THIS is how to Create Cashflow (ft. Chris Miles)

Hey, it's Mark Podolski, the Land Geek. His favorite niche real estate website, thelandgeek.com and on this week's Art of Passive Income podcast, he's back. Chris miles from money ripples.com. chris, it's been a while since you've been on the show, so I thought it'd be a good time to have you come back. But if you're not familiar with Chris, he is an anti financial advisor. He has helped over a thousand of his clients increase their cash flow by over $300 million over the last 13 years. I'll say that again. He has helped a thousand clients increase their cash flow by over 300 million over the last 13 years. Chris, my brother. Good to see you.

Hey, same here, Mark. It's good to be back on again. Yeah.

So, Chris, let's just kind of get into the meat of it. What does it mean to be an anti financial advisor?

It means I basically I poo poo all over financial advisors. What I do, and I don't mean literally. This is not like, you know, Amber heard type of thing. Right. But you know what, so really what it really means, I used to be a financial advisor back in the day. Right. I actually, that was my first business starting out. I actually dropped out of college to do it. And after several years of doing it, I actually sat down with my father. And the thing is, my dad taught me, be cheap, save, you know, that kind of stuff. And so I sat down with him because he said, chris, when are you going to advise me? Now, as I looked at his finances, he opened up his books, I saw him for the first time in my life because he never, he always kept it close to his chest. He would never tell us what, what the financial situation was other than we can't afford it, we don't have enough money. Right. Money doesn't go on trees. That's all he told us growing up. Well, I find out he'd been stuffing his 401k. He paid off all his debt, including his house. He was completely debt free. He was like the poster child for Dave Ramsey. Right? Yeah. But despite all that, he said, Chris, I'm 61 years old. I want to retire. How can I do it? I looked at his numbers. I said, dad, let's just hope. If you want to retire today, you better hope you die in five years because that's how long it'll be before your money runs out. Wow. Okay, Chris, well, what else you got for me? I said, I don't know. You've Done everything right, you know, from my financial advisor eyes, like, I can't put you in another stock market thing because that could go up or down. You know, I could put you in these index things, but that might not work. And I was just like, I don't know, because you did everything that I've taught people to do. And that really bugged me and bugged me a lot. Because, remember, I mean, I kind of want to be on a different path than my dad. I wanted to be more prosperous than him growing up because I didn't want to be the guy that said, I can't afford it. But I found out that I was on the same path myself, that I was following that same path of being the saver, spending. Nothing like trying to turn off the AC in the summer, turn off the heat in the winter, that kind of thing, just to save a few bucks so I can pack all that money into those mutual funds and build up my nest egg. So then maybe if I'm lucky, Maybe I'll have $2 million saved up by the time I'm 40, and then I could pull off $60,000 a year and live the high life. Right, Right. And so that's what I believed. But then it became apparent. One of my friends who used who I trained to be a financial advisor, left to go do real estate investing. As I talked with him, he said, chris, how many of your clients are truly financially free where they don't worry about money? I said, well, none. They all worry about money. They all worry about running out of money. Even if they're retired and they've got accounts, they still worry that they might not have enough to. To last their entire lives. Okay, Chris, good job. Way to help nobody. How about this? How many of you guys, as financial advisors, are financially free, not off the commissions you're earning, but actually doing these same investments you've been recommending to your clients? And when I really was honest with myself, I was kind of mentally looking around the office, and I knew there was guys working there since the late 1970s, and they weren't financially free either. And I said, all right, you got my attention, because I don't think any of them could retire. He said, well, there's your problem. And so it kind of led down this path of actually understanding what really Kiyosaki was talking about. Rich dad, poor dad, what it really means to create passive income, you know, because I used to think that somehow Rich dad, poor had supported what we did as financial advisors, which was bull. He hates us, right Right. And so, so I, when I realized that it wasn't working, that there's no proof to show that financial advising, stuffing money or 401ks at work, it wasn't working at all for people. When I realized that I had an integrity crisis, either I stay in that industry or I leave it, you know, Cause I can put blinders on and just keep making money or I can leave it and keep my integrity intact. And so I chose ladder, left it, you know, just stayed on as a mortgage broker instead. Cause I figured that could be at least be an honest business. And, and then I started to learn about real estate investing, everything else. And then later that next year I was actually able to retire when I was 28, almost 29 years old, where I had enough passive income coming in to cover my expenses. And that blew my socks off, right? Because I never even, I mean I remember how thought how I thought you had to sacrifice and suffer and save for so long just so I can maybe retire by 40, right. If I was really, really lucky. But I'm finding out, no, it's way easier than that by focusing on passive income, not on just accumulating a big nest egg than living on 3%. And so that's where I became the anti financial advisor. I realized that, you know, even after retired I'm like, well, I can just sit around and be happy with my life or I can get on this mission to save people from something that's just not working. It's actually, it's, it's creating this mass issue right now. In fact, there's articles coming out right now saying that currently, like Fidelity. I looked at Fidelity Stats. Fidelity has about 46 million clients. 46 million people with 401ks of fidelity. Guess how many of them have over a million dollars? $299,000. That's it. That's less than 1% success rate. And even that, that's not even a success rate because the $1 million. They also did another study too, when they asked those ahead, over a million dollars, do you feel like you could retire 35% of those? So remember, it's already less than 1%. And then over a third of that, less than 1% even said it would take him a miracle to be able to retire. A miracle, right. So that means that the success rate is almost nil. It's almost zero. That's the kind of mission that we're on to kind of stop people from doing that. That's what we focus on, money ripples, is get people to get Their money working hard for them so they have to work so hard for money so they can become work optional. They work because they want to, not because they have to.

Yeah, I love that. And you. And I see the world the same way because I see passive income cash flow as the only antidote to financial insecurity. I have no money in the stock market and my friends who, who, you know, talk about it and they get all excited, I think, oh, you know, good for today. But it's just a paper gain, right? You can't eat your gains and there's nothing really. It's just on paper, it's nothing until you sell. And then you've got a whole other issue there. And so over the long period of time, you've just like what you're saying. Most people don't win that game. You know, we might hear from time to time those outliers that do, but that's such a small percentage. And so my question is, if you're listening to this and let's say I have a friend who works at Dell and she's putting her money into her 401k and she's loving the matching and it just seems like this is a phenomenal investment. It's free money. Why are you poo pooing, Chris, on this beautiful investment vehicle called a 401 that your generous company is offering you?

Well, because the match is the really the only thing that people have a good argument for 401ks, right? Like, oh, I have the match. It's a hundred percent rate of return or 50% rate of return. But in truth, when it compounds over time, it really only adds about 1 or 2% to your total return. Now if you get perfect dollar for dollar match and that's all you go up to, which is not enough to save, right? But let's just say that's what you do. Yeah, you might improve those numbers to 2 or 3% more. But here's the problem. I just looked at Fidelity, right? Because again, they're the biggest 401k provider out there today. I said, let's see how they performed. So I looked at their 10 year performance. Now understand that the S&P 500 did better than usual over the last 10 years. It did a 10.1% average from March of 2013 to March of 2023. The Fidelity Retirement date funds, right? The ones that they say, like, hey, your target dates 2040 or 2055, 2060. Right. Which 84% they say 84% of millennials are right now Putting into those funds. Well, those funds averaged 8% almost flat. So the market did 10.1, the fund did 8%. That means it's 2% worse than the market. And just so you know, 10.1% in the stock market is above average. The 30 year average is only about 7.75%. It's less than 8%. So do the math. Right. Let's just say that fidelity keeps staying 2% under that it's 7.75 is the actual real long term yield of the stock market. That means you only make 5.75 with those funds. Oh, and wait, there's more. There's a. Exactly a 0.75% fee that's on that, that fund specifically, not including the other 401k fees, just that fee for that fund alone, that right there brings you now down to 5% a year. So even if you add 2, 3% if you're lucky, and most time it's 1 to 2% long term, it's like, wow, I got 6 or 7%. This is why, because when you have guys out there like Dave Ramsey saying save a hundred bucks a month for 40 years, at 12%, you'll make a million bucks. The truth is, if you only make 7%, you're more like a quarter million dollars, not a million. Right, right. That's what. And that imagine what with inflation, how much worse that is. Like, what's a quarter million going to be like in 40 years? It's going to feel like nothing. Which is exactly what people have in their 401ks right now. Even I looked at stats that generation X, our generation, right. The average balance of those in high income, not including overall, but just those at high income, only have a quarter million dollars saved up. And generation X is now just entering retirement today. Right. So think about that quarter million and you're supposed to live on 3%. 3%, that's it. So that's 7,500 a year, Mark. I mean, let's put this in another context, right? I mean, this is the, this is the contrast that got me out of it is that is understanding accumulation theory, which is what financial advisors teach, and then cash flow or passive income. Because, you know, for example, like, you know, sir, working with you, with you. Right. I mean, right. You know, quarter million dollars we invested, you know, and doing the kind of stuff you do with land deals. Well, that quarter million dollars now after a year and a half is kicking off like 7,500amonth. Right, right. Just doing raw land. The crazy thing is Remember, I just said a quarter million dollars. If you live on the 3%, which is now the recommendation from financial advisors to actually stay up to speed, that's 7,500 a year. So doing what we can do in real estate, we can make just as much in a month as what sometimes they can make in a year. And of course, who can live on 7,500 a year? Nobody. Right. It's just, it's just ridiculous. And so that's what we got to stop. That's what we got to wake people up and shake them up and say, listen, that 401k, you're just putting money in prison. You put your money into your home equity, which pays you 0%. You're throwing in prison. The banks and the financial institutions are the ones that teach the financial advisor, then teach you what to do with your money. If you get a prison break of your money, get it out and then get it working for you, your life can change completely. Wow.

I love it. So let's talk about breaking out of financial prison. So you, you, you brought up, you know, financial prison. 401k, no good. It's in prison till what, 59 and a half your, your equity in your home. Right. Can't eat the equity in your home. It's in prison. There's, what are some other common ways that we people just typically lock up their money and then what's the solution to this?

Yeah, almost always. It's, it's usually when they're locking up money, it's usually putting it away for someday. Right. Lock it up in the stock market. But if the market goes up or down. Right. I mean, everybody tells you it's always a good time to buy in the stock market. Well, the people that tell you that, the ones that make money telling you that, which are financial advisors. Right. Notice that the market goes down, they say, we'll buy it now. It's on sale. But if it goes up, when it gets expensive, they say, well, keep buying because it's going up. You know, there's never a bad time to buy. It's like a realtor sometimes, you know.

Right, right.

They, they're always telling you it's a good time to buy, and that's, and that's a big thing. So lock your money into IRAs, 401ks. And not saying you can't use those, but if you want to have freedom and become work optional before the age of 60, that is not the vehicle to use. Same thing with throwing money into extra equity in your home. And Things like that. Now if you didn't know anything else better to do, or maybe you're a horrible spender, you can't control yourself, you're just going to blow money. Great, pay off your house, do that just so that you don't destroy yourself financially. But yeah, get that money out instead. And so people will say, yeah, but if I get it out, put my savings account won't make much money. That's true. And you could use the savings account or checking account and then go and reinvest it somewhere else. That's where we also, we've talked about this on a show before, talking about like infinite banking, but not typical one, I call it. Not like your grandpa Nelson, you know, Nelson Nash, not like that old, old school version of infinite banking, but instead getting that money where it's low cost and getting you higher returns on your policy, that whole life insurance policy that becomes a tax free supercharged savings account that pays you more than 0 point nothing percent like the bank does. You get a policy like that, you start saving money there and then using that to go and invest. And especially if it's a cash flowing investment, I have clients, I'll ask me, even with the stuff that they do with you, Mark, they'll say like, hey, well if I do, you know, some raw land transactions and I get paid on seller financing, is that good? And I'm like, yeah, because man, that money moves so much faster. You make such more cash flow on that thing. I mean, you get that money flowing in and out all the time. You'll be making money in two places at once because the life insurance, the cash value keeps growing, but then you get a line of credit against it that's less interest that you're paying on it than the money you're earning. And then you invest that anyways. You actually make money in two places at the same time. And so when you combine those two elements together, right, where it's actually creating velocity of money and moving money faster and making it just increase and grow, you'll make tens of thousands, if not hundreds of thousands of dollars more interest than you would just using your typical checking or savings account.

Yeah, I mean this is, this is a lot, Chris, and I know you've got to jump. And so, you know, I want the listeners to be able to, to reach out and learn more from you. But before we get to that, we're at that point where I'm going to ask you for one more tip of the week. And again, Chris, I always appreciate your mentorship and and appreciate coming back on the podcast. But what is your tip of the day? A website, a resource, a book, something else actionable for the auto passive income listeners to go improve their businesses, improve their lives. What have you got?

You know, I'd say this, the tip I have is pretty much you look up cash flow index, which we have on our website, money ripples.com, we've mentioned on some podcasts before, even on our show on the Money Ripples podcast cash flow index. Because many people are starting to ask, they're like, hey, interest rates are going up. Do I pay off debt or not? The way I determine about paying off debt is I use this cash flow index where I take the loan balance divided by the minimum monthly payment and then I pay off the lower index. And so this could very well be credit cards, especially because right now, credit card interest rates, the average rate is now 20%. It's the highest has been in almost 40 years. So there's a lot of people that don't even know that their cash flow is leaking away inside their credit cards. So if you got credit card balances, that might be the very thing to start paying off, free up more cash flow, improve your situation maybe even more better than you could doing certain types of investments, right, Especially passive investments. So I would definitely recommend is looking at using that cash flow index to figure out which loans you should be paying off. That would be your quote unquote best investment right now.

I love it. Well, my tip of the week is learn more about Chris. Go to moneyripples.com he has a podcast. He's got the passive income calculator. He's got consulting, he's got courses. It's a wealth of information. And why not be one of those people that increases your cash flow? He's already helped over a thousand people do it and increase their cash flow by over 300 million over the last 13 years. And it really is. And Chris, we talk about it all the time. I don't know of anything better than passive income or monthly cash flow especially. It's the antidote to financial insecurity. You and I know a bunch of wealthy people, they still worry about money because it's locked up in, in these assets that could just crash at any point in time. Real estate's not going to zero, lands that going to zero. That company literally could go to zero where you have absolutely no control. You're not on the board. You just anything could happen. So I think you're doing tremendous service.

Unless it turns into passive income.

It's. Yeah, it's. It's. Yeah, exactly. So thanks so much. Is there. You know, we got two minutes here. Is there anything I should have asked? I didn't ask.

You know what? I would say this. If you happen to have real estate, this is the one deception. If you have real estate, property, look at what's called your return on equity. You know, are you making a good return on the equity that's in there, your net profit on that property? And we're finding that more and more because of appreciation. Some people are sitting on their properties thinking they're making good cash flow, but in reality, they have a big opportunity cost, so they could be making more elsewhere.

So look at that return on equity. I love it. Well, again, go to money ripples.com learn more from Chris. Today's podcast was sponsored by sponsored by Flight school. Learn how the next 16 weeks can transform your life. Go to thelandgeek.com forward/training. Learn more and go up that mountain of land, investing quickly, safely and efficiently. And I know you're thinking, what about the tuition? Ain't gonna cost you nothing. Guaranteed you're gonna make it back 180 days or less. Just show us you did the work. Go to landgeek.com forward/training. All right, Let freedom ring.

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@thelandgeek.com forward slash training.

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