Broke Millionaire Transformation Into Work-Optional Freedom with Chris Miles

Transcript

[Mattias]
Welcome back to the REI Agent. My guest today is Chris Miles, the cashflow expert and self-described anti-financial advisor, founder of Money Ripples, and host of the Money Ripples podcast. Chris became financially independent twice by age 39, has helped over 1,000 clients collectively create $300 million in cashflow, and walked away from a licensed financial advisor career because he realized traditional Wall Street advice was failing people.

Chris, welcome to the show.

[Chris Miles]
Thanks, I just figured I’d take a drink just for you guys there, you know. Keeping it real.

[Mattias]
Yeah, exactly, we gotta prove that now. Yeah, like how do we not use em dashes and when we speak, right? Like, is that how we prove that we’re not?

That’s right. Chris, this is kind of a spicy little topic. It’s fun.

Let’s just dive right into that first question. If you were a licensed financial advisor who walked away from the industry, what was the moment that made you realize traditional financial advice was not serving your client’s real wealth potential?

[Chris Miles]
Yeah, it was an interesting moment because it didn’t happen overnight, but when it did eventually happen, it turned me fast. I actually did, I was a financial advisor for four years intending to actually become a business consultant. I was just wanting to get real life business experience, but I figured I should start my business, and the first thing that came up was, it was kind of like Adam Sandler and the Wedding Singer, you know, and he goes in for that job at the bank.

He’s like, I like money, I like more of it. That’s for you coming, sir. That’s kind of what I came in like as a financial advisor, you know?

I was like, hey, if I learn about investing, that’s the worst thing I walk away with. You know, best case, I’ll learn about business. Well, I ended up loving being an entrepreneur so much and having my own business, and I was commissioned only too at my agency, that I was just like, I’m out.

Like, I can see the upward. And so four years being in as a financial advisor, I decided, you know what? I’m gonna make this my career especially, and I was going full time, and about that time, my dad reaches out to me, and he says, Chris, when are you gonna advise me?

And I thought, you know what? That’s a good question. And so I went back to Oregon, where I’m from, and sat down with my dad.

Now, understand, my dad was like the penny-pinching saver. This guy was like, he says frugal. We all know he’s cheap, right?

I mean, this guy was like post-depression era mentality kind of guy, the kind of guy that obviously buys everything on sale. And so I’m sitting down with him, and of course, he’s 100% debt-free. Dave Ramsey would be so proud of this guy, right?

Although my dad probably is one that would have taught Dave Ramsey. He’s much older. But he was 100% debt-free, including his mortgage.

He had been stuffing money in his 401k like every good boy and girl should, right? He was getting his company matched, and I looked at everything. I said, Dad, you’re 61 years old.

If you try to retire today, you would need to die in about five or six years because you’ll run out of money. It’s like, well, okay, Mr. Sunshine. That’s not what I wanted to hear.

What do I do about this? I said, I don’t know. You did everything right from what I teach as a financial advisor.

You sit and forget it for decades, and here you are. What do I do? I don’t know.

Just keep saving, work longer, and he did. He worked into his 70s until he couldn’t work anymore. And then he lived out the last 10 years of his life living on a budget, pretty much out of money by the time he passed away just last year.

In fact, I was bankrolling his 13,000 a month caregiving and things like that at the time. So it was a rough go that this guy saved literally for 40, 50 years, and it never worked. And it was just a month later, I called up a friend of mine.

Now, this friend, I had trained him to be a financial advisor, but then he quit to go do this crazy thing called real estate investing. And I call him up thinking that, this is what my hope was. My hope was that he was going broke doing real estate, and he would want to come back and work for me in my brokerage.

Well, that didn’t happen. Instead, he’s like, Chris, my life is awesome. My dad and I have partnered on some real estate deals, and we’ve now doubled his income as a professor at the local university.

I said, wait a minute, you’ve been doing this like, what, five months? This is too good to be true. There’s no way my financial advisor brain can handle these kinds of returns.

He’s like, hey, Chris, let me ask you a question. How many of you guys as financial advisors are financially free, not off the commissions you’re earning, but actually doing the investments you’ve been recommending? And I said, well, I can know guys that have been working here since the 1970s.

This is 2005. I said, I know guys that have been working here since the 1970s, so I’d say none. There’s your problem.

And so I said, all right, well, great. Well, tell me the answer. He’s like, I’m not gonna tell you the answer.

You just gotta tell me that real estate’s worse than the stock market. Because I sound like, no, the stock market always beats real estate. And he’s like, no, it doesn’t, Chris.

And here’s why. But I finally just said, okay, I’m open. Give me something.

And he says, he’s like, if you’re really open, I don’t think you are. By the way, this guy wasn’t selling anything. He was just pissed off, right?

He’s like a takeaway sale he’s doing here. And so he said, if you’re really open, go get this book by Robert Kiyosaki called Who Took My Money. It’s a lesser known rich dad, poor dad book.

And then go ahead and then go listen to this AM Talk radio show that these two real estate investors did. And this is here locally in Utah. So I did.

And a few months later, I remember I went to an event and these guys put on. They’re telling me about all these stupid myths about you’re in it for the long haul. And well, how long is the long haul if the market goes down?

And high risk creates high returns. Like how does a higher chance of losing create a higher chance of winning and all these kinds of things. And eventually I realized, I’m like, wait a minute, this stuff is crap.

Like what I’ve been teaching, it doesn’t work. And so I left. I said, either I keep teaching what I’m teaching and I just put my head down and put blinders on and I do it for the paycheck or I leave.

And so I chose the latter. I left, I actually went into, I went full-time into more, well, not even full-time, but I decided to go more into just being a mortgage broker because 2006, anybody could be a mortgage broker. It was like 2022.

And then of course, I also did things like stock trading and then I taught ballroom dancing on the side as well. So a little known fact, I was one of the nation’s top amateur ballroom dancers back in the early 2000s.

[Mattias]
That’s a whole nother angle of the show we could, that’s a good title.

[Chris Miles]
For sure. So I started doing that, but of course I wanted to learn how these guys did with the real estate investing. Now, most of these guys were real estate flippers, but the thing that blew my mind was, it wasn’t about accumulating and saving all this money like I taught as a financial advisor.

That’s what they always teach is, you just save and save and save, set and forget it, turn your brain off. And hopefully 34 years from now, you’ve got something there to live on less than the interest, right? Typically, if you want to retire in your 60s, you’re told a no pull out, no more than 3%.

Well, that means if I happen to be lucky enough to be a millionaire, I’m living on 30,000 a year. I’m living below the poverty line. I’m a broke millionaire, right?

And so of course, learning the other side, like with real estate, and I realized it wasn’t just about doing rentals, which of course I took my starter home, convert it into a rental, interesting strategy. I actually sold it to an investor at full appraisal, rented it back from him and then subleased it out to a renter. So I could strip out all the equity and then still rent it without having to refinance and keep typing the credit.

So I was having fun with some creative strategies that may or may not have worked, especially after 2006. But yeah, long story short, like I started learning I can lend my money to investors and make double digit returns doing that. And it was like this whole world blew up.

It was like Neo taking the matrix red pill. And I was like, holy cow, like there’s so many things in alternative space that I could be doing. Long story short, 2006, later that summer I was 28, almost 29 years old.

I had enough passive income coming in that I didn’t have to work anymore. And so I was like, basically I could retire. I was like, dang, well now what am I gonna do with my life?

And of course people kept asking me how I did it. So in 2007, I came out of retirement to teach people how I did it and teach them how to get out of the rat race as Robert Kiyosaki calls it. And then the recession hit and right when our business was starting and we were focusing on real estate flippers, especially.

And so if you guys know anything about what happened, if you’ve been around long enough, 2007 was not a good year if you were trying to get anything with banks. And I started to see like all my assets were tied up in equity, home equity, couldn’t get it out, couldn’t sell the properties because of course values were starting to tank. And the next thing I know, I went from financially free to over $1 million in debt.

I was about in the hole about 16,000 a month sinking between business and personal. And no, it wasn’t because I was all in debt. The debt came after because I was sinking so bad, right?

Eventually it burned through the savings really fast and I was starting to rack up more and more debt. And of course values were tanking the real estate game. And so I was over a million dollars in debt and pretty much I literally was on welfare.

I was on food stamps and struggling during that time. Eventually, long story short, we can go into it or not, but long story short, I pivoted in my business a little bit to teach people how to find and free up cash because that’s what I was doing. I can’t teach something I don’t do.

And the thing that I was doing at the time was trying to find money, right? And so I was teaching people how they could find money too because that’s what everybody was saying. They’re like, I would love to pay you and know what you learned or what you know, Chris, I just don’t have the money.

I was like, I wouldn’t say this verbally because it’s not a good idea in business to say, hey, I’m broker than you are. You wanna learn? You know, pay me money.

And so instead I just told people, listen, if I can help you find the money, will you pay me? And they’re like, well, of course. I said, great.

Here, do these strategies, do this. You can save on taxes, you know, do this. You can pay off your debt creatively like this and this.

And here, you’ll free up $3,000 a month. And they’re like, that’s awesome, thanks. And I created a whole new business, pivoted our business, pulled it literally almost out of bankruptcy because we were almost bankrupt, both business and personally and was able to reverse it.

And of course, I went from like almost bankrupt 2009 to 2010. We did over 5 million in business in our coaching business. And so that’s kind of where things really start to turn around, started to get out of my hole, even though I launched Money Ripples in 2012, broke off from my previous partners at that time.

And then from there, you know, I even went through a divorce in 2015, but by the end of 2016, I had enough passive income that I was once again what I call work optional, right? Where you have enough passive income to work because you want to, not because you have to.

[Mattias]
Yeah. Yeah, man, you went through a lot.

[Chris Miles]
I did. It’s like a couple of lifetimes there, you know?

[Mattias]
Yeah, my goodness. And I guess like if I’m gonna be a devil’s advocate, and I told you I was gonna do this in the beginning, but it’s not exactly the direction I thought, like was there a moment when you had, when the real estate market was tanking, where you were like, maybe the financial, maybe stocks, maybe that would have been a better route. Was there a moment where you were kind of like second guessing?

I mean, I’m sure so many people were second guessing everything during that like, you know, the worst financial crisis for real estate specific.

[Chris Miles]
Yeah, it’s true. Because it’s funny because, you know, people are saying that now, right? People are saying, oh, I just went into real estate.

And then especially they were like apartment syndication in the last three or four years. They’re like, well, that sucks, right? But you know, back then, I think it’s because everything was tanking because the stock market was tanking then too.

Like it dropped significantly. And what’s interesting too, is that the stock market like in the year 2000, like March 2000 was a high. By 2007, it finally got back up to the high because after Y2K, it dropped.

And it came back up and it was right there again. And then bam, it dropped again. And so people were like, dang, like by 2010, people were like, I lost money the last 10 years.

So it seemed like nowhere you turned, anywhere you turned, it was a loss, right? But definitely real estate, the difference with real estate though, is sometimes you can lose big, you can lose everything. Where at least in the stock market, you only lose half.

You know, it’s just only, you know, it sounds like trying to spin it, you know, the glass is half full kind of thing.

[Mattias]
Yeah, that’s a really good point. And you know, I have some other follow up questions in this too, but like one, if somebody is looking for, let’s say there’s a successful agent that is basically like hearing your story, like hearing like, you know, well, yeah, obviously like real estate could be a really good thing to invest in, but I don’t really wanna be hands on. I don’t really wanna do this.

You know, like I prefer just handing my money off to, you know, an investment broker or just putting it into the S&P 500 and setting it and forgetting it and not having to worry about tenants calling with clogged toilets, all that kind of stuff. What do you say? Like, is there good solutions?

Is there good options for people wanting to be have that kind of best of both worlds in the real estate space? Oh, absolutely.

[Chris Miles]
Well, that’s the one thing I learned is that, I mean, one of the mistakes I made, even in the previous recession was I was a horrible property manager. Like I would take any sob story that a tenant would give me and I didn’t wanna have to pay for that property manager. I wanted to save the, you know, 80 or 100 bucks a month, which is ridiculous looking back, but I was just being so cheap because that’s what my dad taught me to do.

And so for that reason, I was just trying to, you know, save money and it was horrible. And so the second time around, I changed it up. I said, you know, I’m gonna be a more of a hands-off passive investor.

And so for example, even the one that’s the least passive would be like being a, you know, going to a turnkey real estate company where they find properties, usually in a specific area, and then they find the property. They know the numbers before you even buy it typically. And then they’re the ones that put the renters in place.

So you’re the one that literally just goes and buys it. Your hardest part is getting the mortgage if you’re getting a mortgage. And I went that route.

That was the first real estate investment I did when I was coming back. You know, I was, because my credit was shot. It was like a 480, you know?

So it was like getting your name right on the SATs. That was like my credit score, you know, after 2009. And, but I started to rebuild it, eventually got it back again.

And so that was the first thing I did was I bought a turnkey property where somebody else managed it. And I’ll tell you, it was so liberating. It felt so good just to be that hands-off.

But then I realized we could do other things, have ownership and syndications, or I could lend my money. You know, I knew I could do that before, but this time I want to be smarter about it. So there’s a lot of things where I just could be totally hands-off and do it.

I wouldn’t say like, here’s the problem with the stock market. And I think this is kind of where you’re going with this is it’s very set it, forget it, turn your brain off, never look at it again. But that’s exactly what a financial advisor or the companies they work for wants you to believe.

Because if you were to look at it and actually turn your brain on, you’d say, this is crap, I can do better. And so they teach you, they really indoctrinated you to believe that you just put it away, just trust them. You lack the, they used to say the three T’s when I was a financial advisor, you lack the time, the training, or the temperament to do your own investing.

So just trust us, which I guess is like a fourth T. So they would tell us to do that. And it’s like, hey, just tell them like, hey, you guys lack the training, the time, the temperament, just let us handle it all for you.

You just turn a blind eye to it. And that just doesn’t work in real life. I mean, you talk about trying to hand over your money to people, I mean, imagine if you handed over your marriage to somebody else.

I mean, eventually you wouldn’t be married anymore. You hand over your health to somebody else, you can’t do it. I remember, I think it was Jim Rohn that said that you can’t, a coach can’t do the pushups for you, right?

And so it’s the same thing in life. It’s one thing to be a hands-off passive investor, but it’s another thing to be brain off. And if you could be brain on and actually focus on trying to be a wise steward of your money, and you’re still a wise manager of it, and you’re still, it doesn’t mean you have to do all the work, but it does mean you have to at least know what you’re doing, do the due diligence upfront, things like that.

You’ll find that it’s a very different level of stewardship than what we’re taught to do by turning our brains off, because then we’ll just keep mindlessly putting money into those funds, which just gives the financial advisor and the brokers they work for, gives them a raise each and every year because of the commissions they earn, versus you having to get that money back in your pocket.

[Mattias]
Yeah, no, I mean, I think you’re probably right there. There’s probably no true holy grail of being a good steward of your money and turning your brain off. So I think that’s 100% right.

And I think you’re right about having something completely actively managed. There’s definitely no shame in that. We personally have built our portfolio with us managing it, but one of the lines I drew in the sand was, I don’t wanna fix toilets, I don’t wanna do any of that kind of stuff.

And making that declaration and allowing myself just to hand that off, like we, I grew up Mennonite, and I don’t know if you know about Mennonites, but that is the epitome of cheap and frugal. So that was definitely ingrained. And actually, my wife and I, we did the Dave Ramsey plan to pay off our student loans when we first got married, because we wanted to hang over our head the whole time.

So we had that frugal financial whatever, ingrained in us hard, but I knew that I wasn’t handy and I’d be spinning my wheels, trying to fix something by looking it up on YouTube or whatever. And I might kind of feel proud of myself after spending a whole Saturday trying to fix something that would take somebody else like an hour. So I told myself I wasn’t gonna do it.

And sure, I could have probably made a little bit more money over time, but that wasn’t the point. And I knew that if I did that, I’d probably get out of the rental game because it was just gonna be draining me instead of filling up the buckets that I’m hoping it will.

[Chris Miles]
So it’s a good thing. Yeah, it’s the same thing I did too. I mean, I used to have several rentals, but I sold off a lot when it got to that height of 2022, 2023.

That’s the time I was like, you know what? It might be time to cash in my chips and I moved my money elsewhere. And I’m sure there’ll be a time where the real estate market, the rental market would be better, where things can catch up compared to interest rates and prices and everything else.

But that’s the great thing about real estate. People don’t realize that. I used to think real estate investing was just buying a house in your backyard, like in your own town where the numbers might suck.

But still, that’s what you do. It’s long-term, you’re gonna get wealthy. And that’s true for the most part.

However, I realized like, wait a minute, with these kinds of strategies, I can invest anywhere in the country. Even if where I am right now, real estate sucks, right? So that’s the one thing I love about real estate.

There are so many options that are just not taught by financial advisors today because they don’t get paid to tell you that.

[Mattias]
Yeah, I’ve often thought that there could be, how could it be married? And then maybe you would argue it can’t be, but how could that be married a little bit where, I’ve often thought about helping my clients kind of see their assets as like a financial advisor might more like, let’s do ongoing analysis. Let’s think about what you can do with your equity, return on equity, that kind of stuff.

But there’s no, like you said, no financial incentive at all for a financial advisor to recommend real estate. I haven’t heard anybody like bad mouth real estate. I don’t think it’s quite like that, but like, yeah, there’s no, yeah.

I mean, I don’t know what happens behind closed doors, but I don’t think there’s a need. There’s definitely no financial advice or advantage doing it. And so I think like, is there a way to marry the two?

Like, can you have like, a recommended portfolio balance? I’m curious, and that’s another follow-up question for you is if you do invest in stocks or S&P 500s have any kind of finance or like a 401k kind of program that still, do you have any kind of quote-unquote balance? I know a lot of real estate investors are kind of like known to be 100% throwing everything at real estate and not ever looking at kind of like a balance of their portfolio.

[Chris Miles]
Yeah, I’ll see if I can kill two birds with one stone on that question there, because I mean, that’s what we do with our clients. We actually charge them a tuition, right? To really be strategists and connectors to those deals.

I don’t raise any capital. I don’t do any of my own deals because there’s some of the conflict of interest. A lot of times you see guys are like saying, hey, we’ll teach you how to invest, but here’s my thing, invest in that, right?

And it’s where you get mastermind groups that they say, hey, here’s my buffet of people, just go ahead and invest with them, but it’s because they get paid on the backend. And I don’t do that because one, I know that that’s the easiest way for a securities department to say, hey, you either need a securities license or you’re shut down. And then two, there’s just a conflict of interest.

You don’t know if they’re recommending those people because they get paid on the backend or because they’re actually good, solid operators. And so, yeah, that’s where I kind of connected with people because people always ask like, where do I put my money? Who do I invest with?

Or who do I trust? And things like that. And that’s where I kind of created my own network over the last, really developed over the last 20 years of doing this kind of thing.

And so for me, now, am I opposed to putting money in the market? Not at all. Would I put money in the market today?

Absolutely not. I mean, the markets are so overly valued. I mean, it’s just, it’s like, it’s ridiculous.

It’s like the wild, wild west in the stock market right now where having any money in there would just be a huge gamble. I mean, for the market to go back to where it actually should be for the valuation, we would have to lose 50% in the stock market right now. So if you’ve got your retirement plans there because you’re told that’s what you’re supposed to do, you could easily be losing half your money or worse if it doesn’t go down because there’s always that upward trend because as a stock trader, remember I used to study the trends and you have a trend line you draw from like 1920s till now.

It tends to follow that line up and down, you know, like a little bouncing ball going up the steps. And if it didn’t go down to correct, then it could go flat for at least the next decade and go nowhere, which could be worse for people because then they make no money. It’d be better off on a CD, right?

So that’s where, you know, we try to help people see like, hey, there’s other alternatives. We can get away from Wall Street and do these things, but not necessarily be just in rentals, right? Because there’s different types of real estate.

There’s subcategories of real estate and there’s other types of real estate or even business type of things you can do in alternative space, much like what hedge funds are already doing. So for example, you know, yes, we got the turnkey rentals I mentioned. There’s lending.

Lending has been like the star for the last three, four years because interest rates have been higher. You could obviously still get double-digit returns lending your money and you’re actually in a better position, right? Sorry.

Apparently there’s an Amber alert. So it’s like, oh, it wasn’t me, was it? So let me get back on track here.

Okay. So like, for example, you know, with lending, like I said, it’s been the darling of the last three or four years. You’ll lend my money and be in first position, you know, even ahead of equity owners was something that I learned this next go around, right?

Because I used to think ownership was a big thing. But when you look at what they call the capital stack, right, of like who gets paid back first, if something happens, you have to sell a property. You know, I think about it when somebody has a mortgage on their house, you think, oh, I’m the owner.

Well, yeah, after the bank is all their money back, if you have a mortgage, you know, they always get paid back first, whatever’s left over, then the owner gets the equity. Equity is in second position behind debt. So I’ll teach my clients like, hey, listen, the safer position is actually being in a debt position.

Now there’s good and bad, of course, you lose out on some upside and so it’s good to have a balance between them, but there’s a lot to be said there, you know, and there’s even like debt funds, you know, where you don’t have to be in just one property, even though having your name on title is awesome too, because you have some security there and some equity. But, you know, being in a debt fund could give you some diversification. There’s obviously syndications in various forms.

I mean, there’s even industrial. Industrial didn’t have any issues the last four years, even though we saw it happen in apartment space, self-storage space, another one that’s kind of different. You know, much of the commercial type of real estate has been hurt.

However, nothing happened with industrial, like the warehouses and things like that. So obviously we’ve got some of your network that has those. You know, I even have raw land.

I have a raw land partnership where these guys buy and sell raw land. I’m a 70% partner because I finance it all, but they’re the ones doing all the work. And we put in about $600,000 over the last, now it’s been four years or so, and now it’s kicking off about 150,000 a year of cashflow, right, from that 600,000.

We also got like things like oil and gas, you know, like mineral rights and things like that, where, yeah, we own the land, but we’re leasing the land to oil companies and have them drill and do things of that nature. So it’s kind of like real estate mixed with a business partnership that’s uncorrelated to the real estate market. And so you can do all these different things.

And again, I’m not opposed to being the stock market, just this would not be the time. Now, if I saw a huge market crash, sure, I might get in a little bit and play with it. It’s kind of like what I did with Bitcoin.

Whenever Bitcoin would crash, I might say, cool, I’ll buy a little bit for fun and then ride it up and then sell it. When everybody’s, I know when all of a sudden my high school classmates that barely even graduated high school say, how do I buy a Bitcoin? That’s the best time to sell my Bitcoin because that’s when you know dumb money’s going in and it’s about to drop, right?

And same thing with the stock market.

[Mattias]
Bitcoin’s a, yeah, that one kind of, if you play that right, that one beats everything. That’s not the big if. You gotta be smart about it, right?

Like can you time it decently? And that one you can time a little bit more, right? I mean, like it’s based on the halving.

So it’s not like it’s a calendar date you can put on your phone, but like it’s gonna have a cycle a little bit more, you know, that you can maybe predict a little bit easier. Well, so your clients have created 300 million in collective cash flow. What is the common thread and how they think about wealth differently than traditional investors?

You might have already answered this, but I’m just curious what you have.

[Chris Miles]
Well, I’ve danced around it. So let’s just hit it right at the heart, right? It’s really about acceleration, not accumulation.

I think the biggest mindset shift that my clients have had to have is that at the end of the day, all we want is income. I mean, even when people talk about retirement, what they’re really wanting is not just a big nest egg, like every financial advisor teaches. They want income coming from that nest egg.

And I’ve seen this happen. It’s really sad because I’ve seen people that have literally into the millions of dollars and feel broke. In fact, Fidelity did a study of their own clients.

They’ve got about 45 million account holders, give or take. And of those, only about 1.1 million have at least a million dollars or more. So if you think about it, that’s like a two and a half percent success rate of having a million dollars plus.

But Transamerica did a separate study on these same people and asked them different questions about how confident they feel about their situation. 35%, so over one third of that 1.1 million said they think it would, quote unquote, take a miracle to be able to retire. Well, why?

Because if you have a million dollars, live it on 3% a year, you live it on 30,000 a year. That’s just not enough. Most people I know, minimum today, based on all the inflation we’ve had the last six years, most people want at least $100,000 a year.

That means you have to have at that least, if you wanna retire in your 60s, at least 3.3 million saved up in these accounts, which would put you in the top 1% of the country, even though more than 1% are Dave Ramsey fans and savers. That’s the one thing people keep saying like, oh, they said they blow their money. No, they don’t.

People are disciplined savers, just like my dad, who then realized they couldn’t make it. And I’ll give you an example. I had a client named Dan out in California.

He had a million dollars he saved up. He was the fourth highest ranking colonel in the California National Guard. And he thinks, and now I say like, oh, that’s pretty cool.

He’s like, no, it’s not that cool. He’s like, I was the first guy in line to get the 3 a.m. phone call while the other three colonels were able to sleep. He’s like, I was just low enough a rank to not get bothered a lot.

But he’s like, I saved up a million bucks. And so when he went to his financial advisor, he says, great, you can live on 30,000 a year. He says, I live in California.

No one can live on 30,000 a year. So he found my podcast, The Money Ripples Podcast, and started listening and binging and stuff. And then eventually he said, I’m gonna reach out.

And so we started working with him. And between buying a couple duplexes that were turnkey, some apartment syndications and whatnot, as well as some oil and gas and things like that, he diversified his income to where that same million dollars is generating $130,000 a year. And that’s the difference I have to shift my clients is, guys, you don’t have to live on less than the interest.

That’s because the market goes like this all the time, up and down. You have to account for those possible losses. You can’t take out too much.

But when you get contractual returns sometimes with some of these investments or more predictable returns, it makes it easier to have predictable income. And that’s the key distinction that I think people need to understand. And I mean, that’s another guy, I’ll use him as an example.

He had 1.9 million in his 401k. He was 59 and a half and he’s saying, Chris, I wanna retire, but my Vanguard advisor won’t tell me when I can retire. And I said, well, either one, the advisor’s an idiot, which is possible, or two, he doesn’t wanna tell you because how much do you wanna live on per year?

He says 200,000 a year. I’m like, well, that’s because you gotta take that 1.9 million and turn it to 6.7 million, assuming there’s no inflation, which means you might be spending the next decade or so trying to work and slave away and save away and hope that the market helps you out too. But if it doesn’t go up, which Vanguard’s even predicting it’ll only be about a 2.8 to 4.8% average for the next 10 years. And that’s their optimistic view. So if that’s the case, if it’s gonna be overall flat, well, then you’re gonna have to do all the work, all the heavy lifting. He said, Chris, I don’t mind working till I’m 70.

I just want to feel like I’m forced to do it. And so I told him, I said, well, listen, let’s take your 1.9 million and let’s just say that we do some more investments. Most of our investments are between 10 and 12% if you’re a hands-off investor.

I was like, if you make even just on the low end, 10%, what’s 10% of 1.9 million? He said, well, that’s 190,000. I’m like, that’s right.

Your goal is 200,000. You’re almost there. I was like, oh, but by the way, you mentioned you have a rental property, right?

He said, yeah. And you mentioned this before too. You mentioned about return on equity.

And I said, well, what’s your rental income off that net profit, $300 a month? Okay, you have 800,000 of equity in this property and make it $300 a month. That’s a horrible return on equity.

What if we sold that property, say even after paying fees, you come out with 700 grand, make 10%, that’s 70,000. Now you’re making over a quarter million dollars a year this year. So either one, you keep slaving away and hope that you retire by 70, working with your Vanguard guy or in the next year, we could actually have you financially independent.

So naturally he kind of picked the latter.

[Mattias]
I was gonna say, it seems like a no brainer. Yeah, that’s amazing. There’s a lot I wanna dive into with that.

And now I’m blanking on exactly what questions I had going into it. I mean, yeah, it makes a ton of sense. There’s gonna be people that have their money tied up into investment accounts.

I know that sometimes you can do like self-directed IRAs would be a one way to kind of cross that bridge as well. Oh, right. Well, another point I was gonna make too is to make this doom and gloom scenario that you’re painting.

I mean, you’re offering the hope, right? So don’t get wrong. But I was just listening to David Sinclair or he was on this Diary of a CEO podcast.

And he was talking about all his technologies that he’s developing for extending life. And if you’re listening to this and you’re like 30 years old or whatever, there’s a good chance with some of the stuff that he is coming out with that you could have a longer life too. And that just further makes this need a reality.

I mean, like it’s gonna be a huge strain if you’re living to, if the average age then gets to be 100 or even 120 or something crazy. I know that’s a futuristic thing to say and think about, but it’s also not completely impossible. The age with medical increases, technology, like we’ve seen the average age lifespan go up since a while back.

So there’s definitely something that’s within reality and learning these things is definitely valuable. One more question for you and we should probably move on to the golden nuggets is how do you personally balance passive syndication investing with staying informed and active and what is your formula for achieving financial independence without becoming a full-time operator?

[Chris Miles]
Well, yeah, doing what I do is just hands-off investments. I never wanna become the operator. And so that’s where you try to build that trust and network.

Now you can do it one of two ways. You can do it the long way like I did, which is I built my own network and slowly have added people in or even push people out for the last couple of decades or you borrow somebody else’s network, right? And that’s kind of the shortcut to having that success.

It doesn’t mean there’s any guarantees. Anybody who thinks that there’s no risk in real estate is just trying to sell you crap right now. There’s always risk and there could be a lot of risk in the sense of losing money, but your success rate, that’s the thing I focus on with people is that, yeah, maybe there’s higher risk in real estate than the stock market.

The stock market is not likely to, it won’t lose all your money, especially over time. However, in real estate, you could possibly lose all your money in certain deals, depending on the deal you’re doing. But that being said, the success rate, like I just mentioned, if it’s like 1% in the financial advisor world, if that’s how dismal it is, then maybe we have better success over here.

And the thing is, we’ve proven it with real estate and other alternative investments, it’s just better because again, it creates that income. Even if you lose, I had one client that he had his money in different deals and this is the thing, I teach them to do good due diligence upfront, but not have to be like this expert. And there’s those AI tools and everything else.

You can take a proforma that’s 60 pages long, distill it down and try to see if you can find red flags and all that kind of stuff. I mean, it’s so much easier to be a hands-off passive investor today than ever. And so for them to be able to do that and then say, great, now I just have to be aware, watch what’s going on, but I don’t have to be the one like always in it.

I mean, on my own investments, I got a variety of investments and I spent what? Maybe half hour a month on that. I mean, that’s pretty much not full time.

That’s a very, very part-time gig. But again, it’s always about, like you said, stay in the forums, make sure you’re staying up to date. That’s why I have my podcast because I want people to know what’s going on, what I’m seeing, even if there’s dangers in the real estate space, hey, I wanna bring it up and address it too.

[Mattias]
Chris, you may have already mentioned a few, but I mean, you have said a lot of gold nuggets already, but do you have three gold nuggets prepared for us?

[Chris Miles]
Yeah, I’ll use the kind of three sections from my new book that came out called The Work Optional Blueprint, which is kind of the blueprint I’ve used for all these clients to create that financial freedom. It’s really become a system. And it’s this, it’s get lean, get liquid, get out.

And by the way, this works great in business, not just in personal finances too. So get lean means be a wise steward of your money, watch what you’re spending, watch what you’re earning. Like look at both sides of the equation because understand that spenders love to ignore their expenses, but they look at their income.

Savers that are also in scarcity and never become free, hyper focus on their expenses, but never look at generating more income. So they’re the opposite problem. A steward looks at both sides of the equation.

How can I make more money and create more value for people? And how can I be responsible and use my spending wisely, right? And this doesn’t mean you’d be cheap.

You don’t live on rice and beans. You don’t cut out that latte or anything like that. It just means what’s the highest and best use of my money to be able to create more increase in my life.

That’s what a steward does. And so getting lean means, hey, how can we watch and see what’s going on? Can we increase our means?

Can we also find ways to live within our means more and create that profit so that we have more money to take to then get liquid. This means get your money out of prison. Don’t lock your money up in 401ks and IRAs where you can’t touch it or do much with it.

Like they’re self-directed, but even then they change the rules on you and you can be screwed. And there’s no tax advantages to IRAs. You just delight, you just kick the can down the road.

And we’re right now in one of the lowest tax brackets in history with the current Trump tax plan. So to say, oh, I don’t want to pay tax today because I want to wait and gamble my future for tomorrow in case they might, maybe they won’t raise taxes, which we probably will have to raise taxes just to deal with all the debt we’re piling right now. So get liquid means get your money in your control.

Don’t lock it up in equity of properties so much. Keep that money in your control. I would have survived the recession better had I had my money liquid instead of trapped in properties where I couldn’t get to it because Lehman Brothers wouldn’t let me short sell the house eventually after the values tanked, right?

Because they did pay me 300 bucks for a settlement. So thanks Lehman Brothers. But so those things like, so get lean, be wise to your money.

Get liquid means have that money in your power and possession, not locked up in equity or in IRAs and retirement plans. And then get it out into passive investments so that you can start generating multiple streams of passive income. And that’s really the simple system to still down is you just follow that system, which is completely against what every financial advisor will teach you, which will tell you to do the opposite.

We’re saying, no, we want you to actually get that money out, get it liquid, so then you can get it out to invest.

[Mattias]
Okay, that’s great. Those were three different nuggets, but is that three nuggets?

[Chris Miles]
Yeah, get lean, get liquid, get out. I mean, I think it’s definitely three different nuggets, but yeah, and I would just say this as it, oh, go ahead, sorry.

[Mattias]
No, you’re fine, keep going.

[Chris Miles]
Well, I’ll just say this, I would say as a bonus to this, basically you’re pulling more out of me, but I would say this is that the biggest thing, especially in an agency, and this is the biggest thing that’s helped me through hard times and good times, bad, you name it, is that if you focus on, instead of not just asking, how do I make more money in my agency or my brokerage? Instead, ask yourself, how can I create more value for more people? I mean, that’s been the secret for me to making more money.

How can I solve problems? How can I create solutions, become a solutions provider? This is the secret to income, because dollars do follow the value, right?

They follow the value you create for other people. Your whole goal is, how can I find ways to create more value? And it doesn’t matter what kind of market you’re in, doesn’t matter what kind of conditions, or even if the NAR might be lying to you about how good things really are with home bills and everything else, it doesn’t matter, because if you focus on what can I do to address the problems that people are asking, right?

How can I give them what they want? How can I create a win-win for people? You’ll find out that you’ll never want for business because you’re always giving people what they want.

If you always give people what they want, you’ll never want.

[Mattias]
That’s great. What about a favorite book, a fundamental one you think everybody should read, or just one that you’re currently enjoying?

[Chris Miles]
Yeah, I’m gonna skip Richard at Porta, because I guarantee everybody’s been told you to read that book. But if I were to take one other book, that would be great. The one that came to my mind before this show was a different one that I usually don’t recommend, would be Traction.

If you’ve heard of the book Traction, or if you’re more of a visionary, if you’re the kind of person that likes to be the ideas person, I would actually read Rocket Fuel, because that one actually really resonated with me better than even Traction. Traction’s a very methodical book, but Rocket Fuel is the one that kind of inspired me to really understand that I’m a visionary, and I need to have the right operations and people in place to make sure I do the things the right way.

[Mattias]
I think that, in part, with some other things that I’ve done recently, that book, Rocket Fuel, kind of gave me, like, hey, I’m actually kind of normal for who I am. You know what I mean? Like, what, 90% of them are all like ADD, that kind of stuff.

I’m like, hey, yeah, that’s me. I’m a squirrel. So those are great.

I really, those are good books. And yeah, Traction is great. And if you’re looking to kind of run a business like a business, I mean, it’s really good.

So great recommendations. And of course, Rich Dad, Poor Dad, if you haven’t read it, and you need that kind of like aha moment of kind of getting into this space, it’s definitely, it is recommended a lot, but it is for good reason. And then finally, you mentioned you have a book.

You have your podcast. Where all can people find you on social media, websites, et cetera? How can they learn more about what you offer?

[Chris Miles]
Yeah, just look up anything that’s Money Ripples, whether it’s moneyripples.com, @MoneyRipples on social media, the Money Ripples Podcast that I have on all platforms, including YouTube. And then the book you mentioned is “The Work Optional Blueprint” that you can find on Amazon.

[Mattias]
Awesome, well, Chris, thank you so much for being on the show. It’s been a lot of fun. I’m sure we could talk for much longer because there’s a lot more I wanna pull out of you.

But yeah, thank you again. You’ll have to come back on.

[Chris Miles]
For sure, I’d love to.

[Erica]
Thanks for listening to the REI Agent.

[Mattias]
If you enjoyed this episode, hit subscribe to catch new shows every week.

[Erica]
Visit REIAgent.com for more content.

[Mattias]
Until next time, keep building the life you want.

[Erica]
All content in the show is not investment advice or mental health therapy. It is intended for entertainment purposes only.