Ep 160: Your Financial Independence Day

Or achieve financial independence as quickly as possible. Live life on your own terms and in my opinion, make the biggest impact with the talents that each one of you has on this world. Welcome to the Next Level Income show where it's our goal to take your income, your investments and your life to the next level. I'm your host, Chris Larsen. If you haven't yet, get a copy of our book for free at our website, Next Level Income.com. that's www.nextlevelincome.com. just click on the book link and I'll even send you a copy if you put your address in.

Recently I presented at our virtual Wealth Summit and today's episode is going to be that recording from the Wealth Summit we did during the Wealth Summit. I also gave away my course at a special discount. I'm going to give you a discount in the show notes here so you can get that course. I'm going to talk about how to make, keep and ultimately grow your money. And I'm going to teach you the same framework that I teach my coaching clients one on one. And I'm going to, I'm going to show you how to do that on your own. If you are not financially dependent or you don't even have a plan for financial independence yet. You are going to want to hear this episode and you're going to want to get a copy of my course as well. Tune in.

He's turned that knowledge into a coaching system that he uses and again he'll, he'll hit on that for us during his presentation. Chris, thank you so much for being with us. And you can take it away.

Wonderful. Thanks for that intro there. Yeah. Today I'm going to talk about my journey from a six figure career in med devices. Rod was saying to six figures of passive income. And this journey started for me at age 21. A lot of people asked me, they said, well, when did you transition into real estate, Chris, out of medical device sales? And the answer is I actually went into medical device sales so I had money to invest. I'm going to talk a little bit about that. I'm also going to talk about the framework that I use with my coaching clients and I've helped multiple people do the same thing, first and foremost. Legal disclaimer here. You can pause this and watch it if you'd like or freeze frame it. Not making any offers for investments today. If you see anything you like, please consult with your cons, with your own team to see if you enjoy it. A little bit about me. I mentioned my Background in medical device sales. I do have an engineering degree in biomechanical engineering and an MBA in finance, specifically portfolio management. I spend as much time as possible today, when I can with my family. Some of the, some of the experiences you see here on the screen, bottom left, there's me taking three weeks in the Grand Canyon. These are some things that when you have true freedom, you're able to do in your life. This is me taking my boys to watch the Braves win the World Series a couple of years ago on a whim. This is our annual picture that we do at the Biltmore. I live in Asheville, North Carolina with my wife and my two boys, Ethan and Miles. They're 11 and 13. Also mountain bike the Colorado Trail. That's a picture with my best friend at 13,000ft. And we happen to run into another couple hiking out there. Got this picture up at 13,000ft where we mountain bike for a week. And then as Christian Rod know, love to ski. Um, took my son out, surprised him for his 13th birthday this year and flew him out first class to meet me in Salt Lake City. So I think the main point is everything we're talking about here today, whether it's myself or the other presenters, money is a means to an end. And really the key is figuring out what is your why, you know, what is your what is your big thing. So the first thing that I do with my coaching clients is I have them create their three year vision and really create what you want out of your life. So I encourage you to do that if you don't have it already. The financial world has it backwards. So as I mentioned, I have an MBA in portfolio management. I learned all this information about the way the traditional financial system works. I read over 250 books while I was in college on money investing a day traded in the stock market. I ultimately decided that real estate was my personal path towards financial independence. And I talk about that in my book Next Level Income, which you can get. I'll show you how to get a free copy here at the end of the presentation. And I'm actually going to do. I have the ability to. Looks like I can put stuff in the chat here. So I'll go ahead and drop some links in the chat as we go through today so that everybody can get these here. So this is a link for the book. So why does the financial world have it backwards? The financial world teaches you to accumulate a certain amount of money. You really don't know how much that money is because then you pull out 3, 4, 5%, whatever the safe withdrawal rate is. And this causes a lot of anxiety for people because they say, well, how much do I need? How much can I take out? Am I, am I going to live too long? Am I going to outlive my money? And this is why we've had so many discussions today about, you know, creating alternative streams of income. Sharon Lecter started out, I got to see her speak actually about 20 years ago when I was still in college. Phenomenal individual, phenomenal resource, obviously. But talking about how to create a business paying down debt as Adam was talking about the investment optimizer, as Rod and Christian just finished talking about. And all these things I've incorporated into the framework that we talked about to eliminate this anxiety and ultimately create true financial freedom through income streams, through passive income streams. So I like to break things down into ways that I can teach my sons. So I figure if I can explain a concept to my boys that are 11, 13, then most people should get that. Certainly the individuals on the call or on the presentation today, very sophisticated, intelligent people here if you're on today. But there's three main things you need to do if you want to become rich, truly rich, financially independent. Number one, make money, become a high income earner, own a high income business to keep money, minimize your taxes, minimize the finance fees that you pay. As Adam was talking about, live below your means and optimize your finances for, for taxation. And then three, the exciting part that everybody wants to know, and I know Buck's going to talk more about this as well after me, but become accredited, structure a portfolio not only for appreciation but also for income. So what do you, what can you do to really grow your money once you get to that point? All right, so first, another, another resource here that I'm going to give you. Build your business and your career around your life, not your life around your business. Figure out what is truly important to you. I'm going to put another link in the chat here. This is a blog I posted here a couple of years ago. But how do you create 20 to 40 more hours a week? You know, if you want to make more money, if you want to do things that are important to you, this might be things like your health. I'm big on making sure that my health is optimized. I just hopped in the cold plunge a little bit before this talk to kind of get me revved up and fired up and ready to go. Maybe it's spending more time with your family. Maybe you're a high income Surgeon like I worked with for so many years in my career. And you want to spend less time on call now that they work part time. So they're, they're still physicians, they're still very high income earning physicians, but they split a role with a partner. So what if you could, what if you could do that? This comes down to scheduling accountability. And I'll give you another resource here. If you send me an email, I'll send you a copy of my coach's book called the Perfect Week Formula by Craig Valentine. Craig's a friend and a coach and my personal coach. And I will send you his book. And I use Craig's specific formula to help me build my life around my business. And I ultimately used, I ultimately used a lot of his strategies to actually give me the time to write my book. I wrote my book at 5, 5:30 in the morning with focus time first thing in the morning and allowed me to get that book out there and ultimately grow my business. So these strategies you can use to really optimize your life. I'm not going to spend a ton of time talking about how you can make more money because most people on this call are already high income earners. But check out that podcast, check out that book if you want to have more time to do things that are important to you. Some other tips, eliminate the news, eliminate social media, and schedule your important things in your life first and then fill in everything else around that. All right, now onto the key portion. So how much money do you really need each month, each year to live? You know, this is an important statistic if you don't know this off the top of your head. So this number might be say $10,000 a month. This would be your housing, your mortgage, your rent. Most people probably own their homes if you're, if you're here on the webinar today, your food, including going out, utilities, all this stuff. How much did you spend last year? How much did you spend in 2022? If you don't know that number, track it down. I'll give you some resources here and some, some ways that you can track that number yourself. Some easy things to do are just to take your credit card statements and pull that. If you're using Quicken Personal capital, Mint money, all these tools can help you track these finances. But you need a target, right? You need clarity to figure that out. That's why I mentioned the three year vision. First, you want clarity about where you're going. So you need a target for how much money you really need. To become financially independent. And I want you to put three levels down. So I talk about all these things in my course. And if you're listening, I'm going to give you a free copy of my course, which I've never given out for free before. And it goes through all this. Level one are your basic expenses. This is going to be housing, food, utilities, cars, that sort of thing. Number two, your total expenses. What did you spend over the last year? That's your second target. But really I'm in an income. I'm in a mastermind, a passive income mastermind. And the goal of the mastermind is to help everyone get to two times their total expenses. Now you might be saying, Chris, why don't you. I'm just trying to be financially independent. Isn't one times my expenses enough? The answer is yes, it is to get to that point. And really, level one, we achieved that about 10 years ago in our, in our lives. It's a great place to start because then you have a lot more freedom, a lot more comfort. But let's say like we did, you want to send your child to a school where they can get more help to help them learn, to help educate them. Let's say again, like, like we do, you want to work with a specific medical group with personalized medicine to help optimize your life. What if you have the opportunity to take. Take a fantastic trip, you know, and you. It's going to cost you $10,000 and you want to have that. As you create greater wealth in your life, you create greater opportunities. That includes things like giving, setting up opportunities to, to share your wealth and your time with other people. And then once you know these numbers, track and audit your expenses. So there's three financial buckets you're going to need along the way. I know Christian Rod talked a little bit about this, and you guys can probably figure out what I've been using here for. Oh, geez, it's been about 14 years. But first you're going to have to, you're going to want to set up your safe bucket. So this would be, as most people call their emergency fund. So this would be six to 24 months of expenses. So if something happened, you lost your job, there was, you know, a period without income, like Covid, you know, you want say six months on the low end. Maybe you're a dual income household and you're a W2 employee. So you have maybe more predictable income than say an entrepreneur or business owner like myself and my wife, who's an architect. We May have on the higher end, say two years of expenses in our safe bucket. Then you're going to want this protect bucket again. I heard, I heard Christian Rod discussing this on the last part of their presentation. But you don't want to be attacked by these three insidious traitors that can steal your wealth. Things like a major life event. My father, or I'm sorry, major health event or death. My father died when I was five years old. He died in a plane crash. Want to protect your family against those things? Life insurance is critical. Disability insurance is critical. You want to make sure you have proper entity structure set up inside of the course. I'm going to give you my attorney and I know there's going to be some other presentations on this today. He shares his whole course on how to set up proper entity structures to protect you from frivolous lawsuits. Liabilities, let's say you have your own rental properties. You want to protect yourself from lawsuits if something happens to somebody. Because at some point, most likely something will happen. There will be something that occurs in one of your businesses. So you want to make sure you are personally protected from that. Same thing with health insurance when it comes to, you know, if you're a professional and you're listening, if you're a surgeon, if you're a doctor, if you're a business owner, you have enough liability. Don't expose yourself to more liability when it comes to your investments and those other things. And then finally, kind of the exciting point part that weaves into the growth portion of the make, keep and grow strategy is the Opportunity Bucket. And you know this is the Opportunity Fund. I know Christian Rod have talked about this. They've discussed it with me. I put this in. Is chapter three in my book your Opportunity Fund. And this could be 401ks IRAs. This could be cash or brokerage accounts. Personally, we love our investment optimizer, our life insurance policies. For this Opportunity Bucket that we use, do you want access to the exact formula that I use to achieve financial independence? My coaching clients pay $30,000 a year for one on one access to the same information that I've put into my new course. And now you can get the same information and the resources for less than fifteen hundred dollars when I release my course next month. But I'm giving you a limited time offer for anyone that subscribes to my course before it launches. You'll get $1,000 off the course and you'll get immediate access to our new deal Analyzers spreadsheet, which includes your path to financial independence, which will tell you when you will be financially free. The spreadsheet alone is $199, but you'll also get access to our bonus asset protection course as well. Click on the link below and use the code pre launch. That's one word. Pre launch. All caps to save a thousand dollars today. So, as we wrap up the key portion, another action item for you is to write down your money rules. So I'll give you some examples. Our personal. One of our Larson family money rules is we save 50%. And here's a, here's a tip. We don't save the money after we spend it. We save it before we do. So when I started off in my career, I was making good money, but I rapidly doubled my income in my late 20s, early 30s. And what we did was we set a savings target. And as we hit that savings target, we allowed us. We allowed ourselves to spend whatever it was after that. So it's pretty fun because, you know, let's say you're making $150,000, and now you're making $300,000 and you're paying. I don't know. Let's, let's, let's use the easier number. Let's say it's $500,000, you're paying 100,000 in taxes, and you save $200,000, you still get to spend $200,000. So if you go from 250 to $500,000 in income, you're probably spending more as you hit that point, but you're saving a tremendous amount. And if you save 50% of what you're making, that means you can literally live for one year for every year you work. So even if you worked a year, took a year off, worked a year, took a year off, as one of my business partners did for a long time, that's a very simple way to have kind of an enjoyable life. The next thing is, what are your tax and entity structures? So how. How are your businesses set up? How are you taxed? Are you taxes and S Corp? Are you taxed as an LLC? If you're W2 employee, you may not have as many options. I'll never forget when my accountant looked at me, poured me a glass of whiskey, handed it to me, and said, what number you prepared to hear today? When he was telling me how much I owed the IRS about seven years ago. You know, that's a problem when your accountant does that for you. So make sure you optimize your tax and entity structures so that you're paying Minimal tax. And then, you know, our last rule is we take our cash and we put that through our investment optimizer. So go ahead and take some time and write down what your money rules are. You guys just heard a wonderful presentation. We have it on our website as well. The next levelincome.com forward/banking to figure out how much you need each year. You can track it with personal capital. So my coaching clients have used that. They've used Mint. They've also used Tiller Money. I like Tiller Money because I'm a spreadsheet guy. I've been using Excel for decades, so I can kind of go in there and tinker with that. But they're all very. Either they're free or low cost. You can sync these with your accounts, with your credit cards, and you can track the money in the categories that you spend. Now, again, I don't want you to spend a ton of time setting a budget, but it's important to audit your expenses. So at the end of each month, we take a look. My wife and I say, hey, are we kind of in line with our expenses? And then the Passive Income Operating System. If you want to learn more about how I flow money through our personal system, check out the Passive Income Operating system inside my course here that I'm going to show you how to get a free copy very shortly. All right, so please, if you have any questions, I'm going to pause here for just a second. Go ahead and put them in the chat that I have pulled up on another screen here. And then I'm going to talk about how to grow your money. And really, this is, this is an exciting part of the whole thing. Once you, if you're making, if you're making high income, like a lot of people in this webinar, you want to know, okay, what do I do, Chris? How do I create these passive income streams? The first thing you want to do, like Richard Wilson said on the second episode of our podcast, was you want to think like a centimillionaire. This is somebody making a hundred million dollars millionaire. Because in today's day and age, a million is, it's a lot of money. But if you invest and think like those that are worth a hundred million dollars, you're going to do it differently than the Dave Ramsey's of the world. And this is why you're on this seminar. Because you've read books like Rich Dad, Poor dad, you've listened to Rod and Christian, and you've learned to set things up. You've Talked to people like Buck Jaffrey and learned how he invests. When I started off, when I was working in our in my W2 role, I was a sales rep making good money. I didn't have my own real estate business at the time. We had our own personal portfolio. This is 10, 15, 20 years ago. I had a simple what I called my 4 by 25 plan. And after we set up our life insurance policies, our investment optimizer policies as we call them Now, I put 25% of our after tax income into those policies. Now what I learned in my MBA was portfolio allocation. Modern portfolio theory, a big portion of modern portfolio theory says invest in bonds. You've heard of the 60:40 portfolio, typically with 40% being allocated towards bonds. It's done very well over the past few decades because bonds have gone way up in price as the, as the rates have gone down. We've seen the opposite happen here over the past year of rates have risen. But what's nice is insurance companies. If you're putting your cash into these policies, the insurance companies turn around and they not only lend it out to the owners of these policies, but they also invest in very secure bonds, loans. Core real estate is another thing that they do. 25% in the stock market. Now this is up, this is up to you as an individual. Again, I'm not an investment advisor. This is, I'm telling you what I did. But if you have money in qualified plans, chances are they go in the stock market. But if you have qualified plans, I want you to do a little math with me for a moment. If you can avoid paying say 30% tax today and your your money earns 10% over a 40 year investment horizon from 25 to 65 and then you pay 30% the same tax rate after 40 years, how much money do you have? Do you have more or less based upon putting money tax free in the beginning and not paying tax in the end, or would you have more or less if you paid taxes in the beginning, earn 10% and then paid that same 30% tax rate afterward? Feel free to put it in the chat if you know the answer, but I'll jump ahead in the book for you guys. The answer is it's the same amount. So if you're putting money into a qualified plan, you're actually making a bet that you're going to pay less tax in the future. And not only are you making a bet that you're going to pay less tax in the future, but you're locking that money up. You're giving control over to the government essentially. Right? You have to leave that money in there till you're 59 and a half. You have to take required minimum distributions. You're limited to what investments that you can make even if you move to a self directed ira, that or eqrp, which is another option out there. If you want to learn more about that, feel free to let me know. I can send you some more info on that. But all these things still have other restrictions on them. So not only you're making a bet that you're going to pay less tax in the future, which means you think the government's going to balance the budget and lower taxes, or you're going to make significantly less money. I don't believe either one of those are true. Third, cash flow real estate. Now this could be real estate that you own personally. It could be syndications or REITs, as I've heard mentioned earlier today that you invest in. I REITs are, REITs are more like real estate flavored stocks. I would argue that they're actually not their own asset class and I could spend an hour talking about that. But love cash flow real estate. It's what helped us become financially independent faster than anything else. And then also businesses, alternatives, businesses. This could be bitcoin, this could be your personal business, which I highly advocate you do. Or it could be investing in businesses like car washes, which is one of the biggest growing areas of our personal portfolio. But the bottom line is if you want to live life on your own terms, you have got to replace your passive income with active income. I'm sorry, your active income with passive income. So what are some options that are out there? I'm happy to talk more about my experience with any of these. Some of the things that we have done. My wife's an architect, we built spec homes. So we would use actually the money in our insurance policies to buy land and we use that land to collateralize the loan and build homes. This was about 10 years ago. We were doing this when the market made a lot more sense to do it long term rentals. So from the age of 21 till about 35, I had my own portfolio of, of long term rentals, single family rentals. We started to transition in 2013, 2014 entirely, really entirely into commercial real estate. But one of the areas is we built our own home that I'm standing in right now. And by the way, if you are in the Asheville area, whether coming through, visiting or you're nearby, reach out to me. We have Two Airbnbs really close to downtown would love to host you grab a drink, whether it's a coffee or a cocktail, talk a real estate and enjoy kind of everything that Asheville has to offer. But Airbnb short term rentals, midterm rentals can be a really nice opportunity to make outsized profits from a passive perspective. In 2013 I first invested in my first syndication. So I invested in multi family real estate. And that's not only do I tell my story in my book, which I have the link here if you guys missed it earlier about how to get a free copy in the chat, but I also talk about the holy grail real estate, which is in my opinion multifamily real estate. And I talked about specifically the value add strategy in real estate and why I chose to sell all my single family rentals and move into multifamily real estate 10 years ago. You can do other partnerships. You can invest in things like ATMs, you can invest in car washes like we do self storage, senior living. There's a lot of different partnerships and as well as businesses that are out there, you can do private lending, you can do cryptocurrency. All of these are opportunities for you to ultimately grow and create outsized passive income streams that exceed what I think most people get in the stock market. And I can definitely tell you that we've seen that same thing as well. All right, so your action items for an abundant 2023 Number one, determine your target monthly and annual income. Number two, create your tax strategy. If you don't have a tax advisor, we're going to have some great resources during the webinar today. There's also some resources inside my course that you can utilize. And three, develop your investing and passive income plan. And I would, I would argue that you should have both an active strategy. These might be rentals that you manage yourself in addition to a passive strategy. And always go back to that three year vision that I mentioned. Say, hey, where am I heading here? Does this really fit in the short term rentals really fit into my plan? Do I want to be a short term rental manager or not? So what should you do? Let's break it down even further. Let's say you're, you're fortunate enough to be on, on the webinar today and you're making say 50 to $100,000. Make a plan to increase your income. Figure out how you're going to save 50%, get that first savings target and start your emergency fund. Look into life insurance, maybe you have a great matching plan through an employer. You want to explore that for your qualified plans. And then I would argue you should look at acquiring your first property. Look into active strategies, whether this is flipping a property, a short term rental, maybe it's buying a car wash or something like that, that you can actively manage yourself and increase your income. Let's say you're making six figures already. Work with your accountant, make sure you have the proper legal structure set up, make sure you have the proper insurance set up. This is when we hit these levels. We started to really pour a lot of money into our investment optimizer to really drive our opportunity fund. We also were able to to utilize a high match. I was working for Medtronic, big medical device company at the time, and we use that money because I was getting a large match to max out kind of that match within our qualified plans to help minimize our taxes. I don't know if I would do it again today, but again, that's something that you should explore depending on your personal situation. And then once you're accredited, once you're making more than $200,000 a year, $300,000 as a couple, you need to learn to vet passive investments and fund your plan for financial independence. And in my course, we actually have a spreadsheet that is going to help you ask the right questions. So not only are you going to have the qualitative questions to ask, but it's going to give you the quantitative metrics as well. Now it's geared specifically around real estate, around multifamily real estate, but you can use the same questions to help vet syndicators if you're looking to make passive investments as well. All right, so to recap, make more money, keep more money, and ultimately grow your money that will help you allow you to achieve financial independence as quickly as possible, live life on your own terms, and in my opinion, make the biggest impact with the talents that each one of you has on this world. Because I believe if you are free to follow your passions, use your time as you see fit, you can improve the world. And that's how we're going to solve all these problems that we have in the world today. All right, so get a free copy of my book, go to next level income.com forward/book. You can also scan the QR code on the screen that you see here. I'm going to put the link as well on the next in the chat for my course. So my course is normally 1497. For the course today I'm Giving it away for free for the first time. Go to this QR code, go to this link, type in all caps the word summit and you will get this course for free. If you want the spreadsheet, the spreadsheet's a separate piece inside of that course that you'll see. You'll get a discounted version of that spreadsheet that I mentioned as well in that course. But this is going to have all the things that I talked about today. It's going to have the framework for how to make more money, the framework for how to save 20, 40 hours a week to help you work on your side hustle, you know, create more time for you and your family. It's also going to help you develop your three year vision. It's going to give you the resources to keep more of your money. It's going to help you figure out do you need different entity structures, do you need a tax advisor, your passive income plan, how do you flow your money through your system and do it that way? And then finally, how do you vet opportunities that are out there? Should you have an active strategy for real estate and investments? Should you have a passive strategy for real estate or investments? And then ultimately, you know, how much money do you need to be truly financially independent? If you have any questions, I'm also going to put my personal email in the chat here. It's Chris nextlevelincome.com and then I'm also going to share our website here, which is www.nextlevelincome.com. so if you'd like to learn more about the types of investment opportunities that we have, I probably have to change the screen share here, but you can go to the website, click on the Invest link and you can learn by talking to myself or somebody on my team about our multifamily offerings or self storage offerings or mobile home parks, as well as our fastest growing area of our portfolio, which is express tunnel car washes. We have two dozen locations. I even have a location here locally that I personally run. And that's an area that if you want to be a passive investor, you want to get into something that's a little different than real estate, that's more of a business. You can explore that as well. So again, go to nextlevelincome.com for all those resources and I'm going to, I was going to try to wrap up here around around 30 after.

Okay. So if there are any questions, I would just encourage everybody take advantage of the offer that Chris is making. He's, he's an incredible mentor because he's been there, he's done it, and he helps people take it to the next level.

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 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.