S2 E20 - Cash is trash, Cash FLOW is King

In this episode, we are diving into what I personally feel like is an extremely revolutionary idea about planting a seed, letting that seed grow so that you can be a multi millionaire giver through cash flow. Does that sound like a wild, crazy and interesting concept to you? Because it is. We're going to be talking about it in this episode.

We're going to be talking about cash flow. I've mentioned it earlier and you liked it. Cash is trash. Cash flow is king genius. Meaning if we want to create an amazing lifestyle for our family. In fact, two episodes ago you said that it's all about a life balance. But you don't have to have a day balance, right? It's about creating this amazing vision. You, my beautiful listener, we need, you need, we all need to create cash flow, whatever that looks like. Because one of my definitions is you have income and then you have cash flow. Two different things. Income is money that you make from actually working physically, you as a human body, spending time to do things. Cash flow is money that comes into your life currency units that come into your life based on something that you created using either money or time to build. Because everything requires either money or time. In fact, if you guys can find something that doesn't require money or time, please let me know. And I'm all in on that investment.

Oh my gosh. One of the coolest things I think you said last episode is time is my only asset. And that was so profound. I'm like tattooing that on my arm as soon as I leave this room. It's so good. And, and what we're gonna talk about in this episode, which is cash flow, is how those go together so that you can use cash flow to buy more time.

Yes.

If you've never read Rich Dad, Poor dad before, you have to.

Yeah, it's a must.

It is so good because it distills down some of the most basic wealth building tools in the world that most people miss. And so it's pretty easy. I'm just gonna try to explain it in 30 seconds or less.

Let's see it. Watch this clock.

People get a job to make money. That money either goes into assets or liabilities. Liabilities are anything that doesn't bring in more money. Remember we talked about money grows. Money likes to make money. So if you buy an apartment complex that brings in rent, that is an asset. If you buy your own house and.

You have to do anything with it.

Pay a mortgage out, that's a liability. And most people wouldn't call it that. But if it sucks, money it liability always makes money.

Asset.

Asset. All right? So remember that if what you do with your money goes only to liabilities, you're forever going to have to spend and work, go to that job. And so some people call that a rat race. Again, we're not anti job. We are anti being a slave to anything. So even if you love your job and want to keep it forever, we still want you to be able to do that because you love it, not doing it for the money. Okay? So I want everybody who works for me to be completely financially free, working for me because it's their passion and I'll still pay them, but it's a passion project. It's a passion life. All right? So you make money, you buy assets. Those assets can then eventually bring in so much money that it can cover all of your normal expenses. And the day that that happens, you're called, quote, unquote, financially free.

Correct.

So you're free to do what?

Whatever you want.

Whatever you want. Anything you want.

Anything.

And so therefore, you're no longer a slave to money. Now, if you raise up all those liabilities and you have more expenses, then you're back in the trap. So the goal is to create. Be able to purchase assets that can fund whatever you want. Remember we talked about. Instead of, I can't afford it. How can I afford it? Yeah, how can I afford it? Well, I can afford it. If I do these micro changes and be able to save enough to buy this thing, then that thing can pay for that car and it won't actually cost me anything.

Sure.

So it's this beautiful, amazing, simple action of saving to buy things that bring in more than constantly buying dumb things that just keep taking. Going out of style. Taking. Going out of style. Taking. Going out of style. So it's. It's sexy to buy assets. Sharon Lechner is always saying. Sharon Lechner wrote Rich dad, Poor dad with Robert Kiyosaki. And she just keeps talking about how sexy they are. Because freedom is sexy.

Sure.

Being a full person, being a whole person is sexy. And it's sexy to be able to give your best to the world.

Yep. Off the top of your head, what are three assets that people could buy with their money to create more money?

Mmm. Stocks that produce dividends.

Bam. That's absolutely one.

A rental home and. Or Airbnb.

Oh, good one.

And then an apartment complex, again, still rentals.

Yeah. Which is real estate. I mean, that's. You're buying either a physical asset or a liquid asset, which would be stocks.

What did I Miss. I know, there's tons.

There's so many.

Give me a few more.

There's so many.

An example. Since time is massively your only asset in general, if you have a cash flow that comes in that you use or your income comes in and you use that income to invest into human capital, that human capital frees up more time so you can do more things. AKA a maid, someone who can like a meal prep service. Right. Someone you investing in that meal prep. As you, the food just comes delivered to your home already cooked and everything's totally ready. You no longer have to cook. That saves you time. Therefore you have more time and. Which means you can increase your skills and your knowledge and your abilities to do something. Something. For me, books can be assets. Now, I'm not talking about just random books. I mean like literally you could go buy rare books that increase in value over time.

Now, are they technically on paper a real asset? Because they don't generate income. It's a good long term generation.

Long term. Yep. It's a good argument. Because when they're sitting there like, let's say you buy a rare book, a Mark Twain first edition, it's sitting on your shelf, it's not going to generate any income or any cash flow unless you buy it and then immediately flip it to somebody.

Okay.

Right.

So anything that.

You and I are funny about this description?

Yeah, no, exactly.

If you buy a business that you don't have to show up to.

Totally.

Let's say you bought a business for $500,000. You've got managers in place and they give you reports. You don't have to show up. But every month you get a check.

That is in absolutely an asset, 100% for sure.

There's tons of different ways that you can. Oh yeah, even your car could be an asset. And everybody's definitely what cars are always a liability. Well, do you rent your car out?

Correct.

You have somebody else uber your vehicle for you and give you X amount of dollars?

You know, Absolutely. Which is amazing. Same one with your house. Like, that's what I love about Airbnb.

Brittany.

I love Airbnb because you can again use your home or some homes or pieces of your home to create cash flow.

That's one of the coolest things that Ariel Development Group has done over any other developer. I found this out by just honestly doing it for myself. So I built this amazing house and.

I got a friend who said, hey, we double booked my house. Can you put these guests up in your house? And I said, well, I Don't rent my house out. But I would do it for $2,500 a night. And I was like, I'll just say a crazy number just so I. Cause it's gonna take a lot to get me out. That's gross. Blah, blah, blah. They said yes.

Wow.

I made $7,500 in a week. And I was like, all right, all.

Right, wait a minute here. Huh?

That house ended up generating $225,000.

Which was nuts. But guess what happened? I had to, like, leave every time. I was like, you know, I'll get out. I can move. I know I'm a millionaire. I don't care. Like, it's too much. I'll go sleep in a hotel. So we started actually designing Airbnb able Spaces into all of our homes so that when we first started this, a lot of the millennials were too scared to buy houses. Why? Well, I'm just gonna rent because houses weren't really even thought of as that valuable. Because when we came into the real world, it was 2006. 7, 8, 9, 10, 11, 12. And the real estate market was tanking, and so it was such a scary thing. Why buy a house when you can just rent? So if we can give our buyers freedom to rent their whole house out, they move into this small space on a weekend, they can leave whenever they want. They can whatever. It's actually an asset and an amazing income stream for them. They're not even afraid when they lose their job. They can live off their house. Yeah, I had four buyers do that. They all lost their jobs, didn't even miss a beat because their house is making so much money. Or you can live in the big part of the house and rent out the small part. Small part just depends on your lifestyle, your family, your kids, what you can do. But it's like a duplex, but not.

I'm gonna share a personal story. Someone that you know very well, and he did the exact same thing. He's doing what you just mentioned right now. And then he took it a little bit of a step farther. So he has a house, and he. East Nashville, next to Shelby Park.

Did I build this house for you? Yeah. Okay.

Yeah. You know exactly who it is.

Sounds like a smart.

Sounds like a smart person. So he buys this house, and the house was like, 400 and some change. You probably know the exact number. Let's just say it was 480. Right. So he buys this house, down payment, the whole nine. Right. $408,000 property. And this property is gorgeous. Number one. But number two, I mean, I built it. Yeah, it's a Brittany Turner property, so it's immaculate. But number two, it has this entire side apartment that he lives in. Right. So it has.

He moved into the small part.

He was into the small part. And I mean, it has everything you could possibly want. It's like a one bedroom studio with a bathroom and it has a entrance, a whole separate entrance. Has the yard, a fire pit, desk and a porch and has everything you could possibly want. Parking spot right there. Yeah, parking spot, everything. And then you have this 3,000 plus square foot house on the side that he rents out and the door and everything is connected. So he can either.

Soundproof.

Yeah, totally soundproof. So he can be there and someone can be in that Airbnb the exact same time he's living in his part. And then when no one is renting out the home. Right. He can live in the house as he wants, have guests over, have friends over. So he's creating cash flow that turned his liability into an asset. And then he took that money that he made from the asset and did what with it? He bought stock into Airbnb. And when he bought that stock, it was at 170 a share. And then it went up to $220 a share, which is $50 per share increase.

So if you bought a thousand shares. Okay, how long did it take it to go up?

Two months.

How much would he have made?

$50,000. Cash flow.

I mean, that's not that much, but that is to some people.

I feel like it's a lot.

I mean, depends on your view. It does. Yeah. That could possibly pay for a few child rescue operations. That could possibly pay for your whole family to go on vacation every year and create countless memories. How much effort do you think that.

Really took from him legitimately? Minutes. Six to seven minutes, realistically.

So what is his dollar per hour?

Yeah. On that move. Exactly. Yeah. Think through that. Precisely. Because taking that then $50,000 of cash flow that he made. Cash flow that he made from that seven minute transaction, he can now go. That's a seed. He can take that seed, put it into more. Either other stocks that create cash flow, or maybe he can put a down payment on another Brittney Turner home and rent out both sides to other people. He can have a full time renter in the small apartment and then an Airbnb which creates cash flow. He takes that cash flow and buys more stock with it into something else. That stock goes up and he's able to take that Money and fund all of the mission trips from this one home. Right. This one house can be viewed as, okay, this is my donation house. This is my giving house. Any money, any cash flow that is produced from this seed, if you will, is directly and proportionally all of it is funneled into this mission.

So don't lose what he's saying. Instead of donating, let's say, the $50,000, $50,000 to YWCA, he buys an asset. And if that asset generates $50,000 a year, minimum, which we know it's making over 100, he can give for how many years?

Forever.

So this is the power you can have.

Yes.

How many lives do you think he can change with $50,000 a year? Forever?

Yeah.

How many lives can he change versus just throwing 50 grand in there? Is it holy, is it Beautiful to donate $50,000? Yes. But is it forever holy and beautiful if he can continue to provide because he took the time to be around the right people, to educate himself and to optimize his time and his assets?

Yeah.

So that's his gift. Totally is those three things that all of you already know how to do now. And he just is making a ridiculously amazing ripple impact. So let's say it makes 100 grand a year, but he decides that every single bit of that money goes to this organization, Operation Underground Railroad. So he could have used that 50 grand and thrown it at them, or he could have bought this asset and then every year he gives them 50 grand. What do you think he could do with that other 50 grand if all that money goes to Operation Underground Railroad?

Do another one.

He could probably do another one.

Exactly. And keep stacking it and stacking it and building and building and building. And you can have your. We have one of a good mutual friend of ours wants to do what he calls flip the tithe, which is where he uses and lives off of. And his entire livelihood is constructed off of 10% and he gives away 90%. You met him and his father just recently. And giving. I mean, think about that. Having the ability to give away 90%. That would be an example of, let's say this mutual friend of ours, one of my best friends, grows that portfolio of rental homes to 50, and he still makes enough money that he can easily live off of 50 properties generating 100,000 a year. Right. You can live off that. And so taking 10%, living off the 10%, still traveling, still enjoying life, still pouring into his family, and then everything else is just donated and giving away. How full of life and zest and energy would that particular person be?

This is the kind of assets and giving that these nonprofits need is people with this skill set.

Yes.

And it's really not that hard. So let's say our friend, the first friend, you know, buys his house for $50,000, gives 50 grand every year, and then does this for 10 years, puts the other 50 grand into buying another house. In 10 years, he's generating $500,000 a year for that one nonprofit. He also owns 10 houses.

Yeah. All his assets, all the things that you can do.

That's amazing.

It's incredible. It's a perpetual, beautiful machine. And not only that, but every time he's buying those homes, he's injecting money into real estate agents, potentially title agencies. He's giving other people jobs. Right. People, you know, underwriters, financials, mortgage lenders, whatever. He's. I mean, that's all a machine. He's feeding people and then he's giving people a place to rent, Right. Maybe. Maybe he's able to charge very, very little rent for a particular home so that a family in need can live there.

Oh, yeah, we've done that so many times.

Hundred dollars a month to someone who needs it.

Let me tell you how to level it up. Now, we're not trying to dive too deep into airbn. What if you decide to try to impact everybody who stays there by exposing them to incredible products such as the well coffee, which a hundred percent of all profits go to building wells in Africa. So you expose them to these products. You give them thistle farms, lotion, shampoo, all those things. Love thistle farms hire women that have been in trafficking situations and give them jobs. So they're creating jobs for women, rebuilding their lives. They're building wells in Africa. They're replanting trees. A portion of their stay is funding orphans. Like, by being intentional with every part of your life, you can have this massive ridiculous impact. And you don't have to be a multimillionaire.

I'm just getting too fired up over here.

It's so easy, guys.

It's so. I mean, we just outlined a plan to becoming a multimillionaire in. Ready for this one? Giving.

You can be a multimillionaire in your giving.

Yeah. Yeah.

That is amazing.

Hundred people stay in that house a year minimum, which is going to be more. 100 people stay in that house a year. 100 people start buying, well, coffee. 100 people start buying thistle farms. 100 people start, you know, supporting these different things. So it's so cool by you taking the time to explore and create these connections and then bridge that gap to your customers.

Yes.

Show them how their lives, their purchases, their spending made a difference. You're filling their cup. You're letting them be part of changing the world. And how fulfilling do you think that is for them?

You're getting me so fired up right now.

Let's go.

Let's go into the next episode where we keep talking about the fastest way to become a multi millionaire.

Boom.

I know that last episode has got you jazzed up, but where do you go to take this information to the next level? If you're looking to get into real estate investing but don't know where to start, go to broketoook.com Jeremy and I have created courses for you to be able to understand which asset class is right for you so you can dive in, get the information you need to start building wealth in real estate.