Chris Miles: Getting Your Money Working For You
LISTEN TO THE FULL EPISODE ON:
Chris Miles, the cashflow expert and Anti-Financial advisor is a leading authority on teaching entrepreneurs and professionals how to get their money working for them today. He retired very early in life, lost it due to the housing crash, built up his cashflow again and thus was able to retire twice by the age of 39. Chris runs Money Ripples and is host of The Chris Miles Money Show. His personal clients have increased their cash flow by over $300 Million over the past 13 years!
In this episode hosted by Mike Swenson, we discussed:- How Chris opened up his eyes to creating passive income through real estate when he couldn't help in his father's retirement as a financial advisor
- Why there should be more passive real estate investors than active ones
- Getting lean, getting liquid, and getting your money out to create passive income and have finanial freedom
- Using his own life insurance policy to diversify their family's savings more
- Why you shouldn't buy a property that is negative cash flow right now and justifying that it will appreciate
- Importance of knowing first your investment goals in the real estate space
- How his $1Million has went from generating $30,000 to $130,000 per year
- Having real ownership and tangible asset that is cash-flowing versus gambling money without having control of it
Timestamps:
0:00 - Into to Chris'Career
1:41 - Chris' Experience as His Dad's Financial Advisor
3:58 - Are Financial Advisors Actually Financially Free?
9:27 - Active Income Versus Passive Income
13:18 - The three basic steps to improve your financial future
15:56 - Investment Tips When Analyzing Your Budget
22:13 - Alternative Investment Space Like Mutual Funds
24:35 - How to Find Chris
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Minnesota Real Estate
Read the full transcript here:
Mike Swenson
Welcome to The Real freedom show where we inspire you to pursue your passion to gain time and financial freedom through opportunities in real estate. I'm your host, Mike Swenson, let's get some real freedom together.
Mike Swenson
Welcome everybody to another episode of The Real freedom show talking about building wealth, gaining time and financial freedom through opportunities in real estate. And today, we're going to talk a little bit more about the nuts and bolts of your income. digging in a little bit deeper, we'd like to sometimes talk about real estate and the strategy behind that, but we have a money expert here. So we've got Chris miles, cashflow expert, and anti financial advisor is a leading authority teaching entrepreneurs and professionals how to get their money working for them today. And you've seen that over the years, we've had some ups and some downs. And so you really want to focus on helping people with passive income, you've been on a lot of the big shows us news, CNN, entrepreneurs on fire, bigger pockets, and a proven reputation with your company money ripples, and helping clients find fast financial results, and help them increase their cash flow by $300 million over the last 13 years. So we're gonna talk a lot about money and cash flow and passive income today. So Chris, we're so excited to have you.
Chris Miles
Same here, man, as my shirt says, I love passive income, you know,
Mike Swenson
Awesome. And I should mention to you have been on our show before a little bit under two years ago, so excited to have you back. But for those folks that maybe weren't listening two years ago, that maybe don't know you, just give us a quick little intro about you and your background leading up to kind of where you're at today.
Chris Miles
Yeah, like you mentioned, I'm the anti financial advisor, which is kind of another way of saying, you know, have a stick my nose and my finger at financial advisors for that very reason, right. But I wasn't always that way. I actually was a financial advisor at one point, but realise it just doesn't work. Growing up, I was actually raised by parents that taught me good values, but they didn't teach me much about money, other than there wasn't enough of it, you know, phrases you'd hear like, we can't afford it. But you think money grows on trees, I'm not made of money, you know, those kinds of things. I'd be taught all the time growing up. And my dad especially was always teaching about how Yeah, you know, be cheap, save everything, because he was the cheapest guy I ever knew. I mean, just cheap, save everything. I mean, he was like Dave Ramsey's role model that he looked up to you, right. So anyways, so flash forward, you know, I'm in college, I want to become a business consultant. So I thought I should get real life business experience. Well, the first business that came up when I took when I basically dropped out of college to do this, the first business that came up was being a financial advisor. And I thought, You know what, maybe this could actually be good for me, personally, personally learned about money, but maybe I can even help my dad give his life back, because he already had multiple heart attacks and strokes by that point. Well, anyways, I did that for several years. And then while I was doing it, my dad reached out to me said, Chris, when you could become my financial advisor. And so for the first time ever in my life, he opened up his books, I got to see his financial situation. He said, Chris, I'm 61 years old, I want to get out of this job. Now, what do I need to do? And I looked at the money he had, you know, the max funding his 401k, he paid off all of his debt, including his house totally debt free. And as I looked at it, I said, Dad, listen, if you retire today, you better hope you die in five years, because that's when you'll run out of money. And he said, Well, that's not a good option for me, what else can I do? And I said, I don't know you did everything, right, that I teach as a financial advisor, like you're stuffing your 401 Ks, you've got, you know, you're, you're debt free. You're living, what should be the dream. You live in, actually, everything that Dave Ramsey says should be the dream, and it's just not enough. And I couldn't find anything for him. And it bugged me it really bothered me because he was kind of my inspiration getting into that business. And yet, that wasn't enough. It wasn't working the stuff that I was teaching. And I realised when I talked to one of my friends who was a real estate investor, he said, Well, Chris, how many of your clients are financially free? I said, Will none mean they all worry about money, even if they can retire? They still worry that they might run out of money before they die? He said, Well, that's good. We'll have this how many of you guys as financial advisors are financially free, none of the Commission's you're earning but actually doing these mutual fund investments. And as I thought about there's over 100, guys, my office, some had been working there since the late 1970s. And yet none of them could quit. None of them have enough to retire. I said, Well, none. There's your problem, Chris. And that got me down that journey of looking at alternative investments like doing real estate and things like that open up my eyes that it wasn't about accumulating money saving up for that nest egg that so then you can live on less than the interest right live on 3% a year? No, it was all about creating passive income and cash flow. And then later that that year, I was actually able to retire myself was 28, almost 29 years old, completely blew my mind that that was even possible, but again, was about flipping it, and pretty much doing the opposite is why I taught as a financial advisor to become financially free.
Mike Swenson
Well, it's so interesting because, you know, I considered going into being a financial advisor right out of college too. And, and I remember working for a job, you know, similar similarly to you, my parents raised me to get a good job, I put money into my 401k. And you kind of just hope you have enough. And I remember because I'm a spreadsheet guy, I made my spreadsheet of, okay, if I invest this much every year, I get this amount of returns, if I may be increased my contributions each year, we had a match. And I made a spreadsheet all the way down to retirement age to see what I'd have. And it was a, it was a big number. But at the same time, I didn't really know what that would mean, that obviously, you know, meant there's a lot of assumptions that would have to happen to get there. That was before I had kids and kids are expensive. And so a lot of things changed. And so getting into real estate, yeah, I've seen a different side now where you can put money into these assets that are going to spin off cash flow. And so going back to people that do invest in a 401 K, or maybe you want to just set it and forget it. Yeah, there's that concern. As you get to the end of your life, we get to those retirement years, and you have no clue what you have, you don't know how long it's going to last you. And if it's going to be enough, and as healthcare gets better and better, you might outlive your savings, and you work all this time to be able to live and try to enjoy life. And then you run out of savings. That's not a life worth living down the road.
Chris Miles
It's true. It's it's such a different philosophy, because I was kind of like you, I thought, you know, if I save up $2 million, and then live on 3%, I can live on 60,000 a year, and 20 years ago, 5000 a month sounds like a good comfortable life. Now, it sounds like you're pretty much fresh out of college and broke, you know, it's just not the same. So imagine I mean, I'm 46 now, but imagine if I had been you know, I was hoping to do that by age 40. It wouldn't have been enough. And so that 2 million would then have to grow to be at least $4 million to build a cover a kind of a halfway decent lifestyle, you know, maybe 10,000 mug, that $4 million, make 10,000 anatomy 10,000 A month really? I mean, that's well, I guess it is yeah, 220,000 a year, 10,000 a month. But if I could take instead $4 million to make 400,000 a year or more, right four to 500,000 a year. That's a very different lifestyle. Now I'd have to save as much as I can to have a million dollars and still produce at least 100,000 or so a year and accomplish the same thing. And that's and that was my epiphany. You know, in fact, I even had a guy recently on a client that actually when I was last recording with you, he was just starting out as a client. He had a million bucks saved up in his 401 K plan. And his financial advisor said well, you can live on 30,000 a year as a 60 year old in California. It's like no one can live in California 30,000 A year and I'm homeless people. And so when we got his best money invest in things like not just real estate for rental properties, which he bought a few duplexes of course, but then he also got into like some oil and gas investments. And he got did some like apartment syndications and things like that. Eventually, his million now said generating 30,000 A year is now generating 130,002 years 100,000 more, but the same money just used better.
Mike Swenson
That's amazing and fun to see when people discover real estate as a great investment. And obviously, I know there's other things that you work with clients on this, too. I was doing a class for some real estate agents on my team. And these are residential real estate agents that haven't been exposed to really a lot of investment, real estate. And so I was showing them a deal calculator, showing them the potential cash flow, the potential returns on investment over time, as appreciation happens as you're paying down the mortgage, all those great benefits of real estate. And he's a middle aged guy. And he's like, I'm frustrated right now. I was like how so and he's like, I'm frustrated. I didn't know this 20 years ago, or 25 years ago. He's like, they should be teaching kids this in high school. Instead of whatever class they have them in, like, this is the real life stuff that matters. And if it takes you later in life to learn these lessons, it's hard to go back and get that time back. However, to your point with your client example. They can build some momentum pretty quickly when they start to do the right things that maybe they had no clue about, until they met with you or people like me that can show them these alternative ways to build passive income.
Chris Miles
Exactly. It's, it's just it's so mind blowing, right? If you just just to see that happen. And the sad thing is like there should be more I believe active real estate investors. I see a lot of those guys are flippers or wholesalers that won't buy property, they'll just they'll keep transacting business, but they get trapped, not creating passive income for themselves. And you know what, like, 2022 Kicked those guys but big time. I mean, though the ones I saw come out of 2022 into 2023, which recovered a little bit and help them last. Either one they either had to have a lot of risk. serves and or two, they also have to have other streams of income coming in besides just the transacting business. That's the thing, you can make 10s of millions of dollars in your business. If you don't have any passive income, you can go broke just as fast as every, you know, slave employee with a gob.
Mike Swenson
Yeah, yeah, I've heard of a lot of flipper stories where they build and scale and get bigger, and they just get tired of the hamster wheel because you're just chasing properties to put cash in your pocket. But you're not going to have that long term gain. And so the people that have probably wised up over time move from flipping to buying hold, and then I can still do some flipping, but I'm going to pick some properties to buy and hold. And yeah, have hope to see I always use the example of running into the wind versus having the wind at your back. Eventually, you're hoping you're doing less running into the wind, and you're experiencing that momentum of the wind at your back.
Chris Miles
Exactly. It's so true. I mean, it's, I remember talking with a friend where that was the case, like he was transacting, and he was doing great, and it's business. But I remember right around 2020, I made a post about how one of my clients was was making about supposed to make about 18,000 a month passive income. He's like, dude, how do I do that, like, you're in the freakin real estate space, you should know how to do this. And so after that, he started cherry picking some of his own deals. And when when the when 2022 hit, I mean, his business, I mean, almost stalled completely on that side. But he started doing a, you know, he started having his own properties, I don't know property management business started diversifying his business a little bit more. And he weathered it just fine. I mean, he was one of the only guys I saw, like later in the fourth quarter of 2022, smiling and actually relaxed, where other guys were like panicking, they gone bald in that period of time, almost, you know, like they were, they were in a lot of hurt. And so it's, it's a real thing. And I think, even though that was a short, you know, snafu that happened, I think it's coming back again, I think it's gonna come back harder, I really feel like 2020, and then 2022, those two little weird market moments, we're really preparing you for something much bigger that if you don't learn from those lessons, it's gonna hit you much harder. And I think really going into 2023 Going into 2024. Yep.
Mike Swenson
And it does speak to the value of having multiple streams of income passive income, because you as a as an entrepreneur, or you even as a person, need to have the ability to ebb and flow as things change. And while I spend a lot of my time talking with people that are full time in real estate, they even talk about, you know, I'm doing regular multifamily, I'm doing some development, and then I'm doing you know, some, maybe some, some lending opportunities. And so while I'm in the real estate space, I'm diversifying within that because you don't know what's going to happen, you don't know what's going to get disrupted, you don't know how much the economy is going to change things. So having like a three legged stool, where you've got a few different legs to stand on, should one of them get pulled away or, or have a challenging time, it allows you to be more flexible, and to move with it talk a little bit about so people come to you. And they're like, Chris, I have no clue what I'm doing. Or Chris, I need help. What are some of those basic steps for people that are listening right now questions that they should be asking themselves to kind of self reflect on what they can do to increase or improve on their financial futures here?
Chris Miles
Yeah, the first advice I usually give is, is get lean, get liquid and get out. And I mentioned that even like back, you know, few years ago, too, but it's still true today is, you know, find ways to get lean. If you're a business owner, find that in your business become profitable. And then take those profits home. And same thing at home, make sure you're profitable there, like make sure you're only spending on things that really are actually adding value into your life. Don't waste money on subscriptions that you're not using, don't waste your money on eating out too much, or whatever, or just blowing it because you're not even tracking your money. If you just track your money on a weekly basis, I promise you, that you will find more money is just always the way it happens. Right? When you start to pay attention to something, it gets better. Right? It's it's like that in business and you start paying attention to your statistics and your business, you'll find out your sales improves and your profits improve. And things like that. Same thing here is starting to really track your money, get lean, make sure that you're not living on rice and beans, but make sure you're being wise with your money being a wise steward. Then get liquid make sure you have the liquidity of your money too. Don't trap it in equity in your properties, you know, where you're just trying to pay off that mortgage, so to speak, right? Because again, I did that in the last recession. And then when I wanted to get that equity back out, I couldn't because the banks would let me right. Keep that money more in your possession. You know, get your money away from stupid IRAs and 401, k's and retirement plans that lock your money away and then they slap you with a 10% penalty for touching your own money. That's ridiculous. You know, stay out of those vehicles, get your money liquid, and then focus on getting it out to create passive income, right get into those investments that do generate those streams of income so that it does create that safety You know, creates that freedom for you, which is the whole purpose of this podcast right is create that real freedom in your life. And that's what you need. You need to those three things in really in that order to do it.
Mike Swenson
Yeah, and for a lot of people, it looks like, it might take some time for you to build that momentum. But it's all about how you gotta get started to do it. And and while some people, we hear these stories of people that have come on, and they own hundreds or 1000s of units and have millions of dollars in passive income, it starts with one property. It starts with one decision, while probably Yeah, it really starts with the decision to move your investments into something that can produce passive income. But what are some ideas that you have, or some tips that you have in terms of for somebody that maybe has had a tough financial time, right now they're looking to build some momentum? They're analysing their budget, and now they're figuring Okay, I want to try to put my stuff into something that's going to be passive. What are some investments are some ideas of some options for them?
Chris Miles
Yeah, it depends on where you're at. I mean, if you're just starting in, maybe get your first 10,000 bucks, don't do anything, just keep saving, right? Until you get at least a minimum, in my opinion, at least 100,000 bucks. Really don't even try that. Figure out that question right now, I think one of the things you need to make sure you have is about being liquid, not just being liquid, because you have money to get out and invest but be liquid from emergency standpoint, too. And one of the ways I like so for example, like my wife and I, we decided to increase our emergency reserves last few years, up to 12 months of expenses, you know, and we even did that very liberally on expenses. So we wanted $300,000 sitting in cash. Now, that might frustrate somebody saying, Wait, you'd be making more money. In fact, I thought that because we had all 300,000 Just sitting in the bank, right? Earning point nothing percent, and then we get taxed on point nothing percent. Right now my credit union pays point 1%. So that 300,000 would make $300 a year, then you get taxed on it. So really, you walk with 200 bucks a year. So I made a deal with my wife, it says let's instead diversify the savings a little bit more. And so what we did is actually I use my my own life insurance policy, my whole life insurance policy, that infinite banking, if you've heard that I've referenced before, I now have earmarked about a quarter million of that 300,000 in that policy. Why? Because I'm earning about 5% a year tax free. So that means instead of making 200 bucks a year after taxes, just that quarter million, is making 12,500 tax free. And then I'm Yeah, making my 50 bucks a year in the bank savings account for that quick, easy money. So the money that I don't need, and like the next week, I keep that in a life insurance for the week long of expenses, or whatever I might need. I keep that in the bank. And that's how I kind of diversify my savings a little bit more. And then from there, if you got more money, where can you invest, right? Lately, although I think properties are great overall, I think the safer way to go the safer, longer term better returning investments are still buying properties, you know, like buying those rentals as long term rentals. And, and that's great. If you can do that. Right now I know if you try it with leverage, if you try to buy with a mortgage on it, your cash on cash returns might be not very impressive. One thing I would say is definitely don't buy a property that's negative cash flow right now to justify saying, Well, you know, even if it's breaking even or negative cashflow, it will appreciate I would not bank on that right now. That's the mistake, I made the last recession. And I kind of foresee there might be some crazy things happening with values in the next recession too. I wouldn't bank on risk appreciation, I would look at that as gravy like the cherry on the top right, really focused on profit. So most of my clients lately, although some we're still buying some turnkey properties, because they are safer, I think lesser risk than some other strategies. A lot of them are starting to invest with other investors. So there shouldn't either lend their money to investors to earn, you know, 10 plus rates return that way. Other things that might be doing is going into projects, not so much the apartment syndications that's pretty much been beat up and still being beat up right now. But, but you know, sometimes Self Storage might be placed. But a lot of people are just really going for that short year, the short term lending or longer term lending funds that are more going out to investors, oil and gas, it actually been a really good one the last few years for all of us. And and that's even with oil prices being lower, you can actually make money on the leased land and get paid on the royalties of the drilling that they do with both gasoline oil as well as the natural gas, which is a clean energy that comes from that. So that's been good. Actually, just in since the last time we spoke, got into a partnership with doing raw land. I mean, I had a quarter million invested that now we're doing 7500 a month and growing right now. So there's still a lot of opportunity in the real estate space. It just it just depends on really what your target is what your goals are. Are you going for cash flow or growth? I think there's still plenty of opportunities you can be doing with your money right now.
Mike Swenson
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Mike Swenson
I love leaning towards cash flowing assets. I've always been a believer of that, because it's hard when you see places in California or you know, the coasts where you've got a lot of appreciation happening. But it's tough. When the market changes, even now we're seeing a push on prices, because with the interest rates going up, people just can't afford that same same property. And on the investment side, you can't get it to cash flow the same way with the higher interest rates. And so that challenge is pushing downward pressure onto the prices. And so days on market is going up. And so we're seeing that more and more and more. And so the more you can find cash flowing properties, you're going to weather that storm, and yeah, just treat appreciation like gravy on top. It may shortchange you in the future if you're not getting as much appreciated some of those other markets, but you're insulating yourself from the market in a couple of different ways. And so the other thing that I was going to mention, too, that you had pointed out is, you know, you don't have to buy one property yourself. I hear so many people why don't I don't have enough saved up to be able to buy a property or a multifamily property. That's the beauty of working with other investors, pooling your money together doing syndications. It doesn't have to be large deals, but doing smaller deals or finding other ways to invest with people. I just want to help people put deals together and meet the goals that they have. And so there's a lot of different ways that you can invest in real estate without, hey, I have a thinking I have to buy one property myself and save up enough money until I can do that one thing.
Chris Miles
Exactly. Yeah, that's, that's the beauty of it. Right? Like you don't have to be a rich millionaire or billionaire to do this stuff. Because like, like, for example, I mentioned like oil and gas. Well, they're securing $125 million purchase with one of their projects, the largest project they've ever done. In fact, it literally after 30 plus years of them doing the business, it doubles their portfolio, that's just how big of a deal it is. Now trying to take that 125 million by yourself is pretty much impossible for anybody probably listen this podcast, but they they came in and said, well, the syndication will let people buy in minimum 250,000. And I tell you, I had a lot of clients saying, oh, couldn't we do less? Please like, let me get in? And could I do 100,000 or 50,000? Well, they finally got the deal done. Everything was done, but they had another 7 million they still had out that you could buy interest in. They said, You know what? We'll let people pull in with an extra and different LLC, you can do a 50,000 minimum now. Now all sudden, money's going, like going in, right? Because those people want to be I mean, how awesome is that? You can get a piece of $125 million pie with maybe 50,000 bucks. I mean, that's that's the beauty of what you can do alternative investment space that is like mutual funds, right? Why people like mutual funds, you buy a small piece of the pie, but you actually have real ownership you actually have a real tangible asset that is cash flowing versus gambling your money in something that you have no clue what's going to happen because it's somebody's buying and trading different companies inside of it and you own virtually nothing so you have no influence no say in the matter you're not even a partner you're literally just a gambler riding waves so much better when your alternative investments basis way.
Mike Swenson
Yeah, that's the thing that I talk about as well with investors because yeah, you're right, if some idiot sea level employee does something stupid with the stock, everybody suffers and so you don't have control of that in real estate and with some of these other alternative assets, you have more control over what you want to see happen with it and what you're gonna do with it versus Hey, I really might like that company because it's popular right now and then some some idiot does something in the stock tank, the stock price tanks and your stuff holding the bag there so for people that want to learn more about money ripples, working with you and really helping to unlock some opportunity within their current financial lives. How can they do so?
Chris Miles
Yeah, you can always visit our website money ripples.com It's great. Lots of great information on there. And then also you we got our podcast the money ripples podcast that's on YouTube, Apple podcasts wherever you find podcasts as well as our money ripples YouTube channel.
Mike Swenson
Awesome. Well, thank you so much, Chris for coming on and sharing a lot of people have had a lot of great experiences working with you and freed up a lot of money and and yeah, just your your testimony to hear this stuff. have, you know, going from $30,000? A year to what was it $130,000 A year with a million dollars. That's, that's amazing. And so just being able to show them different ways, and I know a lot of people aren't financially minded, and that's what scares people is they're like, Well, I don't really know what to do. And so they want somebody to help them. And somebody like you can come alongside and explain things and show them. Here's a different way, you can have a significantly different difference in your future by doing these few key things versus what you were taught to do growing up.
Chris Miles
Yeah, exactly. It's why I came out of retirement, right. It's like that ripple effect, you create people's lives. I mean, it's just, that's my reward, right? That's the thing that I really got it because I can retire and just be fine, because I've done it twice. But that man, be able to see those people's lives change and that ripple effect and create people's lives. I think every investor, whatever that capacity is, that's the focus should be it's not just getting yourself out of the rat race. It's going beyond that, which is what can I do to further bless more lives?
Mike Swenson
Awesome. Well, thank you so much, Chris. And for those listening, go check out his stuff. And we look forward to having you on an episode again in the future as well.
