Podcast 136. Build Financial Freedom to Live and Enjoy Life Now with Chris Miles

Hey, welcome back to the Average Joe Finances Podcast. I'm your host, Mike Cavaggioni, and today's guest is no stranger to the podcast. He's been here before. It's Chris Miles, the anti financial advisor. So Chris, super excited to have you back. Welcome back to the show.

Chris Miles:
0:14

Hey, I'm excited to be back, Mike. This is always good to be back on here and. Be on a familiar face slash show, right?

Average Joe Finances:
0:21

It's not so familiar. I think last time I was pretty clean shaven cuz I was still doing the Navy thing.

Chris Miles:
0:25

So we're rougher this time around, isn't it?

Average Joe Finances:
0:27

A little rougher, a little rough. I'm trying to look like you, I do have a little bit of the salt and pepper, but mine's more like paprika cuz my facial hair's red. It's weird. My hair's black, but my facial hair is red. I don't ask questions. This is how,

Chris Miles:
0:37

that's like a cool combination like that, it's almost like the you know how to train your dragon type of cool little Nordic combination there, right?

Average Joe Finances:
0:43

Yeah. Maybe. I don't know. Yeah. Could be the other side, like I know I'm half Italian and then half of everything else, so there's something else firing up out of there No, that's awesome, man.

Chris Miles:
0:51

9 57.

Average Joe Finances:
0:52

There you go. Hey, so Chris like I said you've been on the show before so you're no stranger here, but for those who may not know who you are because I know you also have a very popular podcast, so there's probably people that are listening right now that know you from your own show. But for those that don't know you, if you could maybe share a little bit about yourself, share your story. Who is Chris Miles?

Chris Miles:
1:13

Yeah. So I'm the anti financial advisor, right? This is why I'm all about passive income, not about, saving your money into crappy 401ks for 5 billion years, and hopefully you have something. That's not my thing, although it used to be. The funny thing is I was raised not really learning about money. Maybe like many of you, my parents were good people, but money was not a thing that we had a lot of abundance of. In fact, everything in their conversations, my dad would be at the dinner table saying, what do I think? I am made of money. Money doesn't grow on trees. We can't afford this, or I'm gonna work until I'm dead. That kind of stuff is what I heard growing up. So like every other kid, especially when you get to your teenage years, you vow never to become like your parents, right? I grew up and I thought, I don't wanna be like them. As I went out in the real world and I even went to college cuz my dad didn't go to college, your mom goes to college, I did end up go to college, but I ended up dropping out because I realized, I wanted to be an entrepreneur and at first I was gonna do it only temporarily. I was just gonna drop out, do the entrepreneur thing, get some experience, and then go back to college and get an MBA with real experience. After I became an entrepreneur, I realized that's a much better path than the college route. Kinda like what Rich Dad Poor Dad teaches. The first thing that became available as an entrepreneur was becoming a financial advisor, cuz I didn't realize they took anybody off the street that could have a heartbeat and pass a test. I was that guy. I passed the test eventually and I started doing that for several years. And of course the tables turned almost literally where my dad had me go out, fly out to go see him and sit down with him as his financial advisor. And so I thought, All right, awesome. I'm gonna be able to see if I can do anything for him. So he shows all of his finances, opens up his books and everything, and I look at it, he says, All right, Chris, what more can I do? Understand he did everything by the book. This guy was the ultimate Dave Ramsey fan. In fact, Dave Ramsey probably learned from my dad, actually. But the guy saved everything, he was cheap. He saved his 401ks, right? He paid off his house early. He was so proud of doing all of that. And then I sit down looking at his finances. I say, Dad if you wanna retire today at age 61, you need to die in five years because you're gonna run outta money. He's like, All right, that's not what I hope to hear. What can I do? And I said, I don't know. You've done everything right according to financial advising. You've done everything. I could put you in other stuff, but it may not do much for you. It may not be enough to make a difference. And it bugged me because, the problem is I realized that he wasn't gonna become financially free doing everything that Dave Ramsey and all the other financial experts have taught right? Over the years. And then I looked at my own clients they weren't financially free either, even after decades of advice. And then I looked at my own life and I realized I was the same exact path as my dad being cheap, trying to save everything. And I wasn't gonna be hoping, become financially free either. So why would I keep teaching this crap? And that's why I eventually quit. I quit being a financial advisor trying to figure out how to do it. And that's why I met guys that were doing things like real estate investing and doing things outside in these alternative investments. Guys who were retired in their twenties and thirties, where financial advisors, I looked around the office, none of them were financially free. They had to sell, mutual funds or keep money under management to basically get paid commissions. That was the only way they could retire. They couldn't retire off mutual. And and so I thought, I gotta find another way to do it. And I did. I actually was able to get outta the rat race when I was 28 years old, and I was able to be financially independent where enough passive income, were able to pay for all my bills, and then I wondered what to do with my life. And that's where 2007 I decided to come out into the world and teach people how to become financially free. And that's what I've been doing, in so many ways, shapes or form ever since.

Average Joe Finances:
4:34

Chris, I love your story and I love your podcast too. It's added to my weekly rotation. It's definitely one that I'm always listening to. And I always hear, like in your intro where you're talking about how, you know you've already essentially retired twice, right? And you know that first one at the age of 28 I'm excited cause I just retired for the first time at 38, which realistically, when you look at the, what's normal, is still a very young age. And I look at the people that, I think my wife and I had a discussion about this before we were talking about the standard American diet, right? And how it's called, when you look at the acronym it's SAD, so I look at the same thing too with the standard American retirement plan, right? But I call it the standard American diet, right? What is the standard thing that we're doing? And again, it's sad because, you can do everything by the book, do everything the right way, and do all these programs that were made to help somebody retire at the ripe young age of 65, right? And still not have enough money to even live out at least 10 more years and it's scary when you think about that. It's oh, not only do you have to try to live off of 60 to 70% of your income to save up enough that you can hopefully live out your golden days and have enough money to make it all the way through there. But not only that, but you have to, Make sure that you're not gonna essentially you're not, that you're not gonna run outta money. And it's almost impossible to do that because when you think about the standard American budgeting system and just the standard American retirement, 401ks, IRAs, and everything, yes there, it's nice that you can hedge against inflation with that but at the same time, when you're looking at the bigger picture of things, if inflation's at 9% and you're getting between nine and 11% on your average return, you're just basically just keeping up. So you're basically putting enough away that your dollars will still be worth what they were when you started putting 'em away. But the thing is, if you wanna make it ahead and build wealth, you need to get those dollars to be worth more than what you're putting into that. And the only way you're gonna do that is to get some serious compound interest going. And I'm talking more than nine, 10, 11%. Those are good rates of return. At least you're keeping up with inflation. But one of the things I like about real estate is not only can you get those kind of returns, but you also get that appreciation. So when you add all of that in, your returns are looking upwards of 20% plus. So it's one of the beautiful things about real estate and what we call alternative investments. It's funny how some of these alternatives are better than the primary, right? So I like your style. I like the way you do things, Chris, it's, You can't just have this standard attitude of, Yeah, I'm gonna work in my career field for 40 years and then I'll have enough money to retire. You might, but you might not.

Chris Miles:
7:15

It's true. And you mentioned too, I we got major headwind, like you said, with inflation, there's taxes, there's fees coming outta retirement plans and stuff, crazy enough. I actually just redid the numbers for the s and p 500 average. It's 7.75% for the last 30 years. Even though we've had about half of these last years being a big upmarket, it's still only about 7.75%. So if you think about it, even if somebody gets an index fund, which is even better than most people's mutual funds inside their 401ks and IRAs, you get that. You're lucky to pull off seven and a half percent you figure out like with the headwind of inflation and then taxes and everything else coming out, you're lucky to. 5%, that's just miserable. That's not even keep up with real rates of inflation. We already know that government's saying 9%, it's double that. At least double that.

Average Joe Finances:
8:01

Oh, absolutely. Yeah. So there there's what on paper and then there's reality, right? You say, Oh, it's 9% inflation. But then when you go to buy a gallon of milk, it's gone up 15% and you go to buy a stack of hamburgers and it's gone up, 20%. And that's realistically what we're seeing but they say, Oh, the average is nine. But no, it's not. That might be the lowest thing on there. Like maybe a carton of eggs went up 9%. But it's wild. If you just think back to your childhood Chris, and you think about the, what was the price of a carton milk? What was the price of a carton of eggs? What was the price of gasoline? And you just look at what those prices were when you were a kid to what it is today it's mind boggling because when we were kids, we thought a million dollars was a lot of money. We thought a hundred thousand dollars was a lot of money. Now, if you're not making a six figure salary, you're almost on the poverty line really for a family of four. Like you need to be making six figures to survive in like rural America, right? where if you're living somewhere else in like more expensive areas like where I live out in Hawaii you need to be making 200K plus a year just to survive. It's crazy.

Chris Miles:
9:05

That's true

Average Joe Finances:
9:06

but that is the result of inflation. And if you're not doing something to keep up with that, you're only gonna feel this pain even more. Chris, I wanna kind of talk about what it is that you do that's a little bit different and I know we touched on a little bit, but what are some of the things that you talk to people about? I know you coach people as well. What are you helping people do to beat inflation and get out of this standard American retirement system that we see? What are some of the things that you're doing?

Chris Miles:
9:32

Yeah, so this the standard American retirement system, right? You know that little SAP, SARP or whatever you wanna call it, that one, they're telling you to accumulate money. They tell you accumulate money over long haul. And that is the slow way to create no wealth ultimately it's kinda yeah, and if you heard my podcast, I joked about a Dave Ramsey Twitter post that I'd taken a screenshot of because I could not lose it. But he said, if you save up a hundred dollars a month for 40 years at 12% interest, assuming you actually get 12, right? And after 40 years, you'll have $1,176,000. Everyone should retire a million. But the truth is that it actually, he did the numbers wrong. It was 979,000, so he's off by 200,000 bucks. Secondly, if you get only that 7% right now, you're looking less than $300,000. And the standard retirement system, they tell you to pull off at least the newer way, right? Pull off no more than 3% of what you accumulate. So in that same situation when someone was saving a hundred dollars a month like crazy and then, they have, say about 280,000 is what it comes to be. That 280,000 at 3% means you're living on about $8,000 a year. And you might say, Oh, that's better than a hundred bucks a month. Oh, but in 40 years with inflation, what is that actually worth? Usually about every 15 years, I'm being pretty conservative. Inflation doubles, right? So if it's every 15 years, you're doubling inflation, that means after 30, you're almost at 40, 45. You're really about six, seven times. Divide that by seven. 8,000 by seven is about 1200 bucks. Oh, it's a hundred bucks a month. So whatever you save in retirement plan is about what you can live on. So if you save max funder 401k at 20,000 a year, you live on 20,000 a year. So we do it different, right? We don't focus on accumulating money, which really has been proven mathematically. It's just not working with inflation and we didn't even talk about taxes that would be less than a hundred bucks a month. Now what we have is we say how do we create cash flow? How do we actually create passive income? I'll give you example. I had a guy that was out in California, retired military guy. We actually just did a follow up interview that we'll post next month. But in his situation, he had a million dollar retirement plan through the military. He said, Chris, like I, I'm supposed to pull out 3%. That's 30,000 a year I'm supposed to live on. I can't live on that, especially in California. And I said a million dollars, even at a low conservative return, we can usually get it to you about 10%. Right? 10% of a million dollars now is a hundred thousand a year, not 30,000 a year. And then you pay taxes usually that a hundred thousand a year we get tax benefits cuz it's in real estate type based investments where we get some write offs. So for him it was life-changing. And by the way, update on that. He did invest his million dollars got it deployed. It's not making him a hundred thousand a year. It's actually making him net about 11,000 a month. It's about 130,000 a year. So he's making more than that in reality. Way different than you're trying to live on 30, and that's the difference is that you can get away with less, just today I talked to a couple where they got a home equity line credit. They were like, Hey, I got about quarter million you can invest from here. You got 150,000 savings. What can we do was, I was looking at their situation and they were actually able to put away a lot of money too. They were adding to that savings quite a bit. I said, This year we can get you about 64,000 passive. Now granted if they'd done that same thing, and by the way, if they tried to invest in the stock market, they wouldn't be pulling out a HELOC cuz that's gambling and you would lose your money potentially. Don't ever do that. Don't pull out your equity, do that. But they know, they, they can pull out equity to buy real assets like real estate, essentially pull equity outta real estate to put it back into real estate. And so then you don't really have debt per se? That's 64,000. The great thing is based on how they're saving and reinvesting that money, they can hit their 10,000 a month goal within three years. And that's the difference where it would've been like, yeah, maybe they might have 10,000 or so a year they could live on right now, No we can actually get them to 120,000 year end three years.

Average Joe Finances:
13:22

Yeah, that, and those are all fantastic points. And that's exactly what I wanted to talk about and I'm glad you brought up the whole thing about a HELOC cause I was gonna ask you what your thoughts are on like debt arbitrage, right? With taking out a HELOC to buy more real estate. Cause it's actually something that I've done myself. I'm doing the whole Velocity banking thing, chunking down my mortgage, going back and increasing my line of credit, taking that money and buying into multifamily real estate properties and then taking all my distributions and all the money that I'm getting from that and dumping it back into the HELOC and paying it back down. I just have this cash flowing asset that is, essentially paying off this other debt. But at the same time it wasn't even any of my money that had to go and put into it. Its tax free money that I pulled out of the equity of my home to now acquire more assets. So wanted to ask you like, what are your thoughts on doing something like this? So I already know that you're not a fan of, pulling money out of a HELOC to invest in the stock market, but you do like the idea of pulling some equity out to invest in more real estate. Because that's a real tangible asset.

Chris Miles:
14:18

Depending on who you are, Right? Just like Kiosaki teaches Rich Dad, Poor Dad, there are no risky investments, there's only risky investors. I would beg to differ. There are some risky investments too, but definitely the latter part, the risky investor part is key. Cause see, like in these guys cases I just talked with today, they pulled it out and I said, Oh great, what's your plan? They said, We pulled it out in preparation to talk to you we pulled it out, but we don't wanna do anything with it until we get some guidance on where to put it. And that's the key. Many people will just, the average person that maybe listen to these podcasts will say, Oh, I should get a HELOC. Let's pull it out, go buy real estate. I'll go buy it in my backyard. Imagine Mike, if you went and bought a rental property in Hawaii, it's horrible. Like the cash loads.

Average Joe Finances:
14:56

No, I wouldn't use my HELOC for that cuz I would not cash flow.

Chris Miles:
14:59

No. And you guys get better HELOC's than we get in the mainland, right? Like you guys get incredible intro rates but no, like it's just the cash flow doesn't support it. The profit doesn't support it, and so you want the payment to be much lower than wherever the cash flow you get. But I live in Utah. Many people try to do that strategy. Cash flow's not great here in Utah either. Really anywhere in the Western United States sucks. Okay. So when they try to do that, they're lucky to break even on their costs, especially with rising interest rates. That's risky. In my opinion. Now I can buy properties out in the Midwest or Southeast, I got other properties I could buy. Much better situation, much more stable predictable cash flow, and it's profitable. So that's the key is that if you use your equity, you've gotta be really careful to make sure you do it right. And if you're not sure whether you can trust yourself or how to do it right, find someone to help you do it right so that you have that guidance to ensure that you don't lose that precious equity. One thing Dave Ramsey and I agree with to some level principle wise is you don't wanna gamble with that equity, right? You don't wanna lose it, and you don't wanna put it somewhere where you can't afford to keep it going and then you end up like what happened to me in the last recession where I got overly confident, started buying for appreciation versus buying for cash flow, and that's what got me in trouble. So you gotta be careful when you're using home equity.

Average Joe Finances:
16:13

Yeah. And I think the big thing is just don't overleverage yourself, right? Don't put yourself in like a 100% debt scenario, right? Make sure you always have some type of positive net worth. Because if you start, getting yourself to a point where you're having negative net worth because you keep increasing your debt and increasing your debt and increasing your debt, but you're not adding anything to the back end yeah, that's one thing, but also, Focus on just that net worth as well. There was, what you said is key. Cash flow is king. Especially with where the market is right now. We're starting to see this shift. Well, actually It's already happened. We've seen a shift in the real estate market, and I would say that we're at a point where we've plateaued. I wouldn't say necessarily that we're seeing drops now. There are dips. Yeah. And like little divots on that flat plateau, right? As we're going along, I don't think we're necessarily going to hit a cliff and just drop. Yeah, but it's all market specific, right? And it's gonna be based on, what you're investing in, what kind of assets you're investing. What the areas, what the local market looks like, what the neighborhood looks like, it's gonna get all the way down to that, right? So I think, doing your due diligence and research and working with somebody that knows what they're doing as well. Get a mentor, get a coach, get somebody that's gonna help keep you on that right track because, it's a rocky road that's ahead right now. I'm not saying it's gonna be anything like 2008, 2009 timeframe. I really don't think that's gonna happen. But at the same time, there's gonna be some dips and some people might not be ready for that. So you wanna prepare yourself. And one of the best ways to do that is to have assets that are actually cash flowing so you have that income coming in that even if it drops below a certain market value and you are now underwater on it, it is still an asset that is providing cash flow to you that guess what? In the real estate game, we like to wait. So if you can afford to hold onto it and wait, it will go back up in value. It's similar to the stock market, right? You see these drops? Yeah. It always comes back up. The real estate market's the same way. You'll see over like a 10 year period. It'll go up, go down, go up, go down, and, Even in this market out here in Hawaii, yes, it's not a great cash flowing market, but if you are able to hold assets out here, properties out here double in value almost every 10 years pretty consistently. It's a matter of what your risk. Comfort zone is and what your of course, your education level is as well. Cause if you don't know what you're doing, you could put yourself into a predicament where it, it could get a little hairy. That's why I like what you do, Chris and how you help your clients and help them guide them in the right direction to find these cash flowing assets. Not so much appreciating assets, appreciation's. But we're at a time right now where again, like just pay attention to the market, pay attention to what you're going into, just make sure you're making smart decisions with whatever that you're, whatever you're going into.

Chris Miles:
18:54

Yeah, I agree. Never make a decision based on appreciation that should be the icing on the cake for you.

It really should be:
18:59

can the cash flow support itself? If I cash out for my HELOC it costs me a thousand a month. I hope I'm making at least a thousand a month, if not 2000 a month on that versus where I've seen a lot of people, they make 500 a month. Their HELOC's a thousand a month, they're losing 500 a month. And if anything happens in their other income scenarios where that income's gone or it lowers. Now they're stressed. Then you create another 2008 scenario, which that's what happened to me. I was hoping to make big money on it versus the easy little cash flow, I believe that now boring is sexy, right? I like the cash flow every month now, but back then I was like, Man, but I can get so much richer if I can make a hundred thousand, 200,000 for every deal, like if I flip a property or something like that. And that was just dumb because then I was like, I'll take negative cash flow if it means I get appreciation. But if you don't get appreciation, that's the key.

Average Joe Finances:
19:50

Yeah. We've enjoyed a market where you really could chase appreciation pretty much since that last crash up until now. But now we're at a point where it's like you really need to reconsider if you wanna go after something for appreciation, only because you might put yourself in a in the hurt locker. Now if you've got enough to cover it and you feel like in the long term, this is a good move, then by all means, do what you're comfortable doing. But at the same time, if you don't have enough to cover it, you'll find out when loans come due or you have to sell the asset and it's underwater, and now you're, you're negative. That's huge. Now, Chris. You hear a lot of people talking about the same stuff on some of the places that you've been featured, Right on US News, CNN money, Entrepreneurs on Fire, Bigger Pockets, even there a lot of people are talking about the same things about how it's so important to have this cash flow and, I've gone to several conferences recently and several real estate meetups and I think everybody's of that same mindset where the route everybody's looking to go. They're not looking so much more for appreciation. You still have people out there that are doing like big flips and wholesaling and things like that., but there's a lot of people now of trying to like, or starting to scale back and focus more on buying those cash long assets that they wanna hold for 10, 15, 20 years. Now what is the route that you like the best when it comes to buying these cash flow assets? I know you're all over the place, but do you focus more on like single family homes, small multi-family, like duplexes, triplexes, quadplexes? Or have you started looking at like larger commercial, multi-family? And then also on top of that, besides just the real estate piece, what do you think about? Like franchises or like a laundry mat or other cash flowing business?

Chris Miles:
21:29

Man, you're just like describing all the different investments our clients get access to, right?

Average Joe Finances:
21:33

Oh gee, look at that.

Chris Miles:
21:34

Yeah. Those are all viable options, right? That's the beautiful thing about the alternative investment world is that there are such a variety of options. And granted, I think real estate is the tried and true. It's the one that can't be manipulated as much. If there's really two asset classes, I think you can do best where you have more control and certainty. Is definitely in the business sector and in real estate, right? Business because if you can own and control it, real estate for the same reasons. Real estate, The nice thing is even with Open Door and all these great places that, overpriced Oklahoma City and now they're possibly coming down with some deflated values and stuff like that, Great, that's fine. But the great thing is that you can't really manipulate a market very well. It's not like gold prices that, we have JP Morgan being sued a billion dollars for manipulating gold a decade ago, and Bitcoin that's probably the next one. We'll find out. It's been manipulated by the feds, but uh, nobody's talking about that yet. For me, my favorite places is I still do like rentals. Whether it's could be like small multifamily, like even duplexes, single family homes even. I like it for the fact of control because if we really do move into recessions, I like to know that even if I'm not managing the property, cuz I don't manage any of my properties, I get turnkey properties. Like to know that I have that full focus and control to, to pivot quickly if I have to. I still invest in syndications, right now, you gotta be so careful. It's like the Warren Buffet quote. When a tie rolls out, you'll find out who's swimming. I feel like the tide's rolling out right now, and we're gonna see a lot of people that are in that syndication space with their, 15 to 18% IRR Like they all copied each other's proformas to show everybody else, and then all the deals look the same. I think we're gonna find out there's a lot of lying or overestimating on those numbers and there's gonna be a lot of upset people, Lot of lawsuits, a lot of lost money. That doesn't mean you shouldn't do syndication, it just means that you need to be investing with the right operators. So I still do that. The syndication we've done for myself personally more recently was actually in the oil and gas sector. More with mineral rights, where you can both make money off the oil, natural gas, which is in huge, the prices are skyrocketing there, even more so than oil itself. There's lots of opportunity there and I'm seeing great returns at oil and gas sector franchises actually could be a good option. But I did look in that in 2020 very seriously for myself, and I've referred to other clients to it. The reality with franchises is even if you put a large amount of money in to make it more passive, it's still semi-active. I would call it, I would say even more active than a turnkey real estate property. Maybe more active than buying and. Renting your own property by yourself cuz you might put in 15, 20 hours a week for several months before you finally get the system to place where you can just back off and work maybe five or 10 hours a week if you want a good cash flowing franchise. But, That being said, five or 10 hours a week eventually to make six figures or so. I think that's not a bad exchange personally. So those can be a good option. I would just say go for a business that you would actually enjoy and they could be the least sexy businesses ever. The one I almost bought was actually a junk haulers business. It was like a, the competitor to winning 800 got junk. Those were great. Those were some really good viable options. Right now another one I've done recently is actually raw land cash flowing that, cuz there's a lot of people looking for raw land and there's very few people actually in that space. While open doors competing on the single family space so much, you've got raw land that's kinda wide open cuz not many people know how to play in that space and actually cash flow it. But I'll say that's actually my number one cash flow investment right now where I'm making a good like 25, 30 to 50% plus returns.

Average Joe Finances:
25:00

Yeah, no that's great. Chris. As a matter of fact it's funny that you bring up land because my wife and I have actually recently been talking, actually been talking about purchasing some land. So we've actually been looking publicsurplus.com and everything, and just looking at all these different areas and then, Pricing out what it looks like, looking at the tax records, seeing what it's zone for, and trying to figure out like what's in the area what might be coming, are they gonna develop this land or is this, good potential for good ag land to, to maybe potentially, Rent or sell to farmers. So yeah we started looking at that as well. It's pretty interesting and there might be a big shift going that way as well. So I think I'd like to get an early on the land space because it was the same thing, like when I wanted to look at RV parks or mobile homes and things like that by the time I got to looking at that or even self storage, it just became so oversaturated. Started looking at land and I've got a couple other buddies of mine that they are looking at land. Actually, a buddy of mine, we were actually having a phone conversation while he was optioning on some land and he won two parcels while we were talking. And, he was telling me what his plans were for it. It was really cool. So I said, Oh, this is a pretty good thing where you can almost get at pennies on the dollar, really. And you could figure out, as long as you're doing it in the right spot it's a great. Asset to have. But that's the other thing about real estate in general too. Cuz not only do you, when you buy real estate, you own a piece of land as well, unless you're buying like a condo like on the 30th floor or something, right?. But like when you're buying these real assets, like real estate, right? You're buying this and you're owning that piece of land eventually. If you have the place paid off and you wanna knock it down and do something else, you can do that. It's your property, it's your land, you own that. Whereas, the paper style or paper assets like stocks and things like that, you own a piece of paper that says that you have, part ownership in this company or this corporation. But you're not gonna go in there and make decisions, right? So when you have real estate, you can go make those decisions. It's yours. You have a business that's, it's yours. You can make those decisions. No, and I like what you said about the franchise piece too, because yes, you can get something that you can maybe turn into passive, but it's definitely not gonna be passive at first. And then even once you get it to a point where it's fully passive, there's still gonna probably some type of personal involvement in that. When you look at trading five to 10 hours a week for six figures that, like you said, that is a pretty good trade off, right? Versus. The typical 40 hour work week to maybe barely make that six figure salary. I think that's huge now With in, in land in particular. So I like that you're doing something a little bit different too besides I know the last time we talked, like you really big into turnkey and I know you love turnkey a lot. But I like to see that you're doing some land now too. What is it that, that kind of attracted you to land as an asset class?

Chris Miles:
27:39

I think really the big thing for me is much like what you described, it's something we know it's real. The nice thing with land is that you don't, you aren't dealing with tenant toilets and trash, that's the one thing that's great. It's kinda like self storage. You mentioned self storage. I think that's another great place potentially, but you have to be, the best syndicators in that space. The investors are very picky right now where they're, like you said, there's a lot of people just trying to do self storage, may not have good numbers to follow,

Average Joe Finances:
28:01

and they can be picky though. They've built up,

Chris Miles:
28:03

yeah.

Average Joe Finances:
28:04

They got in early.

Chris Miles:
28:05

Exactly right. It got hyped up a little bit and you'll see once Ty rolls out, a lot of those people will disappear and they'll be back to the same people that are making good money in themselves. Storage. But yeah, with land, it's pretty simple. It's unknown in a lot of ways because not people are dealing with raw land. It's not as sexy obviously, cuz you're just dealing with a piece of dirt, maybe you have a river run through it, yay. Maybe you got some wood, maybe that could be, something that's, could be sole off as lumber. But the way we're doing it, it's more, like for example, my partner bought one for 7,885 bucks. It's a piece of land. Turn around and sold it is seller financing to someone for 35,000 and change. And we're selling on terms of a 10 year term at 9% interest, right? So what's happening is that now that seven, almost $8,000 piece of land that we bought is cash flowing over $400 a month. Much, much better return. If they stop paying us, which, of course that's not a huge payment to worry about someone not paying us, but they decide to stop paying us. Great, your deal is done. You're foreclosed on and we go and sell it again to somebody else.

Average Joe Finances:
29:02

Take it back.

Chris Miles:
29:03

Take it back.

Average Joe Finances:
29:04

But when you're saying that though, you say you're getting $400 a month on that. So in less than two years you've already made that $8,000 back.

Chris Miles:
29:11

That's right

Average Joe Finances:
29:12

now it's a free piece of land. That's right. Nicely got eight years to pay us yeah. That man, that is great.

Chris Miles:
29:16

Pure profit. Yeah, so I like that. That's, I think that's one, one thing that's sexy about it. I I do like returns obviously. But I like returns where it's something that I still know that holds a basic amount of value. Just even if you were to argue about gold still holds some sort of intrinsic value. We can't say the same thing about like you're saying, that piece of paper or that piece of digital real estate, that digital anything. Because the truth is that those things don't hold water at the end of the day. So I do like to know I have something that's certain that I know that especially as people are trying to sprawl outward, especially after 2020, a lot of people are looking for places, not just the farmer next door, which is always the cool, easy place to go is buy up their neighbors lot and then sell it to them. But even better. There's a lot of people trying to go and expand, have their own homestead, their own place that they have, or just a place for where they're saying, Hey, let's just get away, Get outside the craziness, get outside the city. Let's just go four wheeling, right? Or maybe I can go somewhere. I can go shoot my guns. Like things like that. There's so many opportunities, so many ways people can use land that can allow you to be able to create more cash flow now.

Average Joe Finances:
30:16

Yeah. I love that. One of the things that my buddy was talking about that, one of the things he wants to do is create some type of glamping experience like he's gonna buy all this land and then create a really great campsite and make it something that people will want to go and be a part of and check out, and he's like, hey, and if worst case that doesn't work out, he's maybe I'll do this instead, or do that. He had like several exit strategies for what he wanted to do with that piece of land. And I think like in anything that you go into, especially in the real estate side, as long as you have multiple exit strategies that you're not just going in there and saying, Okay, this is the one thing I'm gonna do. If you have multiple ways to make it cash flow or make it work it makes the investment less risky and a little more safer, right? If you say, Hey, I want to go and buy a short term rental out here on Oahu and you're in a really risky business, because guess what? There's very few places that are zoned where you're legally allowed to do it for one, for two, you have to get a license even after you buy a place that is legally zoned for it. You have to get a license from the state. Guess what? They had 30,000 licenses, they gave'em all away, and now there's a wait list for as they pop up to get them. So people are trying to buy these short-term rentals and they can't, now they're stuck on the regular law, which right now is 90 days minimum. So that's what a short-term rental is here. Yeah. So you have to do your research in whatever asset class you go. But I think Chris and I agree on why real estate is such a good asset class and such a good thing to be a part of. Now you had mentioned something earlier and I wanna touch on a little bit too about the multi-family space and the syndication space and you were talking about how, when that tide rolls back, we're gonna see who was swimming naked. And that's true because I see these deals online all the time, all across Facebook, or I get 'em in my inbox, or I get this deal flow all the time saying, Oh, here's our rate of returns. Here's our IRR and this is what this is gonna look like and a lot of them do look very copy and paste, right? I'm like, Oh, I don't know about that. So the people that I actually invest with, the syndicators that I always partner up with, one they have a really great track record, but two, I've done my research on them and I also do my research on the asset that they're acquiring. You don't just take their word for it, so if multifamily, like if you wanna go in as a limited partner onto a syndication, what I'm gonna tell you is that you need to do your research on that property as well and you need to do your research on that team that you're going in with. Don't be scared to go into a syndication. Just make sure you're educated, right? And that's with any asset or any investment you're gonna do. Just make sure you're educated in whatever you go into. So Chris, with that being said, are you in a couple syndications, like you mentioned?

Chris Miles:
32:41

Yeah. I'm still in some deals, like with some apartments and things like that. So yeah, it's not that I'm against it at all, but I think what you just said was perfect. Is that when you bet at a horse race, you bet on the jockey more than you do the horse, right? But you gotta make sure the horse isn't lame either, which is why, like you said, you gotta still research the property, you can't just have this jockey saying, Hey, I get paid a lot of money to be on this horse. I don't care if I win. You want the best person that's operating this deal, and you're right, like good track record. And I like people have head track records that go back even before the last recession. The best way to see somebody's character, which is hard to see at times, is when there's stressful times happening, right? When there's stress happen. What happens to their character? Do they run? Is this like fire, like the fire festival, like where the guy just bolts and leaves, once the pressure's too much, that kind of thing which, if you think about, I think in some ways the multi-family space has almost become like the Fyre Festival, right? If you don't know what that is, that was like the big party on the island. It's supposed to be a private island of the Escobar's island, and it ended up being on a typical Caribbean island and there was like crappy port potties and it was horrible, right? People paid top dollar for nothing.

Average Joe Finances:
33:46

Yeah, I remember seeing that all over the news. It was pretty funny. Yeah. I think, and the guy who hosts it there made a killing with all these people signing up for it.

Chris Miles:
33:52

Oh, yeah. Yeah. He had spent some like 30 million, I think they were trying to rake in like 50 million, but most of it was like investor money. They were collecting money. It's Oh, this is gonna be huge. Watch this music festival. It's gonna be amazing. And I've seen that a lot in the multi-family space too, right? Where if people are just saying, Oh no, it's great because based on cap rates, based on what's happening with the going market rate is right now and if we have a hundred percent occupancy, all this kind of stuff pops out. And just by manipulating a few numbers, it can make it look like it's huge return. But in reality, can they deliver? What are they gonna be doing? Are they gonna bail out on you? The first sign of stress? Are they gonna, tuck their tail and run? You really wanna make sure that you have somebody that has a good, like I said, not just a good track record. That's a big part of it, but like you said, like you could look 'em up, you can Google 'em, who's on their team, what kind of people are they? I wanna know if they had failures. What was their worst deal they did, ask'em what was the worst deal you did? What'd you learn from it? What do you do differently now than what you're, what you were doing back then. Those are the people you wanna learn from, people like gained wisdom.

Average Joe Finances:
34:50

Yeah, absolutely. Gain wisdom. Wisdom and they're still around. They survived, the crash and fall of society, surviving that that real estate apocalypse. Chris, this is awesome. I don't even think I've really even asked you any real questions. We feel like we were just chit chatting about the stuff that we like and I think that's what I love about having conversations like this, especially with you, is that, it's just, it's genuine, right? And you show that, you provide a service for your clients. That is, realistic, but also, like I said, that g word is genuine and you're just a good person, right? And you are out here trying to make a difference and help people. And that's why I like having conversations with people like you because, it's not about, Oh, what's in it for me? It's about, how can I serve others and how can I give back? And you've always been very good about giving back, even when it's just in a conversation like this, passing on some great knowledge and imparting that financial education to the masses. So I really appreciate that. I appreciate what you do with your own podcast as well. And that's why I'm such a fan of it, and it's a little bit shorter than my episodes, but it's straight to the point. Chris is feeding you that info without all the fluff of the conversation that him and I have here. But it's good conversation and I enjoy the conjecture, so I Me too. Now I do have to ask you some questions though, cause I have something now called the final round. I didn't have this the last time you were on the show, but it's where I'm gonna ask you four hard hitting questions just to show how genuine you are especially when facing adversity and being put in a tough situation, which I think I know what some of these responses are gonna be just from having conversations with you in the past. But Chris, if you're ready to go, we'll get the final round started.

Chris Miles:
36:20

Yeah, let's throw punches. Let's see what happens.

Average Joe Finances:
36:22

All right, let's do it. All right. First one, this is a doozy for some people, but what is the biggest mistake you've ever made? And we'll keep this in the real estate side. Yeah.

Chris Miles:
36:32

Biggest mistake I made, I mentioned appreciation and all that stuff. Banking on appreciation. I would go even deeper than that, I would say not listening to my intuition, like there was something that just was triggering off. There was like a little red alert going on that I could feel in the back of my mind if something was not right. But then the dollar signs would get involved. Like it's oh, things look good. And even like rationally, like looking around things look good. The market's amazing. And just like it was even just months ago here. And that was the problem, is that I knew something was off. And if whenever I don't follow my intuition, that's when I lose money. It's when I follow my intuition, even if it's counterintuitive, even if it's counter, what it would be considered common sense. I've learned now to follow it and if I follow it, I follow my gut on those things. It works. Same thing when I'm looking for syndicators if something doesn't feel right, I don't go for it. And many times I've been right. It's like something, it doesn't make matter if I can't see it logically or visually something feels off, then it probably is.

Average Joe Finances:
37:27

Yeah, Chris, that is a key thing right there. You gotta trust your gut. You gotta trust your intuition. Cuz a lot of times if you're getting that uneasy feeling, it's cuz you know, somewhere in the back of your head you're getting this warning signal that's telling you this is not something that you should be doing, or this is something you might wanna rethink or, look at it from a different angle. Yeah, definitely a huge key takeaway from that. Trust your gut, trust your instinct, and , a lot of times your intuition is trying to do you a favor. Awesome. All right, so Chris, the next question is, what is something that you've learned that you wish you knew when you first got started? And I'm gonna keep this just in the general broad aspect, right? From your whole financial literacy and financial freedom journey.

Chris Miles:
38:07

Yeah. I'd say something I've learned that I wish I knew in the beginning was really just I guess, how simple money can be, right? I sometimes try to make it seem easier than it really is, right? But I think the hardest things I've had is my child over complicated. Like I remember early on, especially in my twenties, I remember thinking like, I actually had the belief that making money was hard. Like it was hard work. You had to work hard to get money. Therefore, everything I do, every activity I would do, even if I'm working smarter, I was still overworking on the smarter thing, right? And I've learned that it's not about working harder or smarter. Most importantly, it's about working right. Doing it the right way. And so if I can go back in time and talk to myself like, here, listen. Hold your hand, even if you don't want me to hold my hand, Chris come on, at least let me guide you along here's the way to do it. Here's actually how to really look at what money is. And money really is a byproduct of how do you go about serving people, solving problems, even in investing world. If it's not somehow providing a valuable service or valuable property or providing something, right? If it's not something of value, it's not economically gonna work. And if you understand those basic economic, everything else just becomes easy. It becomes simple to figure out.

Average Joe Finances:
39:22

Yeah. Chris, that is a great point because what you're talking about is just having that good relationship with money and understanding that it is a tool that if utilize the right way, can be super beneficial to you, but if utilized the wrong way, be to your detriment, right? I'm glad you were able to learn about that and change your mindset because, just if you would've kept going the way you were going and that standard financial advisory role and just keep doing what you're doing I think we'd be having a different conversation today. But at the same time, it's you were able to open your eyes pretty early when you sat down and you talked with your dad. You were fortunate, right? You didn't just start off and say, I'm gonna go get some new clients and, and have to wait 20 years to figure it out. Oh my goodness, this doesn't really work. You got to say, Hey, no, you did everything right, like you did everything that I was trained, on how to teach people how to do this and you're not at a good point where you can really retire. So you were able to like really get that right off the bat and say, Whoa this probably is not for me. So that's awesome, man. Now the next question I have, and this all kind of ties into each other but that is, do you have any tips or tricks that you would recommend to somebody that is just getting started today? And when I say getting started, somebody that's just starting their journey in financial independence let's say they just got outta school and they got their first career. I'll be easy on this one and say, Okay, they don't have any student loan debt or it was just forgiven. Let's say that somebody in that situation they're now in a decent paying career and they want to make sure that they can retire at a good age, not wait until they're 65.

Chris Miles:
40:53

Yeah. I would give these three pieces of advice, and in fact, even if you're just not just starting, this might even be the advice for you if you're seasoned saver, the three piece of advice I give is Get lean, get liquid, and get out. So Get lean, and this is important, especially if you're just starting, is make sure you're keeping your expenses lower than your income, right? Live within your means but also find ways to increase your means. Find a ways to create that gap in between what you're making and what you're able to, what you're spending. That was the thing that was amazing with that couple I talked with. They're just starting, but because they have 25,000 a month that they can put towards saving. just accelerated their plan to the point where it's like you can hit 10,000 a month passive within three years. That's incredible. Conservatively, right? That's not even, they can probably do it faster, that's the kinda stuff that's cool. So Get Lean means, make sure don't live in a cardboard box, don't be living on rice and beans and all that crap but, do at least be responsible with your money watching your numbers. Get liquid means get your money in places where you can actually access it. Keep it in savings, for example. Don't fund that 401k. That 401k is useless. It's a piece of crap regardless of the match that you're getting. And I've had plenty of episodes on the Money Ripples podcast talking about what the match really pays you. It's bogus, okay? It pays you very little after the first year. Your first year is the best it'll ever be, but then it's locked up. You can't touch it for till you're 60. So why would you put money in there if you wanna have freedom before age 60? So that's what I mean by get liquid. That's where even like the infinite banking strategy can work in your favor and use that instead to build it up so then you can get out and get that money out working for you as well.

Average Joe Finances:
42:22

I love that. I love that. Now what would you say to somebody I, this isn't part of the final round, but I kind of wanna follow up on that, but what would you say to somebody that, let's say for the last 10, 15 years that they've been investing in their 401k and they're like, You know what I don't wanna wait till I'm 65 or 60 years old to access this and I wanna be able to take it and use it in something that's more tangible, something that can cash flow today. What would you say to somebody in a situation?

Chris Miles:
42:46

Let's change the strategy, right? You're right. And then we get, I mean,

Average Joe Finances:
42:48

do you think it's a good idea to pull it out now and take that penalty?

Chris Miles:
42:51

It depends. That's the thing. It really does depend. Sometimes it makes sense, sometimes it doesn't. We've had clients do both, right? And if you're currently working for an employer, you probably can't pull it out. It's probably trapped until you either get fired or you quit working that job. So I don't recommend trying to get fired. So you can get to your money. Yeah. Probably not a good idea, but I would say this is, if you have been funding that 401k and you're saying I wanna retire before. Stop it. Stop the contributions right now. Don't put any more money in. Like one guy just told recently, his 401K plan, by the way, he lost not 20% through the first half of the year. He lost 40% cuz he was so aggressive. Luckily it's come back up a little bit. I said, This might be your time to move that money into money market. Don't even put into bonds. Bonds have been losing money. Move it maybe to a money market or something more stable so at least you don't lose the money. Protect what you got. Then you can decide what to do with it later. If you decide to self-direct into an IRA. So the point is you have lots of different options. The question is really just, at least number one, stop funding the 401ks and the IRAs. If you wanna retire before age 60, those wrong vehicle to get you there that's like trying to drive a car to Europe. And I'm meaning you're in the US Okay? Just to be clear, and you're not like just cross the border. You're gonna have to skip your car many times. Get across that Atlantic Ocean, it's not gonna happen, right? You don't wanna have the wrong vehicle. You gotta have the right one to get you where you want to go.

Average Joe Finances:
44:12

No. I love that. I love that. I appreciate that. So thank you for working with me on that follow up question. That was not part of the final round, but I do have the final question of the final round, and that is, besides your own, do you have a favorite business investing or real estate related book or podcast or both?

Chris Miles:
44:30

I've got both. The book that just popped in my head. I'm a big fan of Mike Michalowicz, if you've ever heard of him. He has the book. Profit First.

Average Joe Finances:
44:37

Profit First. Yep.

Chris Miles:
44:38

Great book. If you're in business, you need to read that one. Also the Pumpkin plan's another good one as well. Those are great books. Podcast wise, believe it or not, I don't listen to too many financial podcast. Occasionally pick up an episode here or there, like Kiyosaki's, but I don't really recommend his show cuz sometimes he says some crazy stuff. But or risky stuff in my opinion. But I would say that podcast that I do listen to on a regular basis, or either like Joel Stein or even like Ed Millet, I love the Ed Mylett show. I remember listening to that guy 20 years ago before he got famous, and he's even more powerful today and just. It's just a cool guy. Those are my two favorite shows, Joel Stein and Ed Mylett Show. Awesome,

Average Joe Finances:
45:15

Awesome. All right, so great, some great recommendations there. Alright. Now that is it for the final round, Chris, but I do have one more super important question. Probably the most important question I'm gonna ask you on this entire show today. Cause people that are listening to this episode are saying, Man, I really this conversation that Mike and Chris are having. And just the information's just really good content. I feel like I learned a lot, but I feel like this is just the tip of the iceberg. I wanna see what's under the water, right? So I wanna know more about Chris. I wanna know more about his show, the Money Ripples podcast, right? So if you could, share with us, where can people find more information about you, your podcast and all of that. Do you have a website, social media? Where can people find Chris Miles?

Chris Miles:
45:55

You bet. moneyripples.com is our website which all of our social media handles are @moneyripples, even the YouTube channel, Money Ripples. Our podcast is called Money Ripples Podcast. We even have a movie coming out depending on when you hear this, it might already be out that we'll have. I'm in a documentary on just our company, Money Ripples you can get a lot more on. And then I know we're talking about Off the Air, there's even a docu-series that's coming out September, October that that's called Hacking Real Estate. And I'm oneof the featured experts in that that docu-series as well. You can find that online, but basically everything go to Money Ripples and you could find it from there.

Average Joe Finances:
46:31

Awesome. Awesome. Chris, I totally forgot to bring that up while we were talking. I even said that too, and I wrote it down to talk about the docu-series that you're gonna be in. But that's awesome stuff. So guys, I'm gonna make sure I have. All the links in the show notes for you guys to make it easier to find Chris, to find his podcast, to find his websites, learn more about him and what he's doing. So hey again, Chris. Thank you so much. And thank you all for joining me and our special guest, Chris Miles on the Average Joe Finances podcast. Make sure you go leave us a five star review and tell us what you liked about today's particular episode with Chris. So we're gonna hop on outta here. Aloha from Hawaii, and have a great rest of your day.