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SHOW NOTES FOR EPISODE 523: HOW TO GET YOUR MONEY TO WORK FOR YOU
After working as a financial advisor and stock coach for several years, Chris came to the stark realization that the financial advising industry was not showing anyone how to quickly and safely become financially prosperous today. In today’s podcast, cash flow expert and “anti-financial advisor” Chris Miles shares how he was able to retire at 28!
What You Will Learn
- Why most traditional Financial Planners are not financially independent
- How you can borrow cheap money without have to tap into banks, private money or investors
About Our Guest
Chris Miles
Chris Miles, a Cash Flow Expert and Anti-Financial Advisor who teaches entrepreneurs and professionals how to get their money working for them TODAY! He’s an author, podcast host of the Chris Miles Money Show, has been featured in US News, CNN Money, EO Fire, and has a proven reputation with his company Money Ripples, getting his clients fast, life-altering financial results. In fact, his personal clients have increased their cash flow by over $200 Million in the last 10 years!
More About Chris
- Grew up near Portland, Oregon
- Moved to Utah (has been there for the last 22 years)
- Originally moved there because the two best ballroom dancing dancing schools were there
- The world championship teams are located there too
- Attended college in Utah
- He a was a Sociology major with a triple minor in:
- Psychology
- Japanese
- Ballroom Dancing
- He a was a Sociology major with a triple minor in:
- He wanted to go into business consulting
- He felt he needed real life business experience
- The Y2K scare was happening at the time
- He dropped out of college to seek the entrepreneur path
- He liked being an entrepreneur, controlling his own time and having freedom
- He became a Financial Advisor
- All he had to do is pass a test and have a heart beat
- Got married, had kids and got remarried
- He now has a blended family of 8 children (6 from his first marriage and 2 from her first marriage)
Financial Planning Challenges
- After 4 years as a financial planner he saw some problems with it
- He’s the kind of person that wants to see evidence
- He noticed that a lot of the financial advisors he knew were not financially free yet
- He kept saying it had to work. The theories seemed pretty solid
- Everyone said the same thing, “Save everything, spend nothing, save it forever, stay in the market for the long haul, be cheap, sacrifice, etc. so that one day, you’ll have something in savings”
- The more he looked at it up close, the more problems he saw. He asked:
- What is the real rate of return in the stock market?
- They said the average was 12%, but that wasn’t the actual yield
- The actual yield was around 8%, and that’s assuming you don’t have any fees coming out
- After fees, it would drop down to 6%
- And when he added inflation numbers, it was even worse
- He soon realized that you could never save enough in a 401K to be financially free
- What is the real rate of return in the stock market?
- He realized that what he was teaching people was that, by the time you actually retire, you will have to live super cheaply to just barely get by
- At the end of 2005, he called up a friend to wish him a Merry Christmas
- He found out that his friwnd left financial planning to do real estate investing with his dad
- He said that, in only 4 months, he had doubled his income (he was a professor at a local university)
- They got into a debate on what had better returns – stocks or real estate
- His friend interrupted him and said, “Chris, how many of your clients are actually financially free where they don’t have to worry about money every day?” Chris responded with, “None.”
- They he asked him, “You are a financial advisor. If anyone should know, you should. How many of your financial planner friends are financially free?” Chris said, “None.”
- His friend told him to buy a book by Robert Kiyosaki called “Who Took My Money?” (on why mutual funds stink) and also listen to a real estate radio program featuring two real estate investors.
- After reading the book and listening to the show, he realized that he could not continue any longer, in integrity, as a financial advisor
- In March, 2006, he quit his financial advisor job
- He decided to be a mortgage broker and teach ballroom dancing on the side
- He did that for about a month
- He wanted to know what these “real estate guys” knew
- He wanted to know how they became multimillionaires
- Some were younger than Chris
Becoming a Real Estate Investor and Coach
- He began to learn real estate investing and became financially independent at 28 years of age
- It was at that time that he wanted to teach others how to be financially independent like he did
- He partnered with the guys who taught him
- Although he had other streams of income, they wanted him to focus 100% on real estate
- He cut off his other streams of income, including his passive, residual streams
- The people they were teaching real estate were mostly people who were already investing for equity
- It was 2007
- When the Great Recession hit, most of their students were broke
- They couldn’t pay Chris and his team
- He cut off his other streams of income
- He had tons of money coming in at that time so he wasn’t tracking it well
- Before he knew it, savings account balances were decreasing rapidly, while his credit card balances were increasing
- He realized he was losing $16K a month in both his personal and business cash flow
- He had to make some drastic changes
- He didn’t file for bankruptcy but he ended up $1,100,000 in debt
- The real estate he owned, where he was banking on appreciation, were worth much less and weren’t cash flowing well
- From 2008 on, he was working hard to pay off his debt
Financially Independent Again
- By 2016, as he was approaching 40 years of age, he finally became financially independent again
- This time he was wiser
- He created mutiple streams of income
- The boring investments looked sexy to him
- He wasn’t trying to to hit huge homeruns – he was happy with singles and doubles
- He was looking for the boring stuff — $200-300 a month cash flow on single family homes
- He was only interested in creating consistent, predictable, stable cash flow
- And this is what he continues today
- He knows there are cycles, bubbles, and a lot of greed and speculation
- He only goes for things that are certain and give him consistently high rates of return
His Multiple Sources of Income
- Below are his current streams of income
- Residual cash flow through his business
- Online income from sponsors and traffic to his website
- Passive investments:
- Turn-key real estate (his favorite income source)
- He loves not managing a property!
- He invests mainly in the Midwest and Southeast
- He has about 6 or so that he works with and when the right opportunity pops up he will invest
- Interest rates on investment properties has increased so he’s putting his turn-key investing on hold
- Multifamily Syndications
- Self Storage
- Real estate funds
- Land deals with seller financing
- Turn-key real estate (his favorite income source)
- He doesn’t like active investing but, if he does and kind of active investing, he recommends that it be something you really love
- He’s always looking for new sources of income but not “desperately.” He sees desperation as a key reason for all so many of the problems in the Great Recession, spurred by greed and fear
- In 2005, he stopped being a financial advisor and dropped his security licenses but he does act as a consultant
- His favorite consulting clients are the Dave Ramsey “poster children”
- These are the ones who become debt free but are wondering when they will achieve financial freedom because they still have to work, even though they are debt free
- He teaches them how to get their money working for them
- His favorite consulting clients are the Dave Ramsey “poster children”
Infinite Banking
- He still has his insurance license from his financial planning days
- He keeps his licenses so he can employ Infinite Banking
- Infinite banking refers to a process by which an individual becomes his or her own banker. The infinite banking concept was created by Nelson Nash. In his book, “Becoming Your Own Banker,” Nash talks about the use of whole life insurance policies that distribute dividends and how owning such policies allows individuals to dictate the cash flow in their lives by borrowing against/from themselves instead of depending on banks or lenders for loans.
- When he was first taught Infinite Banking, it was horrible
- When he had all the problems in 2007 and 2008, he was paying his premiums but the fees and commissions were ridiculous
- He had to cash in his account to pay the premiums or commissions anymore
- He asked the agent, “Is there a way I can overfund these Whole Life policies so that more cash fills them up faster?” The agent said no, that he would just trigger more taxes. It would trigger a MEK (Like an IRA). So, Chris did what he told him
- He found out, later on, after he lost the policies the guy had set up for him, that he could have designed it the way he wanted to
- Chris just thought Whole Life was a rip-off – he was anti-Whole Life
- He then realized he could have designed the Whole Life policies better
- Now, instead of having 100% of your money going to fees and commissions for the first two years, he could just have 20-25% go towards those things the first year and 12% the second year and by the third year, have NOTHING go toward fees and commissions – where he has a net GAIN instead of a net LOSS
- He now calls it MAX ROI INFINITE BANKING
- A real estate investor friend encouraged him to get out of retirement to teach others how to do it his way
- He has now trained a team to show others how to do this for the minimal fees possible and the maximum gains and double dip
- It’s all in how you set it up
- Chris sets it up so there is a minimum paid in fees and commission, which really makes the difference
- Chris starts with finding out what the maximum contribution the person can pay during the year
- You can set it up based on your needs
- Maximum tax benefit
- To start buying deals right away
- If you are an active or passive investor
- And how to plan to pay back the line of credit
- The returns pay off the line of credit
- There are banks that are lending 3.25% on these policies and the policies are earning 5.5-6% tax free
- It’s a double arbitrage
- You’re making money on your investment
- You’re making interest on the policy
- You’re making another 3-4% on top of what you are earning on your real estate deals
- It just depends on what you want
Biggest Mistake
- Trying to always make every deal a home run
- He got caught up in the pre-Great Recession greed
- He got prideful and made mistakes
- He has since learned how to always look at the “what if” scenarios
- Today he “manages his risk” to get it as close to zero as possible
- That’s why he invests in real estate – you can’t get your stocks and bonds investing risk down to zero
- Real estate can be very predictable and calculated
- He likes to invest with people who have been through the Great Recession – they have the experience with tough times
Biggest Success
- Being resourceful and never giving up
- Finding creative ways to make money, save money, pay off debts
- That’s where his consulting business came from – by teaching people how to “find the cash” they need
Advice for Old Dawgs Looking at Real Estate Investing to Help Them in Their Retirement Years
- If you’re listening to this show, you’re already focused in the right place – first educate yourself
- He has a client over 60 that works at Boeing
- Has a big nest egg
- He’s had no trouble investing the money
- The biggest problem is believing he can get the returns he needs
- He has been so indoctrinated into believing he can only invest a certain way – in company stock, a 401K
- Chris has showed him he can invest in “alternative” investments – real estate syndications, cash flowing investments
- Has a big nest egg
- He wants people to look for the evidence! Don’t just invest in what everyone else is investing in
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- People who have reached the millionaire status have either started a business or invested in real estate
- Real estate is the number one thing that can generate INCOME
- If you have a million dollar retirement fund, you can easily earn %10 a year or $100,000 with real estate – not the 3% the financial planners will say you can make
- People who have reached the millionaire status have either started a business or invested in real estate
-
Current Business
- He doesn’t have to work but he feels an obligation to keep teaching and provide hope
- With great power comes great responsibility (Spiderman mantra)
- He currently works only 20-25 hours a week
- If he only works 5 hours a week, his passion fizzles
- If he works 40 hours per week, he burns out
- His goal is to keep training, educating and helping people
- And he’s teaching others top do what he does
Rap-It-Up
- Favorite real estate book: Rich Dad Poor Dad by Robert Kiyosaki
- Favorite business book: Profit First and The Pumpkin Plan by Mike Michalowitz
- Most valuable web site for success (other than your own): Yahoo Finance
- Favorite app: Mint
- If you lost everything – all your assets – and had to start all over, knowing what you already know, and you only had $1,000, what would you do to launch your real estate investing business? I would use the $1,000 to buy lunches and connect with people. Ask people what I can do for them to add value for them.
How to Reach Chris
- His website: MoneyRipples.com
- Podcast: The Chris Miles Money Show
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