How to Build and Protect Generational Wealth feat. Whitney Elkins-Hutten

The really ultra wealthy, I mean, there's the mindset that they come in with. They understand their want, they understand their why, they know who they have to have in their world to meet their goals. Not only from a skills standpoint, they don't try to invest in every asset actively. They're bringing the experts into their world that do this for a living. They scale their networks and they understand the difference between a want and a need. And the biggest thing that I landed on is like, how do they start evaluating investment? And they understand that especially as a passive investor, when they're investing in other businesses, investing with other operators, they get to control 3 things past their goals, the risk and timeline. They get to control who they invest with, where they invest, and what kind of deal they go into.

Hello, future billionaires. Welcome back to another episode of the Invest Like a Billionaire podcast. Today's show, I've got a returning guest, friend of mine. Her name is Whitney Elkins-Hutton. She just wrote a book called Money for Tomorrow. And this is really, really good stuff. So she talks about really her reason for writing this book. She wrote it initially for her daughter. And it's all about not only how to build and grow your wealth, but also how to keep and protect your wealth. And if you know Whitney at all, she speaks a lot, does a lot of different coaching. She's been in this space for over 20 years and she's learned so much. And this is just a pure pass on the knowledge to people that are a few steps behind. So she talks everything about making sure your goals are aligned with where you want to be, changing your mindset to help achieve where you want to get to, mimicking the ultra wealthy and doing the things that they are doing to put yourself in a position to have the best chance of success. And then the real big things a lot of people don't talk about sometimes are what do you need to do to make sure you're keeping and protecting your wealth and avoid building this moat so you avoid erosion of your wealth? And then lastly, how to pass it on. So she has all these things. It's a, it's a longer interview, but it's so good. A lot of good things. Definitely encourage you to get this book and support what she's doing. It's called Money for Tomorrow. And again, if you're liking the show, we appreciate the support. Make sure you hit subscribe so you don't miss any other episodes. And leave a review, share with a friend. I always appreciate all that. So with that, enjoy the show. This is the Invest Like a Billionaire podcast where we uncover the alternative investments and strategies that billionaires use to grow wealth. The tools and tactics you'll learn from this podcast will make you a better investor and help you build legacy wealth. Join us as we dive into the world of alternative investments uncover strategies of the ultra-wealthy, discuss economics, and interview successful investors. Looking for passive investments done for you? With Aspen Funds, we help accredited investors that are looking for higher yields and diversification from the stock market. As a passive investor, we do all the work for you, making sure your money is working hard for you in alternative investments. In fact, our team invests alongside you in every deal, so our interests are aligned. We focus on macro-driven alternative investments so your portfolio is best positioned for this economic environment. Get started and download your free economic report today. Welcome back to another episode of the Invest Like a Billionaire podcast. I'm very excited to bring our guest on today. She's a returning guest and someone that I love hearing her thoughts and perspectives. She's been investing for a long time, has been in real estate, Whitney Elkins Hutton, and she has just wrote a book called Money for Tomorrow: How to Build and Protect Generational Wealth. I'm super excited about this and so awesome that you wrote a book, Whitney. You're actually a repeat guest. We had you on probably a year or two ago and been a longtime friend and in the same space as us. And so really excited to bring you back on to talk about this exciting thing you've just done. So give us a little bit, again, a background on you for those that are maybe new to you and then just the book and we're going to dive right in.

Oh, perfect. Well, again, thank you so much for having me on the show. Again, my name is Whitney Elkins-Hutton. I am the founder of Ash Wealth. I'm also the director of investor education at passiveinvesting.com. And I started off in real estate completely by accident. So I don't have a degree in this, but I have over 20 years of investing experience in real estate. So Started off living, flipping, and house hacking. Did really well on my first project. Didn't, you know, my next project was in the middle of 2006, '07, and '08. So, you know, a little tough times then. So maybe people can identify with that over the, you know, what they've been seeing in the past 18 to 24 months. But, you know, really, you know, decided that I needed to figure out how to invest in real estate the right way. Built a single-family rental. Small multifamily rental portfolio over 36 units over the next few years. And then decided I needed to go into larger projects for a variety of reasons. You know, partnered up on a 52-unit apartment building, then eventually got into general partnership on over 10 multifamily deals and then kind of scratched my head, was wondering, is it, you know, which is going to lead to financial independence for me? And granted, how quickly can you take chips off the table with your active income and put it into passive income is one methodology to do that. But also you have to think about the return on your time. And that's where I became completely smitten with passive deals in real estate and all types of real estate, multifamily, self-storage, express car washes, various businesses as well as debt. And you know, where we're at today, Personally, not as PassiveInvesting.com, but personally, you know, we have over 6,500 multifamily units, 2,200 self-storage units, and 15 express car washes. But, you know, as PassiveInvesting.com, we have made over $200 billion in purchases and have $1.4 billion assets under management currently.

That's awesome. I love your journey and it's so cool to hear you recap it again and you know, you're, from your perspective, doing this for 20 years and really starting from the ground up, right? And I think you started mostly in single family, right? And doing flips and then doing rentals and kind of made this transition at different points to then kind of going mostly into passive, but you still have a lot of your own properties as well. And what really prompted you to write the book? I know, you know, at this stage of your life, you don't need probably any more passive income. You got a lot of it, but it's really, you know, giving back. But what's, What do you feel like the education gap was or is for people that this book is kind of solving right now in the market?

Well, I wrote the book specifically for one person, and that was my daughter. So as over the course of my investing, I'm trying to, you know, put together a blueprint on like how money works, how do you actually create wealth, how do you keep it, how do you grow it? And, you know, this is really all the education that I wish I had probably learned in high school or like in my college days, right? Like, you know, wouldn't it be nice if we came out, you know, of our educational career knowing how money works, knowing how banking works, knowing exactly what assets we should invest in, how to keep money in our pocket. And so as I'm learning all these things, I'm like, I'm looking throughout the, you know, the books that I'm reading, the podcasts that I'm you know, listening to, I'm noticing that there's a big gap here. Nobody has the end-to-end blueprint written down. And so, I mean, not even Money, uh, what was it? Money Master the Game by Tony Robbins, you know, that 600-page tome, like it doesn't have an end-to-end blueprint. I'm like, wait a second, I need to write this down at least for my daughter so she can be a good steward for what, you know, my husband and I have built for her. And then, you know, as I'm coaching and mentoring my own clients, I'm like, why am I just holding on to this for my daughter? They need this. And so I started sharing it with my coaching clients in a program that I call the Investor Accelerator and with my work at ashwealth.com. And then as I'm working with even higher-level passive investors, more seasoned investors, people that, you know, are high-income earners, you know, well into their career, maybe even 5 to 10 years away from retirement. As I'm having thousands of conversations with these investors, I'm like, wait a second, you, you don't understand all the 6 ways to keep your wealth. Like you've been so focused on creating it with your, your day-to-day income and growing it, which are great. Those are 2 skill sets you have to master. But there's 2— if you want to cross the finish line and actually build true wealth for yourself and generational wealth for your family, you have to master the other two skill sets, which is keeping wealth and learning how to pass it on effectively. And so really, why did I write the book? For my daughter, but really also to help people get launched into their financial freedom journey. And if you're closer to the finish line, be sure, go look at this blueprint and make sure you got your, you know, financial foundation in order.

I love that. I mean, You're so right, right? Where there's different books that focus on kind of different parts of, you know, the wealth journey. And so much of it is focused on the accumulation phase. And that's a very important phase is if you don't accumulate, then you won't have wealth. But very few focus on that kind of keeping and protecting, right? And I think it's such a different shift from, you know, it's got to make more income and I got to go do more investing. And a lot of us are there, right? We want to, we'd have to get up that curve to get to a point where we can actually, you know, see the forest from the trees and look a little bit further and think longer term. But it is a mindset shift when you shift from, I just gotta get enough, you know, investments of passive income to how do I actually create generational wealth and what does that actually mean? And how do I pass this on? How do I, you know, raise kids that are not entitled and can understand how to steward this well and keep it going and, How do I not let, as you call, let's get to this a little bit later, the Four Horsemen, you know, try and take away from the wealth that I've built. And so I love that you've done this and it's, we're going to give all the links at the end here so people can get it on Amazon and BiggerPockets. Everyone needs to be reading this. Let's kind of start from the beginning, right? So for someone that is newer to investing, newer to kind of wealth building, they, say they've got a great job, they're making a good income, but they can't seem quite to get ahead. Talk a little bit about just, you know, why the mindset matters, you know, why goals matter and really where people get stuck, right? Where they kind of fall prey to different traps that they just aren't even realizing, right? What were some of the kind of key shifts for you on your journey that really unlocked, you know, the momentum to where you've got to yourself now?

Yeah. So, you know, if we think of wealth building as a game, right? Yeah. If you're learning the game, you first have to understand what the objective is, what are the rules, and then the strategies to play. So think back, like, I don't know, Ben, like when you were a kid, I grew up learning how to play Monopoly. Like with my daughter, we taught her Monopoly, Cashflow for Kids, Catan. And so at first she was just like, okay, I understand, I get the objective, but like, I don't understand the rules. The rules are really complicated. So, you know, we have to streamline that down into 4 major group of rules that somebody has to master. And then we have to understand the strategies in each one of those categories under each one of those rules that makes the play most effective. What, you know, as people are getting into investing, I think they kind of overcomplicate things from various angles. They get really enamored by the tactic without fully understanding what it is they're trying to do. Okay, now I know we were talking about mindset, but I think this is super important that we have the framework in place because it makes the mindset piece a little bit easier to understand the shifts that have to happen there. And so, you know, let's take real estate, for example. I know I would start— I was so— my first property, I you know, bought it, relationship failed. I had a house, I stuffed it full of roommates, I completed the rehab, I sell it 11 months later and I got $52,000 in my pocket and I realized I haven't paid any of my bills, you know, housing bills for 11 months. I'm like, holy smokes, how many more times can we do this? This is amazing. But I got so enamored as real estate as a tactic that I didn't understand why that worked. I didn't know the strategy. Okay. So I think that's super important as we kind of go through our conversation today. Now, when we touch on mindset, the key mindset shift here, there's many, right? We have to understand who is the little devil sitting on our shoulder that's telling us that we're an imposter and that we can't do this. What are all those ways that we are getting sabotaging ourself and getting in our own way? So the, I think those are definitely things that we tackle in the early stages of Money for Tomorrow, understanding on how to create wealth. But the biggest mindset shift that has to happen here is you have to shift from a mentality that you're, somebody's going to do it for you, that you have to do it yourself, right? And it's not like you have to rescue yourself. It's that you get to do this. You're empowered to do this, right? And that is, you know, there's such a different way. It's like, I have to do this. Like, nobody's gonna save me. Okay, well, like, if you guys aren't welcome to go, you have no idea what just happened in my place. Or I get to do this. I'm empowered, right? This, um, am I gonna mess up? Sure, maybe, right? We have to have that kind of, you know, visceral shift. And it's understanding that the world's not out to get us. Like, there are rules in place where we can succeed at wealth. right? Like, not everybody's out to get us, but certainly we don't have plans with our money. Somebody else does, I guarantee it. And then we have to move into like, okay, how do we fully understand who do we have to become? We have to define what we want. Okay, what is it that you want to do by investing? Okay, like, are you trying to create financial freedom for yourself? Do you want your time back? Do you want to pay off your debt? And that want's going to change over time. Then we have to understand why we want it. We have to connect to the emotion because the want is going, is going to keep us going on a day-to-day basis. But the why is going to be that North Star that's going to let us know when we have kind of reached the end. Which freedom did we get? Financial freedom, time freedom, choice freedom, freedom to create impact in the world, location freedom, right? And then we have to understand who do we have to become to get it right? Do we have to, you know, reorganize our self-talk? Do we have to like tamper the saboteur that's sitting on our shoulder? What skills do we have to have? Okay. Like we were talking before the show, like, you know, as you know, we both deal a lot with passive investors, you know, in the various asset classes that we offer. And so, But we have to have our, you know, cultivate a skill set in our passive investors for them to understand what it is they're investing in. And then the network. Who do you have in your network? Who can help you grow? And it's all of these things combined.

No, that's so good. You said so many things there. I'm going to try and keep my response to, you know, one or two things. But I think it's so important, you know, differentiating between strategy and tactics because I think a lot of times investors confuse the two. And I mean, I've seen this so many times where someone gets excited about real estate, they get excited about passive investing and syndications and, or different asset classes like car washes, right? And they just kind of jump in because someone sent them the deal that, you know, they know, or they kind of just came across it on the internet or whatever the source that they found out about it was. But it's, you know, I see this all the time where investors a couple years down the road, they kind of look back and like, well, what did I invest in? And it's kind of this, you know, messy sock drawer of just all the different random things that they invested in. There's no strategy, there's no real focus. And you look back and like, oh wow, I have, you know, way too much multifamily, you know, in the Sunbelt allocation and, you know, not enough in, these other areas. And it's just without the strategy informing the tactics, one, you're gonna not really understand what you have. You're gonna, you know, make it harder to achieve the goals you want to achieve. And you're really gonna, yeah, probably make poorer decisions, right? Because if you don't have that framework. So spend a minute on that. Like, where do you find— like, you already hit some of those, like establishing what is your why and what are the things you want to achieve. But How have you seen it with you kind of change the course when you have a good strategy? And, and what should someone who's kind of earlier in the journey, like, what are some of the questions they should be asking to help inform that strategy to then decide on the right tactics?

No, great. And I think there's a two-pronged approach. So I'm going to offer two frameworks, one of which we already tapped on, right? Like, you know, sitting down and really asking yourself, what do you want? Why do you want it? Who do you have to become to get it? Those three core questions are huge. And don't just ask it once, ask it on a repeated basis. And the reason why I suggest asking it on a repeated basis, because how I answer the question today, those 3 sets of questions, my want's going to change. Who do I have to become to get it is going to change. My why rarely is going to change. Right? And as I hit every milestone in my investment journey, moving from financial security to vitality to financial independence to financial freedom, my want is going to change. You know, when I first started off investing, I did it by accident. I didn't even— I was just like, hey, like I was buying a house to have a roof over my head. And all of a sudden I'm like, wait a second, this is amazing supplemental income. Oh wow, I can make more money at this than I can at my day job. Like, do I really need to be traveling 80 hours a week for my day job? Can I have like location independence? Right? And so as I'm working through all these questions, I'm, you know, getting enamored by the investment that's right in front of me, not fully understanding that if I sat fully in that under, you know, answering that what, the why, and who do I have to become to get it, I would've thought about it more. Like, great, that first flip went awesome, put a lot of money in my pocket, but do I want to be doing my, all this work on nights and weekends? Do you get it? Right? Do I want to be investing solely in my own market to do this? Like, you know, how do I scale a company? Right? Now sometimes we have to do the dirty work upfront. Like I had to build that 36-unit rental portfolio to get the money to start investing in larger syndicated deals. I had to do it that way because I didn't have the high-income net worth job. But what I lacked in, in my journey was I, I was constantly answering the question now, not looking at the questions that I need to, you know, how do I want my life to look like in 15 or 20 years? And that's where I hit like my biggest inflection point, like in about 2016, '17. Now we have a baby girl at home. She's super young. I wanted to spend more time with her and be available for her, but here I am like working my day job. Managing these 36 rentals and then granted I was using property management and then also trying to start a syndication business at the same time, right? And so had I sat there, I might have, and I know you guys talk about this a lot, you know, with Invest Like a Billionaire, I might have gone from this 36 single family units, repositioned all that capital into a passive investment and totally skipped buying the multifamily building for myself in the middle, right? Like I don't get a gold star for doing that. The problem is I didn't ever ask the question, what do I want in 10 to 15, 20 years down the line? Let me go build that portfolio. Yeah. Right. So how do you do this? How does an investor kind of, you know, avoid this trap? First, answer those what, the why, and then who do I have to become to get it today? And then also for your future self. And then you have to understand your goals, your risk, and timeline. And just to kind of give you a quick framework here, your goals are probably going to be aligned with what, you know, one of four of the seven pillars of what I call the Seven Pillars of Wealth, meaning you're probably looking for in some order, capital preservation, cash flow, equity growth, and tax benefits. But the ordering of those, you know, what you want is going to be different for everybody. Like, It'll be even just between you and I, it's probably different. And this is where investors fall into a trap. They get enamored by a tactic. They go because they probably invested in the stock market and they were chasing yield. They were chasing the equity growth in the stock market and they're like, I want to mirror that. So they come into real estate and they immediately look at the numbers. And that's how they invest. They invest in a deal based on the numbers without fully understanding. No, no, no, no, no. We gotta go back and understand like, what does the deal give you? Which of those 7 pillars of wealth does it give you? And then, you know, then we can get into like, who are you investing with? Where are you investing? What kind of asset class are you going into? I have a, you know, a client that I'm working with currently right now. He has an amazing portfolio and it is one of those portfolios that it looks like spaghetti got thrown at the wall and they admit that it was spaghetti thrown at the wall.

Exactly.

And what's fun here, people, is exercise to kind of demystify the portfolio. Just be like, okay, like, okay, let's put everything in its own category, organize the sock drawer as you put it and be like, okay, which of these pairs of socks do you like like and which of them do you wish you never bought?

Hmm. That's a really good exercise to do. That's awesome. Yeah, I love something you said earlier, but I just— I don't want to skip over it because I think it is such a key mindset shift of taking ownership over this, right? Because I think the financial system in general is just geared towards making you think, one, either it's too complicated for you to figure out, or two, just press the easy button and just stick it in your 401 and 60/40 and just retire, you know, mid-60s and don't think about it, right? It's just, it's kind of created this system that makes it where you don't have to think about it, but you, and it, most people I think are, they don't give themselves enough credit for One, you have different goals than the financial system has for you. And two, you actually can figure this stuff out. It's not terribly complicated, right? And this book would be a great resource for you, right? So let's shift a little bit to— you talk about, you know, some principles that the 1% are using to kind of master the creation of wealth. And so you got your goals, you got your mindset, but you know, now what do you, what do you do and, and what are the things maybe you learned along the way that, you know, you would do differently based on what you've seen in the interactions you've had with the ultra-wealthy people you work with?

Well, I mean, to, to not skip over the, the point, you know, that you were bringing up as far as like empowerment, I just a quick little story. After I read Money Master the Game, you know, by Tony Robbins, I was totally all in. I'm that annoying person at the company that I worked with. I'm like our retirement plan fiduciary store going, okay, we need to mirror Ray Dalio's all-weather portfolio, commodities, real estate, all of this. And they were like, go away, right? They're just like, we're going to offer you, you know, VTX, what is it? VTSAX, right? You know, Vanguard, just standard Vanguard, like, you know, S&P 500, the bonds and stuff like that. And so it was kind of an enlightening moment. I'm like, I don't even get to choose what goes into my own retirement portfolio. I don't even get to choose what's on the menu for me to invest. This kind of sucks. But so I was like, okay, okay. Like with my outside fund, I'm going to engage Vanguard and try to— they have an advisory service. And I'm going to engage them because they're the best at this, right? And they're going to help me build a portfolio. And I, mind you, I've already been doing a ton of research on this. I'm thinking they're going to come back with something like Reid Elliott's All-Weather Portfolio. And I wasn't heavy into like trying to build, scale my own real estate at this point in time. And they came back with 3 tickers for me, 50/40 split between, you know, It was like stocks and equities and then like another, you know, like money market account on the side. I'm like, and I'm paying you for what? Right? That's when I was like, okay, forget it. Like, if that's what you're going to offer, offer to me, I was like, I can do this better myself. As far as you do what the 1% do, you know, the 1%, the really ultra wealthy, I mean, there's so many things. There's the mindset that they come in with. They understand their want, they understand their why, they know who they have to have in their world to meet their goals. Not only from a skills standpoint, they don't try to invest in every asset, you know, actively. They're bringing the experts into their world that do this for a living, right? They scale their networks. That's huge. They understand the difference between a want and a need. That's very huge too. But then it, I think whenever the, the biggest thing that I landed on is like, how do they start evaluating investments? And they understand that especially as a passive investor, when they're investing in other businesses, investing with other operators, they get to control 3 things past their goals, their risk and timeline. They get to control who they invest with, where they invest, and what kind of deal they go into. And then they also are evaluating every single investment they go into to see how many wealth pillars it actually gets them. Now, we touched on 4, and I encourage listeners to do this with your portfolio, is take all— list out all your assets that you have and then grade them on the 7 pillars of wealth. How well does that asset preserve capital for you? How well does it create cash flow? You know, what are the different ways it can give you equity benefits or, you know, help you grow equity? You know, what kind of tax benefits does it take advantage of? I had Tom Wheelwright on my podcast yesterday and he just dropped the knowledge bomb on tax benefits. It was super cool. And, you know, how can it take advantage of smart use of leverage to amplify the growth of your wealth? And it has to be smart. Has to be the right leverage. It doesn't work both ways. We learned that in the past 12 months, right? They like inflation hedging assets, okay? Things where the valuation is going to continue to go up, you know, as inflation grows, okay? And then, you know, they are always evaluating the operator. Who's the expert there? Is it on their team or do they have to go find the expert? And, you know, when you look at these 7 pillars, The assets the 1% invest in are going to tick multiple of those boxes, 4, 5, maybe all 7 of those boxes. Now, if you evaluate stocks and bonds, what move the, like, the, the core middle class is investing in, they— it doesn't even tick 1 or 2, right? And so how can we expect to get ahead? How can we expect to get paid on multiple fronts, whether the market's going up, down, or sideways, if we're not really taking care to understand how wealth is created. It's not just cash flow, it's not just equity growth. Like, it's the combination of all of these levers, all these pillars together.

I love that. I think it's— that's such a cool exercise too, right? Is to— you have made some investments, go through not only you know, try and organize that stock drawer a little bit and see, you know, one, what do you like? What do you not like? What do you wish you hadn't done? But then also what are the different categories that these are checking the boxes in? And, you know, can, are these getting you closer to the goals that you're trying to accomplish? Talk a little bit about building your financial moat. This is a concept I've obviously heard like Warren Buffett talk about, right? Where they look for, like when they're investing in businesses that, you know, have some type of moat which protects them from competitors and protects them from, you know, things that can erode the value that they, they have in these businesses. But how do you apply that kind of concept of a moat in your personal finances as you're kind of building your wealth? And what does that kind of mean?

Yeah, absolutely. Yeah. And I love the fact that you brought it up in terms of business because when I first started learning this concept and implementing it myself, it was, I was actually following one of the board members of Home Depot. And he always had this concept of like building a fortress balance sheet. And I'm like frantically scribbling all the things down, right? You know, because I was like, okay, I need to do this in my business as I'm, you know, building my real estate. And all of a sudden I'm like, wait a second, I need to do this in my personal business, just my household business. And again, that kind of taps into the mindset shift is that people are chasing tactics, but they'll do that. They'll put aside reserves for their single-family rental, but they won't have enough reserves for their own personal life. So how do you build your financial moat? I mean, you know, just to, just to touch on a few different ways, like one, you need to have ample reserves. We talk about that emergency reserves, you know, even, you know, if you're new starting off, can you get to $1,000? You know, I think there's like a crazy stat out there that, you know, 75% of Americans can't even, if they got surprised with a $1,000 bill, it would crush them. I mean, I went to the emergency room like in January. You want to know what my bill is from that? Like, you're just one crazy accident away, right? So be sure to get your oxygen mask on first. Get that, you know, you know, start small and get 3 months built up of reserves. You know, what do you need to keep food on the table, the roof over your head, the lights on, right? Then build up to 6 months and then 9 months, 12 months. Set aside your deductibles for your health insurance, your car, you know, all of that, right? In case you just suffer a catastrophic loss, you can pay all your deductibles and you can, you know, you know, figure it out for like 6 or 8 months. So making sure you build that core moat around yourself And then, you know, other ways, you know, that kind of play into the vote, understanding what your credit score is. And you were on a podcast that's titled Invest Like a Billionaire. We would like to assume that everybody here knows what their credit score is and that they have it. Quite frankly, I can tell you even the highest sophisticated investor sometimes does not know their credit score or like has it well protected. And, you know, from creditors and predators, right? There's, you know, there's all types of scams out there. So know your credit score, make sure you're in tune with that. Also set aside a war chest of money to invest. So the moat can be defensive, right? Can you weather the storm? But also it's offensive, right? Because in downtimes, like we, you know, we could argue that we are right now, This is where a huge amount of wealth is actually made. So if you can have your defense in place that allows you to play a good offense, meaning that you have your war chest of funds ready to go deploy and invest, that's huge. You can, you know, you can jump really quickly. I mean, there's a quote, it's in the book, Baron Rothschild, 18th century or 1800s. He said, you know, oh gosh, oh, when there's blood in the streets, right? Like, you know, learn to invest when there's blood in the streets. And, you know, we've heard that quote a lot, but the second half of the quote is even when the blood is your own.

Wow. I never heard that.

Interesting. Yeah. If you look at that, that's the part of the quote that doesn't really get—

No one wants to think about that part.

I mean, it sounds really graphic, but the whole point of that is, is even if you are going through the same experience as everybody else, if you have your financial in place, your oxygen mask on, you can make offensive moves in a defense— defensive environment.

Yeah, I— yeah, totally love that. Let's talk about the Four Horsemen. So as you're building the wealth, we've talked about accumulation, you kind of get to the point where you're starting to tick some of these financial goals and you're sitting pretty, but now you got to kind of watch out. You got to keep it, you got to protect it. And talk a little bit about some of the things that people may not even be thinking about that can erode your wealth over time that you need to be paying attention to and be proactive against.

Absolutely. Yeah. This is a concept that I learned from my own personal mentor years ago. And really actually saw it play out throughout my life, you know, because a lot of impetus of this book came out of me settling 5 different estates in my family where the combined loss of these estates was $700,000. And that sucks in and of itself. And, you know, some people's jaws might be hitting the floor. I mean, mine was, was to be truthfully honest. But you compound that loss out at 7% over 30 years, that's $5.3 million that could have stayed in our family. Okay? And it wasn't just my family, it was my cousin and my two cousins that this happened to as well. And so, and it doesn't have to be this disastrous. I mean, even a $10,000 loss within a family can, you know, equal out to like just under $1 million in 30 years. Who wouldn't want $1 million in 30 years, right? So, so it was, so those lessons that I learned through settling these estates just merely reinforced what my mentor had already taught me. So sometimes you, you have to see it and you're just like, okay, yeah, I know to watch out for that. Right. I know that the oven's hot, but it's not until you put your hand on the oven, you're like, yeah, that's hot. Like, I shouldn't touch that. So we can go, I'll go through all, I'll name all 6 that we use that I think that you should, we talked about the 4 horsemen. Right? I'll mention the Four Horsemen, but there's really 6 things that you should have your eye on the ball. And so making sure that you're using debt wisely, you've got the right debt in place. Okay. And not just like, you know, do you have the right debt in place? But if you're trying to pay down like credit cards, personal loans, student loans and stuff like that, then you know the order of operations that you're paying off the right debt in the right order. It's not as simple as Dave Ramsey would have you do it. Or I should say there's a better way, a more optimized way to eliminate debt than just doing a snowball or an avalanche. Okay, there's a way that it can, you can, you can be really eyes wide open of which debt you should eliminate. And then make sure that you're using insurance wisely. That's another horseman. Oh, you know, make sure that you're outsourcing your liabilities. Correctly. And I mean, I have so many examples in my life. My father maxed out 2 health insurance policies. I've had neighbors, you know, close friends and neighbors here that lost their homes in an inland or urban wildfire 2 years ago, and they were uninsured on their house. A friend, you know, just, you know, a few weeks ago got their car stolen and didn't have the right auto liability insurance on their— or comprehensive insurance on their auto and lost He lost all of his work tools and the vehicle, can't get it replaced. Making sure that you have umbrella insurance to coordinate all these different things, fill in the gaps because there's a lot of gaps, right? Now you've got life insurance in place, okay? That helps ensure the debt that you have outstanding in your assets, right? Like when I die, I don't want my family to have to sell the house. To pay off like my side of the debt. Like I will leave them enough insurance money to where they can choose to either continue to invest with it, or if they wanted to keep the house, they can pay off the house. Right. So just those type of things. Fees in your retirement account, that's huge.

Yeah.

We talk about— it's funny because like when I read the blogs, like Suze Orman, Dave Ramsey and stuff like that, they're all about eliminate your banking fees and your credit card fees. Low-hanging fruit. You should do it. Don't have those fees. And the biggest fee is in your retirement account. Okay? You're not losing just $5 or $10 or $15 a month. You're losing hundreds, potentially thousands of dollars over the course of 30 years or more of investing. So take a look at those. Um, my, when I took a look at my mom's account and what her fiduciary was charging her, She lost over $200,000 in fees to the fiduciary again for that 3-ticker portfolio from Vanguard. Right? She was like, I'm not knocking Vanguard, but I mean, it was almost— that's it. That's one of the reasons why us as real estate investors, we're drawn to real estate as a tactic because it helps us save on taxes. Okay, but there's a myriad of other kind of like muscles to flex to make sure that you can save on taxes. The last, so those are the four horsemen: interest, insurance, eliminating the fees, understanding how to reduce your taxes, right? Those are all going to help you recoup tens, if not hundreds of thousands of dollars over the course of your investing lifetime and keep that money in the family. But I'm going to name two others, and that is I just got a question to ask you, Ben. Do you, do you have retirement accounts?

I don't. I'm, I'm all real estate, so I'm okay.

But I'm sure somebody here, like a listener, has a retirement account. But okay, just let's say hypothetically, if you had a retirement account, would you want to retire on say $50,000 a year, $80,000 a year, something like that? More? Sure.

More.

More. More. Yeah, most people say more. The thing is, your, your, um, standard deduction as a married couple is like right around $25,000-$26,000. That's all that's tax sheltered. So you've been shoving away for 30 years all this money in your retirement account that is growing tax-free, went in tax-free, growing tax-free, and now you're going to take it out in retirement And guess what? You're going to lose a lot to taxes. And not only that, if you're going to withdraw more than your standard deduction, which I plan on retiring on more than $25,000 or $26,000, you could trigger what they call provisional income and cause double taxation of other forms of income like Social Security. So talk to an accountant like that to discuss like how to organize your affairs. Because there are investments that actually don't trigger provisional income. Hmm. So if anybody's 5 years, 10 years out from retirement and you have more than $500,000 in your retirement account already, talk to a CPA. Hmm. Get educated on what to do. And then the most important thing here to keep your wealth is plan for your incapacity. And I don't mean just I don't mean living will. I don't mean, I'm sorry, I don't mean will or trust. I mean create a living will, have your powers of attorney, have your healthcare directives. Because again, if you don't have a plan, somebody else does have one for you. And you know, nobody plans to die. Nobody plans to have a slip, trip, or fall that puts them out of commission. And so you just don't want to be at risk, you know, of your health draining your accounts. If you didn't have a plan in place.

Okay, kind of last, last concept here I want to talk about, and, uh, then we're gonna give everybody the resources to go get the book because at this point they are— they gotta read it. There's too much good stuff in here. Um, talk a little bit about making that shift to kind of a multi-generational wealth plan, and, and where do you see a lot of people kind of miss the boat or kind not do it right.

Yeah. And this is, you know, we know we touched on all the different rules here, creating wealth, keeping wealth, growing wealth. Now we're in kind of the last rule bucket, which is how do you pass it on? I think most of us really fully understand, yeah, we should have a living will or a trust in place, or excuse me, a will or a trust in place. Okay. But that's just part of the kind of like the order of operations in order to pass wealth on effectively. And I'll tell you a little story. When my mom passed away, I knew there was wealth. I just assumed it was in the safety deposit box. I was the sole heir and the sole executor on the estate. And when I say heir, remember my mom lost $200,000 in her retirement account. Heir does not mean that you actually get money. Oh man. Um, so anyway, so I'm trying to settle an estate. My husband and I are going through her house and, you know, she had dementia, you know, um, and it was just, I don't think she had thrown away a piece of paper in like the past, like 25, 30 years. She was super organized. That was the bizarro part is that her filing, the filing cabinet was the floor, right? Like, it's a, like, that everything was like piled up, like all the different, like, bank accounts. And I'm like, thank goodness nobody decided to break in the house because they would have had access to everything. Nothing was under lock and key. Anyways, so we're trying to find the will. Can't find the will. Assume it's in the safety deposit box. It's— there's, there's a copy there. I'm like, oh my gosh, we got to find the will. And then so here I am. I don't know where any of the assets are. I don't even know what the assets are. I don't know where the will is. I don't even know how to contact the water company or the electric company or anything like that because she never moved things out of my dad's name. And so now I don't have to, I don't just have to get her off the account, I have to get my dad off the account so I can start taking care of all this. And so passing wealth on effectively, there's training your executor. Okay, and that is one huge part of it. Like, where's the will? Where is the assets? Okay, just give them a high-level walkthrough. You know, if I pass away, this is why I want everything organized the way it is. These are all the contact information for all of my investments. I'm not going to give that to you right now. I'm going to put it under lock and key, but you know how to get to everything in case something happens to me, right? But then there's also educating heirs. Okay, like they're the ones that are now going to be stewarding whatever you left. And so that actually education starts now, right? They should be like kind of looking over your shoulder as you build your portfolio, whether it's actively or passively. They should be having— you should be playing games, reading books, you know, um, talking about, you know, how things are going to pass on to them. Not just like them getting handed a piece of paper when you pass away and you know, they, you know, Susie gets 30%, Joey gets 30%, and then, you know, Bobby gets 40. Why did Bobby get 40? I don't know. His old daughter left with the trust or the will, right? So, you know, that education starts now because, you know, the whole point is we want the next generation to be good stewards. We don't want to hand them a silver spoon. And so it can be stewards of information. It can also be stores of actual assets, and they can be a blend of both. And I strongly encourage a blend of both there.

Love that. Okay, for the big reveal, we already said what the name of the book is and where to get it, but those that weren't listening, Whitney, where do we get this book and where do we, where do folks kind of reach out to you if they want to learn about some of your coaching and some of the investment opportunities you guys have at Passive Investing?

Absolutely. Yeah. So BiggerPockets, if you get the book on BiggerPockets, you get a suite of tools that go alongside of it. I understand some people love getting books off of Amazon because it drops on their Kindle. I do. You can also get it on Amazon. Totally fine. If you're interested in one-on-one help, if you want somebody to help you, you know, take you through this process of, you know, learning how to protect your wealth and grow it, you can reach out to me at ashwealth.com. And if you're interested in understanding the investments we do at passiveinvesting.com, you can reach out to me at passiveinvestingwithwhitney.com.

All right, Whitney, thank you so much. This is so fun and really, really good stuff. And I know you put a lot into this. It's really your journey and what you've learned, and I'm sure a lot of people benefit from it. So thank you so much for coming and sharing with us on the podcast.

Awesome. Thank you so much, Ben.