← Beyond Blind Blaming
Beyond Blind Blaming
The Anti-Financial Advisor: The Biggest Financial Lies Keeping You Broke | Chris Miles
00:43:00
Loading summary
Transcript63 lines
- [00:01]
A
Money's like oxygen, isn't it? We never count the number of breaths we take until that oxygen runs out, and then we count every little breath.
- [00:08]
B
Today I'm joined by Chris Miles through his company and podcast Money Ripples. Chris exposes popular myths and presents an effective framework for passively achieving financial prosperity.
- [00:18]
A
I mean, all of us have been taught to just save and save and save, right? If you just put 10, 20% of your money away every single year, you do that for the next 40 years, you're going to be free. It's one of the biggest lies that's out there today. There's so many people out there teach about passive income, right? And the reason that people are starting to hate that phrase is because so many people lie when they talk about passive income. There's actually better answers out there that your financial advisor either doesn't know about or is actually scared. Because if you learn about it, you realize you don't need them at all. Stop putting your money in prison. Stop locking away in these 401k and IRA plans that they tell you to throw in there, especially in your company 401k plans. I don't care if they give you the match, it's not worth it. And here's what I would recommend is.
- [01:12]
B
Welcome to beyond blind blaming. This is the place where we explore how easily hidden truths can hold us back, trapping us in cycles of frustration and blame, often without realizing what's truly stopping us. Each week, I'm joined by experts and professionals who share their journey of taking back control of their story, overcoming hidden challenges, and stopping blind blame from dictating their outcomes. The insights you're about to gain will help you see beyond your current limitations and find the courage to seek new perspectives and ultimately live a life that's both purposeful and powerful. So if you're ready to break free from blind blaming and discover what's possible, you'll definitely want to listen to my next guest. I'm your host, Kevin St. Clergy, and today I'm joined by Chris Miles. Through his company and podcast, Money Ripples, Chris exposes popular myths and presents an effective framework for passively achieving financial prosperity. He teaches you to escape the draining responsibility of working more than 40 hours a week and finally quit your 9 to 5 job, Chris breaks down how to start a passive source of income in the easiest ways. Chris, welcome to the show.
- [02:15]
A
Hey, I'm glad to be here, Kevin.
- [02:16]
B
Well, I always start with a little bit about you and your background. And what led you to do now is helping people Build wealth.
- [02:22]
A
Yeah, the whole path was. I didn't intend to be on this path in the first place. I guess that's kind of like a lot of us. But, you know, when I started out, I actually wanted to. I realized pretty quickly as I was going to college that if I really wanted freedom, I needed to be a business owner. And so I actually dropped out of college with one class to go. And no, I wasn't failing. I had like a 3.9 GPA. But I dropped out and I said, all right, I'm going to just take a one year sabbatical, start a business, and then I can go back to college, finish my mba, maybe become a business consultant. Well, the first business that really became intriguing to me was becoming a financial advisor, not realizing they take anybody off the street as long as you could pass a test and you're not a criminal. So that was the path I took. And I'll tell you, the thing that kind of inspired me was actually indirectly, was my dad. Because my dad growing up, he was the cheap son of a gun. We call him cheap. He said he was frugal, but we all know he's a cheap. I won't say that word, but he was really cheap. So he was saying things like, we can't afford this. We think I am made of money. Money doesn't grow on trees. And all that stuff that he was saying when I was growing up there in Oregon. And so I wanted to do something different because I didn't want to live a life of scarcity. I didn't want to feel like I was just trying to work for somebody else. And then maybe someday I might have hope of some kind of retirement. Which, by the way, he actually told me that his retirement plan was pretty much death. He figured that his job, the stress from his job would literally kill him. So I figured, worst case, I learned about money. Best case, not only do I learn about money for myself, but maybe I can give my dad some years of his life back. And so I started on that journey. I became a financial advisor. The typical salesman in a suit. You know, it's trying to sell you the mutual funds and put your money away forever and save it and pay off all your debt, and then you'll be free someday, right? Well, four years in, my dad says, when are you gonna advise me, Chris? Like when you actually sit down with me and help me out? So I sit down with the guy, the guy that changed my diapers, you know, and not that day. I mean, that was another day. But that was the previous week. No, I'm just kidding. No, I mean, I sat down with him. I'm looking at his finances for the first time in my life, and I'm looking at his finances. I said, dad, you're 61 years old. If you want to retire today, you better hope you die in about five or six years, because that's when you're going to run out of money. And he said, well, what do I do? I was like, I don't know. Because you did everything right. I mean, you've stuffed Money in your 401k, you're getting the company match and everything. You've paid off all your debt, including his house. He's 100% debt free. He. He was like Dave Ramsey's poster child for financial freedom. Yet I had to tell him, dad, that's just not enough. And I didn't have an answer for him. I don't know what else to tell you, because you did everything right. And the thing that bothered me was not just because I didn't have an answer for him, but it also gave me a snapshot on my own future, because I was doing the same thing as him. I was being a cheap son of a gun. I was the guy turn off the heat in the wintertime, turn off the AC in the summer so I could save a couple extra bucks, throw in my mutual funds, and hopefully the market doesn't tank and they'll have some money. By the way, this was actually 20 years ago, so you can imagine, obviously, the stock market did tank just a few years after that. And so I'm hoping and praying that I can just be cheap enough and save enough money to be free. And yet my dad, who's my future, couldn't do it himself. Even worse, I started looking at my own clients. I'm like, well, even them, even the ones that could retire really aren't retiring free. They're scared to death that they're going to run out of money too soon, that they're going to outlive their money. And I started to realize maybe I'm teaching something wrong. Maybe everything I've been teaching, in fact, is all bunch of bs. And I'm just literally a pawn in the game for all these financial companies and banks and institutions. And that's when I realized, you know, when the student's ready, the teacher appears. And it was at that time I started to see guys that actually were financially free in the game of, like, real estate investing and things like that. And so I started to do the opposite of What I taught people, instead of putting away forever, I started instead doing the opposite. Where I was starting to take my money and use it now to create passive income and cash flow right now. And what shocked me is later that next year, after I quit being a financial advisor, because I realized I felt like a liar and a deceiver, I figured I'll just go do mortgages and teach ballroom dancing. And so that's what I was doing. But while I was doing that, learning about real estate investing and cash flow and everything else, all the stuff that you hear about in rich dad, poor dad, but never know how to do, I started to do it. And later that next year, I was able to retire when I was 28, almost 29 years old. And so that's kind of where I came out of retirement in that sense, because 2007, everybody kept asking me how I did it. Anyways, so I came out of retirement to start teaching people how I did that very same thing.
- [06:36]
B
That's awesome. Well, retiring at 28 must have felt amazing.
- [06:39]
A
It was a little surreal. I never thought it would happen that quickly because I was hoping and praying to be cheap enough like my dad was to retire in my 40s. I'm in my late 20s, I'll tell you, that was the worst time of life in some ways, because one, all your friends are working jobs, so it's not like you hang out in the middle of the day. And then two, of course, then I'm like, well, what am I going to do with my life? I've got so much life ahead of me. I can't just sit back and relax. I had to do something. And that's why I kind of got stir crazy. And I felt like I had to do something. And naturally I just gravitate towards teaching. I love teaching. And so people kept asking me how I did what I did. I saw purpose in it. I saw I could really help a lot of people. And so that's what I did.
- [07:16]
B
I love it. I know when I semi retired this year, I found that I needed to do something too, which is what led us to the podcast. And it sounds like you found something that you're passionate about as well, so it's good to hear.
- [07:26]
A
Absolutely.
- [07:26]
B
Well, can you tell me, since you know a little bit about blind blaming, it's where you're chasing the wrong problem and trying to fix something that's not at the root cause of what's going on. Can you tell me a time when you've had a client who thought they knew what the problem was when it came to generating wealth, but it ended up being something else. And how much that mistake cost them. Your dad was a great example, but do you have another one by chance?
- [07:46]
A
Oh, I mean, just about everybody. They all kind of fall in that category because, I mean, all of us have been taught to just save and save and save. Right? If you just put 10, 20% of your money away every single year, you do that for the next 40 years, you're going to be free. The problem was that it's still just not enough is what it ends up being. And that's the vast majority of people giving an example. I had another client that he was out of California, and he actually not only did everything right, but the guy did superhuman feats when it came to his money. Because what he ended up doing is he actually would bail out of the stock market right before it would tank. So right before Y2K. And it was just no reason. He's just like, oh, I feel like I should probably take my money out of the market. And so he would take his money out of the market and then the market would tank, and then he'd put it back in when it was low. So he was literally not just doing the whole dollar cost averaging wherever you just throw your money in, which is just another upon another kind of strategy they teach you to do so that you always pay them money, but it doesn't always pay you money. Well, he would actually do it the better way, which was he would go in after the market tanked and then get out before it tanked again. He did it again in 2008. He got out again before the market tanked. He did it twice. And this guy was, by the way, one of the highest ranking generals in the military. The California National Guard was lucky enough to save a million dollars by the time he was 60 years old. Now, I say that he was lucky enough because the problem is this, is that they did a study at the end of 2023. Now, this was fidelity to the study. They found out that of all their clients, only about 1.8% of them, 810,000 people out of 45 million, actually have over a million dollars saved up. Now of this, another study came out. Transamerica did a study saying of those people that have at least a million dollars, 35% responded saying they think it'll take a miracle to be able to retire. So this is part of the small little 1 or 2% that did it. What should be the right thing, just like my client did here and yet even over a third of them say, I don't think it'll ever happen. And it was for this very reason, because this client here, Dan, he had a million bucks. And then his financial advisor says, well, congratulations. That's amazing. Hardly anybody ever does that. Well, for you, that means you can now live on $30,000 a year. Because when you're almost take out 3% from your financial plans, he's like, wait, I live in California. Even homeless people can barely live on $30,000 a year.
- [10:09]
B
Yeah, no doubt.
- [10:10]
A
And so he's like, that's just not right. And so that's when he started looking around podcasts like ours and things like that. And he's like, okay, let's try to do something different. That was the thing. It was all tied up in those retirement plans, mutual funds and everything. And. And so we said, let's start getting your money in different places where it actually pays you income. And so he did that. And he did things. He bought some, like, duplexes, you know, that he didn't manage. Somebody else managed for him so he could have them around the country. Not in California, where here in the western half of the United States, all real estate pretty much sucks. So he got it out east and somebody else managed it for him. He also did some things with like, the oil and gas space out in like, Texas and Oklahoma. He even did some things, you know, with apartment, you know, type of ownership, you know, where he pooled his money with other investors to put money into these apartment buildings. And the next thing you know, his millions now paying him over $100,000 a year. Same money, but just a different income. And that's the thing is, like, think about it. I mean, so many people, I mean, like I said, like, only about 1%, one and a half percent or so of people have at least a million bucks. And of those, a third of them don't think they'll make it. That means only 1% of people think they've got a chance of making it financially. That's the problem, and that's what we're running into more and more, is that one of the biggest lies that's out there today is that we're taught that if you just keep doing it, keep packing your money away and don't worry, your financial advisor will pretty much be dead or retired by the time that you actually get there. But the problem is, of course, by the time you get there, you're like, oh, I just didn't do enough. I'll have to go into my 70s, which is what my dad had to do. And that's the other thing, too. Financial advisors. I'll tell you from firsthand experience, if you ask them, say, can you retire off the investments you're doing? Not off the commissions you're earning from me, but actually the investments. Only if you were to shut down your business today and you only had your investments, could you retire, I would say, more than 99% of the time. The answer is no. If they were truly being honest with.
- [11:51]
B
You, why are you taking advice from them? Would be my next question.
- [11:55]
A
It's like the blind leading the blind, right? So why would we keep doing that stuff?
- [11:58]
B
Yeah. I always ask people what their net worth is. It offends them. I'm like, listen, I'm not going to take advice for somebody who has less network than me. I want somebody who's going to help me get to the next level. I offended several people, but I finally found somebody who's like, no, I'm happy to share that. Here's what I'm worth, and I think I can get you there. I was like, great, let's go.
- [12:13]
A
Yeah. I've told people all the time, if you want to look at where the best investments are with financial advisors, it's being the financial advisor, because they get paid whether you make money or not, which to me is kind of criminal. They get paid their guaranteed fees and stuff, but even if they don't make any money, which, by the way, they have no control over the markets. They just guess. They're like Blinken from Robinhood, Men in tights. If you remember that movie from the 90s, that Mel Brooks movie. He's like. He's up on the Watchtower. He's the blind guy looking up on the Watchtower like, what are you doing? He's like, I'm guessing. I'm guessing no one's coming. That's exactly what's going on with financial advisors. Well, I'm guessing I hope you make money, because I may or may not make money, too. And we're just trusting these people, blindly thinking that this is the answer, because that's what billions of dollars of marketing is going into. And these financial news networks and everything else telling you, go put money with these guys because they're paying us billions of dollars to put them on the air. And it's so liberating when you realize you can break away from that, that there's actually better answers out there that your financial advisor either doesn't know about or. Or is actually scared. Because if you learn about it, you realize you don't need them at all.
- [13:13]
B
It sounds like you run into two types of people. The people who have a healthy savings, but they're getting their normal 0 to 5% return and still won't be able to retire at 70. Which we'll get into the solution here shortly with some questions I have for you and those who have absolutely no idea where to start. Is the advice the same for those two groups? Is it different? How would you start with them?
- [13:32]
A
It can be, but it depends. If somebody's just starting from zero, the best thing to do is start putting money in a savings account. Just get in the habit of doing that. That's the place to start. I'll tell you this. There's so many people out there teaching about passive income. And the reason that people are starting to hate that phrase is because so many people lie when they talk about passive income. And you get people out there that talk about being a business owner, like, oh yeah, you start this brand new online business, it's passive. No, it's not. You got to work your tail off. It sucks. You make nothing for a period of time and then when you finally do make some money, you still got to work for it. You still got to manage it. So it's never passive. It never means just hands off.
- [14:10]
B
Recurring is what I like. Recurring. I had two recurring businesses that I sold recently. And the recurring income, you still have to work for it. And the passive income, I still think you have to work for it. But anyway, keep going. I love it.
- [14:21]
A
You're absolutely right. I love business. I think business is probably the number one investment you put money into because it's the one that's been proven. You look at all the Forbes 500 list, the richest people in the world, all own businesses. But don't for one second think that you just could sit back and do absolutely fricking nothing and then you're going to make money now even on the financial side, right? Like you'll hear real estate investors out there like, oh yeah, you can make passive income real estate investing. Oh, you just got to learn how to like do this wholesaling business, which is a brand new business. You got to learn how to start and hire a bunch of people and then maybe eventually you'll start to feel more passive after you hustle and grind for years in this business, right? All that kind of stuff. And I talk about passive income. I mean, legitimately, it's passive. It means you have to have money to get it to work for you. Now if you don't have money, stop worrying about that right now. Just get to the point where you do have money. Because either it's your time and energy you gotta exchange or it's money. One of the two has got to work for you in one way or the other. And so when somebody's like, I got 10,000 bucks, what do I do? Like, well listen, you make 10% on your $10,000, you make 1,000 bucks, it's not going to move the needle. Have that number up over 100 grand and then it can move the needle a little bit. And yes, there are places you can store money that makes more than 0.8% of your bank. I teach a strategy I call max roi infinite banking and things like that and give you a 6% plus tax free returns. But don't be like, oh, I got to throw my money in and start investing it right now. It's like, no, you just got to start getting money saved. And here's what I would recommend is get lean, get liquid and get out. Get lean is start tracking your money. But you don't have to be cheap about it. You don't have to live on rice and beans, but at least start tracking your money and you'll find that you'll probably capture more dollars and more money. You have to actually start putting into that savings. That's what I mean by get liquid, right, is you got to get liquid in the sense that stop putting your money in prison, stop locking away in these 401 and IRA plans that they tell you to throw in there, especially in your company 401 plans. I don't care if they give you the match, you can never get to that money unless you get fired where you have to quit your job. It's not worth it. Especially if you don't have any of their savings. It's, it's a ridiculous thing to do. Instead, get your money liquid. Like again, keep it in savings. Don't pay all the extra money towards trying to pay down a house mortgage. That's another mistake I'll talk about in a second with another client. But don't just keep locking your money away in prison where you can't get to it, where the banks have the control of it and everybody else has control but you, you got to get it liquid. And then when you get that money liquid, especially when you get up over a hundred thousand bucks, then you can get it out in the places like I talk about where you can actually create passive income off of that. Because guess What? You make 10% on 100 grand. Now you're making 10 grand a year versus just a grand a year off that 10 grand. Right. So that's the real focus there.
- [16:52]
B
Well, before they start. And again, we'll get to the solution. But I know that everyone, when it comes to investing, they go through certain emotions. What emotions should people expect when they start this? After all, we do live in a world of immediate gratification. I mean, this plan does take some time. Right. But you're saying within a year. A couple examples you gave. So walk us through the emotions that people need to be aware of. And that is this either a long plan game or is a long play or this is not something that's going to be immediate gratification, I guess is where I'm going. Tell me your thoughts on that.
- [17:22]
A
Yeah, compared to what you get from financial advisors, it'll feel more like immediate gratification. So I get a lot of people that love it. Right. Because let's be honest, when you look at a statement or something like if you have a retirement plan, you're looking at that number. What does that number do for you? For example, if the stock market goes up, say 10% and you watch your account go from $50,000 up to 55,000 bucks, it goes from $500,000 up to $550,000. You might feel a little bit of your ego going. It's like, oh, that's awesome, look, I have $50,000 more I did nothing for. But the question is, what does that do for your day to day life? That's the one thing that financial advisors never really address. They're always telling you about someday, hey, someday when in 30 years you pay off all that debt. Someday in 30 or 40 years when you retire, then you'll be able to start to live off that little fixed income budget that you're hoping for. And then realizing why you need Social Security too, because you don't have enough to make up the difference. But it's always someday, it's never about right now. And I think that's one of the biggest emotions that a lot of our clients notice. They're like, wait a minute, this is real, this is cash that's in my pocket coming back. It's not like a hypothetical number on a piece of paper that all of a sudden the market drops 20%. It's all gone. It's like down the toilet. And I didn't even see it. I didn't get to have a benefit of it before it flushed down the toilet. You Never get that benefit here. It's like, no, you actually get that cash in your pocket. That money comes in and it's real and it actually affects your day to day life, it affects your family. Because the truth is I get so many people that are what I call asset rich and cash poor. They might be good savers, they might have been paying off their mortgages. You know, give example. I told you I was going to share this, but like, I have a lot of clients that are Asians and they are like the best savers. If anybody should be the evidence of success, it's the Asian population here in the U.S. right? They are just so amazingly disciplined as being savers. And I had with this one client I've, I've known for years and he's a chiropractor, right? And he's like, well, yeah, I'm just, I'm saving up my money and I'm, you know, he's putting away in savings, put some of it in the stock market or whatever in mutual funds, like typical retirement accounts. He's like, but I'm also trying to pay off two homes. I'm trying to pay off my house and I'm trying to pay off my rental property. He's like, and if I keep doing this, I keep packing money away, in six years I'll be 100% debt free. I'm like, cool, what does that mean? Well, it means I won't have a mortgage payment anymore. You'll still pay for tax insurance, right? Well, yeah, I'll still have to pay that. So I'll still always have payments, I guess, if you count it, that. But I won't have a mortgage anymore. Okay, cool. Well, what's that free up per month? He's like, that's about 4200amonth. I'm like, all right, so in six years you're about to free up 4200amonth. That's 50 grand a year. That's pretty good. Here's the problem. You've got a ton of equity in these properties. Like, what are you making right now? You have that rental property. What are you actually making? Well, after I pay my expenses, 200 bucks a month, but really less because I use extra money to pay it down. Like, okay, well, let's just say it's 200 bucks a month. So you're making 2,400amonth right now. But look, you got 700,000 of equity. You've just locked all this money in this prison called your house because you're trying to Pay it off. And that's all. He had blinders on. It's like pay off debt, pay off debt, pay off debt. Well, the thing is he feels trapped, he feels broke. He feels just like he's got to penny pinch everything he can for the next six years. But guess what? Do you think that penny pinching broke mentality turns off when you finally pay off that debt? No. Then the next thing he's going to do is like, well now I got to take the money and just start stuffing money in my savings accounts. And then he's going to save millions of dollars. But guess what? He's gonna say, how much income am I earning from this? Zero. So he's gonna keep saving and saving and saving. Right. He's just caught in his own rat race. I said here's the deal. If we sell this rental property, yes, you'll lose the 200 bucks a month, but you'll get 700,000 in cash. What if we take that 700,000 cash and we go buy properties away from where you are right now because there's no good rentals where you are. Go across the country, you buy rentals out there. We could actually, after those same six years, we could probably get you about to 100,000 a year of passive income versus $50,000 a year when you pay off your debt. He's like, I don't know. And he hum hawed for two years. Finally he decided to do it. He sold off his property, went and bought six more properties with that equity that was in that one property. So he basically had this one property that created six babies, he had six tuplets. And so he's got all these little rental babies out there. And then he just reached out several months ago, he said, chris, guess what? I've been taking that money I've been earning from those rentals. I've been reinvesting the last couple years. And already, by the way, this would've been year five of the six years he's like, already I'm at $100,000 a year. He was a couple years ahead of schedule. What I was even trying to under promise him and way ahead of where he would've been if he just tried to pay off that debt which would still have not been paid off by this point.
- [21:56]
B
So where do we go from here? Let's get into the solution. I don't want to take people away from working with you, but what is the first step? Now you've made some points. What do we do next?
- [22:05]
A
That's why I Said the get lean, get liquid, get out. And it usually requires you to have to shift your mindset away from this accumulation mindset and move more into this income mindset. And so when I say that, just like he had to do, he had to be willing to sell a property, by the way, he didn't want to do it. Him and his wife were like, it's our first property. It's our baby. I'm like, yeah, but that baby pays you jack squat. That baby needs to be beat. By the way, I don't recommend you beat babies in real life, okay? I'm not that kind of guy.
- [22:31]
B
Thanks for the disclaimer. There's somebody out there typing a response already.
- [22:35]
A
That's right. It's like, he's a baby beater. Yes, I am. I'm a baby beater. But no, you got to make sure you get that money out of that prison. So a lot of times we look at people like, where do you have money locked up? Now? It might just be in a bank, and it's not really locked up, but that's money, that's potential. Some people have bought life insurance policies that they don't realize there's cash in there they could be using to go and invest and make income off of it, versus always being an expense. I'm talking about more like whole life insurance or universal life, not like term insurance. But you might have money in different types of savings. You might have it in mutual funds. You might have old 401ks, maybe you just lost a job or you're in transition. I just had one client that literally just freed up a quarter million dollars because the job laid her off, gave her a little severance. But now that quarter million we can actually go make money with. Which, by the way, helps her in the transition between her trying to find jobs. Big, huge benefit for her. So can we be taking that money out? So old 401s, not your current company, 401, by the way, if you're contributing, you might consider stopping that. Even IRAs, Roth IRAs, things like that. I mean, even equity, if you've got a lot of equity in a home, or maybe I have one client that they're stuck, but they've got a lot of land because they're farmers. I was like, listen, we could sell off some of the acreage. You could legitimately get yourself to retire this year based on your 5,000amonth lifestyle. You get a half million or $600,000 out of it and pays 10% or 12% a year. You've literally got the income to help you guys. A work option where you work because you want to, not because you have to. So that's the thing is that you got to find out where that is. Good, easy way to do that. Actually, on our website, money ripples.com, we've actually got a passive income calculator you can put your numbers into and it'll spit it out what you could actually do in your current situation right now over the next 12 months.
- [24:11]
B
Are you tired of feeling stuck in your business, career, relationships or your health? Are you frustrated by problems that just won't go away no matter what you try? After coaching and teaching thousands of people for over 25 years, I've discovered something powerful. Every unresolved problem has a hidden solution you just can't see yet. That's why I created the From Stuck to Breakthrough challenge. A free 5 day live experience where I'll show you exactly how to uncover what's really holding you back and finally break free to the results that you want. Whether it's in your business, your health, your wealth, your relationships. I'll help you discover the real root cause of your challenges and give you the blueprint for permanent change. Join me and a community of like minded people ready to break through. Go to blindblaming.com again, that's blindblaming.com to sign up and we'll see you soon. So what do you mean by infinite banking? You mentioned that before and I've seen it on your website.
- [25:04]
A
Funny thing is, when I was a financial advisor, I never heard of it before, but when I got into the real estate world, these guys kept saying infinite banking. And then what shocked me even more, they said, yeah, it's a life insurance policy. I'm like, wait, hold on, you tell me it's a life insurance policy. They're like, yeah, I use whole life insurance. I'm like, wait, whole life insurance? That's like the crappiest insurance you could possibly get, isn't it? Now, I didn't know one way or the other because we didn't ever offer it. I was just repeating what other financial advisors told me. But they're like, yeah, use this life insurance policy, but don't just use the death benefit, but there's that tax free savings account inside of it that you can actually use to invest and you can use it to save on interest and do things and actually pick up more dollars along the way. I said, how is that possible? And so I started looking into it. Now I'll tell you When I got into it, I actually got sold a piece of crap. One that all these guys, they were recommending this guy, but I remember getting the policy was really expensive. And this is the thing you'll hear online, if you ever look up whole life insurance, like the pros and the cons, they'll say it's expensive because upfront, there's these upfront fees with the insurance costs coming out. But then after a few years, then almost all that money, or more than the money you're putting in, is building up inside this tax free savings account. So you kind of front load the insurance costs upfront versus term, which gets more expensive over time. Life gets cheaper. So anyways, long story short, they're telling me they're using this to invest and do stuff and buy cars and houses or whatever with it. Well, I found out that the guy that set up a policy with me, when I asked him, well, can I lower these costs? Can I make this even better, where I get more money going to that cash account versus just paying for all this insurance. He told me no. But remember, I was a financial advisor, I kept a license. I decided to do my own research after I bought a policy from him, which by the way, I put $25,000 into it. And when the recession hit and I was going broke during the recession, I lost it. All the money I put in was gone because it was all gone to insurance costs. I found out he lied to me. I found out I could have actually pulled different levers to make it more cash rich. Where I could use that tax free savings account not just to hold money, but I could actually use that money to make money in two places at the same time. I could go take that money and use it to invest in real estate, making cash flow there while at the same time still earning interest. My savings account. So think of it like this. Think of it like you had a bank savings account. You can, instead of pulling money out, you can actually get the money from the bank without pulling your money out. Like the bank lends you money, you use that to invest that money. Then the cash you're getting from that investment is paying down your mortgage or paying down your mortgage or paying down your loan that you have with the bank or with the insurance company. And then you make money in interest here because they're still paying you money on that money because you did pull it out and you made money from the investment at the same time. Works great in business too, because then you even get to write off the interest as well. So it's just a cool way to be able to make interest in two places at the same time.
- [27:38]
B
And can you take money out of that account or do you just leave it there? Do you take income?
- [27:43]
A
Oh yeah, you can withdraw the money for sure. You can withdraw the money, take it out. But if you withdraw the money, then you're no longer earning interest on it. It's only wherever you put that place, that investment or that business venture, yeah, you're going to make money there. But if you borrow from the insurance company, because they'll give you money all day long because they know it's guaranteed to always grow, they'll pay you at least 3, 4% a year and they're paying like 6% right now. They'll give you a line of credit against it. So they'll charge you interest. Yes, but the cool thing is your money doesn't get pulled out. It's still earning that 6% tax free interest, and then you still take the money from them at a low interest rate, go invest that money and then that money's earning returns over there too. So by doing it that way you actually pick up more interest dollars along the way. You actually have more interest that's earned. And so it's kind of a cool strategy that I teach my clients and even the ones that are trying to build up savings, they're saying, hey, got this bank savings, but can I not be earning 0.8% at the bank that then I still have to pay taxes on that 0.8%, so I really walk away with nothing. Here it's all tax free grows, tax free comes out tax free. You can use it for whatever you want. By the way, if you do borrow from it, it's not like you have to qualify. You don't have to have good credit. Literally, it's a private loan that they'll do with you and you can pay it back, however, whenever you want. There's no monthly payments. You're just supposed to pay it back by your death, which if you don't pay it back by the time you die, they just take it out of the death benefit and then pay the rest of your family tax free anyways.
- [29:02]
B
Interesting. And is there a certain amount of time until you could do something like that? After you start a policy? Is there a timeline like you can't really borrow money against it for six months a year? How does that work?
- [29:11]
A
It depends on the company. I mean there are a lot of people that if they set them up, you might have to wait a year or two with ours, it's like 30 days. They just want to make sure you're not a terrorist, so they make you wait 30 days.
- [29:21]
B
That's probably a good policy to have, for sure. You said earlier, first thing you got to do is figure out where you are financially. I. Last year, I found a program called Monarch that I really like because it's one of the few financial management systems that I've seen that works with every single account that I have. And I have a lot of things going on. I've got seven houses that I own, real estate. I've got investments, things like that. But it's the only one that I've seen that works with everything. It's kind of like Mint wanted to be, but this actually works. Do you have any favorites that you encourage people to use or, you know, for some.
- [29:51]
A
You mentioned Mint for simplicity. They used to be the one I used to refer to because it was free and it was easy to use. But definitely Monarch Money or Rocket Money.
- [29:58]
B
Yeah, Rocket Money was good.
- [29:59]
A
Either of those.
- [30:00]
B
I think both of them are great.
- [30:01]
A
Resources, depending on your preferences.
- [30:04]
B
Right.
- [30:04]
A
Like I've noticed, Monarch people tend to like, especially if there's a lot of more levers, bells and whistles you might need in your situation. Rocket's kind of an easier one for some people, but it just depends on your personality type.
- [30:15]
B
I've always told people if they're. It depends on how. How many accounts they have and how automated they want it to be. Because the paid version of Monarch as. I've got an assistant who's helping me. She's like, you have no idea what I've set up for you, do you? I was like, no. No idea. But I love the reports every month. And she's like, I don't do anything anymore. I set up these rules and that's it. And then we just look at the rules, and I tweak them every month. So I've really. My big thing, though, was, besides rules and everything else is they just seem to automatically connect to more accounts than Rocket Money or others. That's why I said, if you had a lot of accounts, Monarch seems to attach to it because they use three different companies. They don't just use plaid, they use plaid and two others. Anyway, if anybody's struggled with that like I did, that was my biggest frustration with Mint. Cause I've got about 40 different accounts. And anyway, that's what has worked for me.
- [31:00]
A
Yeah, some connect and then some didn't. Right. So you're like, well, just imagine it's there?
- [31:04]
B
Yeah. And it was frustrating, like, well, I gotta manually put that in there.
- [31:08]
A
Yeah, exactly.
- [31:09]
B
Well, are there any. Well, how do you feel about personal budgets? I was reading a book called I Will Teach youh to Be Rich. Don't know how you feel about him, but he was not a fan of personal budgets. And I always have been. Cause I just. It's not sticking to it and getting stressed out and adding more anxiety to our lives, but just knowing where my money is going compared to what I had planned was important to me. But how do you feel about it? Just curious.
- [31:30]
A
I love Ramit Sethi. Right? He's got some interesting stuff, for sure. He's kind of like the millennial version of Dave Ramsey, isn't he? I mean, he tries to spin it like he's not, but he really is. He still teaches the same stuff. I actually think budgets can be good, but in the right order. And it really is a perfect segue with what you were just talking about. Because the one problem I see with people trying to do budgets is, is that they've never tracked money before. If you don't really know how much you're earning and how much you're really spending, you can't create budgets. Because the problem is you will fail because you'll say, well, I think I'm earning. This is like blinking on the watchtower again. The blind guy in the watchtower is like, I think it's this. I'm guessing it's this. Like, no. The first step, before you worry about a budget, and I like to call them spending plans. I like to change the terminology. I call it spending plan because money is meant to be spent, even if you spend it into savings. But before you worry about a budget, track your money for at least 6 to 12 months. This is where you would use something like Monarch. Because if you track your money, you start to see, what am I really spending? Then you can come with a more accurate assessment, saying, all right, what would the budget be if I'm going to put a budget on it? And what's realistic? Because the problem is some people, maybe you travel a lot more in the summertime. So you're like, oh, my gasoline costs are always like this. Well, prices can go up or down for one. Secondly, what if you travel more in the summer? It throws it off. Or what if you say, oh, I only need a budget. $50 a month for giving gifts. Oh, but Christmas throws that number out of whack. And I went over budget. And then you get all depressed because it's not working right. I'm already over budget. This is a failure. And then you quit. No, track the money, get the average over the year, at least six months minimum, get that average and then create a spending plan based on that. Then start to create those numbers and adjust accordingly because things will go up or down, by the way, mostly up. Cause it's called inflation. But it's gonna adjust to some level for a lot of these things. Make sure you do that. And I'll tell you the number one thing too is if you wanna recapture more money, just start watching it. Cause a budget's good. And I run to a lot of entrepreneurs especially. Cause most entrepreneurs, I'll tell you this, most are usually fall in the versus spenders or savers. They usually fall in the spender category, which is why they became entrepreneurs. Because see spenders, they are great at using money. I'll tell you that Spenders and savers both don't become financially free. Neither of them become financially free. But a spender, at least they're willing to use money. But the problem is they just blow it. It's easy come, easy go. And they hyper focus on the income to try to pay for the spending. Right. That's why a lot of them become business owners because they have more control of the upside potential of their income. Where savers, they're also, even though they're good, they're disciplined. The problem is they never become financially free like many of my clients, because they can never save enough. They can never pay off debt fast enough. It's just never enough. They always still stay in scarcity. They hyper focus on the expenses, but don't really focus as much on how do I earn more income. That's why I think the third one that's actually in abundance is called being a steward, a wise steward of your money. Yes, you want to use money and money is meant to be used, but you got to track it. You got to track both sides. Income coming in, money going out, and start watching that. So for example, I have one entrepreneur that she was majorly adhd. This woman was like bouncing all over the walls like a chicken with her head cut off. Always busy. She even told me she's like, chris, I don't even have enough time to track my money. I was like, listen, you don't have enough money to not track your money.
- [34:44]
B
That's good.
- [34:45]
A
This has got to start somehow. So I said, just start tracking your money. Don't even worry about budgets. Just start watching it. Watch what's coming in. Watch what's going out. Let's itemize it. And we even had her itemize it. And as we did that, guess what we found $1,800 a month. Without sacrificing her lifestyle. Her husband didn't have to stop watching sports, Although we did save some money off Comcast because we realized that he could stream it instead of paying $300 a monthly Comcast for that. Right? And then even just other things, that money was just leaking away with eating out a lot because they weren't planning meals and things like that and this and that and the other. And we found $1,800 a month. That's over 20 grand a year. That would help her be able to relax a little bit, take a breather, and then focus. And that's. I think what's really important is start to track your money first. Watch what's happening with it, then create the budget. But someone who says, don't ever do budgets. That's bull crap. Like, no, maybe I don't call a budget. I call it spending plan. But still, you gotta still be a wise steward of the money that's coming in and out.
- [35:39]
B
The other benefit for me just getting on Monarch the last couple years was saving two grand a month as I started to look at recurring charges that I had that I'd forgotten about all the time. And when you're aware, you can see it last two years in a row, even this year. Another tactic I use is I cancel my major credit cards once a year. But you have to tell them, look, I want a hard stop on all charges because American Express will continue to take those subscriptions, and they'll tell you, look, it's your responsibility to cancel those. I'm like, no, I need you to put a hard stop on all charges going forward. I just learned this one recently because I missed one last year. But you can get a new credit card, have it sent in the mail, and it will stop all those charges, and they'll just email you, and you decide the ones you want to keep and the ones you don't. But again, it goes back to knowing where you are. If I didn't have Monarch, I wouldn't have paid attention. Because when things are good, we don't tend to look at things, but when things go bad, we do. And I think your advice is, hey, you should be aware, no matter where you're at, if things are going well, you can save even more. If things aren't, you can save yourself from getting in a hole. That's what I hear you saying.
- [36:40]
A
Money's like oxygen, isn't it? Right? We never count the number of breaths we take until that oxygen runs out, and then we count every little breath. I found the same thing true with money. I mean, even with that last recession going from 2007 to 2008, I was the financially free guy. But then I decided to cut off some income streams to focus on building this brand new business with some partners. That's one mistake. Don't cut off passive income streams when you have them. Even though you have partners saying you should go all in. Cut off those other income streams. No, don't do that. Especially when that business you start is focused on real estate investors who are going broke all of a sudden. That doesn't work well either. So we had a lot of things coming out that was just making it hard. I was spending between 21,000, $22,000 a month. I was only bringing in 5 or 6,000 in the business. That's not enough. That's why I recommend people start watching it even when times are good. Like you said, times are good, times are bad. It doesn't matter. I recommend if you can, once a week, that'll even help. You don't have to put a hard stop on credit cards. You could actually just. If you monitor that once per week to see what's going on, you'll probably catch it. Even with QuickBooks. I do this with my business. I'll look at it at least once per Week and QuickBooks Analyze what's Coming out and going where the money's going. And then if I have to make some changes. By the way, I just did this last week. Not on the business side. I was kept on that. The personal side. I didn't realize I was paying for two health insurance premiums until I've been doing that the last couple months. I thought I'd cancel it. It wasn't actually canceled. So I called them up, said, hey, let's get this one stopped. And they said, all right, done. I was only paying one premium, but I mean, it was automatically coming out. You just don't notice it sometimes.
- [38:10]
B
Well, and companies forget. We had that with. I actually own a petting zoo. And with the zoo, we had the satellite Internet for a while until we switched to the Elon Musk version, which is way faster. But they continue to bill us. And we caught it and we called them. They apologized. Like our mistake. Somebody didn't click a button. But it could have gone on for months if we weren't paying attention. And we never would have seen It.
- [38:31]
A
Yeah, well, even fraud charges. Like, I can't tell you how many times you start seeing these little $50 Walmart charges coming out. You think it's you, then you realize it's not. And sometimes the bank will catch it, but sometimes they won't. We had one situation where we were right in the transition of a move so we weren't watching very carefully. And literally $1200 was deducted in small charges from our account that eventually we were able to recapture. But still, like if we hadn't caught that, that would have been money out of our life forever wasted.
- [39:00]
B
Well, Chris, just from listening today, it's pretty clear that you invested in yourself. Whether it's reading or masterminds. I don't know what you do, but I've always liked to ask this question too. What do you do to invest in yourself and how have you learned to do what you do?
- [39:11]
A
All the above you just mentioned at least a couple of them, right? I do read books. I have an Audible membership that's a subscription I think is well worth it. I definitely read books or I listen to audiobooks and things like that. Masterminds. I'll tell you, I'll still hire coaches for one on one for specific things. But man, I'll tell you, masterminds are amazing. Can be an amazing investment if it's done right. Because sometimes you get people that just put on conferences with hundreds of people. Not really a mastermind, it's more of a conference. And those are good too. There's some good connections potential. But I'm investing more even this year into smaller masterminds, places where you can actually talk with each other and connect and get to know each other and stuff. I just joined one that Alex Storm Rosie is a part of and become a part of that group. And what I love about that is that if I ever need anything answered in any aspect, rather than trying to find a coach for every little thing that I'm trying to do, it's so nice to go to a mastermind to say, hey, is there a marketing expert that can address this? Is there somebody that's like, I just asked somebody in another mastermind group. I'm like, hey, I'm looking for someone because some of my clients are asking about how to buy and sell businesses. Anybody got something on that and connect them there. And even just in general just having those connections and be able to reach out and just use it as a resource, I think it's one of the most untapped potential that people really don't realize that you can have multiple coaches, which is called a mastermind group.
- [40:35]
B
That's actually part of my new book. I'll make sure I get you a copy. We're right in the second editorial review right now. If you're willing to read it, I'd love to get your opinion on it. But masterminds and coaching is something that I recommend as part of the process. So we call it reflect, connect and decide. So you reflect is where you're looking for the root cause, but you think you might know what it is. But it's usually a coach or a mastermind group who can say, I don't think that's what it is. Here's what you're not seeing. And it takes that outside of your sphere of influence to help you get there, which allows you to make the right decision and fix the. Because I think a lot of people are fixing the wrong problem perfectly, especially when it comes to their finances, which is why I wanted you on the show because I'm running into people all the time who are doing that long term savings and they're starting to do the math and they're starting to figure out I don't think I'm going to have enough to live with if I ever want to retire. So thank you for being here. Thank you for the information. It was incredible. If people want to get in touch with you, what's the best way for them to find you?
- [41:27]
A
Money ripples. Whether that's any ripples on social media, money ripples, podcasts that we have on YouTube and iTunes and everything. And then even just money ripples.com is our website.
- [41:37]
B
Great. Well, Chris, thank you. Incredible show. Loved having you. Hopefully we'll have you again. And I definitely, I would love to see what you think of the book when it comes out because all the things you were talking about, I think it fits into what you teach.
- [41:47]
A
I appreciate that. Yeah, I'd love to see it.
- [41:48]
B
Everybody have a great day.
- [41:50]
A
You too.