Questioning Authority: Q&A with Leading Authorities for Entrepreneurial Excellence
Question and Answer sessions with leading Authorities in health, business and relationships to help service based professional entrepreneurs achieve peak performance in biz and in life.
Authority is a word that has many connotations. For this reason Authority in this context is defined as an expert + influencer= Authority. Someone who has expert knowledge on a particular subject AND has the characteristics to influence others.
Host Dr Scott Vatcher questions Authority figures to help entrepreneurs, business owners and service providers with achieving higher levels of success and fulfilment both in their business life and their personal life.
Exploring unique health challenges that service based entrepreneurs face such as fatigue, burnout, and finding balance between work-life struggles.
Exploring business and financial challenges such as marketing, sales, employees, investments, real estate, hiring and firing, when to scale and when to pivot.
Exploring relationships with self, business partners, romantic partners, your kids and your customers.
Questioning Authority: Q&A with Leading Authorities for Entrepreneurial Excellence
Financial advising is broken. Investing in assets that generate predictable income and cash flow with Chris Mills
What if I told you that achieving financial independence is not just a pipe dream but a reality you can accomplish twice before 40? Join me, Scott Vatcher, as I sit down with Chris Mills, a financial wizard who has done precisely that. Chris, who proudly wears the badge of an anti-financial advisor, debunks the myths surrounding traditional financial advising—often disguised as mere insurance peddling—and shares his unique philosophy on becoming "work optional." Through his own remarkable journey, Chris offers invaluable insights for healthcare and service-based professionals on securing their financial futures.
Financial freedom isn't a one-size-fits-all concept, and in this episode, we unpack its many facets. Together with Chris, we discuss how traditional retirement models often fall short, leaving even millionaires struggling in high-cost areas. Personal stories, including my father's experience of working well into his 70s, highlight the urgency of understanding diverse financial strategies. We also tackle the psychological barriers people face when stepping outside conventional wisdom, offering you a fresh perspective to navigate your financial journey.
Expect candid discussions about common investing pitfalls and the importance of building passive income streams. Learn why not all real estate investments are created equal and the critical role seasoned investment partners play in your financial success. This episode is a treasure trove of practical advice, from managing fluctuating incomes with a "spending plan" to the essential role of an emergency fund. Discover how adding value to your clients can lead to financial stability and increased income streams, ultimately guiding you toward a more fulfilling life.
Takeaways
Traditional financial advisors often fall short in providing effective financial advice and solutions.
Alternative investments, such as real estate, can offer better opportunities for financial freedom and passive income.
The traditional retirement system has a low success rate, and many people are not financially prepared for retirement.
Financial freedom is not just about having enough money to cover expenses, but also having the freedom to live life on your own terms.
It's never too late to start working towards financial freedom and building passive income streams. Knowing your actual numbers is crucial for financial success.
Focus on getting lean by being a wise steward of your money and living on less than what you earn.
Keep your money liquid and under your control.
Invest in assets that generate predictable income and cash flow.
Avoid common mistakes like holding onto low-performing real estate properties and investing with inexperienced individuals.
For those with variable income, have an emergency fund and focus on increasing your income by providing more value to others.
Invest in yourself first before investing in other assets.
Real estate is a good investment option, while the stock market and managed funds are not recommended.
Crypto is volatile and should be approached with caution.
Future episodes can explore different investment options and how to make your investment money pay you from two places simultaneously.
Chapters
01:15 The Need for Financial Education
06:22 Discovering Alternative Investments
10:44 Defining Financial Freedom
13:42 The Timing of Financial Independence
23:21 The Parallels Between Financial and Healthcare Industries
25:16 Creating Cashflow and Financial Freedom
26:03 Knowing Your Numbers
26:33 Getting Lean, Getting Liquid, Getting Out
27:16 Mistakes in Real Estate Investing
29:41 Investing with Variable Income
35:35 Budgeting and Increasing Income
42:25 Real Estate
42:55 Stock Market
43:21 Managed Funds
44:39 Cryptocurrency
46:11 Investments that Pay in Two Places
I'm Scott Vatcher, the host of Questioning Authority, where I question authority figures about health, wealth and relationships. This episode is brought to you by TheAuthorityCocom, helping health professionals be seen as the go-to authority in their community. I hope you enjoy this episode. Welcome to the Questioning Authority Podcast. I'm your host, Scott Vatcher, and I'm here to question authority figures in business to help you, the listener, achieve greater levels of success and fulfillment, both in your business and in your life. And I've got a great guest here with me today, chris Mills. Welcome to the show.
Speaker 2:Hey, it's a pleasure to be here, Scott.
Speaker 1:Yeah, thank you so much for being on the show. Hey, it's a pleasure to be here, scott. Yeah, thank you so much for being on the show. I'm super excited about this episode because it's all about the money. I love it. You know, our basic target market is service-based professionals really health professionals and we dive deep into our professions. We know what we're doing, we help people out. But when it comes to the money side of things not the business, but the finances, the future proofing all of that I think we fall short in a lot of cases. So if somebody just tuned into this episode now and said, all right, am I going to dedicate the next 30, 40, 50 minutes to this episode or not? What is it you're going to bring to the table? What is it that you can say here? Why are you an authority in this space that somebody should listen to you for the next 30, 40 minutes?
Speaker 2:Well easy, unlike other authorities out there that are all full of themselves yet they can't do squat with it and people don't actually get results. That's the one thing. True in my case is that I actually got results. I actually became work optional, meaning I could retire when I was the age of 28, then had to do it again at age 39. And I've done it twice, and not only for myself, but I've helped other people do it as well. So it's something that it's not just something I talk about, that sounds airy, fairy and fun. It's actually something that really works.
Speaker 1:You know you've co-authored the book Entrepreneurs on Fire with people you know. Anyone in the space here knows John Lee Dumas, gary Vee amazing. You've got your very own super successful podcast called Money Ripples. Everyone check it out. If you want to learn how to make your money work for you, definitely go check that out. And, like you mentioned, you retired at 28 and again at 39. I'm 48 and I'm nowhere close to retiring yet.
Speaker 1:So you know, let me tell you a little bit about my situation or like my experience with financial advisors, and then maybe get some quote unquote advice from you. So I've been to three or four financial advisors over the years and we're talking over a span of, say, the last 20 years and unfortunately they all were basically glorified insurance salesmen and I didn't realize it the first two times I said why do you want me to change my insurance? And then I clicked in and realized I said why do you want me to change my insurance? And then I clicked in and realized, right, because you get a residual from that for the rest of your life. So there was very little actual advice. They were telling me to get all these insurances and they take a little cut every month for the vast majority of my whole life without any other financial advice. So that's my experience. So not great experience. So why do you call yourself the anti-financial advisor?
Speaker 2:For the very reason that you hate them. Right, they suck.
Speaker 1:Let's be honest.
Speaker 2:They? They are salespeople in suits. That's what they really are and and I learned that firsthand, right I mean, so I'm not coming from okay, I am judging a little bit, but I'm coming from a place of understanding, from where they came from and and what is how they've fallen short, especially in the financial education space, because it really hasn't translated to people becoming financially free. Because with all the financial advisors out there, you'd think there'd be a lot more financially free people, right, if it really worked, there should be, but it's just not the case, and I'm one of those people. I like real evidence, I like to know that things work. That's the whole reason I went into business in the first place because, going to college, I started to see the professors. I saw the ones that were professional professors, the ones that really didn't have life experience. They're just teaching out of a book, so to speak, and there's a lot of theory. And I realized well, wait a minute, if I follow this path, I'm going to become some nine to five slave or nine to nine slave, especially if you're in healthcare. You probably know that more than anybody. But I didn't want to be that person that was trapped, and so I wanted to find a business, but I wasn't sure what that was. But several months in, the opportunity came up to become a financial advisor. I didn't realize it took anybody off the street. As long as you could pass a test and not be a criminal, you qualify to be a financial advisor. You don't have to have any financial background at all, you don't have to have a college degree, you don't even have to know what, you don't even have to do math or I mean you have a calculator that could do that for you, right? So I ended up getting into that profession and I was excited to have my own business and to have that sort of experience there. But I also was hoping that I would learn how to become financially free myself, and so I bought into that same thing mutual funds and insurances. That's pretty much it. That's all you do as a financial advisor. That's all you offer Out of the entire world of money. You offer two things. I call it Mexican food. You know, although I love Mexican food and it's cause it's Tuesday, it's taco Tuesday when we're recording this. So you know, maybe, at least for me, it is maybe not for where you are, but for me it's taco Tuesday. Um, but uh, but you know, obviously, like Mexican food is great, but if you look at what Mexican food is, you look at a burrito, it's just a taco that got rolled up right, it's the same ingredients. You know. A tostada has the same ingredients. You know it all has the same ingredients inside the Mexican food, but they just package it a little bit different and call it a different name. That's financial advising. That's really what it is. They just offer mutual funds and insurance and that's it.
Speaker 2:Well, several years in, I remember I sat down with my dad, and my dad, all he taught me was the same thing financial advisors teach, which is spend nothing, save everything and save it forever. Right, and just live that kind of life, be cheap. So I was on that path myself in my twenties. And uh, and of course, eventually my dad said well, when are you going to sit down with me and talk to me about money? You know, when are you going to help me be my financial advisor? And so I sat down with him. First time ever in my life, I saw his money because he was very guarded. He never wanted to share it with us because he's always thought people would steal his money from him. He's also the kind of guy I always said you can, we can't afford this. We think money grows on trees. I'm not made of money. You know those kinds of things I was always taught Well as I sat down with him.
Speaker 2:I see his money. He had paid off his house. He was 100% debt-free, just like they teach you to do. He'd also saved money in his retirement plans for a couple of decades, done everything he was supposed to do there, saving as much as he could. And when I looked at it I said dad, you're 61 years old. If you want to retire today, you better hope you die in five years, because that's when you're going to run out of money. All right, chris, that's not what I want to hear. Give me something else. I said I don't know, because you did everything right according to what I teach as a financial advisor. But if I put you in this stock thing or that stock thing right which I didn't have that big of a repertoire, after all, you know but like, if you put you here or here, if the market goes down, you'll lose money, and then you might want to disown me. So I don't want that to happen. So I was at a loss.
Speaker 2:A few weeks later I'm speaking with a friend on the phone. I called him up and just to see how he's doing Now. I trained him to be a financial advisor but he left to go do real estate investing. So I thought, for sure, this guy, he probably went broke, he's. I'm going to see if he needs to beg me for a job again. Right, cause that's kind of that's kind of arrogance I have as a financial advisor, like, let's just be, let's be honest. How many financial advisors you know are arrogant? Like almost all of them, okay, to some level or another. So I know you're shaking your head because of that reason. So, anyways, um, so I'm talking with him.
Speaker 2:I was like, well, how are things going? He says, chris, they're great. My dad and I have partnered on some deals and we've doubled his income as a professor at the local university. I said, wait, the real estate, the stuff you're doing is doubled his income. Now, yeah, it's amazing, it's been awesome. Come on, that's too good to be true. There's no way that this is actually working.
Speaker 2:And so he finally just stopped me. He said, chris, how many of your clients are truly financially free, where they don't worry about money? I said, well, they all worry about money. They all worry about running out of money too soon or dying too late, so to speak. Right, I said, well, okay, that's not good If it's none of them. Well, how about this, chris? This should be the thing that gives you a hint. How many of you guys, as financial advisors, are financially free, not off the commissions you're earning from selling this stuff that apparently hasn't worked, but actually doing these investments yourself.
Speaker 2:And I really thought about it. I said, well, none, I don't think any of them have, and there's over a hundred guys in our office. Some of them have been working here since the late 1970s, so maybe none of us. There's your problem, chris. And if you think about that contrast I mean, his dad started doing real estate with him just months prior. Double his income, got to the point where he could just about quit if he chose. To my dad, I try to give him solutions and I'm like, hey, you better hope you die. You know very different lives, lives that come with these two fathers. Right, it's almost like rich dad, poor dad. Unfortunately, my dad was the poor dad, and uh. And so that got me down a different rabbit hole.
Speaker 2:It got me to look at this alternative investment space. Things like real estate investing, but not just buying a rental right, but actually doing a variety of these things. It could be, for example, it could be raw land. It could be even like lending money to real estate investors to let them pay you a fixed rate of return on your money. It could be 10, 11, 12% a year. It could be oil and gas, where you again, you own the land and then you get royalties off the land. It could even be apartments. It could be self-storage units. It could you know, there's so many different things. It could be a rental, but you don't actually have to manage it. Somebody else does all the managing for you. You just seriously collect the checks.
Speaker 2:I mean, there's just so many different ways that I had no clue to, even as a financial advisor, that I realized oh my goodness, this is a whole new world. I'm already seeing the problem. Financial advising is broken. It does not work. No one is getting financially free off of this.
Speaker 2:Why would I keep teaching something just because it pays me a check? That's to me, that's lacking integrity. I can't do this anymore. I'm out, and so I went to go. Do the other aspect right. I went to go do more the opposite, which is focusing on cash flow and passive income, to the point where later that next year, I was able to retire myself when I was 28 almost 29 years old, and that's kind of what got me doing. What I'm doing today is because people always ask me Okay, how's a 28 year old retired, how'd you do it? That's the number one question. So that's exactly what I came out of retirement. To teach people do in 2007 was to get out of the rat race. How to become work optional, where you can still work if you want to, but you really just don't have to. You don't have the fears that come up where you wonder if you're going to have to keep paying bills the rest of your life. You know you can jump out at any time and be fine.
Speaker 1:That was one question that I started asking, as I kept going with financial advisors and then never found one who could answer. My question properly was are you financially free? Yeah, and not one of them was even close. So I thought why am I going to listen to you when you don't do it yourself? So I love where you say you basically put your money where your mouth is, so to speak, and did it twice. So what is your definition of financial freedom? What does that mean?
Speaker 2:Yeah, I have two different phrases I use. There's financial independence and financial freedom. Financial independence means you can pay your bills and you don't have to show up to your job or your business, right, so you have enough passive income coming in to cover your bills. But financial freedom is different. Financial freedom says I not only can just pay my bills, but I never have to worry about money again. Right, I have more than enough coming in. And it could be.
Speaker 2:It's not really a fixed number per se because, let's be honest, financial freedom is more of an emotional or mental state of being versus an actual mathematical. Freedom is more of an emotional or mental state of being versus an actual mathematical Because for somebody like it's very common for a lot of our clients they'll say I want 10,000 a month or 20,000 a month coming in, and that may not be what they need, they may only need seven or 8,000 a month. But they might say, well, 10,000 a month is more than enough for me, it's a couple thousand extra buffer, I'm good. But for others that might say, well, I want, I know I need 20,000 a month to live, but I want 50,000 a month coming in. That to me is freedom. So it kind of just depends case by case. But really the financial freedom is. It's not the FU money you know, as some people would say it nowadays. It's not that it's really just at a place where you know that you feel free.
Speaker 1:It's really just at a place where you know that you feel free. I love the distinction between the two because it's not a set thing, it's a continuum and that can change for anybody, because what one person's comfortable with, another person's not To have this much in the bank. For this person they're totally comfortable because their whole life they had nothing and now all of a sudden they've got $5,000 in the bank that they can do what they want, versus this other person needs 50 or $100,000 sitting there to feel free or comfortable with that. They say the best time to plant a tree was 30 years ago and that the second best time is today. You know that's an old proverb. I use that when it comes to health all the time in my practice. But how does that apply to money? Like, when is it too late? Was it too late for your dad, like you mentioned? You changed what you did and it sounded like within a year or 18 months you could retire. So these things can happen pretty quick, can't they?
Speaker 2:It is, but it's not get rich quick. That's a big distinction I tell people, because everybody's different. I mean there's some people that they try a little passive income calculator on a website, you know, and find out how much they could create in the next 12 months, and sometimes it's a hundred grand or more. I saw somebody that did a calculator. Result it was like $600,000 a year they could create in their situation, while others it's like 6,000 a year, right, maybe, if that you know. So it really does vary depending on the situation.
Speaker 2:But I mean, for my dad, I mean it was tough because he was still. The one thing is that he was still stuck with everything he was taught and trained forever and he did try to venture out a little bit. But there's some real estate deals that just didn't pan out well for him, especially when the recession hit right, and so I mean he ended up working into his 70s until he was forced into retirement. Fortunately, again, he was a good saver. He did have some lucky breaks with some stocks and things like that that helped him out, but it's a very different lifestyle he's. He's currently alive. He's almost 80 years old now, um, which, by the way, we never thought he would make it that far, including himself. He never thought he would be alive this long. But, uh, I mean, if you think about it, his dad died when he was 72 and my dad's in worse health worse health than my grandfather was Right. So to consider the fact that he's making it to the age 80 is impressive. But, um, but he'll probably be the first to tell you that he's alive, but he doesn't really feel like he's living because now, with physical ailments and everything else, he's not able to do what he wants to do where.
Speaker 2:Uh, I mean, just the other day we're on the phone and he's saying wait, chris, how much, how much money do you make again? And wait, how, like you, you traveled where again and you did what again? And wait, where are you now? Are you even at home? Right now? I'm talking to you and and he's like I just don't understand that lifestyle. He's like I worked so hard to just try to help raise you kids and just work my job and do that thing. He's like that's just a different life that I'm not familiar with.
Speaker 2:And it's true, like you really have to go there first, and I think that's what happens for a lot of people is that the biggest obstacle I run into for many people is that they just don't believe it'll work. They just don't believe it'll happen, even though tens of millions of us here in the U? S alone right Tens of millions of us have made it work already, versus if I were to look at, um, like some of the statistics based on financial advising, uh, here in the States, for example, one of the biggest retirement companies that are out there today, especially for those people that work a job, they get the 401k, the retirement plan, with the match for their employer. So they're throwing on quote unquote, free money, as they always say, and they're doing all this stuff. However, the stats say this is that with that company, who has 45 million clients, of those 45 million, only 810,000 have at least a million dollars. Now, if I put that in perspective, here's the deal In traditional financial advising, with those that have actually stayed up to date with the numbers and everything, you're only supposed to pull off 3% a year.
Speaker 2:That means, if you happen to save up a million dollars, you're living on $30,000 a year and, depending on where you live in the US and depending on your circumstance, if you're not single for one and you're not living in a place as expensive like California, 30,000 might be possible to live on, but for people in California, even if you're single, that's like homeless. You're homeless on the street almost at 30,000 a year. So think about it You're a millionaire, but you're a broke millionaire. You're living on so much less. And that's why there was another study done by a different company, independently, that of those people that have at least a million dollars, which is, by the way, only about one and a half percent of those people, 35% said quote it'll take a miracle to be able to retire, a miracle. So even if they have over a million dollars, more than a third don't think they'll even make it anyways because of that very reason. So if we look at the success, the odds of success, that means roughly only about 1% of people feel like they're okay, right, that they actually have enough that they could probably live on. That's a horrible statistic, because if I were to go on Google and look up a restaurant and there's 99 negative reviews, one-star reviews, but there's happens to be that one five-star review, who's their mom that gave them that review? All of a sudden, I'm going to say you know what I think? I'm going to try that restaurant because it sounds good. No, like you're going to say 99% of the time is a failure rate. I'm going to go for something that has a better success rate, even if it's accidental.
Speaker 2:There are people that have done real estate not even been good at it, and still made more money than those that were trying to be intentional with their retirement plans, gambling in the stock market and so getting people to break that, because financial advisors and the companies they work for have spent billions and billions of dollars. It's kind of like the healthcare industry and pharmaceuticals right, they spend billions, if not more dollars trying to convince you that this is the way right. This is the way to do it. This is the only way, the only path you should be doing.
Speaker 2:Everything else is risky. It's gambling. You shouldn't do that stuff. That's just for certain people. You're not that person. You just do it our way. If you can break free from that and realize that this is not it, that you can actually do something different and, in fact, you have better odds of success doing it differently than the people that have majority of people that have failed at it miserably. If you start to realize that and again, like what I said earlier in this conversation, I like evidence and know that things worked. You look at the evidence. It supports everything I'm saying, right, even though I'm an authority that's speaking kind of against the mass, the mainstream media and everything else that's been bought out by these companies.
Speaker 1:It's amazing to hear you speak like that because, from a health perspective, I'm in the alternative healthcare system and you know we talk about how the medical system is broken all the time and and how the, the mass media and the pharmaceutical money and the et cetera is is pushing people really in a direction that's nothing to do with health and in your case, you're talking about basically the exact same thing, but just financial health, and I never can't believe, I never really put the two together to see that that is exactly what's happening.
Speaker 2:Sick care versus healthcare right.
Speaker 1:That's exactly right. Yes, do you have a phrase that you use in the financial industry?
Speaker 2:Oh, about sick care I mean something along those lines.
Speaker 1:How do?
Speaker 2:you put it that way, I don't know. Well, I mean, I often compare it to pharmaceutical companies, because they are like big business that try to push something that really doesn't ever treat the problem right, and we kind of do that. I mean, really, if you look at financial advisors, they are like pharmaceutical sales reps, aren't they? They are brokers, not just because they're broker than you and I are, but they really are brokering and selling a product. In fact, guess what they call it. All the time they call it a product, you know, they say here's a new product to offer your clients, kind of along the same lines. I remember it just had a memory pop up before I left. This was probably within a year before I left, so I was already starting to question what I was being taught.
Speaker 2:I remember a guy came to do a training. This is in 2005. And he said hey guys, let me show you an example here. If you have a hundred thousand dollars in the market today, you lose 50%. How much do you have left? And all of us being math geniuses, of course we're like well, 50% of a hundred thousand, $50,000, right? He's like that's right. So, guys, what kind of rate of return do you need to get to get back to a hundred thousand. And everybody without hesitation said 50%. He said, no, it's not, because 50% of 50,000 that you have left is only 25,000. So your 50,000 became 75,000. You're still 25,000 short, even though you made the same thing that apparently you lost.
Speaker 2:He's like and let's look at the average. He said you know, if you take it, you know one, you know, say really, you need a hundred percent rate of return to get back to breaking even. So he's like let's do this, let's say that happened in two years, even though it's not likely, so that one year is 100. We're taking you back to grade school math here. Minus 50, for that 50% loss is 50. Divide that by two years. He said look, your average rate of return is 25%, but your actual rate of return is zero, even though you got back. You lost 50, then gained a hundred to get back to where you were. That's a 25% average return. But your numbers don't show 25%, do they? They show you zero. And then we're all like well, wait, there's fees that come out, so you probably don't even have a hundred thousand dollars. He's like exactly 25%. And you still lost money and and that, and that was a huge epiphany. And we did the math. We looked at 1995 to 2005 of the stock market and we all realized, wait, if we didn't lose money in the Y2K era, even though the 90s roared in the States here, my goodness, we would have had more money, not losing money in the market.
Speaker 2:And I went to him. I cornered the guy in the parking lot. I said, hey, listen, we're doing the math here. Why shouldn't I, a guy in my late twenties, why shouldn't I just go and not invest in the market and just get good, certain returns and the? And the guy just turned to me. He said listen, you're young enough, you can take the risk, because the truth is you're probably going to make more just gambling in the market anyways, especially when you got more time. We're just offering this because there's people scared to be in the markets. We're giving them another product that they can use, that they can, that you can offer. So then you can sell to anybody. And that's when I realized, like wait, a minute, I'm not a financial expert, I'm not even really an advisor, I'm a product peddler, right, I'm just, I'm just offering stuff and these guys are just trying to give me new products to pitch and sell so that we can fit the needs of everybody If we can't fit them in a. You know there's a little scrounge. You know there's square peg and a round hole. I'm going to try to make it work and you may use. This was one thing.
Speaker 2:I did come up, though, that I do see a correlation between healthcare and finance. Right, I'm a huge fan of alternative healthcare, but it's always bugged me. It's called alternative healthcare. Has that ever bugged you, scott? I mean a hundred percent. Yes, yeah, like why is that the alternative when this is actually the stuff that's been proven to work for hundreds, if not thousands, of years? Right, you know, and I and I use a lot of alternative healthcare. By the way, my doctor died of cancer nine years ago. I haven't been to a doctor since, after he died. You know I go to other practitioners in different aspects, but the traditional Western health I don't go to because I know that that stuff doesn't work. It just gets people to be unwell, but not well, and I've seen the same thing in the financial world.
Speaker 2:Is that, again, people are just trying, you're just trying to keep people from not dying financially, right, but really we're trying to get them to the point where you're not just like my dad, which is he's living, but he's not really alive. He's not really living life, he's just alive. I want people to really be alive, kind of like the science is back here, is live your life now, not tomorrow, right? How do we get yourself to the point where you can live life now? And the only way to do that is to do what financial advisors won't tell you, which is how do I have income today, not 30 or 40 years from now when I retire, if I'm lucky and if, of course, you're already retired maybe retired or dead by the time, you can be accountable to my results. But I want results today, and that's what we get people to do instead.
Speaker 2:So, like I remember, we had one guy, dan. He came to us, lived in California, so he didn't want to live on 30,000 a year of his million dollars Well, his million dollars in various types of real estate. So we kind of diversified among different types of real estate stuff and we're not investment advisors but we're connectors. We can connect them to different deals, ones that I've invested in myself or we've vetted ourselves, and, by the time he was all done, getting his money out there and deployed. Instead of living on 30,000 a year that his financial advisor said he could live on, he's now making between 100 to 130,000 a year with that same money.
Speaker 2:So it's not about having more money and accumulating it like you're some squirrel trying to pour it up all your nuts and hopefully you can live off it before winter kills you off, but instead you get this money to actually pay you right now and then you don't worry about it. In fact, you never have to kill that golden goose that lays your golden eggs. You actually get to eat the golden eggs and the goose stays fat Right. So if we're going to use all the financial you know uh, analogies and metaphors that they always use it's the truth is like their golden goose, you just slate, you just shave off a little bit at a time until there's no goose left. You know, and that's and that's not what we're trying to do. We want you to be able to have a life now and in the future.
Speaker 1:Yeah, I mean, what you said a few minutes ago really struck me with. What popped into my head was you got to know your numbers? And again, similar with what we're talking about, where there's this tomfoolery where they say you've got a 25% return this year but you're actually $25,000 down right, but if they don't say that second part, they're walking away thinking they did great, I got 25%, that's incredible, but wait if you don't know your actual numbers, that's very scary place to be, because you think you're doing great and you look back like you said, when you retire, I must be doing fantastic.
Speaker 1:And you look back and you're in a situation like your dad where you know, we know none of us wants to be that. So, when it comes to numbers, how do you start to know your numbers? Like, where does somebody start? If somebody's listening to this podcast now and, as a health professional, you know you might be doing okay, but you, you know we're not the richest people around, but we're not the poorest people around either. Um, where do we start? What's? What's the situation where we can go? What can somebody who's listening to this right now do today to start that process?
Speaker 2:Yeah, I like to give three pieces of advice is get lean, get liquid and get out. Uh, get lean means that you're you're being a wise steward of your money. Don't be cheap, uh, I mean, there's people that are financial experts that shame you and say you should live on rice and beans, and you know, you should pretty much sacrifice your entire life until for that someday. Right, and we're not saying that you could still take your vacations, you can still drink that latte, even though someone will shame you for drinking your latte. Right, you can do the stuff, but prioritize it, like you know, as Marie Kondo would say. Or you know Marie Kondo, right, you know from Japan. She'll say you know, whatever brings you joy, right, like, put money where it brings you joy, but if it doesn't get rid of it, eliminate those expenses. Don't focus on those. It's no different. And so, be a wise steward of your money. Make sure that you are living on less than what you earn and then, with the extra money you have, get liquid. So get liquid means that you don't lock your money away in prison.
Speaker 2:Think about it Everything that a financial advisor tells you to do is to put your money in prison, lock it up in that retirement plan. Set it and forget it, as they love to say. Right, just set it in there, don't worry, if the market goes down, it's going to come back up, because it always does over time, which is technically true, even though you never know how long that long haul is going to be if the market goes down when you're getting ready to take it out, so you might wait longer, right, like my dad did. You know, you have all those weird things that happen and they tell you set it, forget it, lock it away in your retirement plan. They tell you to pay off your home and just pretty much pay off your house to where your money's now locked up in a home which, by the way, last recession is what cost me dearly, because I locked all this equity in my house. And then when I said, shoot all my money's locked in my house, can I get it back out, mr Banker? And then he says well, no, you're a business owner. We don't like giving loans to you guys anymore. Besides, you know banks are in trouble right now, so don't get a loan from us.
Speaker 2:And then I had to lose that house. I had to sell it off for way less than what I owed, you know, and that kind of stuff. That's the kind of stuff that happens when you lock your money away in prison savings account, keep it liquid not forever, but really just get it in your power and your control so then later you can get it out. And then, when you get it out, you get it out to these places that I talked about that actually generate predictable income, cashflow. Those are the places you want to go. That's why we focus on things like that. You know, and if that's, if you already know how to do that, great. If you don't, then find the education, find ways to learn how to do it.
Speaker 1:And that's by talking to people like you, listening to your podcast, what's it called? Again, ripples Money Ripples Podcast Money Ripples Check it out. I've listened to a few. One of the more recent ones, you mentioned the four big mistakes people make that just ruin their investing plans. The four big mistakes people make that just ruin their investing plans. Give us one or two, you know, just examples of like just it may seem common sense, so don't. If you're listening to this and you do, it don't sound, don't feel dumb, but like what's a couple of things that people will you see all the time and you're like man, just don't do that. What are some of these mistakes?
Speaker 2:Well, the good news is these four mistakes I've made myself, so I'm probably the one financial guy that won't shame you because I've pretty much done everything wrong. I mean, if you've, if you've gone from millionaire to upside down millionaire, you're over a million dollars in debt. If you've done that, then great, you know what I'm like. But if you haven't been that bad off, then I can't judge you, because anything you've done financially is probably better than I've done. Right, I just happen to figure a few things out. But one of those problems, of course, is like, like we get a lot of people here that they'll come to us and say, oh, I do real estate investing too. Oh, yeah, really. Like tell me about it. Like, well, I bought this property here in my town and or maybe this is my first home that I bought, and then I went and up you lot and then I went and upgraded to another home and I kept this as a rental, and so they have this house, this property, but then they think that just because they have real estate, it's good. And I've seen a lot of people where they barely break even on their bills and they think they're doing amazing because they have this rental property but in truth they're not doing nearly as well as they could be Like. For example, I had one client that he had a property that he purchased it was his first home moved out, went to a new home and then that was his rental for years. His whole goal was, if I just pay off my mortgages, then I'll be happy. He had a six year plan of doing it right. He's going to pay off his own house and pay off this rental home. Well, I looked at the rental home and looked at that, like you said, looking at the numbers, and I said, oh, my goodness, you have $700,000 of equity in this house. So if you sold it today, you can get out 700,000 that you can invest elsewhere in other types of real estate. That's better, because how much are you making right now on this property? After all, my costs? $200 a month, 200 a month, but it's 700,000 of equity, yeah, but it's making me 200 a month. And if I pay off my mortgage, which will take me another five or six years, then it'll be 2,400 a month. And I said, listen, henry, his name was Henry I said, listen, if you take, if you just go and sell this property now, yes, you'll lose that 200 a month. You know whoop-dee-doo or even 22,400 a month down the road, but you lose that $200 a month. But that $700,000 can go and be invested in another part of this country and make much better returns, maybe even about $70,000 a year after your costs. So do you want to keep making $2,400 a year or $70,000 a year? Believe it or not?
Speaker 2:It took him two years to decide which one he wanted. So he eventually did it. He sold it. He just sent me an email a few months back saying hey, chris, I just want to give you an update. I just bought my sixth rental property down in Louisiana. I'm now my cashflow is is over $8,300 a month. So that one property that was he was hoping to make 2,400 a month Eventually he's not even hit the sixth year yet, by the way, even now is still making them over a hundred thousand a year.
Speaker 2:So that's one mistake I see people make is that they don't realize that oh, it just kind of a property doesn't mean it's a good one, right? You got to really really look at it honestly and objectively. Another mistake I see is that a lot of times people just they invest with people that they know, like and trust right, and just because you like them doesn't mean they're good. For example, I like to. I just talked to a guy actually before we were recording this podcast, just spoke with a guy who has been investing for about 10 years and I told him I said honestly, I said I'd like to see people have had at least 12 to 15 years under the belt where they've had a full market cycle, meaning they've been through recessions, they've been through boom times and bust times. They've probably made a lot of mistakes and lost a lot of money along the way, but now they're wiser for it. I said those people that probably lost a lot of hair, like you and I have, you know, or we've got a lot more gray hairs and whatnot right, that's the kind of people I like to invest with, not the people that said I started investing in real estate in 2018. I've done great, I don't care because a dog could invest in real estate in 2018 and made money. It doesn't mean that they're smart, they were just had good timing in the market.
Speaker 2:I want to see people that make money when the market's not good, like the last couple of years, for example, for some people, right and so and and that's and that's the thing that I look for, but a lot of people they don't look at that. They see the people that might be on podcasts like this, but then they're so flashy and they seem so amazing. They've had great returns since 2018 or 2019, but they won't talk about before. Or maybe they switched strategies where they were doing apartment real estate before, but now they're doing marijuana farms now and somehow they're just marijuana experts. No, they're not. They don't know what they're doing. Don't be their guinea pig. You want somebody who knows their investment like the back of their hand, right? Somebody who's just really has been there, done that. They willing to say no to most of the opportunities that come their way because they were waiting for just the right deals, and that's people. If I'm going to invest my money with somebody, that's the kind of people I look for.
Speaker 1:Well, you really got me thinking about my real estate. I've got it. Maybe we can chat a bit more off the air around where I'm at with my real estate, because you really did get me thinking. And it is a very common concept, maybe even more so here in Australia, where it's, like you know, real estate is great. Just get a house. Just, you know, either buy a rental or, yeah, move on to the next one and keep it as a rental and then pay it off over a long period of time, and then maybe when you retire, you'll have a bit more of a cash cow or you'll have a bit more equity in it, et cetera, et cetera.
Speaker 1:So definitely an interesting perspective on that. I will chat with you later on that. One interesting perspective on that. I will chat with you later on that one. What? As service providers that are most of the listeners here our income is quite variable and, if I'm hearing sort of like the behind the scenes, in order to invest, in order to have passive income, you need money to start that process. So what are your thoughts on the people who don't have a regular paycheck when it comes to budgeting?
Speaker 2:I get it. I mean, I've been there, especially having been an entrepreneur for the last 22 years, right, and only I would say in the last, you know, less than a decade have I been in a stable position. You know, because of all the ups and downs, right, and I'll say this like, if you've got a variable paycheck, all the more reason why you need passive income, right? This is why, uh, even when it comes to budgeting and I hate the word budget, um, I actually like the word spending plan. I guess that's not a word, that's two words, but I like the phrase spending plan. Why? Because the truth is, all money is meant to be used. Even if you don't use it in your lifetime, somebody else is going to blow it in their lifetime, right? So money is going to be used one way or the other. The question is what kind of steward are you going to be over that money? Just like in health, right? You're a steward of your body, okay, well, be a steward of your money. How do you take care of it? And if it is where you got a fluctuating income, I've usually just based on what's my low month, and that's why I try to make my spending fit in that that may be harder case than others because, I get it, I've had times where I remember I had business months where I maybe made 10,000 or 20,000 a month, while the next month I made 1,000. And so obviously you can try to average it a little bit.
Speaker 2:But this is why having emergency savings is so important. Even before you worry about investing in a creative passive income, you've got to have an emergency fund for a few reasons. You know one just because, in case you have some bad months, it helps you kind of wade through that a little bit more easily. But second reason is, as I call it, abundance insurance, because when you really think about it, when you know that, even if it's a small savings, even if it's just a few hundred that you have sitting in savings, you can even say you know what, that's enough for a car payment. And you can even say, especially in that industry where your, your income does vary, you might say you know what, I don't need that new client because I'm okay, I can at least make my car payment. I don't need to say yes to something that I should really say no to and I'm not honoring myself or my boundaries, right, and same thing. As that money grows. It might be a house payment. It might eventually be a month's worth of income. I recommend at least especially if you have varying income I'd say six to 12 months of expenses that you'll want to keep on hand, just in case that you don't invest. You can still put in better yielding savings accounts and other things we even talk about, like a strategy called infinite banking that we have on our website as well. That's another way to kind of save too, but really it's really having that good nest egg.
Speaker 2:Now here's the thing I'll say is that this is one thing I learned about money that demystified it for me, because even as a financial advisor, I didn't understand this because I don't think they did either and it's stop asking how do I make more money. Instead, start asking how do I serve and solve problems for my patients, for my clients, for the people that I serve? It could be the company, whatever it might be. How can I go about creating more value for them? Because dollars follow value. The more that you serve, the more that you try to solve problems or add value in a way that money is just a natural byproduct. You never have that money. Worry. That's the one thing that I learned, especially after I got into investing in this whole world, I sort of learned from the guys that were saying no, no, it's not about making more money just by doing the investment. If you can know how to increase your income is how do I increase the value I provide to more people? The more you can provide value, the more you can get paid. And that doesn't always mean another degree, doesn't mean another certification although that could help but what it does mean is how do I go about delivering more value? We get paid really well because we deliver a lot of value for our clients and we can prove it right. We can get our clients to actually do it. You know, to even say that our clients actually make money 100% of the time is a pretty big deal, right, and so that's something you want to focus on as well.
Speaker 2:And the great thing is I know if you're in the healthcare sector, you have a servant heart. I mean, that's that's the big thing is that you are there to serve, sometimes to your own detriment, because maybe you believe that it's um, that maybe you know it's a. It's a zero sum game out there that, in order for other people. To win you have to lose, you have to sacrifice yourself for others, almost become a martyr, and that's just not the case. Um, I used to have that same mentality, even as a financial advisor. I thought, if I'm going to be a good person, I need to lose on how much money I make as a financial advisor so that other people win, not realizing that part of it's because the whole industry screwed up. But it's not even beyond that. It's just about how do I go and serve people and create value for them.
Speaker 2:That, really money, is just a natural byproduct of it, and if you focus on that increasing your income and increasing your skills or whatever it takes for you to earn more money one that'll help get rid of these months a little bit more. Maybe the months are still like this, but at least they're at a higher level and that's a good place to be. So then you have more money to use and then take some money rather than just always blowing it, taking the money, and then you invest in things like real estate and the things that we talk about, where now they can start to generate more income. So then, even if we have another craziest period of time like you know, we had the whole COVID shutdown thing and then even talked about non-essential businesses and careers and stuff like that.
Speaker 2:People were furloughed or laid off for some time. I never want people to be in a position where they feel like they have to do that again, like one of my clients. He worked in Hollywood. He was like I'm out of work now, and then, of course, the writer's strike happened in 2023. For almost half the year he's like I'm out of work again. The only thing that saved him was the fact that he could pay almost all of his bills. He's like 90% all the way to paying for all of his bills, financially independent. So he had a little bit of savings, but that savings stretched out could stretch out forever because he had that income also coming in passively. So that's that's kind of the phase you go through is like one, make sure you have some savings to focus on building your income and then three the other money above and beyond your emergency savings, use that to invest and generate more passive income.
Speaker 1:Invest in yourself first.
Speaker 2:Absolutely.
Speaker 1:Yeah, so I'm going to. I've been loving this conversation. I want to do a few little quick hits with you because I know for a fact we're going to get you back on the show and dive maybe a little bit deeper into these. I thought we would have had a little bit more time to do this, but it's been such an engaging conversation that time has flown. So how about, if we do like a, I'll list out a few things and you give me like a yay, a nay or a meh and then give me a, you know, 30 to 60 seconds on, just a little bit of a teaser for when we get you on next time to dive deeper into these conversations?
Speaker 1:I believe I know the first answer very. If I was a betting man, I'd bet the table on this answer that I'm going to get from you because of what we've already been talking about. But yay, nay or meh. On real estate, yay, I knew that We've kind of talked about that one a fair bit, so but with that said, I'm diving deeper into real estate, not just going well, just get a rental and pay it off over 30 years. There's probably a lot better ways to do it. For sure, how about yay, nay or meh on the share market.
Speaker 2:I would say for the most part nay.
Speaker 1:Okay, kind of connected to that is managed funds.
Speaker 2:I would say even more nay, even more nay.
Speaker 1:Give us 30 to 60 seconds on your thoughts on that. That's intriguing.
Speaker 2:Yeah, give us 30 to 60 seconds on your thoughts on that. That's intriguing. Yeah, one thing I've noticed that the one thing I do like about the stock market Is that you can make you could make more money in there. But I've trained people how to trade stocks and options before About 200 of them. I gave them the most conservative strategy To make sure that they don't lose money. Still, I would say only a handful of those people, when I wasn't holding them accountable, could keep making money on their own where they could control their emotions and be disciplined enough to do it. So I'm all in favor of people doing their own investing.
Speaker 2:If I were to pick between that versus managed funds, but I also know the odds are against them. Right, it's like Hunger Games, but not in a good way. Where managed funds, there is a better aspect, because if you're going to be ignorant, that's better. But the thing is the returns are so low. It's pretty much a guaranteed value rate. You're guaranteed to not make it. So I would rather have people you know if they're going to bet on anybody kind of like you said like invest in yourself, bet on yourself and take control of your own investing, versus just turning it over, set and forget, to only find out later it didn't work right and and one that's booming at the moment that I'm sure people, a lot of people, ask crypto I was to say, meh, I'll give it a meh, I'll give it a nah, because yeah, right now it's just going gangbusters again, like and I'm sure it's a buzzword in the scenario.
Speaker 1:But give it another month or two and it might be down another 50% again. So I get where you're where you're at with the million 15% in a week, right I?
Speaker 2:mean that's right that's a yeah, that's a hard. Yeah, that's the hard thing. It's. It's kind of like the stock market, it's a gamble. Um, if you're gonna invest in things like that, just like the stock market, just gamble money, you're not afraid of losing.
Speaker 1:That's a good way to put it. It's all kind of a gamble on the show. Chris, everyone check out his podcast, money Ripples. I've listened to a few podcasts and it is fantastic. You're a down to earth guy, but you know what you're talking about. Like you said, you've got the battle wounds. You've been there, you've done that, you've lost it, but you know what you're talking about. Like you said, you got the battle wounds. You've been there, you've done that. You've lost it. You've made it, you've retired, you've come back and it's a fantastic place to learn, just to go much more deeper into the things that we've discussed today. So definitely check out that podcast. Was there anything else you wanted to say before we jump off?
Speaker 2:Yeah, I know you said what would be a to say before we jump off. Yeah, I know you said what was it. We'd be good teaser for another show. I think it'd be great to go into more depth about what kind of investments you could actually do Like. What do they look like, how do they pay, and you know that kind of thing where we kind of stay more high level.
Speaker 1:Yes.
Speaker 2:But what if you could not only do that one to cover?
Speaker 1:Your investment money to pay you from two places at the same time. That sounds good to me, all right. Thank you so much for being on the show.
Speaker 2:Absolutely, thank you.
Speaker 1:Thanks for listening to this episode of Questioning Authority. I hope you enjoyed the show. Listening to this episode of Questioning Authority, I hope you enjoyed the show. Stay tuned for the next one coming out soon. This episode has been brought to you by the Authority Co. Helping service providers increase authority and revenue. Check out theauthoritycocom for more info.