Generations Of Wealth

Generations Of Wealth | Chris Miles  | Financial Advisory Industry


Join Derek Dombeck in an unfiltered conversation with Chris Miles, the cash flow expert and self-proclaimed anti-financial advisor, as they dissect the traditional financial advisory industry. Delving deep, they expose the flaws in financial advisors, masterminds, and money mindsets. Chris opens up about the pivotal moment that led him to question conventional financial advice. From discussing the significance of passive income and navigating real estate challenges to adapting to market cycles, Chris shares candid insights, offering a fresh and unconventional perspective. Derek adds to the conversation by sharing personal experiences, creating a vibrant dialogue about reinvention post-economic downturns, effective strategies for real estate investments, and the transformative impact of the right mastermind group. Tune in for a compelling exploration of financial wisdom, resilience, and strategies for success in both real estate and beyond.

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Beyond The Balance Sheet: An Unfiltered Take On The Financial Advisory Industry With Chris Miles

I’ve got Chris Miles. Chris, I appreciate you being on. You’re considered the cashflow expert and the anti-financial advisor. I got to know what that’s all about. Why don’t you give us a little background, tell us who you are and we’ll dive into it.

The Anti-Financial Advisor

I’m an anti-financial advisor because I think financial advisors suck, to be brutally honest. Good-hearted people for the most part, but been deceived because of the pharmaceutical industry and how they screw up health. It’s the same thing in the financial industry. They sell you a bunch of crap that doesn’t help out, which is why we’re doing real estate investing because we know that works where it’s not the case. I first learned that. I went to college because your mom goes to college. I went to college course because I wanted to do something different with my life than my parents did.

My dad worked hard, for example. He was in the automotive industry and worked his butt off. He would tell me all the time, “Work is going to kill me. I’m going to die working,” and he even said things like, “
We can’t afford this. What do you think, I am made of money. Money doesn’t grow in trees,” all that kind of stuff that you hear growing up, maybe like you have too. I was like, “I don’t want that life. I want something more.” When I was in college, I realized I should probably be in the entrepreneur space because those were the people I noticed that made the most money, had the most time freedom, and financial freedom in general. I wanted that.

I dropped out of college with one class to go, went and tried to find some business to start. The first one that came up was being a financial advisor. Not knowing they take anybody off the street as long as you can pass a test and not have a criminal record. That’s the path I took. I liked it. I liked learning about money and different stuff because I didn’t know much other than to save everything. My dad was like Dave Ramsey’s older brother. He was like, “Spend nothing. Save everything. Be cheap and live a crappy life.” That way.

That’s what I had modeled, which fits great as a financial advisor because they teach you to live on rice and beans too. They tell you to stock all your money in their crap versus making money elsewhere. I remember it became very apparent to me when I first sat down with my dad because he asked me after I was in the business for four years, “When are you going to advise me?” I sat down with him for the first time ever. We’re looking at all of his finances.

It’s the first time ever because he never liked to show his money. He was very guarded. He thought everybody was trying to take whatever money he had. He’s in that scarcity mindset, and then as I sit down with him, he says, “I’m 61 years old. I want to retire now. How can I do it?” I see that he’s paid off his house. He’s totally debt-free. He paid off in eighteen years. He’d been stuffing money in his 401(k) for decades. After I’ve seen that, I said, “Here’s the deal. If you want to retire today, you better hope you die in five years because that’s when you’re going to rent out of money.”

“What do I do then?” “I don’t know, because you did everything right from what I taught as a financial advisor.” That bugged me because I couldn’t tell them to go into whatever I was going to sell them because what if the market tanked? A few years later, it did. The Great Recession happened after I met with him here. I was glad I didn’t tell him to go into other stock market stuff, but I didn’t have an answer for him. When the student’s ready, the teacher appears, one of the guys I trained to be a financial advisor, left to go do real estate investing. He became a flipper. I call him up thinking he’s probably broke chasing dreams and not making any money in real estate. He’s going to come back and work for me, but instead, he tells me the opposite.

He says, “Life is amazing. My dad and I have partnered on some deals and we’ve now doubled his income as a professor at that local university.” Where my dad has no hope or retirement. His dad’s already doubled his income in a matter of months doing real estate. I’m like, “That’s too good to be true. There’s no way that’s possible.” He finally said, “Let me ask you this. How many of your clients are financially free where they don’t worry about money?”

“None. They all worry about running out of money.” “Great, good job. Way to help no one. How about this? How many of you guys as financial advisors are financially free? Not off the commissions’ yearning, but doing these same mutual fund investments?” I was honest with myself, and there were over 100 guys in our office, I said, “None, probably none of them, even guys who’ve been working there since the late 1970s won’t retire.” He said, “There’s your problem.”

That got me down and taking the matrix red pill. I went down this whole other rabbit hole and realized that it wasn’t about how much you accumulate to then live on less than the interest as they teach you as a financial advisor. It’s about what kind of income gets generated from the cash that you have, that passive income that we always talk about, but how do you do it?

You do things like hard money lending. You could lend your money to investors and then they pay you. You can go and invest in deals. You could get rentals, do this and that, and all the other. I was like, “Holy cow.” My mind’s blown because now someone with $100,000 who hopes to live on $3,000 a year because financial advisors say don’t pull out more than 3% a year, still $100,000, even if you make 1% a month, is still $1,000 a month.

That’s way better than $3,000 bucks a year that you then pay taxes on anyway. At that point, I couldn’t make the two worlds work and I quit being a financial advisor and vowed never to do it again. I was like, “I’ll never teach about money. I’ll be a mortgage broker, do a little bit of real estate on the side and teach ballroom dancing.” That was the path I was on until later that next year when I was able to retire at 28 years old. People always want to know, “How did you do it?” In 2007, I came out of retirement and taught people how to do what I’ve done, which is how do you get to the place where you work, you work because you want to, but not because you have to. That’s the big key thing. Real estate is a big key in that.

There’s a lot to unpack there. The first thing I got to tell you is I didn’t go to college. I came out of high school. I went into an apprenticeship program and got into the construction trades. At one point, my wife was asked to have somebody come over, a financial advisor, sit down with us. They were trying to recruit her and they ultimately didn’t recruit her. They recruited me. I had a period of time in my mid-twenties when I was doing the same thing. That was the first time I had any financial education. Shortly thereafter, 1.5 or 2 years of doing that, I got sick of sitting down with families, handing them a viable plan to at least make their life better, but they didn’t want to make their life better.

They’d say, “This sounds great, except we don’t want to make those sacrifices.” That was my transition into real estate because I knew what I could do with my construction background. I knew what I could do financially now because I had a financial education. Even though I agree with you, financial advisors, the masses of them, I’m anti for sure, I wouldn’t probably have made the steps that I made if I hadn’t had that couple of years. My biggest pet peeve is that if a financial advisor won’t show me their net worth, then how do I know they should be advising me on my net worth? None of them will ever show you their financials. What does that tell you?

Even if they do, can you trust it? I don’t mean that they’re lying, but here’s what I found out. Financial advisors are not financially successful because of their investing. Financial advisors are financially successful because they’re good salespeople. That’s what I’ve noticed. My friend went in the business for about one year with me. I was in there for four years. He got in and he saw the inner workings of it. He was starting to listen to other real estate investors who were kind of saying, “Wake up. That’s not where the money is.” That’s what I realized when he asked me that question, “How many of you guys as financial advisors would be financially free if you took those commissions away?”

That’s the key because a lot of them get paid assets under management, which means if you invest $1 million with them, let’s say they only pull off 1%, some charge more, but 1% fee, they’re getting paid $10,000 a year, whether you make money or not, they’re always making money regardless of your performance. That’s the one thing I think is unethical. These guys, I know and you know, too, they want to help people for the most part.

The problem is you’re working for financial companies that aren’t incentivizing you to be successful. They’re incentivizing them to get more money under management and tell you to take high risks while they take no risks by charging you guaranteed fees. You’re supposed to take all those risks in the stock market, which is like a bipolar ex-girlfriend. You never want to have that. It’s ridiculous.

Here’s the thing. I like evidence. That’s the one reason why I stopped going to college because I realized that with evidence if you don’t have real-life business experience, you’re not going to make a lot of money in business. What was the whole purpose of a college degree if people could walk away and not be able to make money in business? The same thing with the financial advising aspect, I realized, “This should work, but look at Fidelity”

I looked at the numbers in 2023. Fidelity has 45 million clients in America. That’s a huge portion of Americans that have 401(k)s and IRAs with Fidelity. That’s the largest one. Of those 45 million, only 750,000 have at least $1 million saved up. I know there are more than 750,000 Baby Boomers that are investing with Fidelity, easily, probably based on demographics and amount of money and things like that. It’s probably into the easily 10 million plus that are Baby Boomers here. You only 750,000 have at least $1 million saved up. You got guys like Dave Ramsey out there saying, “If you save $100 a month for 40 years, make it 12%, you’ll have $1 million.” It’s not happening because they’re not making 12%.

Where does the average person get 12% from?

They never have. That’s the whole actual versus average return. I learned that as a financial advisor late, which is what got me to question some of the things I was teaching where the actual return is closer to about 8%, not 12%. Even people argue with me on YouTube and stuff, they’ll say, “You reinvest those dividends you make more.” It’s only 9.5%. If you happen to get the stock market returns, which most people don’t even get that high. In 401(k)s here’s go with fidelity. 401(k)s have the target date retirement funds, averaging over 2% less than the stock market. Plus, they have a three-quarter percent fee. You’re making about 3% less. even when you get the match, the match barely offsets the bad performance.

Here’s another thing too, of those people that had over $100 million, Transamerica did another study. They found out that of those people surveyed, 35% said, “Take a miracle for them to be able to retire.” Even though only 1.5% got $1 million out of these funds still over 1/3 of those said it would take a miracle to be able to retire, which means there’s less than a 1% success rate for getting over $1 million and feeling free. Think about that. That’s like going on Google, seeing a restaurant and you’re debating about going to eat at. There are 99 negative reviews with a 1 star and then that one 5-star, you think, “That’s got to be good.” That’s what you’re doing in the financial advisor world.

Passive Income Vs. Transactional Income

The other side of that coin is, as I started mentioning, where does the average person get 12% or even eight or 9% for reinvesting their dividends? They don’t know that information. It’s not accessible to them. The average American chooses not to try and learn how to do that. You said you retired once you came out of retirement. I know you’re very pro-passive income and you do talk about how everybody needs some passive income versus transactional income. How do you define that? What’s the difference between you?

Transactional income is income that you’re earning through work, or business, including if you’re a wholesaler or flipper or whatever you’re doing. That’s active income. Active income is awesome. Don’t think I’m trash-talking active income because that’s the very economic engine you should have. That is your number one investment to start helping you to then have profits to generate passive income. Passive income is money that you’re not working for. For example, when I buy rentals now, before the last recession, I try to manage my own rentals and I sucked as a property manager. I’m not saying you do, but I did because I was the kind of guy that would take on whatever sob story I heard and then next thing you know, they’re three months late on their rent.

I’m a pushover that way. When I buy turnkey properties where somebody else manages the property, a property management company does it for me, that for me is way more passive. Now there’s still stuff that could happen, but at least now I’m not getting bugged for every little tenant, toilet or trash issue that comes up. That’s probably the least pa the least passive thing I do. Another thing I’ve mentioned hard money. I’ll lend out money to people for hard money deals all the time. There are even times when I’ll do things like syndications, although I’m staying away from like big commercial multifamily lately, especially because cap rates stink but 6 months to 1 year they might be back, the same thing with self-storage. I think that’s awesome in business, but it’s hard to find decent deals in that space.

I’m doing a lot more in the lending space or lending funds where they’ll get paid 10% to 12%. Hands off. They’re doing all the work. I’m not. I even have a partnership with Raw Land where they’re doing all the transactions. I’m a 70% partner for financing it. I updated it and, and saw that my passive income from $350,000 invested is now over $9,500 a month. That’s the stuff. The fun stuff is being more hands-off. Now what I do, even though I don’t need to anymore, is because I’m passionate about getting people liberated and even people in the real estate space need to be liberated to some level because 2022 or 2023, it made it pretty apparent, you need multiple streams of income because if you’re relying on one source of lead gen or whatever it might be in your business. You can get screwed big time.

I’ve had several friends even go out of business how to completely change careers or pivot their business, do a total of 180 lay off three-quarters of their staff so that they could stay afloat. It’s rough. Those times can happen. When you’ve got other streams of income coming in, especially passive streams, because you took some of your profits and you didn’t reinvest everything in their business, which means you have no profit, you’re spending more money in the business to generate more revenue. Instead always doing that, take some of that money out and create some security for your family too.

Learning From Hard Times

I want to dive into that because I get this conversation started with people who have been in the business for the last many years. They built these big wholesaling machines or large companies. They had no clue to set anything aside. They thought the music would never stop. There would always be enough chairs for everybody. I started in 2003, built up, and lost nearly everything in the crash. I had to reinvent myself and start over.

A lot of people who listened to my show know my story. I want to know from you, not specifically about your friends who had to pivot, but the industry, what have you seen in the last few years? I say this openly. I love the fact that we’re weeding out some of these people and some of these weak realtors. There’s a reason there are market cycles. Those of us who are prepared for it, we accelerate while everyone else is decelerating or hitting the brakes. What’s your viewpoint on that?

I totally agree. It is sad to watch people deal with that kind of thing, but like you mentioned, and I’ve gone through it. The last recession kicked my butt when I was trying to flip and do stuff and that would go South. I nearly went bankrupt. I went over $1 million in debt during that time. The things that I learned coming out of that, the resources and tools, there’s no amount of money I could have paid. I could not have joined a mastermind group to learn that. I could not have read a book or watched YouTube videos to figure out how that worked. I had to go through it myself. It creates almost this personal intestinal fortitude. You get this grit and wisdom that comes from that kind of thing.

Although I don’t welcome it, I know it has to happen. Industrywide, you got to get rid of the posers. There have been many posers out there. For example, we have two arms of our business. We have an infinite banking arm, and then we’ve got an arm where we do consulting, helping people create passive income. People will hire us to try to connect them to deals. We don’t raise funds. We don’t do anything investing-wise that way, but we connect them to people that have deals. I can’t tell you how many times, especially in 2020 or 2021, I had people that are like, “I’ve been investing since 2019. Why don’t you send your clients my way?” I was like, “Why don’t you get another decade under your belt first and get a full market cycle? Why don’t you go through some hard times first, then let’s talk?”

They didn’t like that and it’s hard because some of them were friends too. I’m like, “No, it’s the honest truth. You have to get your teeth kicked in a little bit and get some wisdom in your business to make sure that your model works in any economic cycle. If you can do that, then you know, you’re onto something.” That’s a saving grace. I learned that from the last recession there were people that had been great in real estate through the 2000s, but then when 2008 started hitting even 2007 for the flippers, but 2007 or 2008 started happening, many people want to have a business. Some people are going out and getting full-time jobs again.

You have to get your teeth kicked in a little bit and get some wisdom in your business to make sure that your model works in any economic cycle. Click To Tweet

Honestly, the turning point in my career was either quitting or figuring out a new way. That’s when I reinvented myself. I figured out how to negotiate, talk to people, and stop relying on the realtors, the bankers, all the institutions, and rely on the person I knew I could rely on, which was myself. I had a hard money lending company that my business partner and I established for the last many years recently. He bought me out of that. I can grow generations of wealth and honestly, I’m in full acquisition mode again because I love the market we’re in right now. I was excited when interest rates started going up because there was an opportunity. When I started, interest rates were 8% or 9% was pretty typical back in the early 2000s. It’s not that you can’t make money, it’s a different way.

One thing I’ve learned too is that the best time to buy is when nobody wants to buy. Even lately, I’ve been telling my clients, “If you’re going to be buying rentals, now’s the time because interest rates have dropped. Five million more people are now qualified to be able to buy a home that couldn’t do it last fall will be able to do it come springtime as long as the rates don’t skyrocket up again,” which they could, but if they stay down anymore, they are, that’s five million people that have been delaying trying to buy a home that can now buy it.

The best time to buy is when nobody wants to buy. Click To Tweet

I was like, “This is a great time to get in because everybody’s telling you real estate’s going to fail.” When the media is telling you something, do the opposite. When your brother-in-law or that person down the street, your neighbor says, “I heard this,” then do the opposite of that. If everybody’s saying, “Bitcoin is the thing to buy now, don’t you dare buy Bitcoin.” If they say the stock market is a thing to buy now, don’t get in the stock market, which I think is a pretty wise move too. You got to be listening. When there’s blood in the streets, that’s the time to get greedy.

I’m a real estate transaction engineer. I go and solve real estate properties. I’ve bought properties. I bought three properties from one seller. He took zero down carrying 0% financing for 10 years. He’s tickled to death because this is the first time in seven years that he’s made money each month because of decisions that he made. I turned around and sold all three of those properties to other local investors and I’m carrying the paper for them at cheaper than what they can get at the bank. It’s an arbitrage play and I love it. I’ve got those opportunities. I’ve always been able to do that throughout any market, but it’s scaling up now because of the shift. That’s fantastic.

I had pace more beyond my podcast and then same thing, he’s been riding that wave or that horse for so long right now because of that very reason. It’s not saying it’s going to work forever, but that’s the thing. It’s what you’ve learned right? Over time, as you start to learn, there are different strategies for different markets, even Ron LeGrand. I know he’s the OG in the space. He was telling me that the other day too. He’s like, “There’s always something you can do in any market cycle. You have to know which part of the cycle you’re in and then switch. You got to pivot and move. You can make it work in any cycle that you’re in.”

There's always something you can do in any market cycle. You just have to know which part of the cycle you're in and then switch. Click To Tweet

Infinite Banking

You had mentioned something in passing. The other side of your business is infinite banking and there are good and bad. I’ve interviewed other people about infinite banking. What’s your take on it?

You get guys out there like Dave Ramsey, especially Suze Orman. They’re getting asked more and more questions about it all the time and they hate it and they’ll trash it. My response is, for the most part, they’re right. With the way that most of those insurance agents set them up, they suck. The reason I know that is because when I left being a financial advisor and I started in this real estate space in 2006, I remember a lot of people saying, “You got to do infinite banking, it’s awesome.” I’m like, “I’ve never heard this strategy before. I was a financial advisor for four years and never heard of it. Read this book by Nelson Nash. It’s great.” They’re like, “Cool. I can buy a car or a house with it.”

I go to sit down with a guy that does it. Remember I was in insurance lights and still for four years up to that point. I never heard of it before. He’s teaching to me saying he’s using this tool using whole life insurance, which I used to tell people was a ripoff. I never knew if it was a ripoff because I repeated what other financial advisors told me. I don’t know if that was the same for you. That’s what they trained me to say. It was, “Whole life sucks. You don’t make any money on them.”

I’m shocked when I hear from all these real estate investors it’s the best thing since sliced bread when they do real estate. I remember when the guy set it up for me, the insurance agent. I remember asking him, “I know there are ways I can manipulate some of the things on my numbers with other insurance products. Can I do that here with my whole life?” He said, “No, you cannot do anything different than what it is.” I was like, “That sucks. For two years, I have no cash in here.” “Whatever. I’ll trust you because everybody else does. I’ll do it.” That was 2006.

2008 rolls around. My cashflow is suffering. I’m in the whole $15,000 a month and there’s no way I can pay my insurance premiums. I paid $25,000 in those insurance policies and guess how much cash I had? A couple of hundred bucks. When I couldn’t pay the premiums anymore, I lost them. They were the most expensive term insurance in the sense that I could have bought because I lost all those policies. All the cash I paid in and nothing to show for it. Guess what? A few months later, as I was starting to do my own research, own stuff, own numbers, I found out that guy lied to me because I could have designed it in a way where I had cash in there from day one and waiting for a few years because it’s front-loaded on the cost there.

I confronted him about it. We had a two-hour debate. It got pretty heated to the point where the assistants out in the hallway could hear me yelling at him. Finally, after two hours, he finally said, “I designed it that way because I couldn’t afford to cut my commissions.” I said, “There’s the truth and I’m never going to send you a person again.” It became my mission over the next fifteen years to find ways to do it better and better more for myself as an investor, but even for other people too because I was pissed that that was prevalent and that it’s been taught out there. There are a lot of great people teaching infinite banking right now.

Don’t get me wrong. There are guys that do a good job, but they don’t do the best for their clients. For example, there’s a guy who’s a very popular infinite banking space. I won’t say his name, but he’s bigger on YouTube than even I am in this space. One of my friends who’s an investor sent his brother over to him. I told the guy, “I think you’re overpaying. If you use these guys’ people, I guarantee you’re going to overpay.” That the guy was putting in $10,000 a year was overpaying about $1,000 a year. You do the math. This guy is overpaying a lot for something that almost a click of the butt on a few little adjustments could have saved him $1,000 a year.

Guess where that extra $1,000 a year would’ve gone if he didn’t go with us instead? It would’ve gone to pad the insurance agent’s pocket because that’s how they make money. They’re not investors. They don’t give a crap about your real estate investing. Even if they know real estate investors and they might even have a couple properties themselves maybe, for the most part they’re trying to sell you a bill of goods. You got to watch out because I believe that it’s not about the death benefit. Even though that’s great. It’s a bonus.

It’s about that cash value. Most importantly the reason I use it is 1) It is a safe place to store my money because if anybody wants to sue me or the creditors come after me, they cannot get to this money. That’s the number one reason why most of the real estate investors that we work with they’re like, “No, I want for that reason alone because I keep in the bank. It’s a free game for anybody to take.”

Is that state-specific or federal?

It’s state-specific. There are a few states like California where I only protect a limited amount.

Are you trying to tell me that California has rules that are different than everyone else that’s normal?

Liberals don’t want you to be wealthy. I have a lot of liberal friends. I used to be one myself, but when it comes to this, when you get states like California where they’re almost like Canada down there, they can screw you over sometimes when you’re trying to make money. That’s why everybody’s leaving California. It is state-specific. Depending on the state you’re in, it might have some more protections than others.

Nevada’s another one like it too that has some protection, but not all. Another reason is that the thing I love the best about this is that I can get this money to pay me in two places at the same time. I can have the money inside the insurance policy, but then I can also get a line of credit from the insurance company that’s private and doesn’t show up on my credit report. You could pay it back in however or whenever you want. The balloon payments due is at your death, which they use your death benefit to pay back the loan, then pay the rest of your family tax-free.

It’s like this Roth IRA in a sense, because it grows tax-free and comes out tax-free. I can have the money in there to get this line of credit against it because they use the collateral in that cash savings account, use that as collateral to go invest wherever I want. It doesn’t tell me what I can or can’t do with that money. I don’t have the monthly payments. It’s like having a HELOC, but the HELOC that pays me interest and doesn’t require monthly payments. I love to use it for that specifically where I can now make money in two places at the same time because I’m still earning interest over here because I didn’t pull my money out.

Even though I’m paying them interest, if I’m using the cashflow and returns to pay back towards it, I pay them less interest than what they pay me. As a result, I make money there and in my investments anyway which means I double up. If I were to make, let’s say, 10% on a real estate deal, that can usually help me make at least 11% or 12% instead of 10%. I can always add at least a few percent more using this strategy versus using my savings account.

You said the word HELOC in comparison, and this is the HELOC that doesn’t jeopardize your personal home and doesn’t get called due for any reason. One of my pet peeves is all these people on these platforms talking about how brilliant they are using HELOCs to invest in real estate. After going through the downturn of ‘07 and getting my ass kicked and I didn’t lose my personal family home, but it was close. I had a HELOC out there to try and cover bad debts.

Not that I have anything against them using it if they use it correctly and they know the risks and use their heads. When you see these brand new investors going out there saying, “I’ve got hundreds of thousands of dollars of equity in my home and I’ve never done a deal in my life, but I’m going to go jeopardize my family home and take out a HELOC,” it pisses me off. I’ll be honest.

We’re talking about infinite banking with life insurance, but then you have this velocity banking concept using a HELOC, the same kind of strategy. I was warning people years ago, I was like, “Here’s the problem. You probably remember this too in the last recession, banks were cutting back lines of credit left and right. Even if you had an open HELOC, they would cut it back.” When I started hearing certain companies specifically saying their whole strategy was only that one strategy to create wealth, I was like, “This company is going to go under if they’re not careful,” because that one strategy, if anything changes, interest rates rise, which they did and/or they start calling notes due, which still hasn’t happened yet, but could easily happen if we move into a deeper recession, that strategy screwed up.

Imagine if you ran up this big bill and then you start using all your cashflow, all the returns from your real estate, put it back into your house to then the plan is eventually charge it back again, but then all of a sudden the bank tells you the week after they did it so that you have no time to react, they say, “Last week we cut off your line of credit. It’s now where the balance you paid it down to.” Let’s say you had a $500,000 homemaking line of credit, you paid it down to $100,000, you’re about getting ready to invest some more because you start to see that there’s some opportunity in this downturn, then when that happens, now you can’t get to any of that money. That $400,000 you paid in is trapped.

When that happened to me in the last recession with even a normal mortgage, I couldn’t get my equity out. I tried to short-sell my property. They wouldn’t even accept a short sell because eventually all the equity was gone when the market tanked. I couldn’t even short-sell it because Lehman Brothers owned my note, which means I got a $300 settlement for mortgage fraud from them. Thanks for that. I had a foreclose in that house. It cost me way more than 300 bucks that I got back. I had a foreclose on that house because there was no equity. There were no options anymore. They wouldn’t take short-sale agreements. I would’ve been better off in the last recession, not paying off my house.

You got to be careful in that strategy and definitely don’t use the gamble. If you’re going to use it, put in something that’s more guaranteed. Even if it’s, “I take the equity from one property, put it into another property that I know will hold the value.” It’s not speculative. It’s not like a spec home necessarily. It’s something that will going to hold the value that maybe is a value add play or something like that. Do use it for that. You got to make sure that the cashflow services the debt. Otherwise, if you don’t have a good enough cash flow and profit going on, you’re going to be screwed

Let me ask you this question I ask everybody. What’s one thing that I should be asking you that I haven’t?

Stay For The Long Game

We have had so much fun talking already. I’m going to reiterate the same thing and maybe that’s not a question. It’s a statement. When you’re in the real estate business, do not just focus on trying to make more money and always reinvest in your business. I know a guy out there who teaches Profit First called Mike Michalowicz. He wrote that book. I remember him saying this in 2019 before everything started getting crazy. He said, “If you’re always reinvesting money in your business, you are not profitable because you’re just spending money. Your profits are zero If you’re always putting money back in the business. Get that money out. Pull it out in profits, keep that money and then figure out what to do from there.”

When you're in the real estate business, do not just focus on trying to make more money, and always just reinvest in your business. Click To Tweet

I wholeheartedly agree, although I do believe that your business is number one the best investment to invest into, do not think that especially after the first launching of your business, you’re going to put a lot more of your money in. Once you start to get to a point where you start to make some decent money in that business, start to pay yourself profits to then diversify away from it. One of my friends, Rob, for example. He was doing deals left and right. He was doing triple-digit type of deals transactions every year. He was doing a lot of business. I remember in 2019, I was telling him about like, “One of my clients who’s going to make $20,000 a month passively.”

He was like, “How do I do that?” I told him, “Easy. Instead of taking all the properties you’re using as transactions, maybe hold onto some of them.” We started to do that. When 2022 and 2023 hit, we saw a lot of guys suffering. He was one of the few guys who had a smile on his face because he was like, “I’ve got now over 20,000 or 25,000 a month of passive income coming in, even if the rest of my business fails, this is still paying the bills.” That’s why you got to do that. I know it’s not easy from day one if you’re starting out, but once you start to get into a little bit of a mature phase in your business, you start to get your legs under you.

You start to get a little bit whole little bit out. Even if it’s a little bit of time, 1% of your profit even start pulling that money out and get it away to then generate multiple streams of income so that if something like this were to happen to you, you can still be safe. You can keep a level head. You can make good decisions and like you did. You survived multiple storms. You’ve made it through 1.5 or almost 2 cycles. You’ve made it through this because of that very reason. I reiterate that if you want to be a wise investor, it’s about how you can stay in it for the long game. That’s getting multiple streams of passive income.

Value Of Masterminds

I attest the last six or seven years of my success to finally building a network. In the first half of my career, I was a closet investor. I didn’t have people to turn to. I know that you belong to mastermind groups. I belong to some. I host the REI Circle of Trust. The question is how long have you been involved in networking or mastermind groups and what’s the difference before you were a part of that versus now?

It is funny you asked that. I was thinking about that on a run because I started getting mastermind groups about 2017 or 2018. In my business, I was a one-man show. I made easily $250,000 to $500,000 just doing that, but there is something about if you’re in the right mastermind groups, I know that every time I go, and I’m about to go to two of them, I come back a little bit stronger. I come back wanting to be a better husband and father. I came back wanting to be a better leader and business owner. Not to mention the wealth of knowledge you get from a room, before, I always hire one-on-one coaches and I still do here or there.

It’s almost like when you’re in a mastermind group, you have multiple coaches you can work with depending on what situation or problem you have. They’re peers too. You say, “I’m dealing with this.” They’re like, “Me too. Here’s what I’m doing.” Even outside your industry, I get ideas from outside the real estate industry sometimes depending on the mastermind group where you could say, “That’s pretty creative. What if I apply that to my industry?”

That has made me literally millions and millions of dollars by being in those right things. I know you’ve got a mastermind group as well. It’s when you are face-to-face, it’s not like a Zoom or group coaching thing. You’re with other people and you’re able to have intimate conversations or even conversations to be able to pick people’s brains and even get to know them better, that network can pay you dividends above and beyond anything.

I do mine a little differently. We rent a house. We all stay together at each retreat for 5 to 6 days typically. You’re immersed 24/7. Nobody can escape. You have your own bedroom but you’re together all the time. What I have learned in the last many years being a part of other mastermind groups, hosting my own for the last many years is you can pre-judge anybody you want. You can put them on a pedestal or you can put them in the gutter. We all have very similar challenges regardless of income level or experience in business. You said these words. When you’re in the right mastermind group that can come out. However, if you’re in the wrong group with the wrong incentives there, like you may be holding what your vision and your goals should be instead of them asking you what your vision and your goals are.

When you’re in the right group, it’s night and day difference. When 2020 hit, many people in March 2020 were panicking. My network and I’m assuming your network as well were all collaborating and for the majority of us, 2020 was the best year we’d had up to that date in business because we were helping each other.

I like how you do with your masterminds because it could be intimate enough. They could be in one place. The one thing I see wrong with some mastermind groups, now, they get big and impersonal that you don’t get that real connection. You don’t get that look into people’s lives realizing, “You’re as screwed up as I am. You’re playing at a different level, but you’ve got your own problems. I might even be able to help with it even though I might consider myself less than or whatever it might be.” I used to be intimidated by those groups.

Now I realize we’re all part of the human club. We’re all in this together that way. Although I hate using that phrase now after 2020, but it’s true. We’re all here trying to figure things out and we all deal with our own struggles and challenges. When you can take advantage of a group like that and truly mastermind with people, like get vulnerable and open, not be around a bunch of chest thumpers, but when you’re in a real authentic, vulnerable group, it’s amazing what kind of shifts can happen in your life as well as in theirs.

When you're in a real authentic vulnerable group, it's amazing what kind of shifts can happen in your life as well as in theirs. Click To Tweet

That’s where our tagline came from, “Live your vision, love your life.” In our group, there are no more than twenty people there. We’re all together. It’s not just business. It’s business life, health, relationships. All of that is co-mingled. It’s cool. I know some of the groups that you’re a part of. I know a lot of the people that are in the groups you’re a part of. When you’re around those quality, ethical people, that makes all the difference as well.

I’ll give one warning in those groups if you ever joined, especially the bigger groups case, Morby and I were talking about this on our show. He’s talking about like every time he went to a mastermind group, he came back thinking, “I’m going to do 100 doors. I should do a 1,000 doors.” We started having that discussion on my show. He said, “I’m realizing Chris, after hearing your intro, I need to check myself. I’ve been trying to chase after doors, having thousands of doors and for what? I could be happy with 50 properties, 50 doors, make good money and have time with my family and have the simple things in life.”

He’s like, “I get in front of those other groups sometimes. I get in front of those people and then I think, ‘ I got to do more and more. You are always chasing but never attaining.” As a warning, when you’re with those groups, and I’m sure your group is like this too. You get real. You’re not trying to bump your chest about how awesome you are. You start to realize it’s not about the number of doors like many people try to sell you on. It’s about what kinda life can you create with it.

That’s exactly what our vision is all about. We work with our clients or people in our group to figure out what you want for your personal life first and then build a business that will support that personal life but not consume it. I was challenged a few years ago by a mentor of mine because I was envious. He took a 30-day RV trip. He challenged me. He said, “Is it in your vision?” The following year, I took a five-week RV trip with my family.

Now for the last 3 summers, I’ve done a 5 to 6-week trip where I literally work if I do two hours a day. Very few people can say that. I can’t tell you how much I’ve enjoyed this conversation. We could probably keep this going for another hour, but I think we’re going to wind it down. Tell us how can people find you. Can they find you on social media, and websites, stalk you or peek through your windows? What’s the deal?

Other than peeking through the windows, I might hesitate on that one a little bit, but you can follow us and stalk us for everything at @MoneyRipples on social media. You have the Money Ripples Podcast and even our website is Just find @MoneyRipples.

I look forward to us crossing pads where we can shake hands in person. It’s been a real honor having you on the show.

Same here.

I do appreciate it. To readers, thanks for joining us. Go out live your vision, love your life. See you on the next one.


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About Chris Miles

Generations Of Wealth | Chris Miles | Financial Advisory IndustryChris 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, BiggerPockets, and has a proven reputation with his company, Money Ripples ( getting his clients fast, financial results.

In fact, his personal clients have increased their cash flow by $300+ Million in the last 14 years!

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