Who is Not Telling You the Truth When it Comes to Your Investments?

Truth is the waters of financial advice are murky.
 
Chris Miles is a vocal critic of mainstream financial planning. He’s often described as the anti-financial advisor. 

Chris brings a fresh and critical perspective on what truly works in the realm of investing. This cuts through the noise, challenging preconceived notions and exposing the hidden truths in the financial world.
 
WHAT TO LISTEN FOR
1:28 Rethink Traditional Financial Advice
3:16 Real Estate as a Key Investment Strategy
17:07 Avoiding Investment Traps
19:05 Diversification Beyond Stocks 

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GUEST: CHRIS MILES
Chris Miles, the Cash Flow Expert and Anti-Financial Advisor, is a leading authority teaching entrepreneurs and professionals how to get their money working for them TODAY! He’s an author, podcast host of the Money Ripples Podcast, has been featured in US News, CNN Money, Entrepreneurs on Fire, and BiggerPockets

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Transcript

Chris Miles (00:00):

People like to say, well, what's an anti-Financial advisor? And I say, well, it's pretty much somebody who says financial advisors suck is what it is, right?

Announcer (00:14):

This is the South Storage Podcast where we share the knowledge and skills from the industry's leading investors, developers, and operators to help you launch and grow your South storage business. Your host, Scott Myers, over the past 18 years has acquired, developed, converted and syndicated nearly 5 million square feet of south storage nationwide with the help of his incredible team@southstorageinvesting.com, who has helped thousands of people achieve greatness in South storage.

Scott Meyers (00:47):

Hello everyone, and welcome back to the South Storage Podcast. I'm your host of Scott Myers, and on today's episode we have my friend at Chris Miles who is the anti Financianal advisor who's going to talk to you about ways to invest a little differently than what most folks have been teaching and or advising. Now, Chris and I have known each other for a number of years. We met at a mastermind that focuses on just that investing both actively as well as passively. And so he and I run around in the same circles in the terms of private equity in real estate, but quite honestly, and just ways to be able to manage and be good stewards of our money as well as those of others. So with that, Chris, good to see you again. Welcome to the show,

Chris Miles (01:28):

Scott. It's such an honor to be back again,

Scott Meyers (01:30):

So I appreciate the fact that you were taking time out.

(01:34):

You are also, once again involving and immersing yourself in education as well as a group of investors. So taking time out of another mastermind to spend time with us. So tell us a little bit about what 2024 has looked like so far and what your journey looks like as we head into this. Well, maybe, yeah, hold on a second at a point, Emily, just Ian or Doug. So Chris, tell us a little bit about what your approach is to 2024 in this economy that seems to be ever changing with so many different opinions on where we're heading and what to do.

Chris Miles (02:08):

Yeah, there's been as many opinions about money as there are about political candidates aren't there? I mean, true statement, let's be honest. Everybody's polarized in all kinds of directions and it doesn't help that you got TikTok and Instagram influencers saying their stuff, and you got still the OGs of the space, like your good old Dave Ramsey's that ruin about things about money too.

(02:28):

So we got a lot of different things, but for the most part, 20, 24 for me and for what we teach our clients as well, it's really been kind of a steady as she goes. But when you hear stuff out there, that's when you know to do the opposite. Whenever you hear things in the news and the media, it's already too late. For example, in December, I remember I was actually in a mastermind, the one I'm attending right now, and in that mastermind, the guy was going through all the statistics. He's saying, Hey, listen, mortgage rates in 20, 20 October, they hit a peak. They were up near 8% for a 30 year mortgage. Well now they've dropped over 1% and this is even as of December. He says, just that alone, 1% drop and then mortgage rate means there's 5 million borrowers that can now buy into a property.

(03:16):

And so I said, okay, cool. So 5 million can now qualify. They couldn't qualify before. Well, of course those rates kept going, they came back up, but they've come back down. They're still really around the same rates as what they were in December. Well, his thing was, listen, we're still undersupplied. People have been delaying buying properties for a while because they're waiting for rates to come down. He's like, at what point? He's like, I think we're going to see appreciation once again, 5%, maybe more. So I immediately went to my clients and said, guess what guys? Here's the stats. Here's the numbers and everything. I think now is the time to buy. Even though everybody's telling you don't buy real estate, now is the time. In fact, it'll eventually come out in the media. The time will say, eventually I was like, it'll probably be summertime.

(03:58):

They say, oh hey, real estate's actually. It's good. In fact, there's competitive offers right now, and that's the time you don't want to be buying. You don't want to have to compete with everybody. So buy it now. Buy it in the winter time before it becomes spring and summer. Well, lo and behold, what do we see? Last week we see reports coming out February, numbers for existing home sales, they increased, mortgage applications went up. I mean, all these things happened just like clockwork. I even now saw my podcast back in January. I made sure that they got it later than my clients did. Right? But still, I mean it, it made it seem like I was a profit, but it wasn't. All you have to really do is besides looking at data, it's just listen to what the media says and then do the opposite.

(04:36):

Because when the media says something, it's already too late. They're always driving with the rear view mirror and ne ver with looking out the front windshield. And so you have to be really careful who you listen to in this space.

Scott Meyers (04:48):

Well, Chris, and that's why you're here and that's why we've aligned with you and so thankful for you and also for sharing with Storage Nation a little bit about your approach to investing.

(04:58):

And so I want to dive into your backstory and how you came to the place where you realized that the traditional advising, if you will, or advice that is given by advisors. Well, it's not all created equal first of all. And second of all, the entire, I don't want to say the entire industry, but the industry seems to follow some norms and some basics that you said kind of took a look into and just said, I'm not going to do this and I'm going to go out on my own and I'm going to kind of distance myself from that group and I'm going to tell it like it is.

(05:29):

You just told us over the past three or four minutes. So share a little bit about your journey and then how you came to the realization that you can help people by going your own way and doing what you just said, which is taking the data and then analyzing it and doing the best you can for your folks in light of just doing whatever it else does.

Chris Miles (05:47):

People are like to say, well, what's an anti financianal advisor? And I say, well, it's pretty much somebody who says financial advisors suck is what it is. And the reason be is I used to be one, I was a financial advisor for a period of about four years in the early two thousands. Before that time, I wasn't planning to go into financial advising. My plan was actually go to college, become a business consultant, and then go and collect big checks with corporations doing that. However, I realized pretty quickly that if I'm going to be a business consultant, I should have real life business experience because one thing that's big for me and the way I was raised was that you look for evidence, you look for proof. You don't just preach something just because people think it's popular. You preach something. Right?

(06:31):

When it came to money, I wasn't like I was a genius either because I mean, I was good with math, but the truth is my dad was always teaching things like, Hey, we can't afford this. What do you think? Money grows on trees. I'm not made of money. I would hear those depression era kind of teachings. And so when I got to being older, and especially when I became a financial advisor, because I was the first business I found that was going to try to do to get some experience, and then I eventually never went back to college, I actually dropped out and stayed down that path of being an entrepreneur and financial advisor. But as I did it, it was really easy to accept because he taught me save everything, spend nothing and don't get debt. Well, that's exactly what they teach you as a financial advisor.

(07:11):

They tell you how to keep your money in prison is save it, everything, stuff it away in your mutual funds forever, and then hopefully someday you have something. And about four years in, I remember my dad reached out to me, he says, Chris, what are you become my financial advisor, which I never expected. You know how it is when you're dealing with family, that's the guy that changed your diapers. You don't think he would actually listen to your advice when it comes to money, especially when he was the one that taught you about money in the first place. Well, I sat down with him. He says, Chris, I'm 61 years old. I'm burnt out. I've already had heart attacks and strokes to this point. I want to quit. How can I do that? So I looked at his money, he'd been stuff at his 401k for decades you've been taught to do, he paid off all of his debt, including his house early.

(07:53):

So he was totally debt free and stuffed his 401k for decades. You would think he's the model example that Dave Ramsey tells you, this guy should be yelling free him on my radio show. However, I looked at his numbers. I said, dad, here's the deal. If you're retire today, you better hope you die in five years because that's when you're going to run out of money. Okay, Chris, that's not what I want to hear. Can you give me something else here? And I said, I don't know. You've done everything from what I teach as a financial advisor. And that right there, that's what got me stuck. I was like, I don't know what to do. And that got me open to seeing something else. A few weeks later, I'm talking with a friend I hired to be a financial advisor, but then he left to go do this crazy thing called real estate investing specifically.

(08:36):

He was doing more flipping and things like that. And I remember we were having this argument, what's better? Stocks are real estate. And he stopped me. He said, Chris, how many of your clients are truly financially free where they don't worry about money? I said, oh, you had to throw that last part in. They all worry about money. They all worry about maybe outliving their money or running out. So none are free that way. Okay, Chris, way to go. How about this? How many of you guys as financial advisors are financially free, not off the commission journey, but actually doing these investments, investing in these mutual funds. As I was really lost with myself, I knew there was guys working in the office since the late 1970s, and yet they still couldn't retire either. I said, none. There's your problem, Chris. And so that got me down this taking the matrix red pill, looking at real estate investing, right?

(09:24):

Started to look at it because again, I like evidence. I like to know that things work. And he pointed out very plainly is that the evidence was there, it's not working. But yet I've seen on the real estate side, I know Scott, you have too, is that there are people making great money on the real estate side, some even making plenty of passive income that they don't have to really actively work. And that's where I shifted. In fact, later that year in 2006, I was able to retire myself too.

Scott Meyers (09:51):

And so Chris, I'm thinking this is a question that comes up a lot in conversations, and you certainly addressed this many times with your clients, but until you sit down and either speak with a financial advisor or you just do the math when you recognize, okay, here's what I'm making right now. Here's what it takes to live out.

(10:09):

Here's my break even point or whatever that looks like. Here's what I need to live on. And then they take a look at their retirement, when they stop their active income, when the paychecks don't come in, how long is this going to last?

Chris Miles (10:20):

And then just reverse engineer it or even maybe make it last a little bit longer in terms of the investments that are still in place. But I think for probably better than I would say 90% of folks out there, it's a very sobering exercise when they realize like your dad, when you sat down and went through this exercise with him that we're only going to make it five years and we're only going to make it x number of years. And even the financial advising community that you just mentioned, if these folks weren't getting a paycheck from commissions fees and their small investments, they're going to be a deep dodo as well.

Scott Meyers (10:52):

Why is this such a blind spot for us, Chris? Well, it's a phrase. I often say I'm probably paraphrasing someone else that's wiser than I am, but it's a phrase that just because 5 billion people believe it to be true doesn't mean it's true. Just because the majority of the population thinks something is right doesn't mean it's right. And that's what's happened. We have literally, this is almost like the pharmaceutical industry, but it's the financial industry. Billions of dollars are being marketed to tell you that this is the thing to do. Why? Because financial institutions want you to invest with them who works for financial institutions, financial advisors, even the financial experts you see out there, even when you go to financial tv, who are the ones placing all the ads to pay for that channel? Financial institutions like your Fidelities, your Merrill Lynches and so on, and Goldman Sachs, they're the ones paying the bills.

Chris Miles (11:40):

They're the ones providing the education to them be sold to you as a bill of goods. And that's what I realized. I was really just a salesman in a suit. I wasn't really a financial expert. I wasn't doing anything different than what most people that are Savers of America are doing. And let's look at the truth. I talk about evidence, right? Well, there's one client I remember who came to us. He actually found our podcast and from me being on another podcast like yours, and he said, Hey, I went, I just retired from the military. I have a million dollars in my 401k. My financial advisor just said, congratulations, you can now live on 3%. The new rule, the 4% rule has been being debunked a long time ago. 3%. He did the math. He's like, wait a minute. So you're saying I have a million dollars.

Scott Meyers (12:24):

I got to live on 30,000 a year in the state of California. That's not possible. And he's like, I'm a millionaire, but I'm broke. And so he started looking for answers. That's where he kind of came our way. Well, long story short, as we got into other alternative investments, things like he had some rentals, like some duplexes, he got into some things like syndications, like what you offer. He did some things there. He even did some things in oil and gas, and next thing you know, he went from making 30,000 a year to a hundred to 130,000 a year. And that guess, sorry, I didn't mean to interrupt Chris, and I think that's the point that I'm trying to make here is that until you sit down and take a look at that, I would guess that most people out there really better than 90% are going to have to have some type of passive income that if they want to slow down and retire, either quit their job or just stop whatever they have at the end of that time that they've accumulated is most likely not going to be enough.

Chris Miles (13:16):

And so obviously you found real estate, we found real estate, and you begin helping other folks. And so let's pick up the story from there then. How did the journey then go in a different direction? Yeah, for me, I ended up going down the path of doing passive investing, even lending out my money, letting other people invest it. I did more of that passive type versus active real estate. But later that next year after I quit being a financial advisor, I was actually able to retire myself when I was 28, almost 29 years old, which is a weird feeling one because none of my butts I could hang out with in the middle of the day. So I was getting kind of antsy and bored. But two is of course everyone wanted to know how I did it. And that's what kind of pulled me out of retirement in 2007 to teach people.

Scott Meyers (14:02):

That very thing is like, well, how'd you get out of the rat race? I mean, there's a lot of things that happened since 2007, obviously recessions that kicked my butt. I actually went back in the rat race, had to dig out of a debt hole and then get back out of the rat race once again after being in it. I had to retire a second time by the end of 2016 with getting enough passive income to pay for my bills. But still, if anything I've learned, I mean, I was 39 years old. I did it the second time. I mean, think about it. I lost it all. I mean, I went beyond bankrupt. I didn't go bankrupt. I actually decided to pay back that debt so bankrupt, at least hit the reset button to go to zero. I had to dig out of the debt hole and then get myself out of the rat race again by the time I was 39 years old.

Chris Miles (14:45):

And if anything that's proven, I was able to make it work, not just for me, but even clients too. And that's difference because Fidelity, they're the largest 401k provider out there. They have 45 million clients. And I mentioned one of our clients has a million dollars. Do you know how rare that is? Because out of Fidelity, how many of them have at least a million dollars? It's 810,000 out of 45 million. It's just over one point a half percent. So think about it, only about one point a half percent have at least a million dollars. And of that, the Transamerica did a study separate and surveyed those people saying, how free do you feel? How good are you? 35% of those that had a million dollars or more surveyed said it would take a miracle for me be to retire. Why? Because the same reason that Dan did where he had a million bucks and they're telling him to live on 30,000 a year, he is like, I can't retire off that.

Scott Meyers (15:39):

That's not enough. And of course, there's going to be somebody listening to this overseas in some other countries saying, oh, that's plenty of money. I get it. Yes. Or maybe you're single or something like that. I know their circumstances. But for most of Americans, 30,000 years is not enough. Most of the people I work with want at least 10,000 a month. And if you're going to do that in traditional financial planning, you got to have at least 3.33 million saved up, not 1 million. So that's why so many people don't feel free. It's less than 1% success rate if you put in those terms. So think about it. That's like going to Google seeing a review of a restaurant saying, well, I see these 99 1 star reviews, but there's this one five star review from their mom. It's got to be a good restaurant. That's what financial advising is.

Chris Miles (16:22):

And we even joke about meteorologists. They can be right 50% of the time and keep the jobs yet folks that are in charge of your retirement dollars with only 1% success rate, something is wrong with the math there in the short time that we have here, Chris, I know we can't really go do a deep dive into everything that you've done. You've touched on real estate, but if you would at least let's start to talk about some of the frameworks, some things that people should be looking at if they haven't already begun to go down this path, maybe some prescriptions for the masses out there that they can check off the list and begin working on. The biggest thing is get your money out of prison, really, because everything's taught you in financial advising. It's been about locking your money away, locking those 4 0 1 ks, lock it away in those IRAs, right?

Scott Meyers (17:07):

Lock 'em away. Don't touch 'em, set it and forget it is the quote we always hear. Just put it away and hopefully it'll be there someday that they also tell you, pay off your house, pay off all your debt, and I think there's some debt you should pay off, but try to pay off your house early. Well, you get debt free. And Scott, I know you've had clients like this, we often have some of the same people that follow us and they get to that point. Dave Ramsey will say, you're my poster child. Yet they'll come to us and say, I can't retire. I can't quit. I'm asset rich, cash poor, I have net worth. But that net worth is worthless unless it turns into income. And so the big thing is how do we get your money out of prison instead of locking up an equity at your house that you could possibly lose equity potentially like it happened in the last recession.

Chris Miles (17:53):

You can block your money away in these IRAs of 4 0 1 Ks, but then for what if we could get that back into your possession and use that? So we get a lot of our clients to say, how do we get this money out? And then we get it deployed. We get it into these other investments that actually do generate predictable income, predictable income growth, things that you can actually, you really don't get in the stock market, and you might even get some tax benefits, which would be awesome too. You just don't get that normally. So that's the kind of thing we really look for is we really want to get that money out of the prison and get it into your control. And so I don't care if it's even in a savings account, some people will freak out about that. That's why we talk about Infinite Bank is an alternative to a savings account, but getting it there to store it, but then to get it out and deployed so you get that cashflow coming in.

Scott Meyers (18:39):

So Chris, I know one of the other things that you talked about is diversification within that realm as well, and not only in looking into real estate, but just other markets, whether it be virtually or looking at other types of assets to invest in versus paper we see in the stock market. So what are some of their avenues or even some other areas, asset classes that folks should be or could be looking at?

Chris Miles (19:05):

Yeah, you're right. Because the funny thing is they tell you you're supposed to be diversified, but they're always in paper assets. It's just mutual funds, right? It's like mutual funds and insurance is not it. And yeah, I might use insurance a little bit for keeping my money liquid, but for the most part, I'm using anything that's real estate backed, and I love a variety of real estate. I know, Scott, you get this.

(19:24):

I mean, the great thing about real estate is that it's not just one dimensional. It's not just you're buying a rental in your backyard, which doesn't even cashflow, and you're trying to be the property manager and you're stuck. I mean, you can buy anything from self storage, you buy it to apartments which suck right now, you can buy it to, you can buy it to, like I said, oil and gas. You get mineral rights from that. You can go and lend your money. You can do short-term lending. You could go do stuff with that. Or longer term, it could be different types of funds where it might be gathering funds to go and invest in multiple deals. There's so many different ways to do it. And yes, you can even get rentals, although I am sucky property manager, so I'll usually get turnkey rentals if I'm going to get a rental so somebody else manages the property for me.

(20:06):

I mean, there's just so many opportunities. In fact, there's even things like franchises. You can kind of go into quasi real estate with business mixed in. There's a little bit of extra layer risk there. But I mean, franchisees like car washes that are often cash cows, right? Heck, if money launderers love car washes, why don't you? So there's opportunities like that. I mean, I even get into raw land. I have a partnership in that where I'm not the raw land investor per se. I'm not brilliant at doing that. So I have somebody else doing it as a 30% partner. I'm 70% as the financier, and we split the cost, but there's just so many ways to do that. Yeah, I'll also get gold and silver. I'll have some of that too. I'll invest in business as well. My business ideally, not somebody else's as much, although I did get asked to be a shark on a shark tanklike show that's trying to get launched on tv. I was like, no, I don't want to have to invest money in somebody else's business that I can't control. So I mean, there's just so many ways to diversify outside of dealing with just dealing with typical stocks, paper assets.

(21:09):

It's interesting as we continue to obviously take a look at our balance sheet and revisit our investing strategies. And yes, we see, well, lemme see. I see shiny objects out there and everybody's got a good or a better investment because either they're pitching it or they're investing in it that everybody wants to justify the reasons why they've invested in not what they're investing in, even if it's not doing well in the market as one of those asset classes that you just mentioned. But some good advice that I latched onto that I believe to be true, and that is there's folks that are investing in their own businesses. And if they're in real estate right now, at least like myself speaking, for me personally, why would I invest in somebody else's land project or another, a mobile home park or into multifamily or a group of turnkey rentals when I already know what my returns are going to be with a reasonable amount of sureness that we are going to meet these projections and achieve these types of returns?

(22:13):

Because it's the asset class I've been in, I've been doing it for 30 years, and it's storage is a simple, predictable business model that does very well during a recession and the boom time, there's not a whole lot of misnomers or curve balls that are going to be thrown my way that are going to throw off my projections. And if they're high me on the general side and the GP side, then why would I invest as an LP and not have control in somebody? And so I took that advice and I think that's very wise. However, it's not for everyone and not everybody's already investing in real estate, but even if you are, whether you're investing in real estate or other asset classes or just hard assets as opposed to investing into the stock market, we're still beholden to a lot of variables out there from the lenders, even from a private equity and some of these other competing forces against us.

(23:01):

And so there are these, as you term it, and I love this term, lies of omissions out there. And so what are some of those things that we really need to look out for no matter where we are? But I would say especially if we're investing in hard assets right now. Yeah, I love what you're saying because I believe that your business is your number one investment, whatever that business is. If it's in self storage, great. You hone in there, you do that if it's you're the doctor or whatever it might be, or a dentist, right? Focus there. That's your number one cash, not just cash flow investment, but it's like the number one you can control. It's what you do. Stay in that lane, right? It's kind of like my brother-in-Law, when I went to him when I was a financial advisor, he was in a rich family and I was trying to get him to invest with me so that all the rest of his rich family members would invest with me too.

(23:49):

He says, Chris, if I gave you 10,000 to play with, you're saying you might be able to make me a 12% return on the stock market, which we never can do. But I was like, yeah. He's like, well, that's 1200 bucks a year with that 10 grand Chris, I could take that same 10 grand. I could put a down payment on a big rig, which he was selling cars or selling big rig trucks. He's like, I can put 10 grand on a big rig and a few months later sell it for 20,000 profit. So why would I put my money with you? And I said, well, you should be diversified. You should bowl your rigs in one basket. And that's where he kind of said, yep, that's bull crap, Chris. We'll see you later. And he didn't invest with me, which was good. So I mean, is there truth in the middle?

(24:26):

Yes. I mean, it's true. That should be your number one investment, and I think he's right. But if that's your one pony that you're betting on, that could be a little bit risky. So that's why we want multiple streams of income coming in. What you don't want is you don't want multiple streams of active income coming in because if that takes you away from your specialty, right? I know Scott with you, self storage, if it takes you away from that, that's not a good thing because now you're losing money in the place that you can control and make it work. So to get things that are more passive, something that's a little bit more hands-off, great, do that. But yeah, don't try to. I always make it. The thing is with money ripples, when I have with my company, I don't have to do money ripples at all my company, I could shut it down today and be just fine because I've got other streams of income coming in.

(25:14):

They're taking care of my needs. So I think that's kind of one of the wise advice you can give is it's not just about diversification. It's more diversification of income streams to help protect yourself. Have good cash reserves in a liquid place. You can actually get it. Don't trap it in places like equity in homes. Don't do that because I made that mistake in the last recession. That's what got me in trouble. I thought, I need that equity. I can always just refinance my house and get it out. What if the banks and the lenders stop doing that, right? Don't buy into the fact that that's your money's safe inside of a property. I'd rather keep that money in my possession and my control. Yes, I don't mind having equity. That's great, but don't bet, again, all the eggs in that one basket saying, let's keep that equity basket over there and then realize that you're stuck and then you can't sell it and then you're really trapped.

(26:03):

There was an investment book that I read many, many years ago when I began investing into real estate, and there was a comparison. And this gentleman, the author, had drawn out this chart showing what it looks like to invest in a property, put your money in it, whether it's coming from you converted an IRA to self-directed, or it's your own cash and you put into a deal, it's down payment, and then you grow the value. Maybe you refinance and recapitalize and bring some of that back out, but there's still a amount of equity that sits in there and you've got some modest increases, rental rates and what have you, and it grows in value. But that you still got that equity tied up in there. And then he showed that model after 30 years or so, something like that versus the model where you do just like your friend did with the big rake.

Scott Meyers (26:45):

And I put this money to work, whether it's in real estate or something else, and as long as I have the knowledge, the skillset and air in my lungs, I can take that money, that down payment, put it into a property crate value, and then instead of letting it sit there, once I've created this big jump in value and just now write out some modest rental rates increases, I sell it and then I grab all the profits back a hundred percent. Now I buy two more or I buy a bigger one, and then I just replicate that. And then at the end of 30 years, I don't remember what the amount was, Chris, but as you can imagine, it was exponentially more, the retirement looked exponentially greater or that big pot at the end was much greater than if you were just grab some cash, buy a deal, maybe a second deal along the way, putting that equity to bed, as you just mentioned, as long as you are smart about it, you have the ability and the know-how to go out and create it, then yeah, why not?

(27:36):

As long as you can do it, continue to replicate it until you're ready to slow down. We will never stop, but slow down. So I'm assuming that's essentially what you're saying, but let's talk about then what does that look like for folks that maybe they don't have the time, they've got a practice that they're running right now and they're going to become passive investors and they're not going to go out and do a ton of research or they don't have the time. They don't want to be active as you mentioned, because that is not wise as well. We've talked a lot, not only you and I, Chris, but we have here on the podcast to Storage Nation about betting on the jockey versus the horse and what that looks like. But what are some of the maybe overarching, call it not even 30,000 foot, but maybe 10,000 foot for some folks that need to be looking, if they're inspired by this and they want to begin heading down this path, what are some of the first steps that they should take?

Chris Miles (28:24):

Well, the first steps is when I talk about getting money out of prison, is figuring out where it is. For example, on our website, we have a passive income calculator. We can put in some numbers and we could pretty accurately predict in 12 months what kind of passive could we create? Well, why? Well, because we figure out what do you have sitting in liquid savings? What do you have an old 4 0 1 Ks, not current 4 0 1 Ks where it's locked in prison, but old ones or maybe IRAs, there'd be something done with that. Could we self-direct that money? Do you have equity in your current real estate even though we're not trying to do a whole lot of cash out refinances the way the rates are today. But even, I'll tell you another big one that a lot of people miss is return on equity. So many people will tell me like, oh yeah, Chris, I do real estate.

(29:04):

I've got properties. But then we look at the return on equity. It's ridiculous, especially if you're on the western half of the United States. It's the worst When I see clients from there. For example, I had one client out in San Diego. He had his own home, plus he had an investment property. It was his very first property. They were very married to it emotionally. And I asked him, well, what's your cash flow on that property after you pay all expenses? He said, 200 bucks a month. What's your equity? $700,000. You do the math, that's a 0.3% return on his equity. Now he's just thinking, well, it's 200 bucks a month. So he got the little Dave Ramsey blinders on, right? He's thinking, well man, I'm making 200 bucks a month, but if I keep paying down office, this mortgage, I'll eventually pay for mortgage. I'll have 2,400 a month that's coming in and I'll have no debt, right?

(29:52):

I'll be debt free in six years. I said, if we cash out of the money and that 7,000, we can even potentially 10 35, or sorry, 10 31 exchange into other properties, and I know you may have deals that potentially going to go into as well, right? I was like, you moved that in there. If you only get a 10% rate of return, that's $70,000 a year. That's about 6,000 a month versus 200 a month. And he's like, ah. But I don't know if I pay it off though. It took me two years, two years to get him comfortable to finally say, I should sell this property and buy others. A few months ago he actually emailed me and says, Chris, just give me an update. I did finally sell the property like you told me to. And now that money is producing 8,300 a month, so a hundred grand a year.

(30:42):

He's now making from that equity. It was sitting there. He was hoping to make 2,400 a month. Now he's making a hundred grand a year, and he's still a year away from he was supposed to have that debt paid off. So he's already ahead of the game, able to keep taking that money, reinvesting it to build that. I call it income avalanche. And so that's what you need to do. And so when you're looking at deals, and I love what you said, Scott, because if it's not you, then who? If it's not you doing the active investing, you got to find somebody else to do the active investing for you and it's got to be somebody you could trust. So the thing I brag about to my clients about you, Scott, is that you've been in the game forever. I don't want to make you sound old, but you've been around for more than a few years.

(31:23):

You've been through a few market cycles. Yeah. Your experience, you and I have both got gray hairs and lost some of those areas in the process. So that's a good thing. You want somebody who's had their teeth kicked down on different market cycles. I mean, even the last two years have been rough a little bit. Mean learning from those and knowing how to adjust and flow, that's the kind of person I like to put my money with and trust. It's the people that have experience, not the guy that the kid that showed up, he's 30 years old, say, Hey, I've been invested since 2018. I've made good money. Everybody made great money in 2018. Dogs can make money in 2018, but it's the people that have been through the market cycles. They know what to look for. They know the pitfalls. They stay in their lane.

(32:03):

They don't go and invest. They'll say, you know what? I'm bored of apartment investing. I'm going to go buy marijuana farms or coffee farms or something like that. I'm going to do hotels now. It makes us a pivot, but don't take my money and Guinea pig with it. I don't want to be the Guinea pig for your money. I want you to be a Guinea pig with your own money. Do that thing, the thing that you know like the back of your hand and do that. And so you can always find those people yourself, which is tough. Some of the best marketers or some of the biggest charlatans and people will rip you off the cooks out there. So either you find it yourself or you find good groups. That's why I joined mastermind groups to find those people like I met you, Scott, because of that, you find those people that are birds of feather flock together.

(32:42):

People with good integrity that I've always tried to pay back their investors no matter what. I had a guy that's done some short-term lending for some of my clients, and he was bragging repeatedly in the last few days. He won't stop talking to me about it, about how he took over a deal. He was a 25% partner in, bought him out even though there's nothing to buy out. It was going down the toilet fast. He basically bailed out the deal to save the investors in that deal. And those are the kind of people I love. It's the unsung heroes sometimes that are there to make sure that I want to protect my client's money. And that's what I look for too, is I look for people that have experience like you, Scott, have the integrity as well, and they're willing to do what's right. Yeah, there's a whole lot that we can unpack there, but we have to be mindful of your time here.

Scott Meyers (33:30):

Chris, if you don't mind, I'd love to do a round two. I know you got a mastermind to get back to, but I have several other things that I wanted to share with Storage Nation about your background and your story. But a couple things to just add onto what you mentioned, and I think people find themselves and Storage Nation, this is you out there. They're stepping over the dollars to get to the pennies, and as you said, these people get emotionally attached to these properties without doing the math and the logic that sits behind it, realizing it. If he could have tapped into that gentleman could have tapped into that 700,000 in equity so much earlier, how much further down the path would he have been? But those are just some of the things that you had mentioned. And once again, our folks have heard many, many times the advice that you had given on following folks that have been around for a little while.

(34:11):

And that's not just coming from a couple of guys that are experienced, but that's true for myself. They call it the advice, but the experience that people share with me that I internalize are from those folks, the generals that walk with a limp that have been into battle a few times, I can see a little further down the road. Those are the folks that I want to hear from and learn from. And so with that, as we're looking at Legacy and looking back on your career, Chris, and you're one of those folks that I'd love to ask this question of, because you've done 180 degree pivot from where you started. And so for Storage Nation out there, if you could go back to your 25-year-old self, or maybe 22 when you got out of college and began into the investment world now, what advice would you give or what experience would you share with your 22-year-old self man?

Chris Miles (35:01):

I mean, I think the biggest thing is just you get what it is. It's like the hard experiences you don't have to go through again, but you're glad you did because that's where you learned the lessons. That's how you knew how to create wisdom. But I would just say that reinforce that is that keep your eyes open. Question everything, right? Question anything that's out there. Question whether you're being taught, even if I learned when you're faster as a financial advisor, what was going wrong there? I mean, that would've helped me, but it also would've helped me avoid creating damage with my clients, the ones that trusted me saying, I'll throw my money in the market. That's what everybody else is doing. If I would've questioned it faster, I would've got out faster. And I think that's the thing is just be open, be willing to question everything, even if you think it's true.

Scott Meyers (35:48):

Be willing to question, agreed, and very good advice for everyone. I think once again, hindsight comes into play as you're saying this, and we can all be Monday quarterbacks. But yeah, just questioning if you ask those questions. I think you'll arrive at the answer much sooner as you mentioned, and maybe not go down the wrong path or delay that any much longer. So very, very good, very sound as always, Chris, thanks for your time. I appreciate that so much that you've taken time out from your Mastermind down there for this. And if you could please share Money Ripples is an incredible resource. And you had mentioned that the passive income calculator, and I know some folks are probably wanting to know where to be able to find that as a first step. So how can they get in contact with you and what's the best ways to connect with Money Ripples?

Chris Miles (36:36):

Yeah, you find that calculator as well as you can contact us at moneyripples.com. That's R-I-P-P-L-E s.com. Or just like my shirt says here, well, besides the Loving Passive income, got My Money Ripples there, right? You got that. But that's also the name of our podcast, the Money Ripples podcast you can follow as well. Perfect.

Scott Meyers (36:53):

Perfect. Well, Chris, once again, appreciate that folks. I will include all of Chris's information in the show notes as well. And so I appreciate your time and I know you need to get back, but as your schedule permits, hopefully very quickly here that we can do a round two, if that's all right with you. I got lots more that I'd love to be able to share with Storage Nation that with your wealth of experience, if that's all right. I'd love to. Let's do it. All right. Thanks Chris. We'll talk to you very soon. Take care.

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