You're listening to the REI marketing nerds podcast, the leading resource for real estate investors who want to dominate their market online. Dan Barrett is the founder of AdWords nerds, a high tech digital agency focusing exclusively on helping real estate investors like you get more leads and deals online, outsmart your competition and live a freer, more awesome life. And now, your host, Dan Barrett.
(0:40) All right, what is up everybody, this is Daniel Barrett here from AdWords nerds.com. As always the place to go if you need more leads and deals for your real estate investing business online. Look, you know where to go, it is AdWords nerds.com. Folks, we have been doing this and only this online marketing for real estate investors for more than a decade. It ain't an accident. At this point. I could safely say, I at least kind of know what I'm talking about. And this week, I have an awesome guest that really knows what he is talking about. And I'm talking about Chris miles.
Now Chris Miles is here from money ripples.com. That is a website. It is also a podcast and is also a YouTube channel, where Chris spreads financial advice, specifically focusing on what you might say, are non traditional investments. Chris calls him an anti he calls himself an anti financial advisor, because he basically believes that the traditional financial advice that a lot of us get is kind of bunk. And that if we really want to retire and really want to get to a place where we only have to work because we choose to not because we have to.
We've got to think differently about how we invest and what we do with our money. Now, look, I am a business owner, I work with real estate investors every day. I know a little bit of financial lingo, but I don't consider myself super financially literate. I'm not like a big investment guy by any means. And Chris did a really fantastic job of explaining some pretty complicated things and making them very approachable.
So if you have any interest in ever retiring, or, you know doing stuff with your cash, mean, Chris is a great person to talk to, I cannot wait for you to hear this interview with Chris miles from money. ripples.com Chris miles will be on the show, man, thank you so much for being here.
(2:40) Hey, I love being here. And I appreciate you like seeing that twice. Because I was on an interview with Entrepreneur magazine where they said Money nipples. Listen, you're gonna find something totally different than me on there.
(2:52) There's like, yeah, there is like some kind of weird anti-tax show where they're gonna make hay out of the nipple metaphor, and it's gonna work for them. But no, we are talking about muddy ripples.com I have a whole bunch of different things I want to talk about with you.
You have a really deep financial background that I think it's gonna be super valuable for anybody listening to this, whether you're a real estate investor, or anybody in business, even if you're just personal life, I think this is going to be a really fascinating conversation. However, for people who aren't familiar with you, how would you describe what you do and what your businesses today?
(3:29) Yeah, I mean, you mentioned in the intro that I'm the anti financial advisor, right, which just means that I pretty much think that financial advisors and money more money managers and mutual funds in general suck. So that's pretty much it comes down to right, it really what we do is we help two things. We help people one on one strategize ways to help get out of the rat race, like actually, like have enough passive income where their work optionally work because they wants to not because they have to help them do that connected with deals.
And then we also have like a whole other branch for business, which is around infinite banking. And the crazy thing is, I don't have to do any of them. Because I'm financially independent myself. But because people suck at what they do, especially when they talk about passive income, or they talk about, you know, infinite banking, they still suck at it. That's why we exist.
So even though I should be retired on a beach right now. So kind of give you some background that I didn't start out that way. You know, I actually started out as a kid, like most kids raised in a middle class home hard working parents taught you good values about hard work, and in telling the truth and your word is your bond and all that kind of stuff, right? But the one thing that my parents didn't really teach me about was money. You know, what, the one thing they did teach me was money.
That was the lack thereof. You know, hey, we don't have enough money. We can't afford this. Do you think I made money? Money doesn't grow on trees. You know, those are all the kind of stupid phrase you hear grew up as a kid. I even heard phrase from my dad saying, I'm going to work till I'm dead because my job will literally kill me. Uh, he actually had strokes by the time he's in his 40s and even heart attacks by his 50s Surprisingly, he's almost 80 and still around with what was his arteries.
(4:54) What was he doing at the time where he was like, my job is gonna kill me. I'm gonna work on dead.
4:58 Oh, just the typical You know, he kind of a depression mentality, right? He worked really, really hard that you could stay with the same company forever. And then that company would lay you off, you know, and it didn't help course my parents going through divorce, that was hard on him too. So just stress. You know, stress in general is why I did it. And as a kid, I never wanted to be like that I wanted a different life. And I guess most kids, we always say, we don't want to be like our parents, right.
But that was true for me. Because I didn't want that lifestyle. I wanted freedom. I want to control my destiny, which is why even though I went to college, first one my family to do so I actually dropped out just before I got my bachelor's to become a business owner. And I was looking for something to do. And the first thing that came up that intrigued me was being a financial adviser, because I was kind of like, no, if you ever watched you ever watched The Wedding Singer with Adam Sandler, right? And he goes into that job at the bank. And he's like, he's like, Well, what's what's your experience? Like? Well, I got a jar on top of my fridge, I like put more money in it.
That's where you come in. Right? That's kind of what I was like, you know, I didn't really have a lot of financial background or knowledge. But hey, if you can basically pass a test with 70% and not have a criminal record, anybody can become a financial adviser. So I did. And I actually did that for several years. And then pretty soon my dad's are asking me for financial advice. He says, Chris, when are you going to actually help me?
You know, you're helping your clients? How about helping me out? So I sat down that very same table, he always gave me that great advice of save everything, spend nothing. I mean, the guy was such a tightwad. I mean, like, you could seriously Dave Ramsey would look up to him and say, Ooh, that's the guy. I want to be like when I grew up. That's what happened to Dave Ramsey. He knew my dad, right? Sure. Some like that. So anyways, so he was just that kind of tightwad. So I sit down with them.
He said, Hey, Chris, I'm 61 years old y2k sucked, you know, it did not help my portfolio at all. What can I do? And as I'm looking at his finances, this was 20 years ago, I'm looking at Mike. Well, Dad, even though you've been stuffing your 401 K, and you're debt free, he was so proud of that, right? Even though you've done all these things, you've done everything right. I'll be honest with you, you better hope you die in five years, because that's how much money you have before you run out if you try to retire today. Okay, Chris?
Well, that's not what I want to hear. Right, what other options you have? I said, I don't know you did everything, right. You, you stuffed in your money in the 401k got your match, you put in mutual funds, you're debt free. You have this house, I think you got an asset here. I don't know what you could be cash out, refi it and get pull money out? Invest it. Okay, Chris. All right. I gets debt, but I need something here. How do I do that? Where do I invest? I'm like, I don't know. Because you can't legally invest that in mutual funds. And even if you could, I wouldn't trust that the market will go up because I don't know what the future will hold. And, and I was in this dilemma. And it really bugged me that I could even help my dad.
And then I started realized that as I started talking to another real estate investor, he's like, Well, how many of your clients are financially free, Chris, but they don't worry about money. And as I looked at the ones, even the ones that were retired, like retired physicians, they still worry about running out of money. And then he said, Okay, Chris, well, good job. Nobody's financially free. How about this? How many of you guys, as financial advisors are financially free, not off the Commission's you're earning, but actually doing these mutual fund investments?
How many of you are actually financially free? And as I really was honest with myself, and I looked around mentally, you know, around the office, there's over 100 of us in that office. There have been guys at work there since the late 1970s. And they couldn't retire either. Yeah. And so I have this integrity crisis going on, right? Do I do like what some of my friends kept doing? Even after they found the truth, they just stay in their lane is put blinders on and say, well, at least I'm helping them do something that's better than nothing, right?
And so they do that, or do I leave, I chose the latter. I was like, in 2006, I'm out, I'm never gonna do this. Again. I'll never teach about money. I'll just be a mortgage broker. And I'll teach ballroom dancing on the side. And so I was doing that. And, and then pretty soon later that year, as I started to learn from my friends that were in real estate, I was able to be financially dependent myself where I had enough money coming in that I could quit. And that was a shocking place to be. I was 28 years old, didn't even know what to do with my life.
I didn't even think I'd be there that fast. I thought, if I were lucky, and I was cheap enough, like my dad, and saved up enough, maybe I have $2 million in a mutual fund to live on 3% a year, which is like that magic number, not the 4% rule that was been debunked a long ago, but 3% I can live on 60,000 a year and back 20 years ago, 60,000 a year sounds like a dream, you know, pretty inflation. So anyways, that's what happened.
And eventually I came out of retirement to teach people how to do it, because they kept asking me even when I even when people asked me what I did, I would stall and say things like, I sell drugs, because I'm like, What do I tell them? Like, I'm out kind of like a real estate investor, I've got some business streams of income coming in that I'm doing nothing for. But how do I describe this? And so I just say I sell drugs, you know, because that was an easier answer, then saying, I just found out ways to create passive streams of income, you know, and, and that's really what I teach today. And really, fortunately, I mean, we've helped hundreds and hundreds people do that. That is
(9:39) a really interesting story. There's a couple different angles I want to pull out of that, not the least of which I haven't done, it's like, I need to ask you what the hell infinite banking is. So we're gonna we're gonna we're gonna cover a lot of ground. Before we do that though, I actually want to go back to your career as a financial advisor. And I know like now you're you've got a pretty He sort of like negative look at it. But I'm wondering that moment where you sat down at the kitchen table with your dad, right?
Like, it's not a it's not any client. It's or dad. Right? Yeah. And I'm wondering if what one what that was like for you emotionally, right? Because it's just a weird sort of reversal of roles, but to what did that make you realize about the sort of different information you are giving your dad because He's your dad versus the kind of information that advisors typically give their clients, right. There's like, sometimes there's going to be a disconnect between, yeah, if somebody comes up to me and says, like, Hey, what should I do on Google ads or whatever?
Because that's what I do. I'll be like, Oh, you got to do blah, blah, blah, blah, blah. If my mom came up to me and said, I've got $5,000 to spend on Google ads. I'd be like, Well, okay, all right. All right. You know, like, I might treat it differently, right. So like, what was it like for you emotionally? And to? What did that make you realize about the different ways that people can the different kinds of information people give out, you know, if it's just a client versus whether it's like, friends and family and loved ones?
(11:02) Yeah, I think for me, I did. I'm one of those people, like, I just can't BS very well. So I mean, I treat him like every other client. The difference was, I was really nervous, though, because he was the guy that was always like, lecturing me all growing up, right. And so there's a lot of intimidation factor for me, he was probably the second most intimidating person I talked to the first being that guy was a very successful business owner with a family that, you know, pretty much sold off all their car dealerships to the guy that owned the Utah Jazz, you know, like, like, that was a nerve wracking appointment.
But he was probably the second most nervous appointment, just because that personal relationship, because I mean, come on, he wiped my butt when I was a kid, you know, now I'm the one trying to give him advice. You know, I know that was a mental image. He totally wanted to see, ya know, I
(11:43) was like, that comes up in every podcast. So I don't know what to say. It's just a thing that comes out when I talk. Yeah.
(11:49) So it's so it was different. But I'll tell you, it was it was serendipitous, because I was already starting to question things, right? I was already getting little chinks in the armor, like I mentioned, the most intimidating meaning I remember that business owner. And this applies anybody who's in real estate to because you own a business via if you're a wholesaler or flipper. It's the same. Yeah. But he's like, because I remember doing a presentation with my brother in law.
He was the one that came from that wealthy family. And he said, All right, Chris, let's just say give me $10,000 To play with today. You're saying you can make me 12%? Right? Because after my little presentation, showing him the stock market since 2000 BC, right. He's like, here's 12% and small cap 10% 10.7% in large cap stocks. Here's real estate at 3%. Right there with inflation. It sucks, you know, don't do that. And so, you know, he's like, Okay, well, if you're saying I can make 12% You're saying if I, if I give you $10,000 to play with, you're saying you can make me 1200 bucks this year, right.
I was like, Well, I can't make any guarantees, because past performance not indicative of future results. That was claimer. But yeah, you could. It's like, but Chris, I can take $10,000 I can invest it by buying a semi truck because he was still they saw it a few dealerships they had left. It's like, I can go buy a semi truck, put a down payment on it for 10,000 bucks, turn around, flip it a few months later, make $30,000. So 10,000, make 30 or 10,000.
Make 1200 Why would I invest with you? Yeah. And I was like, Ah, you should be diversified. You should put your eggs in one basket, besides businesses risky, ironic that I was in business myself trying to pitch him on why he shouldn't invest with me. And really, it was kind of like, you're really what it was was like, Liar Liar. Right? And which is pretty much why he didn't do business with me because, you know, liar. Liar. When when he's like, Objection, he's like, why?
Because it's damaging my case. overruled, like, I know, it's like, that's kind of like, damaged my case, it made perfect sense. And a lot of other things started coming out like the real rate of return in the stock market, the s&p for the last 30 years, the actual return, not the average, based on averages, right? Because if you've ever heard the example, you lose 50%, you can't go and make 50% to get back to breaking even right? That's what we all thought as financial advisors. I remember some guy came and trained us he's like, No, you go from 100,000 down to $50,000. Making 50%. You only made 25,000. You're only up to 75,000. Yeah, so if you lose 50, you need 100% rate of return. So if that happens, two years, you lose 51 year gained 100.
The next year, even though your real returns zero, your average rate of return will show 25%. And it was like a big lightbulb moment for me as a financial advisor. And I remember cornering one of the guys I said, Hey, I just realized if we would have lost money, even with the roaring 90s, we wouldn't lost money in y2k, we would all have more money not being in the market. And he said, you know, but yeah, you're you're in your late 20s You're young, you can take the risk besides long term, the market still gonna win, right? And I was so convinced. I'm like, well, the real real rich in the s&p 500.
The last 30 years has actually been 7.6%. Yeah, and most mutual funds never even get that. Give an example last 10 years, the s&p 500 to 10.1%, which was a crazy 10 year period anyways, but Fidelity's mutual funds that even the target retirement date funds did about just under just about 8%. And then you have to have the point seven 5% fees coming out so they only made 7.25% When the market did 10.1 What does that mean? Well, if that's a 3% difference, almost right?
That means if you're trying to translate that over, that means if it normally is 7.6, you're barely making what? Four and a half to 5%. Yeah. Which is more like reality. So when I start to see reality, and even with inflation, I would try to adjust numbers. I like what Ben Stein, you know, the actor, he said, he's like, numbers don't lie, but liars figure is what his dad taught him. And I would try to adjust numbers I tried to like, Okay, well, if I don't do you know, let's lower this to 8% average return. Ooh, that was horrible.
Well, my low inflation from 3% down to two, well, that's a little better. Right? So what a just numbers trying to make feel people feel better. But in reality, it was really it was it was hitting my integrity of like, well, this doesn't look good. If I put in real conservative numbers. There's not a lot of hope here for people even if they're starting in their 20s.
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(16:20) I think it's it's the stock market always strikes me as you know, I'm invested in stocks or I think lots of people are in one way or the other. But it's always the two things that have always struck me really oddly about stocks are one the value of your investment in them is so based on the day you decide to take it out. You're not I mean? Like it's like, there's like, a million dollars yesterday, and then today and not so much right. And it's like, the timing aspect has always felt so strange to me, right?
And then the other piece of it is just this like really weird. Do you kind of reference it when you're talking about mutual funds, but this really weird thing that everybody seems to know, but nobody ever seems to like talk about or act on, which is that active management seems to almost always underperform. Like just investing in an index. And it's like the, you get these situations where people have these amazing returns, and they're awesome, and everyone hoists them on their shoulders, and we throw confetti everywhere. But the number of people who have done that, like for any significant time period is vanishingly small. Right?
And it's it just always strikes me as I'm like, yeah, the smartest people in the world who only do this full time. And this is what they've spent their life's work doing. do worse than if I just invest a little bit in everything at once. It's always seem very strange to me. Do you feel like people have been, let's say, the average sort of public hears or financial, public or whatever?
Do you think people have just like a fundamentally flawed view of like, what the stock market is and what they're gonna get out of it? Is there some truth to our kind of narrative of the stock stock market always goes up? Caveat over time, caveat, you know, maybe not for you. But for everybody, on average, like, Is there any truth to that view of the world? Or do people just have like a fundamentally flawed view of the way the stock market works?
(18:13) Well, it's those half truths that always fool people, right? If you make some just partly true, you just take a little seed of truth, even the rest of it's a bunch of crap lie around it, you know, it's still going to be that way. Right? Yeah. It's it's like, what was it? It was a movie Pure country with George Strait, you know, way back in the 90s. But I think there's a farmer that wouldn't talk at all, but the one time he did, he's like, you know, when you see chicken poop, you get that white speck that white specks still chicken poop, right?
And it's kind of like truth that speck of truth is still makes it believable. So for example, you'd like you mentioned like stock market went up over time. That's true. And historically speaking, we don't know about the future. But historically speaking, if you look at at least a 15, year period, stock markets always been up, tenure periods almost always been up. I mean, the 2000s were a horrible decade, right?
I mean, you think about it, this is a great example, just because it goes up doesn't mean that it's gonna get you free, like in the year 2000, if you had money invested, and I had a lot of clients that were in this case where they threw in money into their IRAs, or whatever, and there was in the stock market, and the market hit high in March of 2000, and then start coming down for y2k minister to climb back up and then in 2007, hits that same high again, and then bam, crashes even worse, the next time around with the Great Recession, it took for the s&p 500 till 2013 to hit the 2000, High 13 years, but because of fees coming out, right, and because mutual funds usually don't perform as well. I did start hearing clients say, Oh, I finally made my money back until about 2015 when the market already going up.
25%. So someone might say, Oh, at least I'm back to zero, but no, you're not because in 15 years, I guarantee inflation doubled. So really, you still lost 50% And and that's the problem is that we are being deceived. Because all the marketing out there, all the education is being taught by financial institutions, the Fidelity's. Merrill Lynch's the Goldman Sachs, JP, Morgan's, they're all teaching the same stuff over and over, they're selling us a bill of goods, they teach it their financial visors, then teach you I know, because I was that guy.
All the trainers came from financial institutions trying to get you to sell their product, they were the experts that were teaching financial advisors to then turn around teach their clients, even the media, I mean, come on, who's buying all the airtime on on Fox News, right? It's gonna be the finest institutions, they are on any money channel, it's always the financial institutions, you're not gonna hear somebody come out and say, You know what, these, you know, Merrill Lynch, they suck, you know, and you should totally fire them. They're not gonna say that.
(20:34) So, alright. Well, that begs the question, which is, all right, well, if I'm not going to do the thing, which is you put your money in a mutual fund, put your money in whatever, right? Just throw it, throw it in the stock forever to the stock market, cross your fingers and hope that you retire on a day where the world is happy? If I'm not going to do that, it begs the question what we're doing instead, now you've you've talked a couple times about passive income. That's a big part of your story, right? It's like you've had these kind of multiple scenarios where you're like, Well, I don't technically have to work.
I've got enough money coming in passively in order to pay my bills, and therefore work is a choice. Right? So if that is the other option, let's talk about that a little bit. First of all, I would love for you to explain what you mean by passive income. I think a lot of people have ideas in their heads about what that means and what counts or what isn't or whatever. Right. So let's, let's define passive income, and then maybe give us some examples of types of passive income that people generate, or that people use in order to retire early or even just make their financial situation a little bit better.
(21:42) Yeah, the annoying thing is that there's so many people talking about passive income, and then you really start to pull back a curtain, you realize there's nothing passive about it, right? For example, there's people in the wholesaling space that say, oh, learn how to make passive income, no bull crap, I have a whole brand new business as a result of having a wholesaling business. That's anything but passive, semi passive income, some that you don't really work hard for, right, you're not actively working to get that return.
You know, that could be thing like having rental real estate, you know, if you're a flipper, right or your wholesaler, you cherry pick deals to go by the get the best one that you could turn around to be a rental, that money coming in, even though you might be managing yourself, I prefer never to manage my own properties. Because I suck at it, I always outsource it. So for me that's more passive, even though I would put that in the ballpark of kind of semi passive because you still have to have stewardship over it. And that's true with anything with money and wealth, you should still manage it yourself.
But it doesn't mean you have to really be bathing it right. You don't have to be changing its diaper too, right? So let the you know, let the property manager the pm deal with the tenants toilets in the trash that way. This could be investing in syndications. There's different types of real estate funds, right? You can invest in partnerships you can, I'm in a partnership right now, where they're actively buying and selling raw land, and they're doing seller financing terms and everything else. I'm doing nothing, I just have my money in it.
They're doing the work, we split it, I get 70 they get 30 You know, and, and I'm loving it, you know, I'm making 40% Plus returns on my money. You know, there's businesses, you can get a carwash, right? You can even do things like that there's even syndications that you can invest in car washes, crazy things that you can do nowadays, and the alternative investments based that really when you look at the stock market say why why would I want to create really have mediocre returns with high risk, which is really what the stock market is specifically mutual funds, right.
And that's the one thing that annoys me, when I see this in the real estate space is sometimes you'll see guys are like they're going out and they're buying a bunch of crypto or they're going out and they're trying to invest in stocks or trade stocks and they suck at it takes them away from the very business that they do best in which is real estate. And you know, there's not doing anything with real assets. I like to invest in real assets that generate actual income, real income. And that's the point you want to get to a point where you work in your even if you're working in real estate business, you work in it because you want to not because you have to you have enough real estate or passive income coming in, that allows you to be able to say, You know what, I could shut this sucker down and be fine. If you're in that place of power, you actually end up growing your business better because you relax, you have a better level head. You're not always money driven.
(24:07) Yeah, and you're not making decisions based on scarcity. Exactly. short sighted or whatever.
(24:12) Hey, guys, hope you enjoyed part one of this episode. It's just too good to limit to one show. Join us next week to hear the rest
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