EP. 108 | Your Plan for Financial Independence

Today's show is sponsored by the Airbnb Kickstart course. My wife and I started our first Airbnb here in the last year and we've come to love the ability to earn more money than we would if we had a long term rental. If you're interested in starting your Airbnb business with little money, scaling your Airbnb business, or just learning tricks about the industry in general, check out our airbnb course@nextlevelincome.com Air BNB that's a I R, the letters BNB and you'll get a 20% discount code.

Welcome to the Next Level Income show where it's our goal to raise your income, investments and life to the next level with your host Chris Larson. Get your free copy of his book@nextlevelincome.com book. Also, if you're an accredited investor, check out the Invest link to learn how to gain access to institutional quality real estate opportunities.

Welcome to a special episode of the Next Level Income show for the 4th of July. Hope everybody had a great 4th of July weekend. I just got back from the first ever in person Multifamily Investor Nation conference where I got to speak on stage with a wonderful panel talking about going from a W2 income to a real estate professional or a fully passive income that really is what it comes leads to true financial independence. And what better time to talk about financial independence than on the anniversary of our country's declaration of independence. So today I'm going to talk about a few things. I'm going to talk about the three steps in the Next Level Income strategy to achieving financial independence. I to talk about the three levels of passive income that you need to achieve to have true financial independence and abundance in your life. And I'm also going to talk about the most important piece and share some highlights from the Multifamily Investor Nation conference that big stars like Shaq and Jocko Willink and Barbara Corcoran shared. And you can see the replay of that check out Multifamily Investor Nation Conference and you can check out the replays on on the website there. All right, so first the three steps to achieving financial independence. Next Level Income we talk a lot about this strategy. Make more money, keep more money and ultimately growing your money. Now a lot of people like to jump towards the last part, which is the fun part. It's investing and picking investments where you start to see your passive income streams start to come in. But what a lot of people overlook is usually the easiest way to increase the money. The Capital in your life, the low hanging fruit is going to be what are you currently doing to earn money? So if you're in a career, usually this is how can you get a raise. If you are in an income producing career where you're part of the revenue stream of a company like in sales, which I highly recommend, if you want to maximize your income, you can maximize your sales. If you own your own business, you can figure out ways to invest and maximize the income coming from your business, this is going to be the most important thing that you can do. So if you are not yet an accredited investor and what that means is you have got to be either earning $200,000 or more a year in income as an individual, $300,000 or more years a couple and or have a million dollar net worth without your personal residence included in that number. So if you're not yet at least $200,000 a year, figure out a way to make that happen that may be in your current role. That may be adding a side business, maybe like a short term rental business like my friend Kyle Stanley talks about in episode 50 as well as a special upcoming episode on that. It's how my wife and I also help to increase our real estate income. And you can also have a side business, a side hustle that you can use. My wife and I also built spec homes for several years to help generate another 50 to $100,000 a year in income to invest in passive investments. Number two, you want to be able to keep more money. So what we talk about in next level income, the keep more money strategy is going to be tax strategy and insurance strategy. So let's start with insurance. First off, if you get sued, if you have an accident, if your income ceases to come in because you're disabled, if something happens to you and you're not able to provide an income to your family. My father died when I was five years old. The income that was coming in from his business stopped coming in. My mom had to figure out new ways. We were on Social Security. We struggled for quite a while before my mom remarried. So you know, this is very important. Make sure your family is taken care of with a proper insurance strategy. That means disability insurance, that means liability insurance. And in my, in my personal opinion, probably the most important is life insurance, especially if you're a young income earner. In addition to that, disability insurance. And then the other piece is a tax strategy. So once you start to earn those higher income levels, you don't just need an accountant, you need a tax strategist. So what I mean by a tax strategist is somebody that looks forward at how much income you're making and figure out how to maximize your after tax income. If you need a tax strategist, reach out to me. Put Tax Strategist in the subject line ChrisXTlevelincome.com and I hope I can help connect you with some great resources there. And then, and only then, after you've maximized your income and you've optimized your tax and insurance strategies, should you look to grow your income. I forgot to mention this, but if you have not checked out our newly updated investment optimizer, you can do so at our banking page on our website and learn ways that you can develop your opportunity fund that I talk about in chapter three of my book Once you're looking to grow your income, we have tons of episodes on this podcast talking about options that you can use to invest and grow your income. Of course, in Excel Income we also have options in commercial real estate such as Multifamily, my personal favorite Self storage, which we are growing our portfolio currently, as well as hotels and also another exciting option, car washes and mobile home parks. Check out our Invest link if you want to learn more about that. So we just talked about the three steps that you need to take to achieve financial independence. Now once you're at that final stage, the growth stage, that fun and exciting part where you start to see your passive income come in, what are the three levels that you should focus on? So the first level, it's going to be kind of that entry level. It's the level that my wife and I started out at. What are your basic monthly expenses? Mortgage or rent, Utilities, Groceries, transportation, Like your car. Let's say this is $5,000 for you and your family, that's going to be the first level that you want to achieve so that you have that level of security where you may not have to go and work anymore. And the exciting thing, when you don't have to work anymore to cover your basic expenses, that means every dollar that you have coming in gets to go and be invested. People used to ask me after we hit this level six or seven years ago, chris, why do you keep working if you don't have to? Well, the reason is I wanted to achieve the next two levels of financial independence that lead to true abundance and lead to the opportunities for you and your family to have real fun in your life, to take trips to buy fun stuff like I like to buy bicycles because that's been my Hobby and my sport for two and a half decades now. And I really love to go out and do that. Actually, I take that back. It's three decades. I did my 30th anniversary of my first bicycle race this spring. So what is level two? That's 100% of your average monthly expenses for the past year. So look back, if you're not tracking this, you need to do this. You go back and see how much did you spend in the prior year. Divide that by 12. That's your average monthly income that you need to come in. Look at your basic expenses like we talked about in step one. Your housing, your utilities, your groceries, your car, your transportation. Pull that out. That's your level one. Level two is going to be 100% of your average monthly income. This is your next target of passive income. And this will give you that next level of security and comfort. This is things like going out to eat, like vacations, like buying a new car. So let's say you have your car paid off and you don't have to worry about that expense anymore. There'll come a day where you want to buy a new car. My wife and I bought a new car about two years ago, and that was an expense that we didn't necessarily have to take on, but it's something we wanted to do for the safety of our family. And also we bought a plug in hybrid electric vehicle. So it's great because it saves on our daily cost of fuel, which right now with high gas prices, helps out. So once you've hit that first level, strive for that second level where you can continue to maintain your current standard of living without having to decrease that and stop taking vacations and doing some of the fun stuff that you might want to do. Once you've hit that, what's the next level? My passive income mastermind that I'm a part of, we strive for 200% of your average expenses on an annual or monthly basis. 200%. Now why would you want 200%? Well, if you have been on this journey like I have of achieving financial independence, you've learned a lot about how to make more money, how to keep more money through these strategies that we talk about, and also these investments and how to grow your money, you're going to want to continue to invest. And these opportunities are fun. It's fun to find great deals. And when somebody comes to you with a great opportunity, a business, an investment, an opportunity to travel or take a trip, you're going to want to take advantage of those things. If you have that additional disposable income, you're going to be able to take advantage of that. So that means you can grow a new business, you can partner with somebody and do that. You can invest in a startup, you can invest in a new passive income income opportunity. And also you can take advantage of things like the latest advances in medical care. If you want to say, increase your life expectancy, let's say you want to send your child to private school and it wasn't something that was in the books, or there was an unexpected health bill that came up, one of your family members, your parents, needs to rely on you for retirement or something else. How good would it feel to, to have the disposable resources to do this? And this is why we strove to hit this next level, that 200% of your average monthly income. And this could also come from other things. Maybe your passive income covers your average monthly expenses, your basic monthly expenses, as well as what you normally spend. And then maybe you continue on with the side business or maybe your spouse continues to work. You can achieve this in multiple different ways. It just depends on how you want to approach it. So be flexible here. Once you have the opportunity to be financially independent, you have a wonderful array of options. But in my opinion, you also have a responsibility to make an impact in the world. I mentioned I was going to share some nuggets from the Multifamily Investor Nation conference in Charlotte. One of my favorite speakers was Shaquille o'. Neal. He came, he's got an amazing story superstar, obviously. And he really likes to invest in things that make a difference in people's lives, lives. It gives him joy. He said his primary goal in life is to entertain and to make people smile. And man, he has an infectious personality. He doesn't take himself too seriously, but he's also an amazing investor. And guess what? He invests in things like multifamily real estate, like car washes, as well as businesses. And these are things that really throughout history, the most wealthy families have proven lead to tremendous wealth. And he's been able to implement that and teach these things to his kids. When I was on stage, I said the most important thing that you need to consider when you hit financial independence is what is the impact that you are going to have on the world once you reach this? This is why I am really big with my coaching clients about establishing a three year vision. What's the vision that you have for yourself, for your family, for the world? What impact do you want to make on the world. What do you enjoy doing? What are your natural gifts? This is what you need to understand and focus on to motivate you as you strive towards those practical economic goals, you know, those objective economic goals. This is going to be a little bit more subjective, okay? So you need to really think, you need to meditate on this. You need to go spend some time, probably alone, maybe away from your house on a vacation. Take time to think about what really do you enjoy? What is the gift that God or the universe has given you to make an impact on the world? As I looked to exit my W2 role, it was interesting because I had a lot of anxiety. My accountant assured me repeatedly, chris, you're good. You're covering your monthly expenses. You have money in the bank. You have money in these other accounts that you can rely on. If something happens, don't worry about it, you're good financially. But as I thought more, there was something in the back of my mind that bothered me. And that was, what if I wake up and I'm not needed tomorrow? You know, I don't have to go to work, but what if nobody calls me? What if I'm not relevant? What can you do to be relevant, to continue to make an impact on the world that's going to give you that fulfillment deep down inside? Because as the saying goes, if you find something you love to do, you'll never work another day in your life. But if you don't have to work another day in your life, you better have something that you love to do that motivates you and gets you out of bed in the morning. Because otherwise, what are you working towards? So figure out what it is. What's that true goal that you're working towards? And think about that when you go to work, when you put those business deals together, as you're saving money, when you're making more, keeping more, and ultimately growing your income. Because that's what's going to motivate you and drive you and give you the big why to achieve your financial independence. So with that, I'm going to wrap up here again. Let's celebrate what I consider the greatest country in the world, the United States, and the fact that everyone listening here has an opportunity to achieve true abundance in their life. And hopefully these steps allow you to achieve financial independence as well. Hey, Chris, here again. I hope you found this episode valuable. Now I have one more thing to gift you. We have a page for my coaching clients where you can get a free copy of my book as well as much more. From previous guests on the show. Just check out nextlevelincome.com coaching to get a free copy of my book, audiobook and much more. I'll send you a copy of my book and cover all the shipping costs as a thank you for listening to the podcast. Also, please like share and take just 90 seconds to give us a rating on Apple Podcasts.