the transition part where I’ve interviewed caregivers, whether or not you’re going to be the caregiver for your parents or you don’t have room and the caregiver has to go outside of your home. It’s just some guidelines.

Things like if you think about like my girlfriend, she brought her mother and her to her home and forgot about the prologue, I guess what she fell and broke her hip s o these are the little things that I covered in the book that are not really little things, actually big things.

If you really think about it is wow, there’s a lot of things, people think about like pen rail, safety, stuff like that, but they forget the little things now.

So, at what age should like my generation be like, Hey mom or dad? At what age do they hit that you should start to have this conversation like, all right, the next five to 10 years, what is the plan?

It’s already rough thing because it’s a sensitive topic and really when you’re in your thirties, forties, your parents are in their fifties, sixties, and they’re like, I almost 70 and I’m doing well, but if I didn’t go through this and somebody who’s brought it up Hey, tell me about what’s what you got pat, and, down the road, you don’t, it’s not a subject that people like to bring up because it’s not an easy subject to bring up because the personal thing.

I’m not even at that point where I’m sick or dying, so why we’re bringing it up now, but people just don’t realize just how important it is to be ready ahead of time, because things can happen at any time.

One of my friends just texted me, emailed me the other day that his brother who is only two years younger, he was like 68, just passed away suddenly. Nothing in order. So that propelled him to really take a look at the book and say, I got to get my things in order for my family, because you think you’re 67, I’m still young and I still got time. That’s all we associate, we have a kind of a long lifespan, so you think you have a lot of time, but the death has no post mortem. When it’s going to happen, you’re either going to be ready or you’re not basically that’s bottom line.

I haven’t thought too much about it. We haven’t had a thought yet, but you got several options and maybe add on to find missing anything, but your first option is t he parents, they own their own house so they’re already living in somewhere, they age in place, right? This is typically what most folks want to do cause you know, people don’t like change, change is bad.

And they got all their crap all there they don’t want to go through it, but it’s the cons are obviously right it may not be set up to be medically, the best place they could trip and fall and they don’t have the medical staff there available.

So you’ve got to have somebody come and help them out, or you gotta be a person to do it, which in my opinion is not the highest and best use, especially if you’re listening to this podcast right now. The next option is, you have a series of different assisted living, semi assist like maybe can you break down those different options?

I know here in Hawaii, it’s interesting because there’s assisted living facility, but you also have to think ahead because they’re nice places, wonderful places, but then you have to think about down the road once they need more care, can they stay there?

And many of the places here, they’re not an hour once they need skilled nursing care, they’re outta there. They’re fine as long as they’re ambulatory and they don’t have any major medical problems, but once they hit a certain benchmark and they need more skilled nursing care, you have to find another place. I think there’s only in Hawaii. There’s only three places that let you w hen you get in, you can stay until you die. Cause they have the care that they give you there.

But it’s like a jacked up system, right? Because it’s a life of lottery like you pay in and if you die early, then the house takes the money. If you happen to live the most. Then you eat off of the other person who’s died off their funds that they put into the system. Yeah. I mean it, no, I don’t know. The way we do business, it’s carried interest to me. I don’t seems to me that they make money when the person does not live long, which doesn’t seem to align interests. But anyway that’s just how it is, but is that pretty much the gamble that unsophisticated money people have to make.

But you know what to do because s ome of them here that I hear, I haven’t checked out myself is that, yeah, you got to put it in like a million dollars. You have to put in 5,000 just to be on the waiting list, which is like four or five years long. So you have to think way ahead.

And most people who are, hoarding cash in their house only have sub million dollar net worth and they have to either sell the house and they don’t want to do that because they want to live in place as much as possible or do a reverse HELOC first mortgage, which is in a bad idea in some cases.

But I don’t know. It’s worth the discussion because it gets complicated like this, typically the house wins, right? The sophisticated operators win off and then the uneducated consumer gets screwed at the end.

So now, with your listeners here with this network of what we have, including myself, it’s nice to have all these other properties and you can still end up going to a really nice place that will take you all the way until you pass away because you can sell one of your properties. At least here in Hawaii, you can, and you can get back a million dollars from one or two properties so that’s one thought. Yeah, you don’t have to give your whole network away if you have only one property. Yeah. That house has got to go when it’s time for you to actually get there. And that’s the only way to get there is by selling your house.

Can you stay in the house and then assign the rights to it at a future date? Does it work like that? Or do you have to totally commit?

Yeah. Once they say, okay, we have an opening, you got to take it now. I think you got to take it and then you have so much time to get the money in, to pay for the rest of your stay there. Yeah. That’s how I understand it. I’m just talking to different people who are in the process of doing it.

My brother-in-law, I have a friend that is doing that now. Just getting prepare, but yeah, this is a really interesting situation that you find yourself inside, especially here in Hawaii it’s not cheap. That a nursing care home will probably cost you anywhere from eight to $10,000 even more a month and people aren’t prepared for that.

I don’t know if you can speak to this, but for some people maybe under half a million dollars net worth, probably on or under millions is still a thought, is the strategy sometimes to exhaust all assets to be a warden of the state.

Yeah, I think two years but it might be more now where you have to exhaust everything and then there’s this gap of two years or more now. In order for you to qualify, to go under state care.

That said you don’t really want to go to the state care.

Some people have to. The private care home as I found out are not actually bad. They’re much cheaper and it’s not bad, getting like maybe four people, enough resident home, we’re really fortunate here in Hawaii because we have that culture like that. There’s a nice Filipino culture that they do this for the family and they do this for others.

So that’s what happened in my mother-in-law’s case and I was really happy with what we ended up with.

Yeah. My personal way I’ll do it, but it’s technically legal to sanctions right, we all know that but that’s just how people do things in Hawaii. And I guess what we’re talking about folks, most of the listeners here on the mainland, but here you’ll get somebody who everybody’s got side gigs here in Hawaii

cause it’s so hard to make ends meet. So you might have a nurse that works their job, and then will also part-time live in somebody else’s houses, stay in caregiver. Best of both worlds right. You get people who like love the client, gives them the best care and it’s a win-win for both.

We do have our big box assisted living and care homes here in Hawaii, but not as prevalent as the mainland, as things on the main things are typically.

Yeah, you can pour it a lot more too. That is one of the things where, nice to live in Hawaii. If you know the right people, right? It’s all your network, is your net worth, or your networkers who watches your mom, what’s your opinion between some of those smaller let’s call them boutiques versus the big boxes. What’s your personal opinion?

Say, a personal opinion, depends on what kind of setting you want your parent or you want yourself to be in. Some people like to have this nice setting where they go through the dining room to eat, and then you have all these friends there, versus staying in a home where you’re eating with two or three other people.

Yeah. So this is a personal opinion and also you have to look at what kind of activities do they offer? If you’re just going to sit and watching TV all day in this home, that doesn’t make any sense, but do they have activities to keep you busy? Whatever it is, it could be, do they have shows to watch and do they have classes or art or whatever.

Those things are things that are part of a assisted living facility. They do have these things and that’s pretty impressive when you actually go to visit them and you see what they have. Aside from they have, some of them even have a beauty salon or pickleball courts, it’s crazy, but they do offer those things.

Yeah. You like the thick of all. That’s a thing now. Here’s the big question is like, all right, mom and dad are getting to that age. Who do I talk to? Is there a date, like a website with, let’s like a directory, like where do I go to figure out number one? What are those big boxes and how can even start to find some of those smaller boutique?

The first step obviously is communicating with your spouse or your parents. You have to get the communication open first to even talk about something like this. And then once they see that, yeah, I should start thinking about this and, long-term care or whatever, maybe we should start looking.

When my mother-in-law was at that point, we had to scramble to look for different places. So we went to visit different places before we settled on one, I think being able to have the conversation and then actually going out to visit the different assisted care facilities is a big help because then you have open communication.

Yeah. I don’t mind being here or I don’t mind staying at least they have input rather than if they get sick and they’re forced to do something because that’s the only place that’s open at that time, which is sad. So planning ahead is important. Like many of these places you can reserve a spot for down the road know, and it cost you maybe a $2,000.

Where do they get the list of places first?

Well, hospital’s setting, Rehab center, a social worker will help you do that. There’s the private ones and then, the state run ones and then the more private ones, a more exclusive ones, I think it’s on their own basically. Hey, get up to yellow pages, do an internet search, there’s many out there.

It’s better for you guys to do the searches. If not, you guys would get head hunted with a bunch of sales reps. We’re bringing it to the ones that just are good with marketing.

Yeah, and you got to do it early. You got to be prepared. It’s sad to say that you have to think of this so in advance, but you really do because you just never know. Tomorrow your spouse could have a stroke and then what?

So getting off the topic of care homes, any things that you’ve seen, like a lesson learned, or maybe this has happened that should have been avoided somehow it’s a little bit proactive planning we want to mention.

Yeah and that’s what the guy looks about. Cause the guy just step by step and apply the book. It’s just little things like. Say something happens to your spouse and I ended up in the hospital. Okay. Would you know exactly what meds she’s on? How much the dosage, how often is taken what’s for, who her doctor is, or the doctor’s phone number?

The guide will guide you through all that stuff. So that there’s no question and all you do is update it. You can just grab this book and go, Hey, this is what it is, or make a copy of that part of the guidebook and take it to you with that too, at a hospital. But those are the things that are important things like you can have insurance, but okay if you pass away, who’s my agent, like I have some whole life insurance policies and when I looked up on the website, okay, who am I contacted this I four different numbers. So then I got to my agent, I said, okay, I know you’re the first contact.

What’s the second contact in case I can’t get hold of you and that’s in my guidebook, so I put it down. When I went through this whole process of my mother, my father-in-law, I can only tell you how horrendous waste of time staying in the phone, especially with Hawaii being six hours on for three to six hours

the mainland is closing and we’re waking up and I have to get hold of all these important people or departments and you have to go through a long list of okay go on the internet, find out the number, call the number, and then you’d get transferred and transfer. So those phone calls took me anywhere from half an hour to an hour, just to get to the right person.

So this, the guide book had every phone number in there, the contact person, so he can go straight to the number, if something should happen to you or your heirs can go straight to it. There’s people don’t realize how many places have to be notified. Your pension, your social security or insurance, all kinds of stuff.

Everybody’s gotta be notified and they all want your death certificate. So that’s another thing you have to think about how many death certificates are you going to order when your loved one passes. People don’t realize all these little things that they need to end up doing, and, they need time to grieve. They don’t need to be thrown into this situation of having to handle all this in the middle of a loved one passing so this is just to avoid all that basically.

We’re known for the simple, passive way of doing things. So if we pay a little bit of money, not overpaying, but we just pay for time. Like when people get married and, spouses have to change their name there’s consultants for that, we pay consultants to book our rewards travel or our credit points. The other thing. I paid people to negotiate cars for me. I never go to the dealership. They just do all that stuff for me.

I pay them a little bit, but there should be somebody who like, there’s a huge service for somebody who like does this stuff for people. So I don’t know when I find that person, I’ll put it into that webpage for you guys and there’s gotta be somebody or you guys out there have found lift up these private consultants that do this.

This is what entrepreneurs do, they find that need in the community and they fulfill it and they monetize it. But it’s a little bit of a public service here. Just off the top of my head, if you guys have wills, you guys don’t want wills. You guys want trust so you can skip probate.

To me, if your attorney gets, you probably need a new attorney because that’s not what you want. I like to know your opinion on this so like my opinion, I just see so many clients, they go through so much battles, even when all the surviving siblings can still get along to liquidate assets.

If you guys are already at that point, or your parents are urgently liquidate this stuff and get rid of the stupid things, because it’s like all this crap about like sentiment of vow was just going to piss people off at the end of the day.

You’re so right Lane because right now, I know so many people who got along with the siblings until the parents passed and all of a sudden they want to sell it and one person holds off. You don’t want to bring the one sibling to court, to settle this, so things just go on for years.

Whatever reminds me of is that boss at work would never like to be the enemy and always wanted to play both sides. At the end of the day, all their employees get pissed off at each other and the team falls apart anyway. So you parents out there, you guys need to be the bad guy and make the unenviable decision just to making a call for everybody so we can just all move on and focus. That’s my rant.

I agree and I’ve seen this in my family is broken up. Sibling getting along and then all of a sudden, not getting along, not talking to each other.

Or they get cute with, oh, somebody gets the sports car, somebody gets this, dude just liquidate everything and just a math exercise. I think part of it is if you’re older and why not give away the things now? Why wait until you die to give away everything?

Okay. Folks be careful there. Do not give properties away.

I got property, what’s wrong with that? You give it to them while they can enjoy it.

Of course, we all want to be on the up and up, 15,000 exemption, whatever. Yeah. I agree like those smaller things give it away now, but like properties, the reason why you guys don’t want to give properties away is your kids will not get the step up basis and they’re going to absorb the base that you have and they have to pay huge capital gains. So I’ve seen this happen two or three times where a family has like a $500,000 property bought in Los Angeles and now it’s worth 4 million and the parents just so kind in their heart to give it away, but dude, don’t do that. You screwed them over.

Oh yeah. After your parents died or whatever, I think that you’d probably agree with me on this is that you do an appraisal. So that’s your cost basis for tax wise and you don’t end up paying up, crazy taxes, with the appreciation.

Yeah. If the estate is over five, $10 million, you probably should consult an attorney because it may make more sense to put into irrevocable trust, a dynasty trust, but if it’s less than that keep it, that should be pretty simple.

But I will say, to be prepared you have to get a good attorney and a good accountant. I was fortunate because I had and they spoke with each other. So that was really nice, so I got things done, which would have been very difficult if I didn’t have someone I trusted.

Any other last tidbits of advice?

All I say is, get prepared, take the first step. I think the book that I have is pretty, pretty comprehensive and whether or not people think they need or not, it wasn’t hard to download it because it’s free, it’s Annettekam.com, A N N E T T E .com one word, you can download the book for free. You can download the guidebook.

If you think, nah, I think I got everything covered. I encouraged them to just go on Amazon, look at the reviews because I get emails, I look at the reviews and I know that something as simple as this book and it’s not difficult, you can probably read it in a couple of days, but as something as simple as this can impact so many people, that’s what I’ve learned.

People that have all of a sudden said, okay, yeah, I’m ready to do this. Tell me I’m doing it and it’s changing our lives because I’m communicating with my husband, so that’s important thing is communication, get prepared, do the first steps, just one step at a time. If you don’t make the first step, nothing is done.

So folks go to Amazon, pick up the book, Wait, Don’t Die by Annette Kam there’s a 123 five star reviews, which is pretty awesome. People are so negative these days either to see the two or three stars so that means it’s pretty good. Her website, she has the free electronic copy of this.

You guys can read it, but Hey, I would pick up the hard copy for mom and dad. You know how they don’t trust anything that’s electronic these days. They don’t think it’s legitimate. So like the 20 bucks you guys pay will be worth it. That’s like a one hour of some new college aged kid, maybe you guys hourly rates for way more than that.

So just pick up the book, buy two for them put it on every John that they have, so the parents can read it and maybe it sends a message that way. We’ll put this in the show notes at simplepassivecashflow.com/legacy. Thanks for jumping on Annette.

Oh, thank you for having me Lane. Appreciate it.