Episode 398

There and Back Again with Chris Miles

Meet the leading Cash Flow Expert for Real Estate Investors and Anti-Financial Advisor, Chris Miles! Having become financially independent TWICE by the time he was 39, Chris speaks from experience when teaching real estate investors how to quickly create cash flow and lasting wealth!

Featured in US News, CNN Money, and Bankrate.com, it’s clear that Chris has a high reputation for getting real estate investors life-altering financial results in his company, Money Ripples.

On top of helping thousands of real estate investors, Chris is also the host of the Chris Miles Money Show.

After working as a traditional financial advisor and stock coach for several years, Chris uses his company Money Ripples, to expose the popular myths around money that have kept so many real estate investors from enjoying financial freedom and peace of mind.

Chris consistently practices and teaches real estate investors how to do what no other financial advisers can or will – achieve financial prosperity, now and in the future, spending time doing what they love most.

Chris is a strong believer that “you should work because you WANT TO, not because you have to. Mainstream financial advice is broken! The BEST way to create financial independence is to use alternative methods, like real estate, to create passive income and “get out of the rat race.”

We chat about:

  • How to Create an “Anti-Financial Plan”
  • Why Financial Advisors Suck
  • How Chris Retired TWICE by 39 years old

Connect with Chris Miles! https://moneyripples.com/

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"You can invest 10,000 hours and become an expert or learn from those who have already made that investment." - Jack

Transcript

Audio file

There-and-Back-Again-with-Chris-Miles.mp3

Transcript

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Welcome to the REI Mastermind Network, where host Jack Hoss gathers amazing stories from leaders in real estate investing.

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In each episode, our guests will tell you what they're doing that works, what they've tried, that failed, and best of all, you'll learn actionable steps to take your real estate investing.

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To the next level.

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Now here's Jack with another value packed episode.

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We got Chris Miles on with us and and Chris has his own podcast so check that out, but you can find everything at the money ripples.com and I'll make sure to have that link in the show notes, so head over to REI mastermind.net for that. But I really appreciate your time Chris and looking forward to dive into this.

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Especially that.

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You've been able to essentially retire twice over, and it's kind of a funny or interesting story, I should say, regarding how that came about.

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Yeah, for sure.

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That's happens.

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We screw up, we gotta do a second.

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Time, right? Yep.

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Yep, that's very true.

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So why don't we learn from that?

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Like what?

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What happened there?

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Yeah, so this is kind of a brief story in my background that 20 years ago I actually started as a financial advisor, like the mainstream salesman in in a suit kind of crappy financial advisor here about, right, selling mutual funds and all that kind of.

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Stuff did that for four years.

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After four years realized it wasn't working.

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I realized that clients weren't becoming financially free.

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And my big epiphany, it was just like yesterday was when my friend Doug, who left it being a financial advisor, wanted to go do active real estate investing, right.

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He, you know, I I've reached out to him to wish.

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A Merry Christmas, happy New Year.

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To see how he was doing.

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And he's like, man, life is awesome.

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My dad and I have partnered awesome deals, and we've already doubled his income as a professor at the local university.

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I said come on, that's.

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Too good to.

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Be true, right?

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There's no way he could have.

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Done that in four or five months.

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He said, man, we're doing it and throughout this debate on what's better.

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Stocks or real estate and finally just say.

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Chris, how many of your clients are actually financially free where they don't worry about money?

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I said, well, I don't know.

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Even the retired ones, they still worry about money 'cause they watch CNN.

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If you watch CNN, you worry about everything.

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So, no, I mean they're, they're all, I would say not financially free that way, he said.

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Well, good job, Chris.

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Way to go.

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It's like, well, how?

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About this, how?

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Many have you guys.

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These financial advisors are financially free, not off the commissions yearning right, but actually doing the investments and able to be able to retire.

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And I thought about even the guys that have been in business longer than me, guys have been doing it since the late 70s, and even they couldn't be financially free.

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He's and I said, well, none.

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He said, well, there's your problem.

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Well, give me the answer that he say.

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I'm going to give you the answer because you just got done.

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Argue with me that stocks were better.

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And I said, listen, I'm open, give me something.

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And so, he said, listen, if you're really serious.

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Go read this book who took my money?

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By Robert Kousaki cover lesser-known rich dad book save you the save the read.

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It's a mutual funds suck that's previously typed the title which?

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Should be and and then he said go listen these real estate investors on a on a local radio show and I did, and I started to pick up on that and a few months later I couldn't be an integrity and keep teaching was doing anymore because I realized he's right.

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Why would I keep teaching something that doesn't work?

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Why would I teach something that doesn't?

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Give anybody any financial hope?

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mortgage broker, 'cause. It's:

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And so, I did.

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But I want to know what they knew, right?

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I started pick up on.

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Some of those.

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Things, and by about six months later I was able to be financially independent myself.

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We had enough cash flowing, passive income coming in. I didn't have to really work, and it was weird because I was almost 29 and it was almost like it was so easy. But of course, the recession kicked my ****

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I started getting a little bit, you know, too big for my britches, right?

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I was a little bit more arrogant because I thought, hey, everything I touch turns to gold.

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Is that?

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My test touch.

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And instead, it reversed. It backfired on me. And, you know, I started digging in my hole in debt special after launching a new company and everything like we, you know, I was in the whole of $16,000 a month.

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And so, the very thing that actually got me.

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To be financially.

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Free now became my weakness because I went from having more than enough passive income and cash.

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Will come to cover my expenses too. Now I'm 16,000 short every month between my.

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Business and my personal.

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Fences and I went over $1,000,000 in debt. I didn't file for bankruptcy, but I had to dig my way back out of that hole.

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. And and by, you know, later:

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The biggest lesson I learned was cash flow is everything.

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I mean, really.

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Make sure you have multiple streams of passive income coming in.

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Because you never know, especially in this day and age, what's going to happen to your business.

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You never know what's going to happen in.

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The markets necessarily?

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You know you can always.

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Pivot and you can move and and.

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We've had to do that in.

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The last few years already.

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But I'll tell you, the biggest thing for me was really having cash reserves, making sure I had plenty of that on hand, not just relying on credit as that cash reserves.

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And then also making sure they have multiple streams of passive income coming in because you know if you get labeled as a non-essential business in in today's world right, you can get shut down.

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And when we've seen that, we've even seen people that are military, and nurses and doctors become non-essential because of decisions they make.

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So, what makes you safe, even as an entrepreneur, even as an investor?

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You still have to be careful, and that's why you know I'm a big.

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Huge proponent on having those multiple streams of passive income beyond your active real estate business.

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So, when you were reviewing these new opportunities after the after the downfall, like what, what, what changed there?

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How did you?

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You what?

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What were your investment investments looking like in regard to?

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You know you made, you had to have made a pretty big shift then to make sure that if that passive income was helping you.

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Dig out of this hole.

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You know, I was really just focusing on driving active income for a while, you know, just trying to dig out that debt 'cause I didn't file.

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For bankruptcy, so.

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I had to pay that debt back, right?

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Or negotiate?

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Made it and it was hard.

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You know, I remember I lost my house to foreclosure.

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I tried to short sell it, but now there's a small bank called Lehman Brothers that wouldn't allow me to short sell and only let me 4 clothes.

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That was awesome, even after we had offers and you know, so I had.

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To you know.

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Figure out ways to do that.

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I turned in my Mercedes, turn in the keys, and then the collection company called Back says hey.

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It was 30,000 bucks for.

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re you gonna do? Can you pass:

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I said if I get paid.

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You:

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I would've kept paying me.

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Payments, you know, so you know it was, it was, it was a rough time.

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You know, I had collected calls, calling multiple times a day, you know, just here, there and everywhere.

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And so, I had it was really more of a psychological game.

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Then it was a strategic game, right?

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Because if anything, there's days where I felt like I want to, you know, curl in a.

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Corner and pee all over myself, right it was.

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Just it was a hard time and had to figure out really just how to start generating income.

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And so, I went down the core principles of what creates money and then this is true with any business, right?

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It really comes down to how do you create the most value you can for people you know?

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How can you serve people, solve problems, or add value in a way that money is just a natural by?

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Right.

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And especially during the last recession, there were so many problems prevalent, just like there are now.

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People complain and whine about different stuff.

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Your big question, your real big question or answer to that question would be how do I solve those problems?

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How do I show up in a way to serve and add value that money is just natural byproduct?

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Right.

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It's just the natural receipt of services that you get.

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Yeah, and that's why I really started doing and then as I started really dig out that whole sort pays off all of those debts, then I started adding more things like passive income.

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I stopped the active stuff.

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I realize I'm a crappy property manager.

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So, you know, some of the first investments I did was buy turnkey real estate.

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You know, I I've had.

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Somebody else managed the property.

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I just bought it, so give me that 12% plus cash-on-cash return and whatever I make on the appreciation growth, I buy it with leverage once I got my credit built back in after you get a mortgage.

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Which, yeah, I would do that again.

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And you know, and I started doing small things like little functions or syndications and things like that.

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Put money in other places.

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You know, things that I didn't create, deal wise, but put my money with people that were doing those things.

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And you know, I've even got now partnerships in like raw land, and you were investing, making like, you know, pretty much triple digit returns on that.

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Right now, per.

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Here and and those kinds of things.

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So, it really got focused on around really trying to create that diversity of income streams coming in and definitely most of its real estate, but I even got some things in like well in gas, you know minerals and things like that.

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So, it's always about really how to keep generating that, create other streams of income throughout my own businesses as well so that there's multiple streams there.

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And multiple streams outside.

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Have it, and I'll tell you, it's so much more peace doing that.

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Once I built those in one by one, I didn't do it all at once.

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Obviously, it took years of building them all in as I start to get that well-rounded approach that created much greater financial health for myself.

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Sure. Well, you know.

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Before we hit record, you even talked about regarding maximizing your return on investment.

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And and we.

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Infinite banking has become kind of a buzzword in our industry.

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But you kind of have a different take on that too, right?

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I do, yeah.

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I mean, I love the infinite Baker guys, you know, as Dave Ramsey would say, bless their hearts, right?

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I mean, they're doing, they're doing good work, but they're just not doing the best work.

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And I learned this too because I've been insurance license for 20 years.

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And I've seen that evolution in the industry, and I bought one with traditional infinite banking policies before the last recession.

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The problem was that they weren't cash rich enough so that when crap hit the fan and I couldn't keep making premium payments, I lost it all.

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I spent 25 grand in those life insurance policies to only lose it during the recession that was at the most expensive.

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Crappiest term I have ever bought if.

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You really think about it?

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And I think I'm not alone like with other investors that that feel like, OK, there's a lot of these costs, but I can just go and invest and make more money.

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What I've discovered over the last several years, and kind of what pulled me out of out of retirement the second time, there was actually another podcaster.

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He had his own followers and he said, Chris, like, what do you tell me to do and have?

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Like really get that Max ROI on these things?

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That's been a huge difference. You need to teach my people. And so, I said alright, it's no more than 510 hours a week.

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Do it.

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And so, I did, and I got really passionate about it because for example, most of the time you see.

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Infinite bankers that first.

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Year you put.

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Money in you might have 50% of the money you've gotten cash that you can actually use as a savings account, right?

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Maybe 75% if you're lucky. The way I've learned to design, we get the lowest cost the highest.

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Ry possible you can actually get at least 80% of your money in the first year from day one that you can then leverage new lies and by year five have as much money as what you've paid into it.

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Not your 7 not.

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Your 17.

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As some of.

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Them will do.

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You do as early as.

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Five years have all the.

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Money you've paid into it to where it's really.

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Like a tax free supercharge savings account.

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But what's better?

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And this is what you don't want to do.

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A lot of infinite bankers out there, they're all insurance salesman a lot of times, right?

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They'll tell you things like this is supplemental retirement and someday tax-free money like a.

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Roth IRA Ray, which is true.

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The problem is, they'll tell you like you'll pay yourself back and all.

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This kind of crap.

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But do not pay off your cars.

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Do not.

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Pay off their.

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Houses with this.

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Because the truth is, when you borrow from those policies, right, you get a line of credit against it, just a secure collateralized line of credit that you get, whether it's from the insurance company or from a bank.

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When you get a line of credit against it, what happens?

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A lot of times the interest rate might be higher than what you're.

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Paying out of car loan or mortgage?

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So, my philosophy is an investor as an investor first and foremost is maximize the banks as much as you can.

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Get that cheap money, get those low interest rate mortgages, get those low interest rate car loans, whatever you want to get.

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Do not use your life insurance.

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To pay for those things.

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But instead, if you're going to be having to put down a down payment or you need quick cash to be able to use and flip and.

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Save yourself all the points and spreads everything else you've got paid everybody and all the other investors.

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You want to make more money that way.

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This could be a great alternative.

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You know, the great thing is I can get a line of credit right now, gets my lab insurance for 3%.

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I mean, 3% is dirt cheap, right? But I'll use that instead is like for my down payment by a property.

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Or do invest in this indication.

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Or, like I said, if you're actively flipping and doing things like that, great.

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Then you can use this money to help give you that.

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Cash, right now you pay 3% a year. You know, if you only need it for 90 days. Yeah, you just got charged .75.

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That here's the cool part though, is that even though you're being charged 3% so I get in the HELOC, right? The difference is.

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You're also getting paid.

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Like 5% on this money. So, you're getting this spread already of at least 2% and you're making all the returns on your real estate at the same time. So, what happens rather than just using your?

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Savings account, which is what most people do.

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Just move money in a savings.

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Yeah, you don't pay interest, but you don't earn any interest on money you just pulled out.

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But here you don't pull money out of your life insurance. It's all there, growing, compounding tax free. By the way, in most states, 100% protected from lawsuits and creditors.

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So, you can access this money from a line of credit instead, paying 3% while you're making five tax free.

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So, it ends up happening that's not just a 2% spread, it's really like a 40% return on their money based on the interest or paying.

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You're doing the exact same thing a bank does.

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When they borrow your money and paid you a crappy, return that savings account and then turn around and use it to loan it out somebody else, you're just doing the same exact strategy.

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But now you're earning money in two places at the same time, 'cause you're actually investing the money versus just making money off the loan.

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Yeah, that's particularly interesting.

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I mean and and I think there's a lot of questions you probably should have.

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You should ask.

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Someone who's pitching this infinite banking concept?

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To you as.

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Well, right.

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Or do you have a few questions that you think that a person should probably ask?

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Right.

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Well, yeah, first and foremost 11 sales strategy that I think is horrible is.

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Is really just show me the numbers right like I want.

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I want to see numbers upfront.

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Some guys will tell you once you apply for the policy, then we'll show you numbers.

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You know, when I have my guys run numbers, they read it right then and there with you on zoom real time before you try anything, you know, just to see it and strategize it so you kind of know what you're doing before.

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You even apply.

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So, ask for numbers up front and in fact if you ever have a question, you can always e-mail our team and say, hey, here's numbers I got from this company.

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What do you guys think?

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And so, you can compare 'cause.

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The hard thing is it's not about the insurance company, although there's our insurance types that make it easier.

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It's really about how the insurance agent designs it.

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The design is everything.

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The cost design, it doesn't matter about dividends, it doesn't matter how long raise as much.

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I mean, all that stuff is kind of negligible for the most part.

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It's always about how low can we get those costs while keeping it tax free.

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That's the real, the real factor. So, I think that's #1. #2 I also say is if they say.

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Yeah, you pay yourself back.

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Ask him to clarify on that, because the truth is you're not paying yourself back.

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You know what they're trying to say is, you know, rather than using your savings account, right, you use, you get a letter of credit from the insurance company to borrow from them to then go and pay for that car or pay for that house especially.

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They're telling you, yeah, you can pay for your.

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Cars or houses that way, we'll say.

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Well, so, so really, I'm just paying interest to myself, right. If they say yes, that is 100% false, 100%, you never pay interest yourself, you are paying interest to the bank.

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To that, you know, so that that line of credit, right, well, it's the insurance company, the insurance company still acts.

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As the bank.

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You're paying interest to them.

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What they're saying really is you're paying more than interest only.

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So, as you pay some of that principle, it pays down that line of credit.

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Just like if you pay the.

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Heloc paid more than interest only payment.

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You pay it down.

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That's true, and yes, the insurance company pays.

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You, but you do not typically pay yourself.

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They're just painting returns on all that money in there while you're just paying down the line of credit.

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So, you know, really just asking for.

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Clarification, you know.

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Ask them I think this is a great question.

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To ask is.

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Hey, you know, do you invest?

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You know what?

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Do you do and?

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You know, it's hard to find somebody who actually has more investor mindset where they're just insurance salespeople, right?

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That that drives me nuts.

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And yeah, guys my team that aren't financially independent yet, but they're in that process, right?

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I've got, I've been financially independent, like I said twice, it's a very different perspective how we go.

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About teaching it.

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Versus just doing that same thing.

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Here's another thing.

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If you've got a good lump sum of cash, as a lot of my investor friends do, if you've got a big lump sum of cash, what I would say is this is do not put all that cash in the policy upfront.

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So, if you get an agent that says, hey, well, you want to jump in 152 hundred 300 grand in here, do it.

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And then we'll put this minimum premium down below very big strategy that I know a lot of those infant maker guys love.

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Because they get paid Commission off that big upfront chunk, right?

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Which raises your minimum required premiums and everything.

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Else. So, I would recommend against that usually, and I would say 99% of the time I usually recommend people break up those payments even over a couple of years or just put some money in, invest the rest, get that money work for you so all that passive income can pay those other premiums. So, you can start recycling money through and reinvesting it back out and creating this income snowball that.

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Right, yeah, it pays the insurance agent less, which ****** them off.

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But the truth is, you make a higher ROI as a result, where if you just do that big upfront, you raise up that death benefit, increasing all your costs, jacking it up and you end up losing a lot more money than.

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You probably should.

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No, this has been this has been great, and I know it's been kind of rapid fire here, but if you'd like more information about what Chris and his team are working on, I would really recommend you check out his podcast because.

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This has quite a few episodes and and there's a lot of content there that kind of deep dives into this, so look for the Chris Miles money show on your favorite podcast app.

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But easiest way is going to moneyripples.com.

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And then like I said.

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I'll make sure to have that link in the show notes, so go to REI mastermind.

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Net for that information, Chris, I really appreciate your time.

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I hope you'll come back again sometime so that we can kind of do a deeper dive on a few of these concepts.

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Yeah, I'd love to, Judy.

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Appreciate that.

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If you learned at least one actionable step to incorporate into your real estate investing.

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If so, please consider returning some of that value by leaving a positive review subscribing to.

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Or joining our growing network on Facebook and Twitter.

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To all of our social media accounts in the show notes.

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See you next time.