The Truth About Building a Freedom Business - Ryan Lee

Summary

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Podcast Summary: Escaping the Drift with John Gafford

Episode: The Truth About Building a Freedom Business - Ryan Lee

Date: March 17, 2026
Guest: Ryan Lee, Host of "Passive Income Machine" Podcast, Author of Retire in 10 Years or Less

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Episode Overview

In this engaging and practical episode, John Gafford sits down with Ryan Lee, a real estate investor, educator, and author, to unpack the real truth behind building a business that creates genuine financial freedom. The conversation dives into Ryan's personal journey from the corporate rat race to financial independence, the nuts and bolts of creating passive income through real estate, and the systems, mindset shifts, and actionable tactics required to escape the "drift" of financial mediocrity.

Ryan shares the actionable blueprint behind his “Retire in 10 Years” philosophy, highlights the pitfalls and lessons learned along the way, discusses how to navigate today’s uncertain markets, and explores advanced concepts such as leverage, whole life insurance, and the effects of AI and economic shifts on real estate investing.

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Key Discussion Points & Insights

1. Ryan’s Background & Wake-Up Call

[02:57-07:00]

• Ryan shares his traditional upbringing and journey into corporate America, where he initially relied on hard work, saving, and 401k investing for his future.
• The 2008 financial crash ($105k net worth slashed to $28k) served as a wake-up call:
  • Quote: “Their entire dream, their entire vision of retirement was melting before their eyes and before my eyes. That’s me...if I don’t control the outcome, how can I ever predict retiring early?” (Ryan Lee, 05:46)
• Introduction to Rich Dad, Poor Dad reframed his entire financial paradigm, prompting a search for alternatives to the traditional "work-save-retire" model.

2. Taking Action and First Steps into Real Estate

[07:00-11:13]

• After reading Robert Allen’s Creating Wealth (“Retire in 10 Years”), Ryan sets a goal to buy two single family homes per year for 10 years.
• His first real estate investments (three homes in 2009 across Utah and Arizona) used the principle that long-term ownership, not timing the market, builds wealth.
• Key lesson: The best time to invest was “30 years ago…right now.” (John Gafford, 11:02)

3. The Pitfalls of DIY and Scaling Up

[11:13-15:53]

• Initial “success” made Ryan feel accomplished, but direct property management and DIY rehab quickly became overwhelming:
  • Memorable Story: Tenant shoots a neighbor's cat, multiple angry voicemails, and police involvement. (14:32)
• Quote: “I got further away from financial freedom than when I started—because now I have a part-time job and a full-time gig.” (Ryan Lee, 14:57)
• Pivoted to building systems: Shift from working hard IN the business to working smart ON the business, scaling from 3 to 17 properties in three years, ultimately allowing him to quit his corporate job.

4. Building a Repeatable, Freedom-Oriented System

[15:46-22:23]

• Ryan explains targeting 15% cash-on-cash returns and focusing on solid, long-term buy-and-hold rentals.
• Key elements of a freedom business in real estate:
  • Buy in the right locations (good neighborhoods, schools, low crime, diverse economy)
  • Assemble the right local team (especially property managers, contractors)
• Property Management Wisdom: Appreciate and incentivize property managers—gift cards, personal touches—because they’re the linchpin to keeping your investments performing well.
  • Quote: “They are the key to your financial freedom…that is the linchpin in my world is your property management.” (Ryan Lee, 23:16)
• “Cheap, fast, good—you don’t get all three. Pick two.” (John Gafford, 23:26)

5. The True Value of Real Estate & Lasting Wealth

[24:26-29:14]

• The critical lesson: The real wealth in real estate comes from equity appreciation over time, not just monthly cash flow.
• Don’t try to time the market; own for the long haul and use systems to scale, leveraging delegated teams for acquisition and management.

6. The Role of Whole Life Insurance in Building the Freedom Machine

[29:14-32:54]

• Ryan reveals his hybrid strategy: overfunded whole life insurance policies as the engine for leveraging and recycling capital through property investments.
  • Use policy loans for down payments, then use rental cash flow to pay them off.
  • Cash-out refi every 5-6 years replenishes private, tax-free funds in the insurance policy, enabling repeat cycles.
• Quote: “If I can take my income from a whole life insurance policy, I never deal with banks, I never have to ask permission...completely tax-free.” (Ryan Lee, 32:43)

7. Navigating New Market Risks: AI, Unemployment, & Government Policy

[32:54-36:46]

• John raises concerns that widespread AI-driven unemployment could destabilize rental demand.
• Ryan’s strategy:
  • Focus on asset/ownership-friendly states
  • Continually assess economic signals
  • Remain adaptable (Airbnb, Section 8, etc.)
• Both debate risks of multifamily syndication—many got “obliterated” in recent years due to poor assumptions on rates and performance. (John Gafford, 37:10-37:14)
• Key: Prioritize liquidity and asset flexibility alongside equity growth.

8. Escaping Currency Risk: Hard Assets vs. Devaluing Dollars

[38:11-41:02]

• Discussion on the possibility of aggressive dollar devaluation to address national debt—“convert fake dollars into real assets.”
• Criteria for “real assets”: Always in demand, can be financed with debt, rise with inflation—single family homes fit the bill.
  • “Debt is the new money.” (Ryan Lee, 39:13)

9. Capitalism, Dependency, and the “Two Parallel Economies”

[42:57-45:34]

• Skepticism about utopian “AI-abundant future” and universal basic income (UBI).
• Ryan outlines the "ownership economy" vs. "dependency economy":
  • Ownership = control, responsibility, consequences.
  • Dependency = reliance on government/corporations, little control.
• Quote: “If I own assets, I own my time, and I have more options with what to do with that time.” (Ryan Lee, 44:17)

10. Practical Investing: Cash vs. Leverage, Lessons from Experience

[45:34-47:55]

• Leverage (option B: three properties with loans vs. one all-cash property) always wins due to higher returns and asset growth.
  • “If I can use the bank’s money…leverage is a multiplier.” (Ryan Lee, 47:05)
• Balance leverage with sufficient liquidity to handle volatility.

11. Mentors, Community, and Giving Back

[48:02-50:38]

• Ryan shares how mentorship from Robert Allen and Robert Kiyosaki shaped his journey—eventually partnering with Allen to co-write his latest book.
• The power of community and teaching others solidifies and multiplies success.

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Notable Quotes & Memorable Moments

• On the 2008 crisis:
  “For the first time I realized that’s me…If I don’t control the outcome, how can I ever predict retiring early?” — Ryan Lee, [05:46]
• On property management:
  “They are the key to your financial freedom…That is the linchpin in my world is your property management.” — Ryan Lee, [23:16]
• On leverage:
  “Leverage is a multiplier…it’s really what multiplies my rate of return, what allows my money to work harder.” — Ryan Lee, [47:05]
• On financial freedom:
  “Money’s greatest intrinsic value is to give me more control over my time and more options with what I can do at that time.” — Ryan Lee, [24:56]
• On shifting paradigms:
  “Once your paradigm changes…the world that you see changes.” — Ryan Lee, [05:46]
• On ownership vs. dependency:
  “If I own assets, I own my time, and I have more options with what to do with that time.” — Ryan Lee, [44:17]

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Key Timestamps

• [02:57] Ryan’s traditional career, 401k struggles, 2008 crash awakening
• [07:00] Reading Rich Dad, Poor Dad, then Allen’s Creating Wealth, initial real estate action steps
• [14:32] Tenant nightmare: property manager woes & the pitfalls of DIY
• [15:53] The shift to scalable, systematized investing
• [21:41] The value of appreciating and paying property managers well
• [24:56] Quitting the corporate job—freedom through cash flow
• [29:14] Real estate + whole life insurance: the equity mill strategy
• [32:54] Impact of AI, market risk, and government policy on rental markets
• [39:13] Debt as the new money, inflation, and converting dollars into real assets
• [42:57] The “ownership economy” vs. the “dependency economy”
• [47:05] Leverage vs. cash—why leverage is essential for scalable wealth

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Resources & Further Information

• Book: Retire in 10 Years or Less by Ryan Lee & Robert Allen (retireintendyears.com)
• Ryan Lee on Instagram: @theryandlee
• Podcast: Passive Income Machine
• Escaping the Drift: escapingthedrift.com

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Final Thoughts

This episode drills deep into what financial freedom really means, how to escape the “drift,” and how to construct a business and life that works for you—not the other way around. The blueprint: build systems, acquire real assets through smart leverage, control your liquidity, and relentlessly maintain an ownership mindset, even as the world, technology, and markets rapidly evolve.

Key Takeaway:
No one’s coming to rescue you. Build your own life raft—start where you are, leverage what you have, and never underestimate the power of ownership and community.

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“There are places in this country where you can buy doors that do cash flow and will appreciate. Start doing the work for your future today.” — John Gafford, [51:04]

Transcript

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[John Gafford]

And now, Escaping the Drift. The show designed to get you from where you are to where you want to be. I'm John Gafford and I have a knack for getting extraordinary achievers to drop their secrets to help you on a path to greatness. So stop drifting along. Escape the Drift. And it's time to start right now. Right now. Right now. Right now. Back again. Back again in time for another episode of the podcast of like it says, the opening man gets you from where you are to where you want to be. And today, if where you want to be is actually retired, living with some money instead of broke, living off the government, well, you might want to take a listen because my guy today in studio live from Utah, he flew down just for this is an expert at teaching you how to retire with wealth. Not just a Social Security check, not getting by, but actually how to have wealth. And he has a pretty interesting system for how to do it. He is the host of the Passive Income Machine podcast and he is now the author of the book retire in 10 years or less. Because who wants working. Ladies and gentlemen, welcome to the program. This is Ryan Lee.

[Ryan Lee]

Ryan, go let's go. John, man, how are you, man? It's a pleasure to be here, man. Studio is looking phenomenal.

[John Gafford]

I love it.

[Ryan Lee]

This is such an honor to be here.

[John Gafford]

Thank you, brother, I appreciate that. So give us a little bit of a little color on Ryan.

[Ryan Lee]

You know what, I probably grew up a lot like most traditional people, right? I had a great family, good upbringing, phenomenal parents. But man, when I got into the space of earning money, I got stuck. I got stuck. And this is really what prompted me to write this book after several years. But really, you know, for me, I started climbing the corporate ladder. Little teeny trade offs in my life where I would make more money. And I kept thinking that the 401k was going to be my pathway out because, I mean, who, who wants to work for the rest of their life, right? And I found myself stuck in the corporate rat race. And in 2008, right, in 2008, I realized I had no control over my money. I had no control over what it was, what was happening with it. I couldn't stop it. And I realized if I ever wanted to retire, let alone retire in 10 years like the book is talking about, I had to figure out a different way. I had to become a little bit more empowered with money. And so that's been my journey post college is learning about the game of money. And man, it is quite the game.

[John Gafford]

So when you say, oh, wait, you realize obviously the financial Crisis hit in 2006, 2007, I'm assuming you were banking on your 401k, watching the value of it grow. And then it took a little bit of a beating when all the markets got, got hammered. And what was that like, that realization when you saw that number?

[Ryan Lee]

Well, it was kind of crazy. I was only about five years out of college, right? And I remember when I got my first job, I had to move to Tucson, Arizona, right? And so I moved my, my new wife to Tucson, Arizona, had my new bo. I did not like reporting to Rob. I did not necessarily love the job that I had. And I remember when I got that first paycheck, you know, this is, you know, I went to college for the sake of getting the degree, getting the piece of paper, not because I wanted to be that. That's what, that's. I thought that's what a professional, responsible young man would do. And when I got that first paycheck with my college degree, I remember I took it to the bank of America and I opened it as kind of like a symbol of success and I opened that Thing and after I opened it and looked at it and I kind of flipped it over a couple times to make sure there wasn't a mistake on it, man, there was not much money there after taxes and insurance and everything. And I thought to myself, man, there's gotta be a better way. So I thought, look, if I can work hard because I'm, I've, I grew up in a hard working family. I'm not afraid of working hard. If I can work hard and start saving a bunch of my money and let the stock market. Because that's all I knew to grow my wealth, maybe I'll retire early. And back when I first started, that was my goal, is to retire in my 50s. And so fast forward five years out of college, you know, my net worth had grown to about a hundred thousand dollars, 401k brokerage account, all that kind of stuff.

[John Gafford]

Were you on that plan of, of, of 20, paying yourself first and investing?

[Ryan Lee]

Were you up to 30%? I was every single penny I could find. Like I'm putting it in this account and yeah, I'm watching the market grow. But man, the crazy part about it was in 2008, yeah, I lost a bunch of money. My, my 401k went, you know, 401k brokerage account, all that stuff, it went down to about $28,000. And at first I thought I did something high of what, a little over 100,000, right? 100, 105,000 at the peak of my net worth.

[John Gafford]

Well, that's, I mean, dude, it's important because that's, you know, that's a lot of money for somebody that has, it

[Ryan Lee]

was crazy because I just traded five years of my life and every single little trade off I was making to make more, save more, it came with strings attached. And I only saw it in hindsight that I was trading my life away to earn more money. But the, the biggest thing in 2008 for me was it was a window into my future, right? I looked at all the people I was working with, modeling my life after, and these were people that were 20, 30 years ahead of me. And their entire dream, their entire vision of retirement was melting before their eyes and before my eyes. And for the first time I realized that's me. Like, if I don't control the outcome, how can I ever predict retiring early? How can I ever impact it? I'm just along for a ride. And this is what set me off on the path of questioning the traditional model. And once your paradigm changes what your, once your perspective changes the world that you see changes. And my gateway into this whole world was rich dad, poor dad. Right. I mean, I remember I read that book. I'm like, oh, my gosh. Everything I thought I knew about money

[John Gafford]

and Robert's on the back of your book. I see. Yeah, yeah.

[Ryan Lee]

It might be wrong.

[John Gafford]

Yeah, yeah, There you go. So that was your first forays, that book?

[Ryan Lee]

Yeah, that was the first. That was the opening to the door that there is a whole different world of money. That if I was willing to step into it and learn it, it's governed based on financial intelligence, not dependency. If I was willing to raise my financial iq, I could maybe take back control over my money and really learn how to invest, not just speculate.

[John Gafford]

Okay, so let's talk about this, because this is the step where I think most people get stuck. Right. Is most people. And one of my favorite sayings is education without action is entertainment. And there's far more entertaining stuff in the world, a lot of out there than rich dad, Poor Dad.

[Ryan Lee]

Right.

[John Gafford]

I mean, it's a good book, but it's not exactly entertaining. And what I would say is, so what was the first action you took? And after getting this new stuff where you're like, okay, I'm gonna make a pivot. Do you remember what the first. Like, what was it?

[Ryan Lee]

Yeah. So first off, I almost cried, right? I mean, I'm like, what the heck, man? Everything is wrong.

[John Gafford]

Yeah.

[Ryan Lee]

But the great thing about Kiyosaki was, you know, it opened me up to a new idea, but I really honestly had no idea what to do with it. So I started searching, I started looking, and this is the second book I came across. And I came across this book. It's written by Robert Allen. He's the co author of this book. The title of his book was called Creating Wealth. But that wasn't what caught my eye. Down below the title of his book, he said, retire in 10 years, following Alan's seven principles. And I thought to myself, I can do anything for 10 years. What are the seven principles? And I'll never forget, when I opened up his book, it was kind of like a playbook for what I read in Rich Dad, Poor dad and his Model. I mean, it was so believable that I thought I could actually do it. That if you bought two single family homes every single year for 10 years, in year 11, after 20 single family homes, you'd have enough wealth to be financially free. So that was my first action. I bought three single family homes in my first year of investing outside of Wall Street. And that was how I got into the game.

[John Gafford]

Now what year was this?

[Ryan Lee]

This is 2009.

[John Gafford]

Okay, so you're buying houses. Where were you buying them?

[Ryan Lee]

Man, I first I bought my first one in Utah, but then I bought my next two in Arizona.

[John Gafford]

Okay, so you're buying Arizona, you're buying Utah. So you're probably paying 150,000 a door.

[Ryan Lee]

160,000 last man, man, you guys here in Arizona, you guys got hit and it was lucky timing for me. I get it. I've since now bought many, many more single family homes. But yeah, I buy houses for about 110, 120.

[John Gafford]

Yeah, I can, I can tell you one of the biggest, you know, I don't know man, I go back and forth with this so I always, I'm filled with regret on this one. I don't have a lot of grit.

[Ryan Lee]

Yeah.

[John Gafford]

But in 2008 and 2009, I was the number one foreclosure real estate agent in the country.

[Ryan Lee]

Demolished in the country.

[John Gafford]

Well that's the point. In the country for lender processing services, which LP was the biggest processor of foreclosures. Yeah, they're the ones that got in the robo signage.

[Ryan Lee]

Yeah, I remember that.

[John Gafford]

Right. I was their number one agent in the country. Like I would come into work wearing board shorts and flip flops and turn on my computer and have 30 new listings every day. It was wild. And I had a buddy who will remain nameless who was also in the same business who was living in an apartment like hand to mouth. And he just bought everything he could buy and LLCs and everything else. Yeah, and it wasn't exactly scrupulous to do that. I mean he was putting on the open market, but he was the ultimate buyer. So he wasn't doing anything underhanded, I guess necessarily to the banks. But we were not supposed to buy our own property.

[Ryan Lee]

Got it.

[John Gafford]

I bought one and I totally told the bank and I disclosed it to them and put on the open market and somebody actually bid me up and it was a thing. I bought one to live in, but he bought all of them. And like you look back now, here we are 20 years later. He built an amazing at a massive amount of. Cause he was my doors for like 30 grand.

[Ryan Lee]

Oh yeah, you were buying them like 30, 40% on a rebuild cost.

[John Gafford]

Yeah, it was insane. I mean literally my mother in law, you know, I did buy a few of them for like, for, for people that I knew because like this is a good deal, you need to do this. And my mother in law at the time. At the time, well, she's still my mother in law, but at the time all of her money was like under the mattress, right? Not sophisticated woman, you know, cash just saved her money. And not literally under the mattress, but just in a bank account. And we took her money and bought a couple of these houses and you know, now here we are 20 years later, she's in the best memory care facility in, it's in the parking lot at $8,000 a month being paid for because of those, because of that, man.

[Ryan Lee]

100%. You know, that's, that's the number one regret I hear from people I serve and work with. You know, we've done 5,000 transactions, single family homes since I started doing this over the last decade now. And the number one regret is I wish I would have bought more. When? Oh sure, back in the day, right?

[John Gafford]

Best time to plant a tree 30 years ago, right now?

[Ryan Lee]

Yeah, right now. Get going.

[John Gafford]

So you started buying houses and you go back to your story. So you were doing, you bought three the first year and then I'm assuming it didn't take you that long to get to 20.

[Ryan Lee]

Well, it didn't take me that long to get to 20. But I'll tell you what, after three, almost fell apart, right? First property, honestly, now I'm still working corporate gig, right? I'm selling medical supply. That was my whole, my whole game back in the day.

[John Gafford]

A bad gig in a while is not a bad gig.

[Ryan Lee]

I made good money. I made good money and I was funneling all that money back into the game of real estate. But after the first property, I'll be honest, I walked around the office with my chest puffed out. You know, I'm a real estate investor. I thought I was mini grant cardone. Second property, I had a little bit of anxiety because I didn't know what the heck I was doing. I read two books, right?

[John Gafford]

Yeah.

[Ryan Lee]

Third property, legit had a panic attack. And here's what I realized. After three properties, I was doing this real estate and it was taking me time to find the listings, to find the property, to then rehab. I was flying down to Arizona, doing the rehab on my own.

[John Gafford]

What are you doing?

[Ryan Lee]

Because I didn't know, man, I didn't know. And so, you know, I thought that's how I'm going to make more money. I'm just going to work hard, right? Work harder. And after three properties, I got further away from financial freedom than when I started because now I have a part time job and a full time Gig and I realized I could not scale my portfolio any faster. And I'll be honest with you, John, where the lesson really punched me in the gut is property management, right? I am the world's worst property manager.

[John Gafford]

That is something you do not want to do as manager.

[Ryan Lee]

Oh my gosh, man. And after that third property, like, I was losing money. And, you know, unless you want to go into it like I had.

[John Gafford]

Was it a late night phone call that maybe finally pushed you over the edge?

[Ryan Lee]

Okay, all right, so here it is. So I was doing lease options back in the day when I first got it.

[John Gafford]

I don't hate that. I don't hate that. I don't hate that.

[Ryan Lee]

Not bad, right?

[John Gafford]

That's the Cody Sperver method, man. I don't hate that.

[Ryan Lee]

Dude, I'm telling you, it was actually great. So I, I, I did this open house on the third property and the tenant gave me a $5,000 option payment, a down payment on the property. Now his application was full of red flags, but it was $5,000.

[John Gafford]

Okay, that was probably not some smart.

[Ryan Lee]

And I think to myself, man, I'm just gonna take that right there. So I took it. And for the next six months, I basically gave him all of that money back. And I'll never forget, I'm up in Rapid City, South Dakota, selling medical supply. I'm in a hospital, fortunately, and my phone starts ringing. And by this time I'd gained a healthy apprehension of my phone because every time I rang I knew it was a problem with one of my properties.

[John Gafford]

Sure.

[Ryan Lee]

And so it's ringing over and over. I've through full of medical, you know, hospital providers, I'm trying to sell them equipment and my phone just vibrating on the, on the desk, you know. So finally I excuse myself and I get out to the the foyer, there have a voicemail from the tenant's wife crying, saying, please don't evict us. She'll make sure it never happens again. Voicemails from several of the neighbors of the property I own saying they're going to sue me. And a voicemail from the tenant himself saying that that's his.

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[Ryan Lee]

His lawn. And he would do it again if he had to. Then I had the final voicemail from a police officer saying, son, you better call me. I call him up and I find out that my tenant shots with a gun a neighbor's cats who he perceived coming on his property blew up the cat right there on the, on the property. And I realized to myself, I can't do like, can I do it? Maybe I didn't want to do it. Like I was further away from financial freedom because I have a part time job and I'm not a good property manager.

[John Gafford]

Yeah.

[Ryan Lee]

And this open, this opened me up to like quitting number one. And I think this is where a lot of real estate investors get a bad rap is they, they go in thinking real estate is going to be the path, but it's not financial freedom unless you build a system around.

[John Gafford]

I call them the, the HGTV investors

[Ryan Lee]

was me, I was tv, I read the Purple Book. You know, I'm like, oh, cash flow is the game. Yeah, $1,000 of cash flow between those three properties. But man, I'm working my butt off for it.

[John Gafford]

Yeah.

[Ryan Lee]

And so what I realized is I had to actually build a system where I could be the CEO of a portfolio, not do the work. And for the first time ever, man, I, like I said, I grew up in a very hard working, blue collar family. For the first time ever, I had to shift from working harder to working smarter. And that changed the game over the next three years. After that first year, I scaled it from three properties to 17 properties. And I'll never forget the day I quit. I walked away from my corporate job

[John Gafford]

financially free, as I call that working on the business, not in the business.

[Ryan Lee]

That was it right there. I had to work on the business. That was the whole game.

[John Gafford]

Yeah, I consult for equity a lot with a lot of companies that are struggling to grow and scale. And that's always, almost always the problem. I literally have an appointment tomorrow at 1 o' clock. With a plumbing business here in town that is desperate not to scale. And I already know what the problem is. I already know. And so you know, we'll end up take what, we'll take a piece of that plumbing business and get them going the right direction by just extrapolating the principles from the business.

[Ryan Lee]

Yeah, and, and that's so powerful, man. That's the whole game.

[John Gafford]

So when you get to 17. So okay, when you were buying properties, obviously it's changed a lot since then. Right. The yields, well, I mean rents have gone up a lot too. What was your box as far as rent yield that you.

[Ryan Lee]

15% cash on cash.

[John Gafford]

That's all you wanted was.

[Ryan Lee]

That's all I wanted was a 50%. I built a calculator and I could just run things through my system and say, okay, if it's 15% cash on cash, if it's in the right neighborhood and you know, there's no major, you know, foundational issues with the property, I'll buy it. Right, sure. And that's obviously since changed a lot, especially if you're doing it passive. So I think really for me, the biggest game that I've learned now over owning, you know, I've owned real estate now since 2009 all the way to today is it's not trying to time the market. Market's going to change, it's going to go up and down. Interest rates are going to be what they're going to be up, down high, low. But the real wealth in owning real estate is owning the real estate.

[John Gafford]

Yeah.

[Ryan Lee]

And so if you can build a portfolio in a system, and that's really what that book is all about.

[John Gafford]

This book that you wrote here, 100. Okay, cool.

[Ryan Lee]

I know how to get like anyone can become financially free and generate six figures of tax free income using the system talked in there, talked about in that book with less than 20 single family homes as long as you own it for 10 years.

[John Gafford]

Well, we, you know, we, we buy property all over the place and a lot of people are scared to do that. So let's talk a little bit about building that system. I'm curious what you do if it's different from what I do when I go into a market. But let's say you want to go into a different market, let's call it St. Louis.

[Ryan Lee]

Whatever.

[John Gafford]

Let's say you want to go to St. Louis. What's the process you would go about by buying property?

[Ryan Lee]

Yeah, I mean it really.

[John Gafford]

Here's what you would do.

[Ryan Lee]

It's gonna, I'll work backwards Right. It's got to be the right location. That's number one. Location makes all the difference. Number two, then it's got to be.

[John Gafford]

What do you look for in a good location?

[Ryan Lee]

Like I like, I mean I'm buying single family homes. I want to appeal to the broadest market. So I'm looking for good neighborhoods, low crime, good schools, you know, good highway access, that kind of stuff. I'm trying to buy a place that has the highest demand to appeal to the most people. That's, that's my criteria.

[John Gafford]

Well, for me, you know, I'm also looking at place that have good sectors. Like I like markets that I don't know that have like heavy or transportation hubs, heavy medical hubs, those sorts of things that are not going to get heavily disrupted by AI that's coming down the future.

[Ryan Lee]

Yes.

[John Gafford]

You know, if it's a, if it's like, oh, I'm going to buy, buy here because there's an auto plant there, that's probably not a good idea for the long term future. But medical hubs, transportation hubs, those things I do like as well.

[Ryan Lee]

100 I agree with you.

[John Gafford]

Honestly dude, for me like the rust belt right down the middle of the country is so wonderful, man.

[Ryan Lee]

And it's crazy. You can still buy properties out there for 15200.

[John Gafford]

Yeah dude, I got, I got a market right now that we're all over. We're looking at that. We can buy for in rehab, 150 a door renting for two grand a month.

[Ryan Lee]

And we have to share some secrets.

[John Gafford]

Yeah, yeah, get that done. But no, but so back. So you identify the market that you like. Now to me like you don't get it. All right. You can't find in a market that's projected to have heavy appreciation versus a market that's going to cash flow heavy, most of the cash flow heavy markets are not going to have heavy appreciation, which is fine with me. I don't, I'm not looking for boom appreciation because that also is, is going to tend to have some bust depreciation.

[Ryan Lee]

Totally, totally.

[John Gafford]

So what are you looking for there?

[Ryan Lee]

So I'm looking for a place where I can hold the right property. That's the game. Like if I think where most people get real estate wrong is they think they're going to get rich overnight. 18 months, 24 months, that's, that's never going to happen.

[John Gafford]

Yeah.

[Ryan Lee]

I mean if you're flipping, you have an active business in real estate, you might make money doing real estate. But I'm just In the game of buy and hold. So I want to buy a property and be able to hold a property for at least 10 years. Now I can use 1031 exchanges if it doesn't work out. But the goal is buy in the right neighborhood, the right team behind me. So I need to make sure I've got a good team behind me of property managers, you know, vacancy make readies. All that kind of stuff has to be handled and taken care of within a range of expectations. And then after that, after that, it's the right, right, right location, right team, then I'll look at the property.

[John Gafford]

Well, let's talk more about the team. Because I won't buy in a place unless I. Unless I have the trades wired in. Yeah, Unless I absolutely know that I have the trades done. So many people do this backwards. Like they go try to find a deal and then try to find the people to fix it.

[Ryan Lee]

Have the team first.

[John Gafford]

Yeah, that's going to kill you. Like, you need to understand all your trades. And this is gonna be a shout out to them because I'll tell you who I'm using right now. This is amazing. I don't know if you know about this, but this is a pretty incredible. You're familiar with offer pad. Yes. Hedge fund. Well, they do about $4,000 a year, but because the market has changed the way it has now they have offer pad construction where you can buy a house in any market. Where they do.

[Ryan Lee]

Come on. I didn't know that.

[John Gafford]

And they will go out, they will bid it. And because they're buying en masse, I mean, they buy millions of square feet of lvp, millions of square foot of tile, square foot, everything. You can go out, they'll bid you their pricing on everything.

[Ryan Lee]

Wow.

[John Gafford]

So you're getting that institutional and the institutional level. And then they don't tell the crews if it's an offer pad house or it's your house.

[Ryan Lee]

Oh, that's even better.

[John Gafford]

And they're guaranteeing a thousand dollars worth of work a day. So if it's 27, 000 project, it's done in 27 days.

[Ryan Lee]

That's.

[John Gafford]

That.

[Ryan Lee]

That's a phenomenal deal right there. I love that.

[John Gafford]

Yeah, dude. So. So when I got hooked up with that, my buddy Jeremy that runs that, I was like, whoa. Now all of a sudden I'm like, I'm much more comfortable going in a lot of other markets where I don't know people, because it collapsed my time

[Ryan Lee]

of having to deal with 27 days. Flip time. That, that's amazing.

[John Gafford]

Their project managers, their tradespeople, their. Their materials. I'm in. Let's go. Because for rentals especially, you're not, you know, you're not doing the Taj Mahal. You're doing the best.

[Ryan Lee]

I mean, it's just. It's box. I get every. Every counter looks the same. Every paint, same lvp, all that kind of stuff.

[John Gafford]

Yeah, it's the same stuff. So anyway, getting that team together is good. So now you start underwriting. And I think also I agree with you, one of the most important things there is definitely the property manager having it down. What percentage are you looking to pay on a property manager? Manager?

[Ryan Lee]

You know, here's the thing about property management. I'm going to pay them a fair percentage, right.

[John Gafford]

Which is what?

[Ryan Lee]

Anywhere between eight to ten, Right. So I'll pay ten. If it's the. If I only have one property, if I have multiple properties, then I'll want to negotiate it down. We've got some as low as 6. But here's the reality. I want my property manager to think that I am the. The. I'm their best friend, right. I'll send them gift cards. I'll call them up. Right. The. The objective for me is I want that property manager to care about my portfolio more than any other property that they manage. And when they go into a house that's Ryan's house, they know it's Ryan's house.

[John Gafford]

Yeah.

[Ryan Lee]

So you know what? You know what makes the biggest difference for property managers?

[John Gafford]

What's that?

[Ryan Lee]

A $300 golden corral gift card. You do that once a year for your property managers, they will love you forever. Like, that's been my biggest secret.

[John Gafford]

You just take care of them.

[Ryan Lee]

Oh, my gosh. You just send them out of the. Like, sometimes it can be around their birthday. Like, I always.

[John Gafford]

Thank you, whatever.

[Ryan Lee]

Just to thank you, but, like, going. Because imagine what a property manager does. Like, for me, a property manager, it's like being a garbage man.

[John Gafford]

It sucks.

[Ryan Lee]

It sucks. Like, everyone hates you. Everyone's complaining.

[John Gafford]

Just if you're listening to this, you know, I'm saying this, I want to explain something to you. So my company simply Vegas, right? We do 4,000 transactions plus real estate a year. We just got rid of all of our property managers. Because if you go on, like, Google and look at the negative reviews about my company, which are, my company is amazing. But the negative reviews are always some tenant that the landlord decided to keep his deposit.

[Ryan Lee]

Yeah.

[John Gafford]

Like, we have no control over that. So we're finally like, look we're not the property manager business.

[Ryan Lee]

Totally.

[John Gafford]

We're in the, we're in the house selling business.

[Ryan Lee]

Oh my gosh.

[John Gafford]

We got rid of all our property managers for that reason. It's a, it's a terrible job because it's never their fault.

[Ryan Lee]

It's never.

[John Gafford]

The owners are like saying, keep the money.

[Ryan Lee]

Oh my gosh. So if you do one thing, if you do one thing to acknowledge that property manager once every six months.

[John Gafford]

I love it.

[Ryan Lee]

You will be the only person in six months that have actually recognized that person for who they are, what they do. They are the key to your financial freedom. Like that is the linchpin in my, in my world is your property management.

[John Gafford]

Yeah. It's like, it's like anything that has to do with real estate or construction. I always talk about the three legged stool. It's good. Fast or cheap. You don't get all three.

[Ryan Lee]

Yeah.

[John Gafford]

You can pick two. So if you want to go cheap, that's fine, but you're not, they're not going to respond to you. That's not going to be fat. They might be good in the end, but they're not going to be fast.

[Ryan Lee]

Totally.

[John Gafford]

Like if you pay them, you can probably do pretty well.

[Ryan Lee]

And that's where I learned my lesson. I was trying to grind my property managers down in the beginning. So 6%. Yeah. I'm like, I'm getting a deal. But then you pay for that deal in the long run. Like your properties aren't maintained the way you need them to be maintained. And the real wealth from owning real estate is owning real estate. That I have to make it to year 10.

[John Gafford]

Yeah.

[Ryan Lee]

To realize what the spreadsheet said I could possibly have from that piece of property.

[John Gafford]

Well. And so many investors don't realize the importance of that time from acquisition to time to market and how that murder. You get spun on interest. And so they try to grind the trades. They try to grind them. Especially now since, you know, with the climate of our country, with the, with, with the crackdowns and a lot of people getting deported. A lot of people that are banging hammers in those houses.

[Ryan Lee]

Yeah.

[John Gafford]

Might not be here legally. Let's just be honest. They're just, that's who's out there.

[Ryan Lee]

That game is, it is a tough game.

[John Gafford]

So the trades have gotten really, really tight. So if you grind a guy down on laying tile for A$65 a foot, if somebody else calls him and says I'll pay a 225 a foot, he's going to turn the truck totally and you're like staying at your job, like, where's my tile, dude?

[Ryan Lee]

And that's an expensive decision. You're trying to grind someone down and then you're paying for it in vacancy.

[John Gafford]

Yeah. Because you're sitting there with, waiting to get to the end, which is crazy. Okay, so you got to your 17, you got to quit your job. Best day of your life, dude.

[Ryan Lee]

I'll never forget that day, man. So I think we've all had these moments. Well, not this. Is everyone watching this. They need to have that moment. You need to build up a stream of cash flow that gives you more options. And that's what I really believe. Money's greatest intrinsic value is to give me more control over my time and more options with what I can do at that time. So after four years, four years, I'm still working in the corporate grind. Right. And honestly, after I got in the game of real estate, my job meant something so much more to me. It was my fuel to earn money so I could then funnel it into my, into my ownership. Right. Of owning assets that paid me income independent of my time. So I worked as hard as I could. I got my bonuses, promotions, everything I could do to just funnel money over into my portfolio before years later. Right. It's 2012 now and companies are still, they're kind of still tightening their belts after 2008, right?

[John Gafford]

Yeah.

[Ryan Lee]

And so I was taking, I had two more geographies in my territory at that time. And I remember my boss, Rob came in. Rob only came if there was a problem, right. So I'm either getting fired or something else is going on. And I remember Rob sat down with me and he offered me a promotion, but it was kind of like Charlie Brown, right. He had the audacity, came into my office, he sat in my desk, right. I sat across from him and he's sitting in my chair, my desk, and he's telling me about this, you know, I can't remember. Ten thousand dollar promotion I'm going to take, but I'm going to have to now go bump up my hours again, take over a bigger geography. And I remember in the back of my head while he was talking, it sounded like Charlie Brown. This is like, yeah. And in the back of my head, I'm adding up my cash flow. Like I'm going, okay, those two properties that pays for my, my food, those three properties that pays for my mortgage, that property pays for my car. Like I'm all going over these numbers over and over. And because every single property I was buying it was getting me one step closer to financial freedom. I just didn't realize it yet until I had the opportunity to make a decision. I remember when Rob, for a small

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[Ryan Lee]

you ready to take the promotion? Like, I looked up at him. I came out of my days and I said, I quit. And I'll be honest with you, John, man, when that word, like, when that sentence came out of my mouth, I wanted to, like, grab it out of the air and put it back. I didn't mean to quit that day, but, man, as soon as I did it, this weight came off my shoulders. For the first time in my entire adult life, I had finally taken control over my life. Now the crazy part was I didn't have. I didn't tell my wife that I was quitting that day. So I had to walk out in the parking lot until, you know, caught my wife, Beth. I'm like, hey, Beth, I just quit. There's this little silence on the end of the phone, right? And I thought, man, she's gonna be pissed, right? She says, ryan, it's about damn time. And I'll tell you what, man. My life, my second life started that day.

[John Gafford]

Good for you, dude.

[Ryan Lee]

Yeah.

[John Gafford]

Yeah. I always say it's not about having money. It's about what the money can buy. And what the money can buy is time and options. Yeah, that's all it's about is having that. It's like, you know, we build these companies and. And, you know, I'm blessed to have excellent people that work for us here. Yeah. So, you know, one of my mentors, Ken Clothier said once he goes, you know, leave your business for, for three months and see what happens.

[Ryan Lee]

I love Kentucky.

[John Gafford]

Yeah. You come back and it's like all of a sudden it's like, if it's nothing, then you don't have a business. You got a job.

[Ryan Lee]

Yeah, you were, you were never, you never owned a business.

[John Gafford]

You never owned a business. You own a job. So luckily, I can say that I own businesses here, which, which I love, which is good. Now you've got an interesting component that you add in, add in to this, which is using a high value whole life insurance.

[Ryan Lee]

Yeah.

[John Gafford]

So let's talk about that, because that's the one piece of this that was kind of like, okay, you know, everybody's heard the story of how to, you know, buy an invest in real estate. The Burr method, sub to whatever, blah, blah. They've all heard that. Yeah, this is the piece that I was like, okay, let's talk about that. Because a lot of people have heard this.

[Ryan Lee]

I'm gonna blow your mind now.

[John Gafford]

All right, let's.

[Ryan Lee]

You ready? So, yeah, let's have it. All right, let's, let me, let me ask you this, okay? The number one thing that people have to understand when it comes to investing is how do assets produce income? Right? And that's, that's the biggest challenge with people retiring or being financially free is they think that owning a 401k, owning a piece of real estate, owning Bitcoin, whatever, yummy. You choose the assets that it's going to make them financially free. But no one ever asks the question, how does this asset produce income? And in the world that we live in today, man, that's more important than ever before. Is it tax efficient? Is it going to rise with inflation? How long is the income going to last? And if we had to look out there, like when we look at real estates, I think, and this, this is my, this was my error in the beginning. I thought, okay, every house delivers rent to me. It gives me a little rent check, you know. But today, man, the margins are crazy. Like, you might get a property today that's cash flowing, 100, 200 bucks and be happy about that, right? I mean, not you. Okay? Not you. But the margins are, they're super tight today. Yeah, they're super tight. How, how can I buy a small base of assets and generate six figures of retirement income? And let me ask you this. Where is the biggest, like the biggest wealth gain in owning real estate? Where does it come from?

[John Gafford]

It's the depreciation against taxes.

[Ryan Lee]

It's owning the real estate, right?

[John Gafford]

Sure.

[Ryan Lee]

So I own an asset that rises in value because of inflation. Right. More money in the marketplace causes the price of houses to go up. I'm renting that asset to a tenant that's paying off my mortgage for me. I get to depreciate all of my cash flow or all of my expenses. But I've got this like big pool of equity. So the game of insurance is really this. I want to go from making money, right. And that's requires my time, effort and energy in most cases. I'm then going to take that money that I've made. I'm going to put it in a place where I will never lose it. That's an overfunded whole life insurance policy contractually designed to protect my money and give me access to using leverage. I'm going to use that leverage to buy the right piece of real estate. I'm going to use the cash flow from that real estate to pay off that policy loan. I'm still going to use a bank loan to buy the real estate too. So 20, 20% down comes from the policy, 80% down comes from a bank. But my goal is I just want to own the real estate for 10 years, right. I'm going to own it beyond 10 years. But after 10 years, here's what's going to happen. I'll have hundreds of thousands of dollars of equity inside of that property. Yeah. If I have hundreds, hundreds of thousands of dollars of equity inside of that property and I have a whole life insurance policy, my objective is I'm going to take my income from the whole life insurance policy. I'm just going to take it out as policy loans private. I can do whatever I want with it. I don't have to report it. I'm going to take a policy loan, use it as income. I'm going to take a policy loan again in year two, use it as income, policy loan again in year three, use it as income. I'm just going to use my policy as income. But eventually I'm going to draw that thing down. Right. But if I still own the real estates, right. And I've just owned the real estate for another five years, let's say in this example, I'm going to go back to my real estate portfolio after five years and I'm going to do the greatest thing in the entire world. I'm going to take a cash out refi. I'm going to re amortize my debts. I'm going to go to the bank and say, hey, My portfolio was valued at 2 million and now it's valued at 3 or my portfolio is valued at 5 and now it's value today, whatever it is. Right. Just owning the real estate. Any bank in the world will lend me money. They'll re amortize my mortgage. I'm going to take all of that equity also tax free. I'm going to pay off all those policy loans and I'm just going to repeat the process. I call it an equity mill. 80% of the real value of owning real estate over a long enough period of time doesn't come from cash flow.

[John Gafford]

No, it's equity.

[Ryan Lee]

It's the equity. And most people don't think about that. And that's a really challenging thing. If I have to borrow from my equity every single month to take my income, I have to deal with banks constantly. But if I can take my income from a whole life insurance policy, I never deal with banks, I never have to ask permission. I can take the income from the policy completely private, completely tax free and then I just harvest my equity once every five to six years to pay off the policy loans and repeat the

[John Gafford]

process and just go again. Yeah, that's a really interesting way to do it for sure. Let's talk about something different. Let's talk about this. That's, that's fascinating and that's in the book, I'm sure. But I want to talk about this because there's, there's a lot of AI has, is changing the world a lot. And I know that a couple of things. I'm talking about two different things. The first thing we don't talk about is AI because if you look at some of the mass layoffs that are already happening and companies are laying off in the middle towards the bottom of their employees as quickly as they can. I think there's going to be this curve and this is just me literally just thinking as I'm talking, right. I think there's going to be this curve of mass unemployment that is going to happen before we get to some sort of universal income solution for all these people. The problem with that is the single family home investor I think is at great peril by having all of these people that are living in these homes as renters that are very qualified today with good jobs that are fine, that all of a sudden become unemployable.

[Ryan Lee]

Yeah.

[John Gafford]

And now you are their landlord. And so I think it's going to create, I think there's this, there's this arc somewhere that's coming. So my question is A, have you thought about that?

[Ryan Lee]

Yeah.

[John Gafford]

B, what is your plan to ride that and see? What do you think people should do?

[Ryan Lee]

Man, that's a. That's a powerful question.

[John Gafford]

Yeah, it's a lot, dude. It's a lot.

[Ryan Lee]

Honestly, AI is turning the world upside down. Whoever could have forecasted, I mean, we're living in the Terminator two days right now. Skynet is coming down and we got to go send Terminator to go get John Connor or something.

[John Gafford]

Although, you know, I think we're safe because I still can't get my cloud bot to book me a dinner reservation. I can't get it. I can't get it to work.

[Ryan Lee]

Right, well, all right, so let's talk about this. And this kind of comes back to buying the right asset in the right location. I think one of the other things that we actually deal with heavily and we got a little taste of this during COVID I want to buy in states that are owner friendly. They're. They're owner friendly versus tenant friendly. And there are red states and there are blue states. Right. And so part of what I look for when I'm buying a property is I do want to be in a place that honors contract law, that honors ownership. Now maybe some of that will change and I don't know what the future is going to look like, but the one thing I do know is if we just, and this is why I like single family homes. But if we go to like the Maslow's hierarchy of needs, real estate, a place to live is at the base of everyone's needs. Everyone's going to need a place to live. Now to your point, if there's like massive unemployment, who's going to pay for it? How are they going to pay for it?

[John Gafford]

Right.

[Ryan Lee]

And so for me, the only thing I can really do is own the asset, try to buy it in the most ownership friendly state, and then try to foresee what's coming based on, you know, economic signals that I'm getting right now. Our occupancy is still super high.

[John Gafford]

Sure, everything's fine right now.

[Ryan Lee]

But you're right, I mean, if that, that could shift overnight. And that's the problem is it could, it could shift overnight. And then the, the challenge with real estate is it's not. It's one of the most illiquid assets that there is. I mean, it's hard to. It's easy to get in, it's harder to get out. Right? So I think some of the other things you could look at doing is you could flip it into Airbnb. I'm just brainstorming this with you right off the top.

[John Gafford]

Which Airbnb is dead. I think Airbnb pad split probably a little better.

[Ryan Lee]

Split a little bit better. Yeah.

[John Gafford]

You know, for me it's like I'm thinking about this and I'm like, do we need to start trying to focus now more. Even though it's a. It is a bigger. It's a lift.

[Ryan Lee]

Yeah.

[John Gafford]

More into section 8. More into that stuff. Because that's already being subsidized by the government.

[Ryan Lee]

Yeah.

[John Gafford]

So at least now you're somewhat it. And we've already in that subsidized. Subsidized business.

[Ryan Lee]

And I kind of go back and forth on that over the years. Right. I've had Section 8, but I don't love. I don't love the like the, the men. I mean I love the, the consistent rent checks. Right.

[John Gafford]

Yeah.

[Ryan Lee]

But I don't like the subsidy from the government. That's. That always frustrates me. So. But maybe that is the direction that we're gonna have to go. And I think this is a real estate investor has to be able to figure out how to own assets. Anyone who's going to be in the ownership economy has to figure out how to own assets. That gonna deal with all the volatility of owning assets over time.

[John Gafford]

Do you know, because you're in the single family business and I know that, you know, everybody is. Most of your gurus over the last several years have said you need to get out of the single family business to get a multi family. And I know some syndicators that have gotten absolutely smoked in the last 12 months just because everything they did on their performance when they acquired these multifamily home. These multifamily properties was predicated on rates coming back sub five.

[Ryan Lee]

Yeah.

[John Gafford]

And their performance just got smoked and they're getting obliterated right now.

[Ryan Lee]

I think that's one of the biggest dangers right now in the marketplace right now is just the commercial space right now.

[John Gafford]

Yeah. Commercial's hard. Well, I think you're gonna see it. I think you're gonna see. I think there's some opportunity for in. In places that need affordable housing to convert some of the commercial into some past split living stuff.

[Ryan Lee]

I think it's the lack of liquidity. You're absolutely right. I mean people built their pro forma. They took on investor money and then they took on bank capital. And man, that's, It's. It's a scary. It's that there's going to be some things that turn over. Over The.

[John Gafford]

It's already. It's already happening. That, that. That's already happening. All right, next question. Which goes this. So I had lunch the other day with a friend of mine who level international banker consultants, and he called me to go to lunch, which he never does. And when he calls me, I'm like, why are we going to lunch? And he. And his response to me was he said, listen, everybody I'm talking to in banking is saying that the US Government is going to aggressively devalue the dollar as a way to deal with the debt.

[Ryan Lee]

Yeah.

[John Gafford]

So he's like, I'm trying to. I need to get out of all of my cash positions.

[Ryan Lee]

Totally.

[John Gafford]

I don't want any cash at all. I need to get out of everything that's cash. So he wants to buy real estate.

[Ryan Lee]

Yep.

[John Gafford]

So he's like, what are we buying? And when I hear somebody of that, that has that kind of inside kind of knowledge say that, it's like, okay, what asset class would you run to in that?

[Ryan Lee]

You know, I think the core premise of everything that's in that book right there is exactly what you just said. I think the reason most people are stuck financially is they don't understand the rules of the game of money. And the rules of the game of money, they've been in place for several years now, and they're getting more visible now than they were ever before. But my, like, my number one thing, if I could boil that book down into one statement, it's this. Convert fake dollars, like dollars that are getting devalued, dollars that are worthless, dollars that are debt, dollars that are fiat dollars that are enforced by the government into real assets. So now the question is, what the heck is a real asset?

[John Gafford]

Yeah.

[Ryan Lee]

And for me, I'm looking at a real asset as something that has to always be in continuous demand. That's number one. It has to be able to. To allow me to use debt, because debt is the new money. So for me, if I can't use bank money to buy an asset, then it's not a real asset in today's economy. So something that's always in continuous demand, something that can access the bank money, so more fake money to acquire the asset, and something that, because of its demand, will adjust over time with inflation. So it's going to rise in.

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[Ryan Lee]

price or value because of inflation. Because if the government keeps printing money, I want my, my assets to stay current with the rate of inflation. So for me, this is why I come back to single family homes. Now AI could throw a whole loop in that. I totally get it.

[John Gafford]

We don't know.

[Ryan Lee]

We don't know. But the, the one thing I do know is for me, I'm not trying to really be a professional real estate investor. I'm trying to be someone who converts fake money into real assets. Own assets for a long enough period of time and generate tax free income from them. And the best way I know how to do that is use the bank money to acquire a piece of real estate, harvest all of the equity and the cash flow and get it into a private life insurance contract. That way the equity gets off the bank's balance sheet and onto my balance sheets. And then my, my objective is to be as omnipresent with the market so I can see things coming and then course correct and adjust. Right. And that's really, that's really the game of real estate is using that ability to foresee and then maybe, maybe single family homes aren't the thing.

[John Gafford]

I'll just.

[Ryan Lee]

1031.

[John Gafford]

Yeah, I mean, but again that's why when I, when I first talked this, I mean granted I kind of was a loaded question because you know, I was coming with the AI later. But that's why I said when I look at a market, I'm looking at, I'm looking for hubs like transportation hubs, I'm looking for hubs like medical hubs. I'm looking for stuff that I think is going to be the last to be interrupted by heavy AI influence. I want to buy stuff around hospitals, buy stuff around those areas because I just think it's, it's, it's a good, smart business plan. You know, Elon Musk came out recently and he made a comment, he said that, that saving for retirement is going to be moot because AI is going to make everything so cheap. And, and it's just money will have no, like we're all going to be living in this age of abundance. Right. I kind of had issue with that. Comment for. For a couple reasons, and I want to know what your thought is. Number one, I think that, man, without any need to strive for another level.

[Ryan Lee]

Yeah.

[John Gafford]

Bad happens.

[Ryan Lee]

I agree.

[John Gafford]

When you. When you have a bunch of people sitting around, like, as much as we wish everybody would sit around saying Kumbaya, somebody's gonna get bored.

[Ryan Lee]

I agree.

[John Gafford]

And that's bad.

[Ryan Lee]

Yeah, that's bad.

[John Gafford]

You've got to have, like, that. To me, I'm a capitalist at heart, and that to me is what makes capitalism work, is it gives you the ability to strive for another level and it keeps people from doing nefarious things, I guess, in general society. Now, granted, there's people do bad things in the name of capitalism, but just in general society, I don't. I don't foresee. Just as humans, I don't think we're wired to have a Kumbaya society.

[Ryan Lee]

I don't. I don't think that's possible.

[John Gafford]

I don't think it's possible.

[Ryan Lee]

Like, and we've proven it all throughout history.

[John Gafford]

It's never worked.

[Ryan Lee]

It's never, ever worked.

[John Gafford]

Those islands where, like, there was an island somewhere where, like, all these billionaires had houses and it. I guess I was reading an article on Vice not telling her. I was like, it just. It just decayed into madness, like Lord of the Flies, where people were just like, no, this is just. You just. It just can't be done. So I had a problem with that. The second problem I have with is I think it sets this bad precedent for people that they're like, I don't need to do anything because Elon says, like, you know, we're all going to be living this Kumbaya thing.

[Ryan Lee]

Yeah. So I'll tell you what, man. I have some very strong beliefs on that, you know, And I'll just. I'll use another frame that I said in the book. I believe there's two parallel economies running in our world right now.

[John Gafford]

Okay.

[Ryan Lee]

And you can choose which economy you're playing in. There's the dependency economy. And the dependency economy is based on. Look, there's a path. The government has my best interest in mind. Wall street has my best interest in mind. I'm just gonna go to work, keep my head down. I'm gonna stay dumb with money. I'm gonna binge on Netflix. I'm just gonna have my job for 40 years. And, you know, I'll be dependent on everything working out. Stock market, taxes, inflation, you name it. It's someone else'. Right.

[John Gafford]

Pension plan.

[Ryan Lee]

The pension plan. Right. And in the, in the dependency economy, you get what you earn, you get what you deserve, because you never take the initiative to learn the rules of the game of money. You become dependent. And we can kind of see what's happening in our political system right now. I think our political system caters to people who are victims of the game that they've set up. Right. And they just promise them free stuff, take from those guys and give to you. And there's only so far that's going to ago. Right. And so that's the dependency economy. If you want financial freedom, it's not just doing the dependency economy better, it's actually doing the exact opposite. And you know this, every, every wealthy person you've hung out with, they don't get wealthy by having a mutual fund that performs better than someone else's mutual fund. So it's the ownership economy. And the ownership economy is the, is the base of what freedom really is. I own my money, I own my choices, and that's one side of the stick. I have to pick up the other side of the stick, which is I own the consequences of my choices. And the best thing about the ownership economy, me is I learned real lessons. Like I've lost so much money in real estate, I've made so many stupid mistakes, but if I'm smart, I never make the same mistake twice. Right. And I just build a better system that gets better every time I get real world feedback. So the ownership economy is owning my money, owning my decisions, and owning assets that I understand produce income for me. And that's, that's really the game that I look at. So in this future based world of everything's perfect, everything's wonderful, I think it comes back to the core premise of money. If I own assets, I own my time, and I have more options with what to do with that time. And if things are falling apart as the government sings this kumbaya song and says, hey, we're putting everyone on universal basic income and that now everyone's just going to be poor together. That's basically what socialism is.

[John Gafford]

Yeah, the problem with socialism is you always run out of other people's money.

[Ryan Lee]

Totally.

[John Gafford]

So says market Thatcher.

[Ryan Lee]

But then what do the owners do? I mean, the owners, they, they find a way to circumvent the system, they go somewhere else. I mean, it's the whole book of Atlas Shrugged, right? The owners leave and they go form their own society elsewhere. And so, so, you know, the more I look at the world that we live in today, the more I stand firm on Ownership, ownership of free speech, ownership of money, ownership of choices. And that's a challenging place to be, but it's the only way to be free.

[John Gafford]

Okay, all right, last question. Path A, pass. Path B, let's go right. Path A, buy prop, buy one property, cash, all in cash where it cash flows heavy. Or option B, buy three properties with plus 6% interest. Leverage, man.

[Ryan Lee]

Always option B, always option B, always

[John Gafford]

option B, buy the leverage.

[Ryan Lee]

Well, because it comes down to the core premise of money, right? I mean money is debt today. Debt is leverage. And so if I buy in cash, yeah, I own the assets, but when I buy in cash now I, I, you know, I've got cash flow, but why not use the bank's money, right? If I can use the bank's money, I look and my wife always gets mad when I say this. So this is going to go to your broad network. But like there's two ways I can go rob a bank. Bank, okay, I can go into the gun or I can go in with a single family home or a piece of property and either way the bank's going to give me money. One I just go to jail with after and when I go home with a property. So if I can use the bank's money, if I can use the economic system to buy more assets and then if you really consider, and anyone who owns real estate understands this is the greatest power of real estates, it's using debt as income. So I want the ability to use debt to acquire assets, to build a portfolio and then I want the ability to use debt as a way to generate tax free income. That's really the game for me. And if we just look at it from a rate of return standpoint, right? If I buy a property, and we'll just use simple math, if I buy a property at $100,000 and it appreciates by 5%, but if I bought it with all cash, my rate of return is 5%. That's where everyone's going to point to it and say dumb, right? Market's better than that. But if I bought the same property and only had to put 20% down and it still appreciates by 5%, my rate of returns, 25%, same property. But leverage is a multiplier. It's, it's really what multiplies my rate of return, what allows my money to work harder.

[John Gafford]

So yeah, but, but you also did, you didn't. For a total internal rate of return, you've got to include, include the cash flow in that equation.

[Ryan Lee]

Totally. But even if I include the cash flow, it's not going to like.

[John Gafford]

It won't go to 25.

[Ryan Lee]

It won't go to 25. Yeah. So the way I look at it is Nassim Taleb, I love his book, he says anti fragile. If I'm going to use the game of leverage, if I'm going to play that game, I've got to counterbalance my barbell with liquidity. Liquidity and leverage have to go hand in hand. If I go all in on leverage, I'm not going to play the game of real estate for long. Right. I'm going to get knocked out of the game.

[John Gafford]

Yeah.

[Ryan Lee]

But if I go all in on leverage, I can build a much bigger, much more robust portfolio and I can shift the risk to the bank, not to me. And I can just counterbalance that with having a lot of liquidity. And that's again kind of where the life insurance component comes in.

[John Gafford]

Got it. Cool. Well dude, super interesting. If they want to buy the book, where can they buy it?

[Ryan Lee]

Well it's retiring 10 years dot com. That's the easiest place to buy.

[John Gafford]

We give. You know I'm ask one more question too because I, because I wanted to ask this and I forgot to ask it which is this. So many years ago when you were struggling here you were, you read Rich dad, Poor dad and then you read Robert Allen's book and now you've got him on the back of this book and Robert Allen co wrote this book with you. We never even talked. Like that's pretty amazing. So how do you go from finding your heroes to working with them?

[Ryan Lee]

Man, I'll tell you what's, you know, when I first walked away from the corporate world, I walked away out of pain. Like I just, I didn't know what I was quitting to do. I just knew I didn't want that anymore. And it was kind of crazy, you know, a coup. Most people thought I was crazy. I walked away from a six figure salary, right. I was making good money in the medical cell cell division. But there were a few people that said how did you do it? And can you show me too right. And so I gave him enough information. I read these books, I did these things, go try that and they'd go do a couple things. Then they come back and talk to me and I'd say okay, maybe try this. That's when I got stuck here. Here's how I did it. And it just started spiraling to where I saw people getting results and they would send their friends and I started working with people which then turned into a company. I've been now doing this over for over 10 years. We've done over 5,000 single family homes in this 10 year period of time. And the craziest part is the real estate is a major component of it. The life insurance is a major component of it. But the most powerful part about what we've built as a community. Yeah, A community of people that can help keep you in the game, can help that all the questions that you're ever going to ask have already been answered inside of that community because people have lived it.

[John Gafford]

Time machines.

[Ryan Lee]

And so a couple, a couple years back, we were doing one of our big live events and I thought, you know what I mean, I talk about these guys all the time. I'm gonna hit these guys up. I don't know them, I'm gonna hit them up and just see if they'll come to this events, right. And so I hit them both up and they came. Robert Allen came to the events and we stood them on stage in front of hundreds of people and I gave him an award and said, it's a lifetime achievement award. Like, you inspired me. And because of that, I was inspired by all these people. And he got so emotional. It was, it was, I mean, his, like sometimes he said, you know, when you sit down to write a book, you never know who's reading it. Yeah, you read it and look what you didn't look. And so he came in and he's like, you know what, man, I want to do anything I can to help you. He's BFFs with Robert Kiyosaki.

[John Gafford]

Yeah.

[Ryan Lee]

So he introduced me to Robert Kiyosaki and it was the same thing. All I wanted to do is say, look, I stand on your shoulders. Thank you. And so both of these people, when they saw what I had built using, because, man, I reference them constantly through what we do, they went all in. And they've been helping me promote it, helping me drive it, introducing me to their connections. It's been, I mean, that was one of the greatest rewards, honestly, is to be able to go back to the mentors who inspired me and say thank you. And I wrote this. I wrote this and I'd like you to be part of it.

[John Gafford]

Unbelievable. Guys, the book is retire in 10 years or less. Where can they get it? Anywhere.

[Ryan Lee]

Amazon.

[John Gafford]

Amazon.

[Ryan Lee]

Just go to retireintendyears.com we give out about 500 worth of bonuses that go with it.

[John Gafford]

Awesome. Pick up the book, dude. And where can they find you? Look on the, on the Gram, whatnot.

[Ryan Lee]

Yeah, the Graham. I mean, the Ryan D. Lee is basically where I'm at.

[John Gafford]

Can't we all be something? Yeah, someone's got be John Gafford.

[Ryan Lee]

Ryan D. Lee. So I'm the Ryan D. Yeah, me too.

[John Gafford]

Yeah, I hate that because people think you're just being pompous. I know somebody else had your name

[Ryan Lee]

before someone had it.

[John Gafford]

You got to do something.

[Ryan Lee]

And he's an actor. I tried to get him. He's like, he's super famous.

[John Gafford]

I know there's a Ryan. There it is. All right, brother. I appreciate having you. Anytime you're back in Vegas, you're always welcome back. Guys, if you listen to this today, man, listen. Yes, I wish we could all go back in a time machine to buy houses for $130,000, but nobody's coming to help you. You got to get started in this. There are places in this country where you can buy doors that do cash flow and will appreciate. Start doing the work for your future today. See you next time. What's up, everybody? Thanks for joining us for another episode of Escaping the Drift. Hope you got a bunch out of it, or at least as much as I did out of it. Anyway, if you want to learn more about the show, you can always go over to escaping the drift.com you can join our mailing list. But do me a favor, if you wouldn't mind, throw up that five star review, give us a share. Do something, man. We're here for you. Hopefully you'll be here for us. But anyway, in the meantime, we will see you at the next episode.