How to Create Multiple Streams of Passive Income Now

Published by Everyone's Talkin' Money podcast
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Well, first of all, stop putting your money in prison. That's the first step you need to take. Stop locking your money away in a company employer where you can't access it. Now, if you have your own Roth, IRA or IRA, maybe you can do some things with that. But it won't create passive income now unless you're at least 59 and a half years old. So don't put your money in prison. Don't lock it up in equity by trying to pay off your house aggressively because it gets locked up. You can't get it out unless you ask the bank for permission. And right now, with interest rates, do you really want to be asking for that kind of permission? So stop that. Stop putting extra money into prison where it gets locked up.

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Welcome to everyone's talking Money podcast. I'm your host Shannah Game. There's no judgment, no dumb questions, just smart conversations about you and your money. So come on in and grab a seat. Everyone is welcome here. You can learn about investing, saving, traveling, and tips on negotiation on plenty of podcasts. But none of those are like Financial Feminist. Financial Feminists was one of the first to talk about how money affects women differently, without shame or judgment, and without shying away from tough conversations about systemic oppression. Host Tori Dunlop weaves equal parts wit with heart alongside hard hitting questions to dig into the deepest topics in finance and feminism, from the essential to the taboo. You'll learn everything about topics like the best retirement accounts to choose how to stop emotionally spending, the recruitment tactics of cults and multilevel marketing schemes, or predatory financial systems like bail bonds to toxic masculinity diet culture, the secrets of the entertainment industry, and everything in between. Financial Feminists is a space for a new generation of feminists and allies to gain financial education in a shame and judgment free environment. It's also an exploration of the ways that finance and money connect everything we touch and how we create more equitable systems and create more change for the better in our communities. New guests interviews every Tuesday and actionable solo episodes every other Thursday, with plenty of fun bonus episodes in between. Listen to Financial Feminist wherever you get your podcasts. Did you know that passive income is one of the best ways to build wealth? It sounds pretty good. But passive income also has some flaws. The problem is, when most people talk about passive income, it isn't actually passive income. Like if you bought a business where you actually have to work to make that money. The true definition of passive income is to have money coming in when you aren't working, like when you're sleeping and snuggled in your bed and you're comfy. PJs. That sounds pretty great to me. But how do you actually build passive income? That's where our guest Chris Miles, the cash flow expert and antifinancial advisor, comes in. He has used his passive income skills to become financially independent twice and paid off over a million dollars in debt after last recession without filing for bankruptcy. In this episode, Chris is sharing how to create multiple streams of passive income on virtually any budget, why traditional financial advice sucks, and why true wealth can't come from a scarcity mindset of saving and only contributing to your retirement accounts. Contrary to what the Dave Ramsay's of the world spews to millions of people, you won't want to miss Chris's very candid take on this. This episode will have you thinking outside of the box when it comes to building wealth. And as always, take what works for you and leave the rest. Let's start talking. Chris, I am so thrilled to have you join us on the podcast. You were on the podcast, I believe it was last year, and I thoroughly loved the episode. I was so inspired after our conversation, and so I'm excited to have you back on to kind of dig a little bit deeper.

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Absolutely, Sean. I'm really excited to be back on. It's such an honor to be here.

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We're talking about passive income, which is something that everyone is talking about. Everybody wants to have passive income, and I think there's no better time than right now for everyone listening to kind of figure out this passive income thing. Right? Everything is costing more. We have historic inflation. Student loan repayment is starting again, and we're all just trying to live life and spend money after the pandemic. So we got a lot of interesting things going on. And last time we were on the show, we talked all about creating cash flow, and this time we're looking really directly at passive income, which I know both of those are really correlated, but we're shining the light on passive income. So you're the expert. Tell us, how can passive income, how can this really just change our lives?

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It's kind of like Warren Buffett says, if you don't make money while you sleep, you're going to work until you die, right? And the key with passive income is that it's nice to have that always coming in, be able to have money coming in when you work, when you don't work. And that's the real true definition of passive, right? There's a lot of people out there that will say things like, well, I teach passive income, and then maybe they're like real estate investors, but then you dig a little deeper and you find out, no, you're just teaching me how to create a part time or full time business that's not passive at all. And you get some other people say, oh, create passive income, and then it's another online type business, or something like that. When I talk about passive income, it's really legitimately passive, meaning that you get your money working for you, in fact, working harder for you, so you have to work so hard for it. Right. Your money is being invested in places. You're not doing the investing in the sense although you might be partnering with somebody, but somebody else is doing the work, you're just getting paid the returns.

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It's interesting because you're a formal financial advisor. We're going to talk about this. I'm a non practicing certified financial planner, so we have a lot in common there. But as you're talking about this idea of passive income, it makes me think about my dad, who's in his 80s, who has been in the financial industry his whole career, who I would say is pretty old school financial planner, if you will. And we would drive by, let's say a gym together midday, 12:00, and he'd be like, what are all these people doing at the gym? Shouldn't they be working? And so I'm wondering for somebody listening right now, because I think there's still that I don't know, I feel like it's a false money belief that we have to always just be slaving away at our job and earning money that way. And what you're talking about, right, is you're inviting us into know there's a different way of doing this.

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There really is. Yeah. When you say that, it takes me back. I mean, from his perspective, 20 years ago, I was a financial advisor, and the epiphany for me was when I was sitting down with my dad, we were sitting down at his table. Now, he was the one that taught me how to be the nice penny pinching saver in my life.

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Right? Yes.

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Hard worker. But he also had scarcity about money. He would say things like, money doesn't grow in trees. No. We think, I am made of money. I can't afford this. And so I always grow up with that. And I vowed never to become that person. And then I became a financial advisor later in life, and I thought, if I can bring back give dad his life back right, they'd be able to give him some extra time, because he literally thought he would work until he died.

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He could never my dad, too.

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Yes, yeah, exactly. And it was such a miserable existence, in a sense. And then I'm sitting down with him as a financial advisor. He decided to ask me for advice for once, and he was 61 years old. I sat down at his table, and I'm looking over his numbers, and he says, all right, Chris, what else can I do? And he saved in his 401 case, he'd paid off his house or leave. Very proud of that debt free everything that Dave Ramsay would blush and be proud of. Right? And then I paused for a moment.

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And laugh at that.

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Yeah, at least I said, dad, listen, if I were to be blunt, if you didn't have Social Security, you better hope you die in five years, because that's how much money you have left. That's really all you've been able to save is five years worth of expenses. Okay, chris, that's not what I wanted to hear. I know. Okay. What do I do? I don't know. I don't have an answer for you. And it was a really hard thing to come out of, right? And I realized that point. Not only was he not become financially free even after doing everything right, when I started looking at my own clients, they weren't financially free. Look at all the financial advisors who are supposed to have it figured out like us, right? And we weren't financially free based on just the mutual funds. Obviously there was many advisors that might make good money off the assets under management, but if you took that away, they'd be just as broke as anybody else. And that was a big epiphany for me. And that's why I started searching like, well, how do people do it? Just like your dad said, wait, how are people even able to do this stuff? And I found people that were retired in their twenty s and thirty s financially independent, and they were primarily in the business of like real estate. Either they're in business and or they're investing in real estate and things like that. Alternative investments, the things that we couldn't offer as financial advisors. And that's the big shift, right? Give you an example. I had a client on my show recently, Dan. He came on when he first started with us and he said, yeah, I just retired as being the fourth ranking colonel and the California National Guard. He's like, I got a million bucks. Got it. You know? But my financial advisor says I'm going to have to live on 30,000 a year because you can only pull off 3%. And he's like, that's not a life for me. I don't want that. And that's the accumulation mindset. What had to shift for me when I was a financial advisor, to transitioning away from that, as well as for anybody listening to this right now, is you got to transition away from that accumulation, hoarding saving type of mindset where savers are losers, and instead get into more a cash flow, passive income mindset, which is what Dan had to do. And so with Dan, just to give you an update, after six months, he just came back on my show recently and he said, OK, Chris, here's what happened. A million dollars, we deployed it. We did some real, bought some real estate properties that are being managed by somebody else. I put some investment into an apartment deal. I did some investments into this mineral rights, oil and gas type of investment, but it's land based, not just drilling based. And he's like, right now I'm creating $11,000 a month of passive income. He's like, I'm financially independent. He's like, you know what I'm doing? He's like, I'm doing projects and working as an independent contractor, doing fun stuff. In fact, he did his interview from the job site out in near Trucky up there in the mountains. And he's like, yeah. Now I just work by choice. I'm work optional. And I think that's the ultimate goal is that you can keep working if you want to. In fact, many Americans want to keep doing something that they feel is purposeful or useful, but it doesn't mean that you have to be in a place where you're having to get that paycheck each and every month.

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I really like that shift in thinking. I mean, for me, it's very powerful because we're not taught this right. We're taught, like, put your money in your 401K, get your match, do you know, check all those boxes, and then, you know, just wait till the day you retire, start taking some money out, you got a little Social Security, and figure out then what to do with the rest of your life. And I think a lot of the younger generations are like, wait a minute. That is ridiculous. I don't want to live that way, but I don't exactly know what to do to change it, you know? And I really believe your advice, that mainstream financial advice, it does suck. It doesn't help you create wealth. But I want to play a little bit of, like, devil's advocate here. If we look on the flip side, are there any circumstances where getting financial advice actually does make sense?

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Traditional financial advice? Two degrees.

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Yeah, let's go with that.

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There's the basic stuff. Like, for example, people often know me as kind of ripping on Dave Ramsay specifically just because he is one of those financial gurus out there. That's the ultimate savor mentality, which is a scarcity mentality. And just so you know, you can't ever be truly financially free having that scarcity mentality. Now, here's what's interesting. I actually recently saw an interview with Dave Ramsay, and I'm blanking on the YouTuber's name. He's an influencer out there, but he decided to open his books and let Dave Ramsey to look at it and give him advice and understand that I already knew this going in, but I was surprised that Dave Ramsay was public to even talk about this. Now, see, Dave Ramsay, if you don't know what he teaches, he teaches about budgeting saving, paying off all your debt, being debt free, because you can't be happy, and a Christian if you're not debt free, which is BS.

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Thank you.

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All that kind of stuff, right? And there is a half truth to what he says, too. I'm not saying it's full BS. I'm just saying it's half BS. But he teaches all this stuff, and again, he's a great guy, very kind hearted, has blessed so many lives. There's no doubt. Especially if you're more, like, in the remedial financial stage. Meaning, like, you know, when you go to college and they have, like, the 101 class, which is the intro class, his advice would be, like, the 99 R. You know, it's like the this is the class you got to take just so you can take the intro class. Right?

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And so the advice he gives, the basic stuff of, you know, learning how to track your money, learning how to save and start having emergency funds and things like that is good advice. Even just having the habit of saving is good advice. That's the part of financial advising I do. Like, where it goes wrong is how to create wealth. See, if you're just trying to get to zero, that's one thing. You're just trying to barely make ends meet, that's another. But, like Dave Ramsey, what we saw here with this interview is that normally he's telling people, you know, pay off all your debt, sell off everything or whatever, except for just have this paid off house and be living on a budget. This guy had millions of dollars. He's worth, I think, roughly about $15 to $20 million. He opens his portfolio. The only bad criticism that Dave gives and even it's a little bit kind of tongue in cheek. It wasn't like, really outright. It was kind of more passive. But he just said he's like, yeah, the only problem here is you have a few properties that aren't debt free, so I can tell which properties you love the most. So that was a little passive statement, but not the usual in your face, hell fire damnation day. Ramsay and what Dave said is this. He said, listen, he's like, I think you should invest in things you love, things that you know a lot about. He's like, for me personally dave is speaking here. He's like, for me personally, I invest in my business. I invest in real estate, and then I like mutual funds. He's like, that's what I like. This other guy didn't really do a whole lot with mutual funds. He's like, I have people I know that they don't do mutual funds, and that's fine. He's like, I think real estate is great. I think you should do real estate investing. Now, notice he's talked to a guy that has more money. The problem is his audience, the people he's meant for. My wife knows, because she actually was trained in his facility. She actually was trained there in Tennessee by him and his team met Dave and everything. She's like, Dave doesn't live by those same rules. He lives by different rules of what he teaches. He lives by the rules that we talk about on our show, which is more building your wealth, not gambling it away, which that's one thing. I do disagree. I think mutual funds are a gamble. I think they are mediocre returns with high risks, and I don't think they're worth it. But are they better than doing nothing? Could be, depending if you get in the upmarket or the down market, like, right now, but it could be. And so that's the thing with with Dave is that he's talking to this guy saying, you know what? Yeah, I keep doing this business is a great investment. Real estate is a great investment. He should be saying that from day one, in my opinion. But I know his market is for the broke people. The problem is the people who listen to him are the people that already have believed the way that he is taught. He only justifies what they're already doing. They're already savers. They're already putting their money in mutual funds in 401 KS. But the truth is, is that if they want to create real wealth, they can't keep doing that. The 401K won't get you there. You don't hear people that save their way to great wealth in 401 KS. And I know I'm rambling here, but I've ran into an article I found recently, I shared on my podcast where the there was four case studies, four people that had saved roughly about $2 million in the retirement plans. Interesting thing, almost every single one of them, none of them were able to save totally in the retirement plans. All of them had pensions or something other kind of bonus that paid out. It wasn't from saving retirement. Even though they would max fund their 401 KS and they'd get the matches, they never built up the full $2 million with saving in those mutual funds. So think about this. These are the people that have beyond the median. The median 401K balance is about $80,000 right? Now, I don't say the average because averages get skewed, but the person, if you take the person right in the middle, has an $80,000 balance in their four hundred and one K, you have to live off 3% of that. That's not even 24,000, that's $2,400 a year you're living on. Even those people, 2 million living on 3% at 60,000 a year. And the crazy thing is, all four of those people, other than the 84 year old, he wasn't as bad. But three of the four people were scared of running out of money. The 84 four year old just figured he would die first, right? So if that's evidence, why should we be criticizing this?

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Yeah, okay, let's get a little like soup to nuts here because I think everyone listening. They're probably like me and they're like, okay, how do we do this though? So let's say we have been putting in money in our 401K. Maybe we have some savings, maybe we've got a small chunk of cash somewhere. How do we take what we've got almost at any dollar amount, and actually turn that into passive income? Like what should we be investing in or what should we be looking at?

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Well, first of all, stop putting your money in prison. That's the first step you need to take. Stop locking your money away in a company employer where you can't access it. Now, if you have your own Roth IRA, IRA, maybe you can do some things that but it won't create passive income. Now, unless you're at least 59 and a half years old. So don't put your money in prison. Don't lock it up in equity by trying to pay off your house aggressively because it gets locked up. You can't get it out unless you ask the bank for permission. Right now with interest rates, do you really want to be asking for that kind of permission? So stop that. Stop putting extra money into prison where it gets locked up. Second step is then figure out where can I put my money. Now, if you're just starting out, you're just starting to save, you have $10,000, okay, that's your emergency fund, right? Or at least 20, maybe 30 plus thousand dollars should be your emergency fund. Start there. There is a strategy that I teach called infinite banking that can help people build up their cash and do things using whole life insurance instead of just the point, nothing percent savings account. There are ways to create very low fee life insurance policies that actually allow you to build up your cash faster. And then you can invest with it and double dip, essentially make your money in two places at the same time. But once you start to build up some cash, maybe you got 100 grand, 200 grand or so in savings, then it's a matter of trying to find the right deals. Now that's the tough part. And that's why even for our clients, when we have them consulting with us one on one, I mean, that's typically what they're looking for. They're looking for some sort of guidance and connections to those deals. You can find your own. Like, for example, a type of investment I think would be, generally speaking, safer for the average person getting started is looking up what are called turnkey real estate companies. Now I'll just say, okay, tell us more. I'd say the majority of turnkey real estate companies right now don't have great cash flow currently because of those interest rates. So you should be trying to buy out the mortgage. Some of them you could buy outright with cash. The better ones usually have at least a 10% cash on cash return. Which means if you pay, say, $100,000 for a property, you would be earning $10,000 a year or roughly about 800 some odd dollars a month. To give you a real life example, I just had one show up from one of our providers that it was a property out in Texas, out in northeast Texas. And this property was $110,000, but the actual value is $120,000. You buy with 10,000 instant equity. So you have a little bit of safety there and then the cash flow, even after you pay their property management fees, because they manage the property for you. So to give you example, to let you know what a turnkey company does, they help you find the property. So you're not just looking on the MLS yourself, try to find it. Find properties on your own. They help you find the property. If you need financing, they help you get financing, and then they help property manage it for you. So they're actually doing the work. You're the one just collecting the checks. They're the ones even finding the renters. They're the ones dealing with any issues that come up there's big issues, like maybe there's a big maintenance repair cost. They might ask you for permission first before charging you. But for the most part, you're buying these properties that are, if they're done right, freshly renovated, so you're not worrying about repairs right off the bat. And you have a renter in place right off the get go. So the great thing is like this one, this property $110,000, but you're making $930 a month after paying their property management fees. So you're making this 10% return with chas tags, advantages, and that doesn't include anything about appreciation or any other benefits. There.

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This is where I'm going to paraphrase Robert Kiyosaki, which says there's no risky investments, only risky investors. See, the problem I see is that most people, when they try to do it, they try to do it on their own off the get go. They look for like a real estate property in their own backyard. And they'll say, well, how do people make money? Because I live in California, and it's really hard to make money. Like my mortgage payment is going to be higher than my rent. And the answer is yes. Duh. Because nothing in the western half of the United States looks good right now. So there's pockets of the United States that do look better. When I buy properties, I live in Utah. I don't buy anything in Utah. I don't buy it in my backyard because rents just stink in comparison to what I have to pay for the price. So I buy properties like in Alabama. In Tennessee and Missouri or North Carolina, places like that. Places that are really unassuming. Yeah, it can be risky if you don't know what you're doing and you're just trying to buy something because you heard real estate was a good deal. This is why rich dad poor dye can be dangerous. That book, right, by Robert Kiyosaki, because in that book, people get the conclusion. They say, oh, I should buy real estate. I'm going to go buy real estate. And then they do it. But they do it incorrectly, and that could be the most costliest mistake they ever make. Now, overall, do I think it's risky? No. But if not done properly, it can actually end up creating a lot of stress for you.

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So what is real estate done incorrectly? Is that just buying a property where there's absolutely no return?

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Absolutely. It's all about cash flow. Never ever buy a property based on the potential value. It could be like appreciation or what it could grow to be. That's where most people usually make the mistake or because they just want that rental property, they think it's cool to get it, but then when they finally do the numbers, they realize they're not making any net profit. So like any business, right, if you think of it from a business perspective, a business is more valuable and happier when it has profit. Even at home. You're happier when you have a lot more income coming in than your expenses. Right. No different with real estate. You want to make sure you have extra profit, not just a few bucks. You want to have as much as possible. And that's what that cash on cash return means. It means what's the money you came out of pocket and what's your net profit coming off of that deal. So if you come out of pocket, say, for a down payment of property of $40,000, I would hope I'm making at least three to $400 a month. That's what I hope for. And that's after everything is paid. Mortgage payment, if you have a mortgage payment. Taxes, insurance, any other fees, property management fees and everything. Now. If you're managing it yourself, I would say go for at least 1% a month, which would be 12% a year. So if you come out of pocket 40,000, you better be making at least 400, 500 net profit a month if you're trying to manage it yourself. Personally, I think that's crazy. But there are some people that actually like doing it. So that's the key, is that the numbers have to work up front. You got to know up front what the numbers are. And that's why if you find a good turnkey real estate company, and I know we have in our network about six of them and two of them we're actually referring to right now, while the other four not so much. If you find a good company, you're going to find better deals and you're going to know upfront what you're going to make. It's not going to be so mysterious. And that's just one type of passive investment.

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Yeah, I want to move on and talk about some others. But before we do that, I just have one kind of follow up question. I'm wondering if is there ever a point in time, let's say you have these couple of properties, one or two properties. Is there ever a point in time when you decide to sell these? Or is the objective, as long as they're creating passive income, that it's a win?

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That's a good question. Yeah, because there's a thing called return on equity, and all that means is how much equity do you have in the property versus how much is that profit per year? So give the example. I had a client in California. Of course it's usually the California. Whenever somebody on the west coast oregon, Washington, California, they say, hey, I've got property. I say great. Sell it. You don't know the numbers. I'm like, I already know the numbers. If you have equity, assuming you have equity, that the numbers are going to be better selling that property. So in this case, this guy's case, he had a property that had about 700,000 of equity, but his net profit after he paid his his mortgage payment and everything else was $200 a month. Now he had the acute accumulation mindset, focus, right? He was looking at first he thought he was doing fine. He's like, yeah, Chris, I got real estate. I'm good. But then I looked at it and said, wait a minute, you're only making $200 a month on this? Well, yeah, it's profitable, but don't worry, in six years, I'm going to have this paid off. I'll be debt free, and then it'll be $2,200 a month. I said, well, that's fine, but here's the deal. We could sell that property right now, take that 700,000, we can do a tax free exchange into other properties, and even if we only earn 10% on that, that's $70,000 a year. You're currently making 2400 a year. Even if you paid off the house, eventually right? Made it debt free, quote unquote. You're still only cash flowing about 26,000 a year, and that's not for five years plus down the road. So why not make 70,000 year today where we keep reinvesting that? Eventually after five or six years when you're supposed to be debt free on the other property, you'll have about 100,000 of passive income coming in instead of 26.

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What was those numbers? Better?

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Much better. Now, it's hard for wrap his brain around, but that's what I mean by return on equity. If you do the math, 2400 from 700,000. He was making less. He was making like 0.3% on his money. So even though he was profitable compared to what he originally bought it for, because it appreciated and it kept growing and he was paying down the mortgage at the same time, or really his renters were paying down a mortgage for him, it got to the point where it just was ridiculous to keep that property.

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Okay, so tell me a little bit about some of these other ways that we could create passive income. What are some of your other clients dipping their toes into?

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Yeah, there's several. I mean, there's apartments, you can invest in apartments now. The good news is you don't have to buy it yourself. It's not that big of a jump for you. You can actually go in together with other people, which is usually referred to as a syndication. So those syndications, those syndicated deals, is really a business partnership where everybody pulls their money together to buy a specific property and then you earn the profits from it, the cash flow, the profits and everything. You're not the one managing it or operating it, somebody else is doing that and they're usually taking a certain cut of the returns and or fee to do that, but you get all the profits. So pretty much like you're basically really passive in that sense. You're not doing squad, okay? You're really just putting your money in and that's it. And so we had one recently, this one was exceptional. One of my, one of my contacts had two separate complexes in Michigan and two different suburbs outside of Detroit, so it was actually a two apartment complex deal. And that one he was offering what's called a 16% preferred return. Preferred return just means that they pay you a minimum of that return every year, even as it's trying to get profitable. So these people were making 4% a quarter on this and then any potential profits on the back end as well. That's another example recent that people were jumping all over most of the time. Usually those kind of deals, at least ten or 15% can be pretty typical, although those preferred returns, in many cases with deals I've seen, it might be like seven or 8% where they pay you a minimum return and then you get any profits on top of it, especially if it sells. So apartments is one, self storage units is another. It's not popular yet. Like, I'm not seeing a lot of my contacts in the self storage space come out with a lot of good deals yet. But I would not be surprised in 2023, we start seeing better deals pop up where they start saying, hey, we got a great opportunity. Many times in the self storage space, 15% to 20% returns aren't atypical. I mean, that can be common sometimes.

{( speakerName('B') )} {( convertTime(1893150) )}

So what might change in 2023 to make this more attractive?

{( speakerName('A') )} {( convertTime(1896886) )}

I think just there's a lot of people that, especially in the apartment space, I don't see a whole lot more apartment deals that are good, at least the good deal providers, they're being very strict on making sure that they don't buy deals just because they're trying to invest money. Right. They want to buy the right deals. And same thing happened with self storage. There's a lot of people, especially after 2020, had a lot of influx of cash sort of buying up stuff because they said, I heard this is good. Sometimes there's just mom and pop people buying it. People that are like doctors or dentists have no clue what they're doing and then they buy it. What will happen is because they don't know how to manage it and run it, they won't be seeing the returns and say, you know what, I want to get out from under this thing. Let me sell it.

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{( speakerName('A') )} {( convertTime(1933276) )}

And that becomes the deal for you, right. Or the deal for that operator who then you can invest with. So that's why I'm kind of foreseeing that happening, especially with apartments and self storage.

{( speakerName('B') )} {( convertTime(1944070) )}

What about things like I've heard a lot of people on social media, so I'll say it with an asterisk mark because I don't know for sure, but maybe you can enlighten us. What about things people call like boring businesses, like car washes and laundromats and even vending machines, things like that?

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Yeah, actually we just had a syndication recently with one of our providers that had a car wash that was already up and running, operating and everything. And people can pull in money together to go and invest in that. Essentially, that's what you're really doing, those syndications, you have a share ownership right now with businesses, I think it's a definite option. I would still be careful because there is an element of speculation with business versus buying real estate right now. Here's an example of where you can mix the two together. One of our other syndications is one that was really popular, especially with the guy, Dan that I just mentioned earlier. He invested in what's referred to as mineral rights. So we have a contact where they actually buy the oil, the land, like in Oklahoma, for example, they'll buy a bunch of land before the oil companies do. But what they'll do is they'll buy the land and they'll turn around and lease it to the oil companies and not like the Exxon Mobiles where they waste money and they don't very profitable. Like usually the medium sized companies are about a billion to 5 billion worse type of companies. They'll lease it to them. So those people are paying them rent for using that land. And the oil companies are also doing their own drilling and everything else and all the profits they're making from the drilling. Also you get a cut on that as well. So you get to double dip a little bit. You get to earn money from the lease, which is the guarantee, and you get money from the production. And that's not just oil, that's also natural gas, which is a natural byproduct when you drill oil. And that's becoming a big shortage right now, especially with Europe and Russia and everything going on there. Natural gas is part of it. Obviously, if they find gold, silver, I mean, that's great, that's a bonus. But generally they're just really going for the minerals and that kind of thing. There's money you could be making and really make good money. And I know I'm investing in that same kind of deal as well and, you know, making roughly about 20% a year on that kind of thing.

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Nice. Well, you know, I wanted to ask you, as my husband and I, Jeff, we were like sitting down and kind of thinking about this conversation and we were having like a larger conversation around generational wealth. We talked to somebody last week for the show and he was talking about building generational wealth in the African American community. And it's interesting because we come from different perspectives. Jeff's family hasn't really created wealth and certainly hasn't created generational wealth. It's just kind of lived by getting by a paycheck to paycheck kind of thing. And my family is different. My family has done a lot of protection. There's a lot of life insurance and trusts and things like that established but still hasn't created true generational wealth, like you're saying, buying apartment buildings and different things that could be passed on that could really turn into assets. And so as we're having this conversation, I'm thinking about everybody listening to that's, maybe really excited about this idea, but still kind of stuck in that old frame thinking. And so I'm wondering, how do we just go about and kind of shift our mindset so that we can open up to the possibility that everything that you're talking about could be possible for all of us listening?

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Yeah, that's a great question. Generational wealth really starts with education, right? It's about how do you create a legacy in your life? There's truth in both perspectives. I hear a lot of financial advisors or especially insurance agents will say, oh, well, generational wealth is created from your death benefit, from your life insurance, right? And that goes into your estate plan, that goes into your bank of game, right. Your Bog or whatever it might be or your estate plan and that's fine and dandy. But first and foremost, one, it's got to start with you. You've got to create your own education. You've got to create your own wealth first. That's 1st second, you got to start teaching your children what you know. I think it's cool because my wife is a great example is we have a blended family and between the two of us we have eight children. She has two, I have six. So it's a pretty crazy Brady Bunch that we've got here. And with her two children, she home schools them and she teaches them. She's like, hey, I'm going to teach you about investing. And so we have a twelve year old that's earning money off of oil and gas. She's making money off of that. Her little investments going in to try to make some returns and she gets excited about it and trying to teach them not just about investing, but also how to think about money differently. Even with my kids, I never ever say the phrase we can't afford it because it's not true. You can afford anything you prioritize, right? So teaching them is first and then really secondly is ensuring that they can become wise stewards of their money too. So it's not like you just give them a bunch of money like they're trust fund baby brats, right? We're really trying to help teach them and educate them along the way to do what you do and if not, do it better. I mean I how many times have I heard people tell us or tell me or, you know, my clients even say, man, I wish I knew this 20 years ago, you know, and we all say that, well you have an advantage. You have children that could be learning this 20 years ago, right, compared to your age or 30 years. So I think that's the real secret there is if you want to create generational wealth and it's one, create it yourself, become a student yourself and then two, become the teacher next and help pass that on to the next generation and beyond.

{( speakerName('B') )} {( convertTime(2290970) )}

I like that. I like that way of thinking. I don't know, it's just super motivating that so many of the examples you've been given are all things that we can do. And I know we touched on this a little bit and you talked about like, okay, we're just throwing numbers out here on the wall, but let's say you've got $10,000 or so. That needs to be your emergency fund. Keep that money. Is there a point where, is there a threshold where you're like, okay, now I can start looking into really creating passive income. Is it 25,000, 50,000? Or is it just really dependent on your circumstances?

{( speakerName('A') )} {( convertTime(2333050) )}

It's a little of both. I mean, 1020 thousand is a great place to start. Now if you do like I said, you're probably not going to be doing a lot of these investments we're talking about with ten or 20,000, I would recommend, even before you worry about any of that stuff, get at least 100,000 saved up that you can access and use, right? In the meantime, most of the time, it's going to be make sure you keep yourself protected by having that emergency fund in place, because you expect the best but prepare for the worst. So have that safety cushion there, but it doesn't mean you have to keep your money sitting in the bank doing nothing. There's things you can do, like, we mentioned that infinite banking concept, right, that you can do with money and create money with that. There's things like even with within our academy, we have people that are in that kind of group there where they might only have a little bit to invest. I mean, there are some investments that take a minimum of $100 or a minimum of $1,000 that you could start doing something with. I know my wife, even with her girls, she had already been saving, like, this kind of quasi education college type fund, because she's like, yeah, they could go into college, but they might become entrepreneurs like us. So she's creating this fund and maybe has, like, you know, $10,000 in it. Well, cool. We could put it in somewhere where these smaller investments, maybe making nine or 10% returns off of that money and grow it in the meantime. So there's options for everybody there's. There's always a place to start. The key is if you're looking to do some of these bigger type of deals, don't even worry about those until you're getting to your 100,000 plus of savings. If you're in the smaller range, then look at some other smaller strategies. You can just start with very simple strategies to just kind of warm up to it and really learn and educate yourself in the process.

{( speakerName('B') )} {( convertTime(2434010) )}

All right, Chris, so 2023, many people have argued it's going to be the biggest New Year, new Year. So if I'm listening right now, and I really want to start creating passive income, can you give us a pep talk or a few words of wisdom or even a little action list for how we can really get things going.

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For 2023? The biggest thing is really, I would be playing some defense with your money, right? One is I would really start to track your money, really start watching money like we talked about in our last episode, right? But really tracking your money, really staying lean and mean, I said this. In 2020, I'm going to give the same advice for 2023, which is get lean, get liquid, and get out. Get lean in the sense of really controlling your expenses. I just met with a couple in their mid 20s yesterday. Blew my mind. She's 25 years old, just married, newly married. They just bought a home in California well, Mojave Desert, you know, but just bought a home in California and they've got like almost like over $100,000. They could start saving and investing that they saved and invested, right?

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{( speakerName('A') )} {( convertTime(2505956) )}

Just incredible. And I even told him, I said, listen, we're going to take you on his clients just because you're saving $7,000 a month of their income. They're just keeping lean and mean with their money so that they can put away 7000 a month, even though they're both employees, they both get killed with taxes, more than any of us that are business owners. And I was like, you guys are on an amazing path. You guys could create some quick freedom with them. It's like, yeah, they're lean to the point where they're saving $7,000 a month even though they didn't have enough money usually for us to take them on as clients. He said, hey, listen, with the rate you're saving, we can still create some amazing results for you. Keep it up. Let's keep that momentum going. So get lean. Getting liquid means, like, don't lock it up in prison, right, and then get out. This could mean that if you've got money that you've already lost maybe 20% plus in the stock market right now, it doesn't mean that you have to cash it out, but maybe you move it into some more conservative accounts just to preserve the principle you have in there. Maybe you move it to like a money market account or fund or something like that. Because even bonds right now we can't trust because even some of the bonds have been losing money this year. So things like that just to really get prepared and then start getting the education. That's why not to sound too self serving, but our Money Ripples podcast, just like your podcast, right? I mean, we're talking money. We're talking and trying to educate you and get you to expand your mind. Keep building that education and that knowledge base, and then when you feel ready, great, then it's time to take action. But sometimes the best action you take right now is just be prepared.

{( speakerName('B') )} {( convertTime(2597470) )}

I've really been thinking a lot about this conversation with Chris about how we're all just lulled into this belief that saving money and contributing to our retirement accounts, that's the only way to build wealth. I can tell you after working with a lot of really wealthy people, that this is not how they were able to build wealth. And most of those people, they started from scratch. They didn't inherit money. They literally started from ground up. So maybe Chris has you thinking about how you can balance all the stuff you should do, like building a strong emergency fund. And yes, take advantage of your company 401K match because it's free money, but then think outside of the traditional financial advice and ways that you can also build passive income. I don't know about you, but I am pretty excited about this idea. If you want to learn more and connect with chris. You can find everything, including his podcast, on his website, If you enjoyed this episode, you know what to do. Shout it out to someone else who is also interested in building passive income. You can head to those show notes for all the links to our episode guests as well as the sponsors who make this show possible. I'll see you right back here in a few days for a brand new episode.