Lifestyle Design and the Four Concepts of Freedom with Brian Davis

Hey, it's Mark Pinolski, the land geek with your favorite niche real estate website, thelangic.com and on this week's Art of Passive Income podcast, I'm really excited to talk to Brian Davis, who is a passive investor with an interest in over 3,000 units. He's the co founder of SparkRento.com and just has an incredible philosophy on life. He is an expat. We're going to learn all about that and we're going to learn all about passive investing. Brian, welcome.

Mark, thank you so much for having me. Pleasure to be here.

It's great to see you. So let's talk about lifestyle design. It's one of my, my favorite subjects. When, when I say lifestyle design, what does that make you think of?

So to me, lifestyle design is just about intentionality. It's about bringing intentionality and that, that intentional design component to every single part of your life. You know, from your personal life and your family life to your social life, your obviously your career and professional life, your finances. Right, your personal finances. And really building this from the ground up from a place of what does my ideal lifestyle and ideal life look like? You know, what's, what do I want to be doing at 11:37 on a Tuesday morning? You know, so some people don't like that term lifestyle design. They might find it pretentious. I love it. I think that there is nothing more important than getting super intentional about every component of your life because if you don't, then the river of life is just going to float you downstream and you will be at the whims of that river. So, yeah, that's lifestyle design in a nutshell to me.

Yeah, it's so funny because I think we're the only species that has this, this, this crisis of what do I do with my life. Right. Like, like all the animals that are just instinctual, they do their thing, they don't have this problem. But human beings, if we don't design it ourselves, we don't figure out our purpose every day, then we're sort of left to the whims of life. And life's going to kick us around a little bit until we, we figure this out. And so it's to have a, take an active approach to your, to how you want to live is, I think, is way better than taking this sort of laissez faire approach. So let's talk a little bit about your idea of freedom. I know you have a concept of the four freedoms. Let's talk about that.

Yeah, I'm glad you brought that up. It's something that I've been kind of kicking around recently and just exploring in my own life and in my own writing. I do some freelance writing for other personal finance and real estate blogs as well. So when I. This concept of the four freedoms is that if you have these four freedoms, then you can do anything you want with your life. So one time freedom, being able to set your own hours as you work. You know, a lot of us are more familiar than that than we were before. Post pandemic. Same thing with the second freedom of location freedom, being able to work from anywhere in the world. Again, that's something that was less common five years ago. But post pandemic, a lot more people, you know, if they don't have it, at least they're familiar with it and it makes sense to them. So time freedom, location freedom, work freedom is the ability to do the work that appeals to you most, the work that you find most fulfilling. A lot of people get into this golden handcuff trap where, you know, they're. They're making pretty good money or solid money doing a job that stresses them out or, and maybe, you know, maybe puts them to work, you know, 45, 55, 65 hours a week that they'd rather not be doing. And for a lot of people, it's not even work that they hate or dislike. It's just not the work that they were put on this earth to do, if that makes sense. It's not their calling, it's not their dream work. It's not super fulfilling for them, or maybe super challenging for them. And then the fourth component here is financial freedom, which you can look at from three two lenses. One is sort of the more traditional financial independence definition, where you can cover your living expenses with passive income from investments. And obviously that's the ultimate goal. But you don't have to be financially independent to have mostly financial freedom from things like stress, freedom to be able to go work your ideal job. And the way that we couch this, the way that we talk about this at Spark Rental, is that you don't need to be financially independent to live the lifestyle that you would be living if you were financially independent. And I'll back up a second to explain how that works. Every person who I've interviewed who has reached financial independence, they've all gone back to work. And it's probably over a hundred people at this point that I've. That I've interviewed who have retired early reached financial independence, you know, whether through real estate or Other investments, maybe selling a business, whatever it is, they all went back to work because there's only so long you can sit on a beach sitting pina coladas, right? If you retire in your 30s, your 40s, your early 50s, you're just, you're not going to sit around on the couch watching TV for the rest of your life. That's a boring and meaningless existence. So you know that notion from the fire movement of oh, I'm just going to sit on the beach for the rest of my life and sip my ties? That's a fantasy. And it's. If that's what kicks you into gear in the beginning and kind of introduces you to some of these concepts behind the fire movement, the more hands on kind of stuff that is useful, then that's fine, but. But the reality is you're going to.

Go back to work. And FIRE means Financial Financially independent Retire early.

Yes. Yeah, sorry, I didn't mean to, I didn't mean to throw around these acronyms that people might not be familiar with. But anyway, everyone goes back to work, but they do it on their own terms. They do, they go back to work doing things that light them up, that make them really excited to get out of bed in the morning. So what that means is you can skip all of the heartache and all of the trouble of the super high savings rate and you know, the slaving away and working the crazy hours and, you know, having a difficult lifestyle. You can skip all of that if you can just cover the shortfall between what your ideal work pays and what you want to spend every year. So just to give you an example with real numbers, let's say that you want a lifestyle that costs $70,000 a year and your dream work only pays $60,000 a year. You have a $10,000 a year gap that you need to cover with passive income from investments. You don't need $70,000 in passive income, which is way harder to achieve. Right? I mean, that, that's going to take years, probably decades to achieve. But $10,000 a year in passive income, you could, you could do that in one, two, three years, potentially, especially if you invest in high return investments like land and real estate syndications, as you and I both know. So that is, that ties this all together, of bringing together the work freedom and the financial freedom. We all want to do work that lights us up, that is our purpose, our calling here on this planet. And you don't need to be financially independent in order to do that. You just need to cover any shortfall and maybe there isn't even a shortfall, or maybe there's a little bit of a shortcut fall and you can just budget a little tighter and quit your day job today and go do your calling right now. So, all right, I'm off my high horse. Those are the four freedoms.

It's, you know, what's the advice to the person? They're really good at what they do. They make a great income, but they don't enjoy it. It doesn't light them up. And like that, like, that's like the worst type of golden handcuff. It's like society's telling you you're wanted, you're getting all this adulation, People are lining up to work with you, and now you're saying, I'm getting paid really well, and then you've got to say, oh, wait, but this really doesn't light me up. What's your advice?

Well, it just comes down to priorities, right? I mean, if your priority is the adulation and having people praise you constantly and maybe you speak at conferences or maybe you get quoted by the press all the time as an expert in your field, maybe you make great money. And if all of that stuff is your priority, if that's your goal, then that's fine. There's nothing wrong with that. We all have different priorities. But this is what lifestyle design and intentionality is about, is getting really clear and intentional about your priorities so that you can say, well, my priority is actually being able to work 30 hours a week and spend more time with my family and make money from anywhere and travel the world with them. Or maybe you like the high paycheck and all the glory, and that's okay if that is your priority, but you need to make a firm and intentional decision about that priority.

Yeah. What about the price that people have to pay for this intentionality? Because there's a price to pay for everything. And I'll give you just a quick example for myself. So I, you know, I've been slowly, you know, sort of building up my land coaching business empire. Yeah. So I've always been a land investor, and that's always been, you know, it's been great. And, you know, we scaled that up. Like, oh, if I can scale that up, why don't I just scale up my land coaching business so I can have bigger impact, I can help more people. And so once I started doing that, like, oh, my gosh, there's a price to be paid for this. I have this great lifestyle and now I'm in more meetings I'm working harder than I've ever had to. And it's all for a wonderful purpose, but I'm paying the price for this purpose in what was before working, what I want, where I want, with whom I want. Now I'm doing things that I don't necessarily love doing, but that are serving this purpose. And so there comes a point, I think, in everyone's intentionality where you hit that, that pivotal point where it's like, do I push or do I pivot? And from a business standpoint, I know a lot of entrepreneurs who try to grow their businesses, they realize, oh, wait, this is really hard. And then they, they don't like it and they go back to being small. And so what they had to do was push through that wall. Where I've seen other entrepreneurs, they just don't have a good product market fit. And it's. You can push and push, push, doesn't matter. You have to pivot. And so do you have anything if you had any experience like that where you've had to push, you had to pivot while you're creating your lifestyles? I, like, wait a second, there's some miswanting here. And I had to either push through it to get what I wanted or I had to pivot.

Yeah. So you talked about the price and how there's always a price. And to me, the price almost always comes down to discomfort in some way, shape or form. You mentioned that you are working harder than you ever have before in service of trying to achieve some of those goals of growth and serving more people. And you can, I have zero doubt that you can get to a point where you are working the amount of hours that you want to be working every week and doing the highest value but also highest fun tasks that you want to be doing. But that requires a lot of discomfort to put really good systems in place and good employees in place as well. You know, a combination of automations and streamlining and delegating to employees, that takes a ton of work and it's really uncomfortable. There's. There's a book that I've read recently on about this very topic called the Replaceable Founder by Ari Meisel, which I highly recommend.

I. I've had Ari on the show and I've been on his show.

Oh, so you know Ari really well.

Okay, yeah, yeah, Less. Less doing, more living. Great book as well.

Yeah, exactly, exactly. So you, you know, the, the kind of premise behind that, but it's uncomfortable. You know, putting making yourself replaceable in your own business is Quite uncomfortable. And it takes a ton of work to get there. You can do it, you know, you can have that, that four hour workweek, you know, Timothy Ferris kind of, kind of life with a business that achieves all the things you want it to achieve. But it's, it's no trivial feat to get your business that automated, that streamlined and you know, put people in place that you trust that much. So yeah, to me it comes down to the price is usually hard work and discomfort to get there.

Awesome. Awesome. All right, let's talk a little bit about being an expat. Why did you become an expat and what are the benefits to you?

So I have always had some wanderlust. You know, I've always loved travel. There was a time in my twenties I was dating a woman who was a travel nurse and actually in 2008, so I lost my, my day job and all my investments hit the fan because of, I was working for a hard money lender and all of a sudden no one's doing hard money loans. Right. In 2008. Anyway, so I mean, I had no idea what I was going to do with myself. And she said, hey, I need to hit the road again for travel nursing. Do you want to come with me? And I said, well, I don't have anything else going here, so I'm kind of. My investment properties are in the toilet and I don't know what I'm doing for work, so why not? Yeah, I'll do it. Let's go. So we spent two years traveling around the country together and that's, that was my first introduction to actually working full time remotely. I ended up getting a job Telecommuting back in 2008, you know, long before it was cool. Right before the cool kids were doing it.

Yeah.

But yeah, so I loved it. I loved that nomadic lifestyle. You know, we were spending three months at a time here and there. Anyway, she and I broke up of course, you know, given that I called her my ex girlfriend, my, my wife, who we were not married yet at the, at this time, a couple of years later we're dating and she knew that I had some wanderlust, wanted to do more travel and particularly international travel. And my wife's in education and she reached out to a mutual acquaintance of ours who worked for international schools and said, hey, how does that work? I think my fiance would be interested in living overseas for a little while, doing some more travel. And this was all unbeknownst to me. She didn't tell me any of this, but so she signed up for a recruiting service for international schools and then hit me up as a surprise and said, hey, Brian, want to go to Boston in a few weeks for an international job fair? I was like, what? And I was still working for the online business at that point, so I could work from anywhere. And I said, sure, why not? Let's go see what happens. And within a day, within 24 hours of us being at this conference, she had a bunch of job offers from all over the world. And she. The one that looked most appealing to us was in Abu Dhabi, the capital of the uae. And we kind of looked at each other and we were like, screw it, let's go. Why not? Let's go have an adventure. And we thought that we were going to go for two years because it was a two year contract and that was nine years ago and we're still overseas. So, yeah, it's been a fun adventure. I mean, our home where we lived, we ended up renting it out with all of our furniture in it. We rented it as a furnished home later, ended up selling it because we didn't come home. We thought we were just going to move right back into that house. But yes, we spent four years in Abu Dhabi, moved to Brasilia, the capital of Brazil, spent four years there. We're currently in Lima, Peru, and we will be here for at least one more year. We might move back to the States for a little while after this, just to reconnect with family. Now our parents are getting older, it's been a fun adventure and there are a ton of benefits beyond the obvious of, of the expat life and living overseas.

Yeah, tell me some of those benefits.

Yeah, so, you know, I mean, obviously we get a lot of great international travel. I mean, there was a time when we were averaging like 10 countries a year that we were visiting. It's slower today. We have a young daughter, but we still do quite a bit of international travel. You know, that's sort of the most obvious advantage. But beyond that, I mean, our daughter was born in Brazil. She's got dual citizenship. She has a Brazilian passport and a US passport. She spoke Portuguese until we left Brazil, now she speaks Spanish. We're hoping she can pick the Portuguese back up at some point given that she has citizenship for life in Brazil. So, yeah, I mean, she goes to an international school surrounded by kids from all over the world. And it's an international baccalaureate school. These schools where my wife works are some of the best schools in the world. US Embassy schools around the world. So that's another benefit, you know, the amazing quality schools which are often much more affordable or even free for, you know, depending on whether you work at the school or maybe you work at the embassy. We don't have to pay the same US taxes that you do. We can take advantage of the foreign earned income exclusion, which basically puts our first. I think it's around 115 grand per person a year right now. You know, it changes every year, of course, but yeah, the first 115 grand or so a year that we each earn, you know, both my wife and I, that's tax free. Living overseas after, above that, you know, we, we have to pay but. And there are some other types of taxes which I have to base off employment taxes, but regular income taxes. Our first 230 grand or so as a household, tax free. So that's.

You have to pay taxes in Peru.

Or my, my wife does pay some taxes in Peru. I don't file a tax return here. Hopefully the Peruvian authorities will not come knock on my door now, listening to this episode.

Well, of course they're listening to the ARA Passive Income podcast. I mean, what.

Of course, who doesn't? Yeah, yeah, it was the same thing in Brazil. Technically I was supposed to file a tax return in Brazil. I just didn't. You know, it's not like I was earning income in Brazil anyway. You know, my, my income is based in the US so. And then the UAE actually doesn't charge income taxes at all. It's one of the few countries in the world that doesn't charge income taxes. I think that's still true. When we were there, that was true and I think that's still the case. So. Yeah. And if you do pay taxes in one country, you can usually offset those in the other country, so you're not getting double taxation. At least that's true in the US if you pay a certain amount of taxes in one country, they're not going to tax you on that amount in the US is my understanding. I'm not an accountant, of course, so you know, talk to your CPA about that. But. So anyway, that's, that's one more advantage is the foreign Earned Income exclusion and lower taxes. We also take advantage of geo arbitrage. I get paid in US dollars, actually my wife gets paid in US dollars too at the US Embassy school here. But we are living in Peruvian Solace and before that in Brazilian Hay Ice and before that in Emirati Durhams. And it's a lower cost of living in most places around the world than in the US So I get paid in dollars, spend money in solace. We, we have a furnished apartment that we don't have to pay for because Katie's job covers it for us. But if we did have to pay for it, the rent is 1300 bucks a month for an apartment with an 180 degree view of the Pacific Ocean. I mean, it's a, I mean it's a multimillion dollar view that we have in an admittedly, you know, totally mediocre apartment. I mean, it's not like a fancy apartment or anything, but it has a really fancy view. A view that I will never have again in my life. You couldn't get anywhere near the beach in the US for $1,300 a month rent, right? Yeah, especially in a major city. Lima has something like, I don't know, 12 or 13 million people living here. It's comparable to New York or la. So, yeah, we live in a major city with still has relatively low cost of living compared to the U.S. some of the best restaurants in the world are here in Lima. You go to the 50 best restaurant lists, there are like five or six on that list right here in Lima. It's nuts. So anyway, point being, Geo arbitrage, you can live a much higher quality of life in another country, especially if you are being paid in US dollars.

Yeah, absolutely. I've had friends who lived in Bali, I've had friends who are Australians, lived in Bali and they're taking, they're loving the G Arbitrage life and they've got a housekeeper and they've got massages and they eat amazing food and it's like a fraction of the cost. And then, then you can have in the US So are there any downsides? Did you see any, any negatives to it?

What's. Yeah, there are, there are a couple downsides. One is just distance from family and friends. And of course you make friends overseas, you make friends with expats and sometimes with locals. But you do have to live far away in another country, probably another continent when you live abroad. And that's hard. We try to come home for six to eight weeks of the year. So we do spend a solid amount of time in the US with family every year. But still we're not there. It's not like I can drop by my dad's house for dinner on a Wednesday night, and that's hard. We've missed a lot of weddings, we've missed funerals, we've missed the birth of children, my nephews. I wasn't there when they were born. That's a huge downside, just being so far away from family and other loved ones. Increasingly, from a business and professional side, it's become increasingly clear to me that it has stunted my professional growth a little bit not attending some of the big conferences in the U.S. you know, that is, it's become a priority for me over the course of the next 12 months to actually start to make that effort to fly back to the US Even though it's going to be expensive and it's going to be really inconvenient and time consuming to fly, the travel time to get to and from, that's going to be hard and it's still probably worth it. For years I've been avoiding attending US Conferences and I think that has had a negative impact on my personal growth and on our businesses growth. So yeah, there are downsides. To return to your theme from earlier, there's always a price, right?

There's always a price. Yeah, absolutely. So with the time we have left, how does passive investing in Spark Rental help me take advantage of those four freedoms of lifestyle design?

Yeah, so I cut my teeth in real estate as a rental investor, going out and doing Burr deals for the most part, which is really labor intensive. Their labor intent to find the deals, to renovate the properties, to manage the properties afterwards. And even if you hire a property manager, you have to manage the manager and it's a lot of work. It's not truly passive income and it's certainly not passive investing. I got rid of all those properties because I hated being a landlord and it was all just too much work. So now I invest totally passively. I invest in real estate syndications and in notes and other types of passive investments. And if anyone's not familiar with the term real estate syndication, it's not an intimidating term. These are just big real estate deals where a professional investor buys it and then raises some of the money from passive investors like you and me, who basically become silent partners, what are called limited partners or LPs in these deals. So we become fractional owners in these big apartment complexes or land deals or mobile home parks or whatever type of property it is. And it's a hands off way to invest. But you still get all the benefits of real estate investing. You still get the cash flow, you still get the appreciation, you still get the full tax benefits. So you get all the pros of owning real estate without having to become a landlord. So that's sort of the big picture. And as far as what we do at Spark Rental, we try to make the two biggest barriers to entry for real estate syndications go away. We try to surmount those two barriers to entry for people. And those two barriers to entry are one, the high minimum investment. It's typically 50 to 100 grand to invest in these deals, which is not chump change. And it's really hard to diversify if you have to plug that much money into a single deal. So we go in on these deals together as an investment club where each person can invest five grand if they want, or more, whatever they want above five grand. And then collectively we're investing 200, 300 grand, whatever it is, in that deal. So we're well above the minimum investment. And then the other barrier to entry is deal flow and in particular finding sponsors and finding deals that allow non accredited investors. Because most real estate syndications, or at least many real estate syndications, only allow non. I'm sorry, only allow accredited investors to participate. And again, if that's a term that you're not familiar with, these are wealthy investors need to have at least $1 million net worth, not including equity in your home, or you have to have earned 200 grand or more over the last couple of years, 300 grand if you're a married couple. So better off people, wealthier investors and non accredited investors do have access to some of these deals. And in fact, in our club we only look at deals that allow non accredited, credit accredited investors to keep it open for everybody. But syndicators, also known as sponsors, they by law are not allowed to publicly advertise deals that are open to non accredited investors. So then you have a catch 22 where if you're a non accredited investor, how are you supposed to find sponsors or deals to invest in when they can't advertise to you, they can't reach out to you. So that is the other barrier to entry that we aim to solve for in our club. Denny and I, my partner and I spend half of our time networking with syndicators and with sponsors and we bring them in to our club. We meet twice a month. Sponsors will present their deals or we'll have just educational presentations. And again, it's a really easy, low stress, low dollar amount way to invest passively in real estate, get all those benefits without becoming a landlord.

I love it. I love it. Well, Brian, this has been a fantastic podcast. Your mentorship has been fantastic. But now we're at that point in the podcast. I'm gonna ask you for your tip of the week, a website, a resource, a book, something else actionable for the auto passing income listeners to go improve their businesses, improve their lives. But before you give that, just have to give a shout out to our sponsor, which is flight school. Learn how the next 16 weeks can transform your life. Go up that mountain of land, investing quickly, safely and efficiently with with our team, and you're going to start creating that passive income without any renters, rehabs, renovations or roads. I know you're thinking, what about the tuition? Ain't going to cost you nothing. Guaranteed. You're gonna make back that money 180 days or less. Just show us your work. Learn more. Go to landgeek.com forward/training. All right, Brian, what is your tip of the week?

So I'll give two very quick ones, one specific and one broader. A specific one. I recently loved the book the Gap and the Gain by Dan Sullivan and I think it was Ben Hardy, the other author. Great book. Highly recommend it. More broadly, listen to audiobooks. Join Audible. And while you're working out every day or while you're cooking dinner or while you're commuting, listen to books. Fiction, nonfiction, personal development, business, books, investing books, crime novels, fantasy, science fiction, historical fiction, whatever. I go through probably 50 books a year, and three quarters of those are audio books that I listen to while I'm working out or doing other things. And I would never be able to go through that many books if I were only relying on reading on my Kindle. Join Audible. Listen to audiobooks. You know, make your life better.

Yeah, I love it. I mean, and the way I read, because I have the attention span of a ferret on double cappuccino, is I'll get the audiobook and the book and I'll listen on, you know, 1.75 or 2x speed while I'm reading. And then I'm totally, you know, locked in. So that, that kind of helps. Well, my tip of the week is learn more about Brian and group investing @spark rental sparkrental.com we'll have a link in the show Notes. If you're getting value from this podcast, do us a favor. Follow rate, review the podcast. Send a screenshot of that review support@thelangeek.com I'm gonna send you for free assigned a copy of Dirt Rich, but just do it selfishly anyways because we get better guests, because they see all those wonderful ratings like, oh, this is a big deal. I'll go and talk to Mark. All right, thanks, everybody. Brian, are we good?

We're great, Mark. Thanks for having me on the show.

Thanks again. Let Freedom Ring. Thanks everybody.

Thanks for listening to the Art of Passive Income podcast. Are you ready to learn how you can start building a passive income without renters, rehabs, renovations or rodents? Schedule a free consultation at thelandgeek.com forward/training let Freedom Ring.