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Inflation exploded to 8.5% in March of 2022. That means if you have cash sitting around right now, you’re losing more spending power, and your free lifestyle is going down the drain.

It’s no wonder you never see millionaires hoarding cash!

Instead of cash, the wealthy put most of their net worth into assets. And there’s one asset class they love more than anything else. Not only does it let you beat inflation, it also reduces your tax bill.

If you hate being robbed by taxes and inflation, then you will love this asset class too. We’re talking about real estate.

In this episode, you’ll discover how real estate lets you become almost immune to inflation, while boosting your income and escaping tax.

Listen now!

Show highlights include: 

  • Real estate’s “Power Four” that put cash in your pocket without giving a third of it to the government (3:00)
  • How to make money by buying and holding assets you expect to drop in value (3:33)
  • Why letting you debt stack up for decades makes you wealthier than if you paid for everything in cash (4:52)
  • Fund your next holiday without working one minute for it, thanks to “Mailbox Money” (5:51)
  • The “2 year rule” that lets you legally avoid tax (even on a million dollar flip) (12:31)
  • The “multiplied eyes” theory that lets you uncover bargain deals on autopilot (15:11)
  • Why paying 20% interest to an investor lets you make more money (even if the bank will give you 5% right now) (17:08)

Get past being stuck and find new ideas to grow by joining the Bigger Vision Facebook group and visiting MyBiggerVision.Com

Read Full Transcript

Do you ever feel stuck in the rat race? Life doesn't have to be that way. If you're willing to put in the work, in “bigger vision”, Chris Garrison helps you discover the keys to abundance, freedom, and personal growth, that let you live the life of your dreams. And now here's your host, Chris Garrison.

(00:33): Welcome everybody as Chris Garrison with a bigger vision podcast. I'm glad you tuned in today. And I hope that dropping some of this knowledge is going to ch change your life. And we're gonna talk about real estate. Why the wealthy love the real estate. Listen, there's a reason there's some power that comes with owning some dirt, not just dirt, but the thing that sits on top of the dirt, you know, I began my journey and financial freedom by starting my own business from ground up. It was a lot of sweat, a lot of tears. I probably quit myself hundreds of times, but always knew if I quit, then it was not gonna get me any further in the journey of financial freedom. So I stuck it out and I kept bringing action and performing and began to see a, a little success. And I began in my path of desire for success and hunger for excellence, and just being the, just flat out the best that I could possibly be.

(01:35): I started looking at individuals that were influencers on social media hopped on U YouTube came across sky grant Cardone came across ed millets came across some of these other well known influencers, motivational speakers. And I noticed as I was getting around the influence of these highly successful individuals through YouTube and following 'em on Facebook and Instagram, him, that they all had an element of real estate. And I began to wonder, why is all of these individuals in real estate? Now I do have a disclaimer to throw out. I did. I do have a father that is in real estate, single family homes. And he, at the end of his kind of, I guess business career, as far as buying businesses, building businesses, and then later buying businesses and, and building them he got into real estate as well, but I never really had a hunger for why he was into real estate.

(02:39): Now, I, I did understand that he collected rents and he was well off know up. He didn't even have bank debt on it. So what you call cash flow was very high because there wasn't a loan note payment that was required to be paid each month. So he was able to put that straight back into his pocket. But outside of that, I didn't really look into it. I didn't understand the power four that I guess you would say, I didn't understand about appreciation. Meaning every year, as long as you didn't buy in a declining market, your property is going to increase in value. Now that's pretty awesome. You make an investment and next year that investment is gonna be worth more than what you paid last year. Now, to me, I would call that passive income. So that's one form of income right there. The other is duh appreciation, depreciation, not but at depreciation is the way that you're able to keep more of your income and have to give less of it to the government, because the way they take a home, the way they take a property is not the land.

(03:55): You can't depreciate the land, but if you've got an asset sitting on it like a bill, a home, then they take that and they depreciate it over several years. And they've got something called a cost segregation study that will look at all of the materials that you have and will assess where they're at and the depreciation. And you can take year one, the way the tax laws are set up right now, all of your depreciation, or you could break it out over, I think it's 27 and a half years. They say a home will just fall over. According to tax purposes, a fall, a home will be done with after 27 and a half years. So depreciation was allowing me, would allow me to capture more of my income and keep it so that I can take that income and reinvest in new assets, new homes, new land.

(04:48): Okay. So that's two of the four. Then I've got debt pay down. Well, yeah, Chris, of course, you're making your payment every month. You're paying it down. No, I'm not. I'm not paying that down. I've got a tenant in, in that building, in that home that is making their rent lease payment and that rent lease payment, a portion of it is paying my loan payment, see how that works. I still go to my job over at absolute cleaning and restoration and work on building that. And I go to my seminars and my masterminds for self development to build me all while I've got this asset over here, that is building equity for me because every note payment that I make to the bank has given me that much more equity that I have on my balance sheet, which adds to my net worth and not doing it's not coming outta my pocket.

(05:44): It's coming outta my tenant's pocket, flowing through me to the bank, a portion of it. So number three is going to be debt paydown. And number four, what you hear most often about is cash. So what is cash? You know, we've heard cash flow. And if you're talking to an accountant, cash flow is how it's moving through the company in and out. But that's not what I'm talking about. I'm talking about cash flow is your profits that you take off the top. After all expenses have been paid. That is what I'm not off the top off the bottom. That is what you have been left with at the end of the day, when everything's been paid for this asset. So this asset cost us some maintenance. It costs us some repair. It costs us some insurance and some interest on the loan and the principle payment.

(06:32): And now at the end of the month, we've got a little bit of cash flow and this cash, I can do whatever I want with. I don't have to put it in a savings account. I don't have to spend it. I don't have to put it back into my investment. I can do whatever I want. It's just like a paycheck. Some people call it mailbox money because it comes into mail. If you don't have it on ACH and it's going to, I allow another revenue stream for you. Cash flow is awesome. So real estate is why it, it, so these elements of real estate is why the wealthy are plugged into it because what do the wealthy have money? And what do the wealthy want to do? Keep their money. So how do they keep their money? By putting it into assets that are going to spit off cash flow. That's going to allow them to have depreciation, to keep more of their money and less given to taxes. That's going to appreciate over time with them doing nothing that is going to give them, build their equity and allow someone else to build their equity. It should put a smile on your face. When you think about real estate, no wonder the rich are getting richer because they have found a revenue stream that is multifaceted. They found the revenue stream of vehicle that will take them to wealthier quicker than any other vehicle that I have found or come across. The return on investment is massive. And here's the deal. Most of these individuals that are in a real estate world, don't even use their own money to buy this real estate. They use OPM other people's money. I know I just blew your mind if you've never heard before blew mine the first time I heard it other people's money, yes, people will give you money to go buy real estate.

(08:27): Why would they give me money to go buy real estate? You might even be thinking why I would never do that. I would. Well that's because you're not an investor. That's because you haven't made money yet that you've got so that you've gotta put it somewhere so that it brings a return on investment so that you collect interest on it. See, there's this nasty word called inflation and inflation is the lack of spending power that our dollar, a Fiat currency has. So let's take, for instance, we've got this dollar and it's worth an actual dollar inflation comes in and we still got the same pop paper dollar. And we, we were able to buy a Coke with this dollar, but I comes in over a few years and now we're only able to buy half a Coke with the same dollar, same paper dollar, but the buying power has been reduced because of inflation because we print money.

(09:28): It's not back to buy something that is limited in quantity. We're able to send paper through a enter, throw some ink on it, and boom, there is money. And as we flood the market with more money, inflation goes higher and inflation kills the buying power of money because there's no longer scarcity with the dollar. Anything that has scarcity is more valuable, correct? Because we all will all want to have something that no one else has. It adds more value to it. That's one thing about real estate that I love. Again, there's no more land being created. God rested on the seventh day. Land is not matter of fact, land is disappearing underneath the ocean. You go down to Louisiana and you ask them about the erosion and how much land they've lost over the last several years as the tide is taking out their soil into the ocean.

(10:18): So land has scarcity because it's not being created anymore. And the things on the land produce cash flow and it gets paid by someone else. It's, it's just, it's exciting to me. So well, Chris, how do I plug into real estate and how do I use other people's money? There's people out there that have money that they need to deploy so that they can beat inflation. So if you're talking today in 2022, inflation is just insane because we just went through the pandemic and the government was just pushing, started printing money and pushing stimulus packages out to hopefully maintain and stabilize the economy. I'm not an economist, so I can't get in the nitty gritty on it. I just understand that inflation is a real thing and your dollar value it's buying power is losing buying power every single day. And if you don't stick it into something that is an asset, that's going to beat inflation, then you're losing your hard work that you've put in to earn this money.

(11:22): It's as simple as that, you are actually losing time because you produce something for a value. And what you produced is not even worth the time you put in it, as it was back back yesterday. Think about that trading your time from money. And the fact at your time is not worth what it was yesterday, because what you got paid for your time is not worth what it was yesterday. It's crazy. So these individuals with this money are sitting here. Let's just say for the sake of conversation, inflation is 5%. They're looking to make more interest, a more return on their investment than 5% so that they're beating inflation. If they get over 5%, they've won. If you put money into the bank right now, you're not even getting a percent in a savings account in a check deposit account, okay. In a CD certificate of deposit.

(12:11): So the, that is why individuals will put their money with someone else for that someone else to purchase an asset that is less risky and is going to in return, give them a higher return than inflation. So I'll give a prime example. I bought my first house, personal home, purchased it off the foreclosure market at the courthouse steps. And I used a family member's cash to buy it because you do, you have to produce cash. You gotta either show a bank letter that you can purchase, or you gotta have a cashier's check with you when you're purchasing these. You can't spend 30 days getting financing. So I used a family member's cash to purchase this home. And then this home was on the foreclosure market. It needed some maintenance done to it. It wasn't something that I would've been proud of to just move into.

(13:05): So I jumped inside of it and started doing some sweat equity to save money. Cause I didn't have a lot of money and I began to build value in it. And then I kept it for two years because that's the rule, if you, so your primary residents and you're in it for two years, then you skip on capital gains tax. What that is. If I buy it for 50 and I spend 20,000 in rehab and now I've got $70,000 in it. And then I sell it for a hundred thousand, there's $30,000 in profits that I just made. But that 30,000 does not get taxed because I lived in it as a primary residence for more than two years. Okay. As, as normal earned income, it doesn't get taxed as normal earned income. All right. So I moved at that point before I sold that house, I bought another foreclosure.

(13:52): And this time I did the same thing, I used another FA family members money. Now I got a track record, same person got a track record with them. So I buy this, the second house that's worth more upfront, costs me more, more rehab involved in it and worth more at the end as well than the first house. And I sell the first house. As soon as I can move into the second house. Well, the whole time I'm using this money, I'm paying this family member more money than what I borrowed when I give it back to him. And that is his interest on that money. And he was making more money than he would've made if he had his money into the bank account. And it was more secure because it was a piece of real estate that he knew would also appreciate over time instead of maybe a stock where a company makes a bad decision and it plummets, he knew that he could drive by this place and make sure that whoever was operating the rehab, he could check in and make sure there was progress where you're the last to know when you're in the stock market, if you're the average ordinary person.

(14:52): So then I began to expound on my knowledge with real estate and started seeking more knowledge because I was enjoying these little profits and I understood that the wealthy had it. And I started learning about the four power fours of the appreciation, depreciation, debt paydown and cash flow. And the in, I began to tell others that I was educating myself on this, that I was in the market to buy a house that I was looking for houses that were maintenance deferred. I was looking for apartment complexes and commercial buildings that people wanted to sell. And they wanted to get out of, I was looking for opportunity, but I was people about the opportunity I was looking for. And I was telling realtors, I was telling other real estate investors. I was telling my family and my friends and my social media network, because that multiplied the eyes.

(15:45): I got two eyes right here, right? I've got two eyes that I can look for opportunity in real estate, but that applied the eyes that was looking for opportunity in real estate to feed me. But then as a side note, it was also building credibility with my potential investors. And then I would began to start showing as I was working on my own home. And I was talking about real estate and talking about the information that I was learning in my education. I began to say, Hey, when an opportunity comes about, if you're interested in investing, then shoot me a private message. And I, over a period of time built enough of credibility to where I had investors that said, Hey, Chris, I've got 25,000 over here. I've got a hundred thousand over, over here. I'd like to invest with you. Can you gimme more detail?

(16:36): And I gave them a, I gave them an amazing return. My very first investor, I gave 10% to my very first two investors. I gave 10% interest. So if they gave me a hundred thousand and 12 months, they've made 10010% interest on a hundred. And then I also gave them a bonus 10% regardless. So it was almost like 10 points, I guess, is what you would really call it. I gave them a 10 point on it. So that a hundred thousand, they got an additional 10,000, regardless of the time period. So my investors made 20% over a 12 month period on their money. Now I've got some investors that are making just a straight 10%. I've got other investors that are making 13% annualized. I've got one, that's making a little over 20% because it's just an in and out. And I wanted to over give so that I could secure my position in their life as a, a, a credible operator in real estate, where they would feel comfortable.

(17:37): They just, you know, had a little more fear. So I had to earn their, their money more by paying them more. I had to give more away in the beginning so that I could get more later down the road. Next time I'm gonna say, Hey, instead of this, I can do this and it's gonna be a less return, but it's still gonna be a fantastic return. 10%, 13%. Where the heck are you going to find that any other place, the only place that I've seen, that you can find that is in real estate with such low risk. Let me thought that out there also, now you can go to the casino and you can get, you know, a hundred X, but what is the risk? You could throw it in crypto and I've got money in crypto, J throw it in crypto. And what is the risk? Now? You you've got 10,000, you know, thousand, 10,000 X possibility, but the risk is so much higher. And that's something you need to understand the higher, the risk, the higher the reward, but also the bigger, the loss you, that's, why you diversify and real estate is one of those areas that I have found that gives you the lowest risk, the best diversification and the highest return. So let me give an ask real quick. Since you're on, you can find me on Chris Garrison, Facebook, Chris Garrison, 84, Instagram, Chris Garrison, LinkedIn, Chris Garrison, 84 TikTok. You can find me on YouTube, Chris Garrison, and reach out to me. If you want to invest with a operator, that's got a track record and get double digit returns on your money. Then let's have a conversation. Now I do have to have a conversation with you, and I consider you a friend already, cuz you're listening to this podcast and you know about, but I wanna have a deeper conversation and see if we're a good fit because I enjoy using other people's money.

(19:24): And this is why at some points you run out. Even if you are a multimillionaire, you spend all your money on real estate. You stop scaling at some point because you do not have enough money, no matter how rich you are, you will run out. If you keep spending it or investing it into assets. Also, I like to leverage the bank and the bank likes to see some liquidity. They like to see a 10% liquidity of the loan amount that you're taking out. Okay. You gotta show something for the bank. And I a hundred percent believe in leverage, not over leveraging, but I do believe in leverage because I believe in scalability and I am trying to scale. And the more leverage that you can bring to the table, the faster you can scale. Again, I do not believe in over leveraging. I'm not gonna take a hundred percent of the money outta my asset from the bank or private investors or anyone else, because there is always the possibility of the market dropping.

(20:24): And that equity that you keep in the property is a safeguard because if I've got 20% equity and let's just say we lose 10% of equity because the market drops out. I still have 10% equity there. I still have a way to sell my interest in that asset and still walk away with money. You gotta be able to pay your investors back and you gotta be able to pay the bank back. So real estate is an amazing and amazing and amazing asset to own. And if you're not interested, if you've not gotten interested in real estate, then please there's a podcast called bigger pockets talks. I mean, they've just got a ton of information out there and amazing commun, just start listening to those podcasts when you're at the gym, when you're driving down the road and begin to gain some knowledge about real estate, whether you desire to ever operate in real estate or not, at least you have some kind of fundamental understanding of what it's about because you, if you not listen to this podcast or you not listen to any other real estate podcast, you might not understood that real estate appreciates over time.

(21:31): So it increases in value as it sits. It also brings you depreciation so that you can keep more of your money and give less to the government through taxes so that it also allowed debt pay down. When you've got a, a building on lands and there's a tenant leasing it, renting it, and they're paying your note. So that debt pay now is not coming outta your pocket. It's coming out of your tenants pocket and you may have not have known about cash flow. The fact that it doesn't take every penny to own real estate when you buy right. And we'll talk about buying right on another podcast. We're gonna talk about how you can do creative on another podcast. But today I wanted to give the fundamental of why real estate should be important in your life. And if you're sitting there with money, put it in a real estate.

(22:17): If you're a doctor and a surgeon or a lawyer or a high paid professional, put your money into real estate, connect with an operator like myself and look and find where you can beat inflation so that you truly are building up a great retirement. 100% passively. I'm gonna tell you a secret that's my end goal. My end goal is to be the bank because the best lifestyle is where your money's making you money and you're doing what you wanna do. I want you to live in success. If you could please leave me a five star review and a comment. Write me a comment because it helps the ag algorithm so that I can reach other individuals that are looking to increase their potential and, and develop themselves here. We talk about mindset, business and investing, and you can find me on Facebook in the bigger vision group. We've got a great community right now, currently over 800 members, a lot of motivational content mindset content that gets dropped there because that is exactly where we start. We have to start with ourselves so that we are able to produce something. We do weekly lives. We bring on incredible individuals that have have great stories and insight and drop golden nuggets that you can pick up and run with. So let's live in success and until next time let's grow together,

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