The Anti-Financial Advisor with Chris Miles

Our guest for today is the cash flow expert and anti-financial adviser. He 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 Chris Miles Money Show, has been featured in US News, CNN Money Entrepreneur, Entrepreneur on fire and has a proven reputation with his company Money Ripples, getting his client's fast financial results. In fact, his personal clients have increased their cash flow by over 250 million dollars in the last 11 years.

Our guest brings his expertise as a financial advisor.

Let’s dive right in and learn from Chris Miles how to start our cash-flowing income stream today!

[00:01 – 10:29] Opening Segment 

• We introduce our guest, Chris Miles
• Chris talks about his background

[10:30 – 17:54]  Residual Income Versus Passive Income 

• Christ talks about his initial investments in 2006
• Learning and knowing what to do with your cashflow
• Chris goes over his swing and a big miss 

[17:55 – 32:33  Becoming Financially Free Again, The Second Go Around

• Chris talks about the importance of passive investment
• Turn-Key Properties that come with ownership and control
• Chris' bad investing advise

[32:34 – 40:28] The One Thing To Hold On To In Your Portfolio

• Being independently wealthy
• Final thoughts
• Chris' book recommendations:

The New Great Depression: Winners and Losers in a Post-Pandemic World

Tweetable Quotes:

“I consider residual income like passive streams of income through business and then passive income, which is through your investments, like your money making money.” – Chris Miles

“Like I love that kind of strategy to own and control, because that was the big thing that came out of 2008 was control, is that if you can't control the investment, you never know what's going to happen." – Chris Miles

“here's a multifamily deal we're doing, just like the last one we did kind of boring. It's just the same old, same old. But we know it like the back of our hand. That to me is like the sexiest thing you could ever say.” – Chris Miles

“more important than a return on your money is a return of your money” – Chris Miles

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Transcript

Anthony Vicino: [00:00:15] Hello and welcome to Multifamily Investing Made Simple, the podcast, it's all about taking the complexity out of real estate investing so that you take action. Today, I am your host, Anthony Masino, joined, as always by Dan. I don't want to do the intro today. Crigger, how are you doing then?

Dan Kreuger: [00:00:31] I'm good. I can sign off on that nickname this week. That one works quite well.

Anthony Vicino: [00:00:35] That's the first nickname I've ever given you where you've you've been like. Yep, that nailed it. Nailed it. And I've given you a lot of nicknames like episode eighty-five now or so. And like every single one of those, you've had a nickname and you've never approved. So before we get to the day's show, Dan, I just want to know what's on the top of your brain. What's the first thing that comes to mind when I say so what's up? Well, not that I, I

Dan Kreuger: [00:01:05] Just I just picture Collins, the little baby

Anthony Vicino: [00:01:08] Chief, you can't use your newborn

Dan Kreuger: [00:01:10] Baby. Well, because that's me. What's up? I automatically take my baby. I need to be home for anything tonight.

Anthony Vicino: [00:01:17] Hey, let's pull the audience. Yesterday, Dan said he had to leave a meeting early so that he could go babysit his child. True or false, can a dad babysit his own child or is that just called parenting or what would have happened anyway?

Dan Kreuger: [00:01:31] I went on that one.

Anthony Vicino: [00:01:33] Yeah, I've gotten into the weeds already. We haven't even touched on real estate. But that's OK because today we have a very special guest. We're going to be talking all about finance. We're joined by the one the only Chris Mileti is the cash flow expert and a. financial adviser. He 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 Christmas Money Show, has been featured in US News, CNN Money Entrepreneur, Entrepreneur on fire and has a proven reputation with his company Money Ripples, getting his client's fast financial results. In fact, his personal clients have increased their cash flow by over two hundred and fifty million dollars in the last 11 years. So without further ado, without further pomp and our circumstance, let's go ahead and bring out Chris. Chris, how you doing? Great, man.

Chris Miles: [00:02:18] Appreciate being on the show.

Anthony Vicino: [00:02:20] Yeah, it's great to have you, man. So before we go any further, we got to unpack the a. financial advisor, because I feel like there's a little bit of shade being thrown at the financial advisors and entitled a little bit, I think. So it's OK. You're in a safe place. There are no financial advisors in the room. So go ahead and let loose also all about being an anti-financial advisor.

Chris Miles: [00:02:42] Yeah. So I didn't start out that way. Right. I started going to college, doing what most people do, not going into my major. Yeah. I started out as a sociology major in college. I eventually moved out to Utah. I grew up in Oregon. That's Utah where I finished up school. We're almost finished school actually dropped out with one class to go. I was a sociology major with a triple minor in psychology, Japanese and ballroom dancing. So a little-known fact was one of the nation's top amateur ballroom dancers, which is one of the big I was in Utah because they had the world championship team here. So anyway, let's think about we owe an answer. The question about Dan, Dan, congratulations, by the way. Thank you. Your newborn there. I've got a blended family of eight kids. And so I will tell you, if you ever say babysit, you will get raked over the coals because it's to be with two spouses

Dan Kreuger: [00:03:36] Moving that from the vocabulary. Yep, yep, yep. But I still say

Anthony Vicino: [00:03:42] And in fairness, I never would have thought it, but I mentioned this like months ago, about a different couple that had just had a newborn. So my girlfriend and she's like, he can't babysit. It's his child. That's like what I do alone.

Chris Miles: [00:03:56] It's always the women that point it out.

Anthony Vicino: [00:03:58] Yeah, they do.

Dan Kreuger: [00:03:59] Yeah. Well, I appreciate that anyways. I mean, so

Chris Miles: [00:04:03] That's how I started to have kids, you know like I was in college. I was like, you know, if I, I'm going to become a business consultant. That was my goal. Right. I should have real business experience. So I dropped out of college with one class go, said, hey, I should become an entrepreneur. What do I do? Well, the first opportunity came up that I thought was harder to get into than actually was being a financial advisor. I thought you would be like a finance major, have degrees and be amazing. I was going there interviewing, not realizing if you could pass a test and wear a suit, you win like that. You basically have to have a heartbeat and you become a financial adviser. You don't have to have any real massive education or qualifications.

Dan Kreuger: [00:04:39] We have to have sales skills. Right, because it's a sales job.

Chris Miles: [00:04:42] Right. This is why I stuck for the person I was always the guy who is good at serving, not good at selling, you know. And so but that's the thing is like I got into it. I love being an entrepreneur because I want to control my time and my freedom. But after about four years erm. Right. So I got in at Y2K right after 9/11 and so about two thousand five, I started to see that there are some holes because I like evidence. I didn't know that things work and, and I noticed that people have had decades of this advice prior to me and a lot of times I would inherit these clients from guys who either died or quit in the business and I'd hear these clients and they were much better off than anybody else. Well, it wasn't till about the end of 2005, like I had to add a guy I trained in the industry. You left to go do real estate investing with his dad. So I called them up thinking, hey, four months Apache's broke. Never come back begging for a job again. Right. Well, find out. He's super pumped. He's like Chris, like, it's awesome. My dad is double his income as a professor at the local university. I'm like, what? In four months he's doubled his income. Yeah, it's incredible. My bull. That's too good to be true.

Chris Miles: [00:05:53] I'm sure you guys I've heard this, especially in the multifamily space. Right. That sounds too good to be true. Like, really, can you get that IRR like that back in the stuff. Right? I was like. Come on. And so we got this debate about what's real or not, and he finally said, Chris, hold on. Let me ask you some questions, which how many of your clients are actually financially free where they don't worry about money? Well, I thought about it. Well, I mean, I've got clients that are retired, but they watch CNN. You can never be free and watch CNN. So none is like. All right. Well, good job, Chris. Way to go. Well, how about this? How many of you guys, these financial advisers are financially free, not off the commissions, but doing the same mutual fund investments you've been recommending. And that's one of the guys that you've been working in this industry since the 70s. Right. Like mid the late 70s. And I thought that is like, well, none. He's like, well, there's a problem. If it hasn't worked for them, why would it work for anybody else? And so he's like, well, listen, if you're really serious about this, because I was like, OK, well, tell me the way he's like, I don't think you'll but I don't think you're open to it.

Chris Miles: [00:06:56] Like, come on. I'm admitting that there are some possible weaknesses here. Tell me. He's like, all right, if you're serious, get the book by Robert Kusaka called Who Took My Money. There you go. A different book to basically sum up those three hours of audiobook. Mutual funds suck. OK, so listen, this radio show that was AM Radio Free podcast, right? Listen, this radio show that these two real investors put on well, after a couple of months, I'm like, I can't use this junk anymore and stay in integrity because I know it doesn't work. Right. Because the real results are on the market are less than they propose. They're more like seven, eight percent, if you're lucky, you know, and before taxes, right before taxes. And then inflation is not two or three percent like the feds say like we're going for two percent like bull crap. That's more like two percent would be that if you were if you started living your adult life in nineteen eighty-five. Right. Rule seventy-two. So two percent. Thirty-six years. Nineteen eighty-five means that this year it's only double the lifestyle, double the cash. You need to live from nineteen eighty-five. Oh, come on. We all know it's the way the freak more than double since nineteen eighty-five. Right. Let's at least quintuple if not

Dan Kreuger: [00:08:04] Every time I buy an iPhone. It's twice as much as the last iPhone I bought. But that's,

Anthony Vicino: [00:08:09] That's because you're buying Apple. Go go go. Buy a nice no android. Yeah. I think it's going to last forever. Forever. You'll never need a new phone. Exactly. Pocalypse.

Chris Miles: [00:08:20] Exactly right. I mean I remember as my dad when I was a kid, ask my dad back in the eighties something like how much money do I make? One hundred bucks a day. I'm like, no way. You're not paying one hundred bucks a day right now. You do the math. You're like, oh, crap. He's making like over two grand a month. That's nothing. You know, that's just the perception. So anyway, I realized it was false. I vowed never to teach about money again in twenty-six. But then I had to know what these guys knew. Right. And so I start to learn from them. Later that year I was able to become finance myself when I was twenty-eight and I was like, well crap now what I do with my life. Right. And so I had this identity crisis for a little while and finally, 2007 rolled around and started coming out of retirement and teach people how to get in the rat race. Now here's the key, though. If you might have seen this. My bio, says, I retired twice, became independent twice. That's not a good thing because the recession kicked my butt. Right. I was young and dumb. I was a little bit too ambitious. I was trying to go for the swinging for the fences. I struck out a little bit, both in business and with my real estate. So I end up going from millionaire to upside down. A millionaire is like over a million dollars in debt. Avoided bankruptcy, but I had to dig back out of that hole. And it wasn't till like twenty sixteen. I can say they're financially independent again this time better off. My time was thirty-nine and so that's kind of a long-short version of Reader's Digest. But basically, that's what I've been doing, is really just trying to, you know, been semi-retired, part-time working here, just doing my podcast, part-time consulting, and doing some stuff to help people get out the rat race.

Dan Kreuger: [00:09:57] That's very I'm curious you it sounds like the catalyst that caused you to kind of move away from the financial advising business was the fact that I think it was a co-worker that left. I got into real estate, came back, and told you how awesome it is. What exactly did you jump into after that conversation that produced your wealth? And then so they created a little bit of an issue there during the crash. Was it single-family homes? Like what did you get into?

Chris Miles: [00:10:30] Yeah. Like, you know, that's the thing. Like 2006 was like hot. Right. And so it's funny. I started out, I did two things. So I had residual income and have passive income. And I distinguish those two on purpose. I consider residual income like passive streams of income through business and then has of income, which is through your investments, like your money making money. Right. Well, now I could be a financial advisor, but people are still asking me questions. Right. And I was still a mortgage broker in two thousand six. But I remember one of my friends that was a millionaire himself. He's like, well, do you like doing mortgages? I said, well, I like teaching about them and the. The strategy of what to do, but I hate the paperwork, I hate the underwriting process. I hate people reaching out to me all the time right now, much more visionary than being that integrator. And so he's like, well, then why not refer to somebody who does do the paperwork? Like, I can do that, huh? That's not a bad idea. And so I would I just talked to people and was actually just family and friends. I was doing zero marketing. I wasn't doing anything at all. In fact, when people asked me what I did at that time, I just tell them I sold drugs because I didn't have a good answer.

Chris Miles: [00:11:36] Like, I don't know, I'm just trying to find ways to create value and trying to find my identity. Right. Well, you know, the thing is, like, I'd refer them off to that guy teaching about what they can do, their mortgage to cash out, reify going to invest in real estate or whatever. Right. Cool. Well, who do I go for the mortgage, talk to this guy? Like, go go to him. He'll get you all applied for everything. Well, then I get a check for like a thousand or two thousand bucks after spending half an hour with them. I was like, well, that's awesome. So I had these streams of income coming in where I was literally working like less than a four-hour workweek for temporary work and for the workweek. I was doing that on top of that. Then I was also buying properties and stuff. I had my starter home. I converted it into a rental and got cash out of that as well. Actually, I actually sold it to an investor, leased it back, and then subleased it so I could get all the equity out, and then I can get the rental cash off of it too, and start doing more stuff. Then I start one of the flips.

Chris Miles: [00:12:32] It's trying to do more of that. And that was where I went wrong with the real estate. One was with the cash, one part because when I was renting properties, I didn't care about cash because appreciation was going up so much like, well, who cares? I'm a little bit negative this month or just break even because, hey, this guy is living in the real estate market, right? There's this price are skyrocketing, kind of like we are now, but in a different way because everything would be over oversupply. Right? Well, you know, I did that, but then I'm then trying to think like a flip. I could flip a hundred thousand our home if it 10 percent, that's ten grand. But if I do a five hundred thousand dollar home appreciates 10 percent, that's 50 grand. So let's buy these big mansions instead. So I was going to try to buy bigger properties to make bigger gains against swing for the fences. And that just went the crap by the time we hit twenty-seven, especially when banks tightened up that summer. I remember that summer like banks like the month July they started restricting August, they put a few more in. By September they were going to let me cash out anymore, even though I jump through hoops.

Chris Miles: [00:13:36] And then of course by 08, 09, things are crashing. And next thing I know, I'm like short selling or foreclosing or whatever on stuff. And so the big mistake I made is I wasn't doing what I call is boring because now I believe the boring sex. Right. Like what you guys do in multifamily stuff, like you say, hey, here's a multifamily deal we're doing, just like the last one we did kind of boring. It's just the same old, same old. But we know it like the back of our hand. That to me is like the sexiest thing you could ever say. Right, because I was like that right. There is what we should do like this that keeps turning and turning and doing the thing that you just do best. And so now when I invest like it's always about cash flow, profit, what's always working versus, hey, maybe I should buy a farm today. I'm not going to go out there and buy a weed farm that we kind of cool. Like, it sounds fun, but I don't know squat about it, so stay away from it. Just stay in my lane and do what makes me good money. And it's consistent and predictable and that's what really matters.

Dan Kreuger: [00:14:42] So what I don't want to hog everything here and do you have anything you want to jump in with because well, this is a question just

Anthony Vicino: [00:14:50] Off the top of my head. You know, I think this is something worth sharing because we just came out of a meeting, Dan and I, with a gentleman who is up there and is in his years at this point. But he's been in the game for since ninety-five. Yeah. Since 1995. And he's worth wow. No, hundreds of millions at this point. And we were just

Dan Kreuger: [00:15:11] 70 million cash

Anthony Vicino: [00:15:13] Liquid. Yeah. And we were just having the conversation about the fact that he does the same thing every single time, just classy value add workforce housing. And we talked about how, you know, some people that want to go out there and get those trophy properties, those McMansion mansions and turn those and they look really good and feel proud to own it. But at the end of the day, these classy workforce housing buildings did not much to look at, but they Cash-Flow and they appreciate and you set a clock to it and there's something boring about it. But there's also something very predictable and predictability and an investment. Baby, now you're talking my language.

Chris Miles: [00:15:49] Yep. That's what I get. Sexy, right? It's just like clockwork, know. And yeah, I totally agree. That's what I look for syndicators because I don't do any investments myself. I don't create any investments. I don't raise any money or anything like that. But that's what I look for, whether it's for myself or for my clients. It's like, hey, what's the kind of we're the kind of syndicators that one like when the really like when the pressure's on, they're going to make sure they're going to keep paying. Now, they've got to have that integrity. That character right then too, is, hey, are they doing a deal that they know they know so well that they've got every possible scenario worked out in stress tests that make sure that it's going to be successful if it doesn't give you the returns you hope for. Most importantly, more important than a return on your money is a return of your money if they can make sure that

Dan Kreuger: [00:16:38] Principals got to be secure, right.

Anthony Vicino: [00:16:40] Yeah, well, not downplaying that risk. It's interesting because if you had the choice between working with two operators, one who is like I've just been for the last thirty years doing the same thing, multifamily value, that's all I do. And then you got this other guy who's like, I did some fixin' flips and then I did a little bit of short term rental. I did a mobile home park. I owned a ski resort. I did some multifamily like Jesus. What what what's your name? It sounds really cool. It looks good on my resume. But, you know, when you stop to think about it, it's like, I don't know. I think I want to go with the guy who's done this over and over and over and, you know, nothing against those other things or being in multiple streams or vehicles because diversification is a thing. But there's also a lot to be said about staying in your lane and becoming a master of your craft before you start branching off indefinitely.

Dan Kreuger: [00:17:27] It's kind of like Cheesecake Factory. They've got a menu that's like a book, but everything's subpar at best right now. They don't do anything. Well, just do a bunch of their cakes there.

Anthony Vicino: [00:17:38] I've been there

Dan Kreuger: [00:17:39] Even though she's not that great.

Anthony Vicino: [00:17:40] Anyways, don't sue us. Cheesecake Factory.

Dan Kreuger: [00:17:46] Yeah, I think we just gave them some free press is what we did. I was going to support

Anthony Vicino: [00:17:53] Your local restaurant, by the way, people.

Dan Kreuger: [00:17:55] Yes, the mom and pop operation, they need your money right now, that Cheesecake Factory, they're good. I was going to ask you said you kind of became I forget the way you phrase it, said you essentially kind of became financially free. It happened, and then you kind of became financially free again. On that second go-round. Did you immediately jump into more of a passive role as opposed to being the active guy who's out there doing the flip side of all the work? Or did you did it take some time for you to kind of figure out that, you know, there was a more efficient way for you to grow your wealth or you didn't necessarily need to be doing all the things yourself?

Chris Miles: [00:18:31] Yeah, I was more of the passive route for sure. And it took me a while to get that confidence back because I got so emotionally burned. I mean, you can imagine Members was in April 2009, just a week before my fourth kid was born. Like I remember getting foreclosed on my own house like it was my dream home guy comes knocking on the door, say I just buy your house at the courthouse just a half-hour ago. We can get out. You know, I was like about to have a baby. We don't have a place to live. Like, I'm I barely have any cash right now despite being on welfare, you know, so, you know, how am I going to make this work? And so, you know, go into that kind of experience and come out on the other side like I was gunshy at first. And it took me like I start out doing turnkey real estate investment. Right. So and I still love working binturong properties, whether it's single-family or duplex or flakes or whatever. Like I love that kind of strategy to own and control, because that was the big thing that came out of twenty-eight thousand nine was control, is that if you can't control the investment, you never know what's going to happen.

Chris Miles: [00:19:33] Even I mean, there are so many friends I had that had their own funds and their own deals are doing hard money lending and then they couldn't pay back. I was like, well, great. Now I got a little piece of paper that doesn't mean anything, you know? So so I was really gunshy. So I had to start out going to the turnkey real estate path. And then I started to warm up, especially as I got to know certain syndicators like, OK, now maybe I'll get into the deal with like a multi-family apartment complex. Right. Or right now, I'm working on doing a deal, partnering up on doing land and best seller finance. I'm doing now we're totally passive leveraging their expertise. Let them do that while I do what I do best, which is teach. That's what I love doing.

Dan Kreuger: [00:20:13] It's less thing about taking the passive role is that you can always invest in a wide variety of different things. As long as the operator is doing the work. That's their thing. That's their niche. That's the, you know, the boring thing for them. It's kind of great you get that diversification, but you don't have to go out and try to learn a new market or a new asset class.

Chris Miles: [00:20:36] Yeah, exactly. Like I've got friends if I want to self-storage if I'm like that's the thing I look into. I know a few people I can call this a great one. Is a software self-storage deal you've got going on right now? If someone's got if I want something in Florida. Cool. I got people in Florida having that kind of contacts in that network is amazing because again, you don't have to be the expert to leverage their expertise. Hey, let them get some of the gains, too. But whether they pay you a press or the pace and profit growth suite, that's a beautiful thing. And the fact you can make double-digit returns better than the stock market. Right. And especially in the sense of cash flow. And this is key. I mean, it's such a game-changer that you start to look at the traditional world of mutual funds and stuff as just a joke. And it's hard right now because right now the markets at an all-time high. I hear all these people, especially the millennial generation. Right. They're all about fire right now, financially independent, retire early. And their answer is by Vanguard S&P Index

Dan Kreuger: [00:21:37] And live on ramen noodles.

Chris Miles: [00:21:39] Yeah, exactly. Zero ramen noodles. It's like Dave Ramsey, but they still hate Dave Ramsey. And I

Dan Kreuger: [00:21:45] Know

Chris Miles: [00:21:46] It's ridiculous because I mean, the last twelve years we've seen an average of 50 and a half percent rate of return. So of course, it looks awesome. But even though it's a fifty percent yield, the truth is the market still to get back into balance has to get around that seven or eight percent. So the fact is it's going to swing back the pendulum and all those people who thought they were financially independent are going to realize they're not because they have no control over their money. And then again, they think the four percent rule was right. Hey, you live on four percent. So you have a million bucks to live on. Forty thousand a year. That's too I have a number that was a good number, like back when I started. Even then, we started realizing that's true. I have a number ten, fifteen years ago. So the fact that they're still using their numbers is antiquated. It's old, outdated, and crap. You know, I say that most three percent, which means if you're a millionaire, you're living on thirty thousand a year. You have to be on you're living below the poverty line as a millionaire. You're broke. Lower-class millionaire. Right. That's a stupid where you and I both know you can get a million bucks to pay at least seventy eighty thousand plus per year. It's such a different game-changer. Just. Getting outside of it and I believe completely with real estate weigh less risk than gambling on the stock market, which is bipolar like my ex-girlfriend. It's nice to know. Mm-hmm.

Anthony Vicino: [00:23:06] Yeah. And all that doesn't like we're obviously real estate fanatics on our end. So we're going to be banging that drum pretty hard. But Dan mentioned earlier is that the whole taxation situation is completely different to when you're looking at investing in a stock market and you might be getting a 15 percent yield, but how are you being taxed on that now? Favorably? It's not helping your tax burden, whereas passively investing, say, in syndication or just in real estate in general, you get all those benefits depreciation. So you look at it like, yeah, you get these double-digit returns, you can double your money in five years, it's killer. And then you also get the tax benefits and it's like, oh, that's pretty awesome. And also all that, just like it comes together to be a pretty compelling sales pitch. What do you find is the hardest part when you're talking with people who maybe have never thought about real estate playing a meaningful role in their portfolio was the biggest resistance that people have

Chris Miles: [00:23:59] Few places of resistance. I mean, one, they remember the last recession right now, one recession of the last six where real estate prices actually dropped. You know, if the only one over the last six recessions either stayed the same or even went up during the recession, we're in a recession right now. And look what's happened. Real estate prices are going crazy, right? So that's one big one. People still think that recession means real estate prices tank, but somehow we still believe the stock market will go up, which is ridiculous because every recession I know other than this one currently, for now, the stock market's still going up, but almost every other recession, stock market drops. So that's one. Two is really that kind of the same thing I told my friend, which is that sounds too good to be true. Right. And I get a lot of people, for example, just retired from Boeing and he's got a million bucks. He's like, I'm ready to deploy. Problem is that I'm like, easy. You make 10 percent, 100 grand a year. He's like, well, that's exactly what I need. I have one hundred grand or more a year. Good. Easy done. Well, where do I put it? And the one thing is, I stay away from the line of the night telling where to put the money, but I will say, hey, here are the options you can do. But it's amazing that even though they see the options, have a will and make that money, because, again, it's just like the stock market they're so used to. Stock market thinking is it's all speculation and theory, right? It's like, no, this is the minimum return you've got to get paid on this particular investment. So, I mean, yeah, there's still a risk. But again, you're buying a real asset. You're not buying some arbitrary number on a company. You're buying a real asset, something that you could breathe, breathe on it. You may

Anthony Vicino: [00:25:40] Be able to breathe on the air that

Chris Miles: [00:25:42] You touch, feel it right. It's something legit. It's there. It has a real, real value there behind it. And so for them to kind of switch that mindset, to realize, wait, I'm actually taking lower risks to get a higher return is the exact opposite. And maybe that's one of the myths I know you talk about in the show. You say like, what's one of those lies, right? High-risk rates, high return, some of the biggest lies I've heard out there that people buy into. Right. And they think that somehow the only way to get high returns is to gamble with their money. And the reason they think that is because that's exactly what financial companies have taught us to believe. Right. They want us to take all the risk while they take none of it. They take their guaranteed fees. They let us get more money in the stock markets. That's what Fidelity Banks on, literally. They tell you, leave it in there, don't pull out. Don't pull out the interest because, hey, the more you leave in there, that's guaranteed increase in cash flow for them. Year after year, though, almost every myth that's taught out there is from the financial institution telling you what to do, make them richer.

Anthony Vicino: [00:26:40] It's all about the incentive structure. Right at the end of the day, you have to understand how is the other person benefit in this equation if the other person is benefiting because of the fees associated with holding your money and giving in, managing it for you, but not tied to the performance of that asset, that's a critical problem. And it's one of the reasons that I actually really again, I I'm an apologist for multifamily real estate syndications because that's what we do. But you have an inherent alignment of interest with the operator, who's in many cases, yes, they're collecting fees, but it's the type of fees that keep the lights on rather than just lining their pockets and making them rich. Most of their compensation is tied to the performance of the asset. And this is such a simple concept that when you sit down with people and you're like, OK, you're your stockbroker or you're a hedge fund manager, your financial adviser, like, how are they making their money? It's not doing what they're advising you to do. They're making their money off of you in spite of you. And so when the only person who stands to benefit when the stock market goes down is your financial advisor, it's problematic.

Dan Kreuger: [00:27:43] That's another important distinction there that you just made, that they I think that people miss it. I mean, in these types of alternative investments, like the real estate syndications and like all the stuff that Christesen. To whether it be real estate or whatever, but in these types of deals, the operators are investing along with the passive investors, which is not the case. If you go to Schwab or any other financial adviser, they have the product. It's like, how much are you putting into this? The answer is going to be zero, which would be my guess. They're not putting anything in with you. They're getting a commission to sell you a product. So at these types of deals, you guys are all in the same. So incentives are very much aligned.

Chris Miles: [00:28:26] You actually said you took the words out of my mouth because that's one of the biggest things you're looking for. Someone who is doing it was an operator. You want to make sure they're putting their own skin in the game, their own money, and not just raising capital to essentially ahli. Right. And you're right. I remember as a financial adviser, the most I would tell people is, hey, banks, financial institutions, they're the number one invest in the stock market. Obviously, they're doing well. So you should do right. Not really fully putting two plus two together. Realize well that, number one, invest in the stock market because you're giving them your money to throw in the market. They don't put their own money in the market. They keep your money out. They just take the guaranteed commissions, the guaranteed fees off the top that take off at the top of your return that you don't see. Right. That's for one case. And worse, they take even more fees because there's an admin fee, right? That's like it's a mutual fund. Companies' dream come true is putting your money in a crappy 401k and keeping in that prison for so many years. If you want to retire before you're 60, that's the dumbest place to put your money because you came to access it without getting your hands slapped or jump through a lot of hoops to make sure you just do it right with a 70 to 80 or whatever, so that you can get this little ladder there, you get money out and all the stuff that people try to use as defensive. Wilfork is awesome. And the thing is, it's true that it sucks. It's stupid. You can go outside of those places, places where financial advisors are not. And that's where you will find better returns with less risk.

Anthony Vicino: [00:29:52] And the far one came might be nice when you're 65, but that's a really long way away from me, so it's not done me any good right now.

Chris Miles: [00:29:59] Yeah, by then it's like it's a matter because every time I get the clients that are about 60 or older or like, well, I put money in. Yeah, I get the tax deferral, I don't get a tax break, I get tax deferral. But then when I pull out want to pay the tax anyway. So who cares. Unless I get a match it doesn't do any good right now. So you can get the match, pull out and then invest it outside of the stock market. You're probably going to get many advantages from it.

Anthony Vicino: [00:30:24] Well, we kind of blew right through it, but that was our best investing advice of the week, I think, right? The high risk is high risk. High returns. Yeah, yeah.

Chris Miles: [00:30:32] That's totally that's what broke people. All right. But you guys know, I mean, you guys are operators. You know, this like you take as little and much manage risk as possible to lower that risk to the point where you can guarantee as much as you can your own returns. That's how we like

Dan Kreuger: [00:30:49] To risk one to make five people do the opposite. They risk an infinite amount to try to make a little bit just right.

Anthony Vicino: [00:30:56] Yeah. And the Bitcoin, we have a section in our book, Passive Investing Made Simple, that's coming out this summer that talks about the risk-adjusted return a little bit further. Yeah, that was Yasuhiko. Depending on when you're listening to this, go preorder the book right now. You're going to want to get that's really good, but be available on Amazon, Barnes Noble, all your major retailers. But so in that, we have a section where we talk about the risk-adjusted returns of seven asset classes. In a study conducted by old Thomson Reuters from 1997 to

Dan Kreuger: [00:31:26] 2000, it was just Reuters actually

Anthony Vicino: [00:31:28] Before Thomson Reuters. It was both who wrote the book to say no.

Dan Kreuger: [00:31:33] I pulled it out of the X fact.

Anthony Vicino: [00:31:36] I put the graph in anyways. What it showed was it plot it plotted all these different major asset classes like stock market bonds, real estate across the axis of risk in return. And what they found is on the high risk, low or high risk, high return side, you get the stocks, which is what you would consider like that. That makes sense given that thesis of high risk, high return. Then on the bottom side of low risk, low return, you get the bonds. So everything stacks up with your general investing principle. But you then look at commercial real estate on that graph and it flies in the face of everything else because it lives in the top left of the graph, in the low risk, high return section. And it's like, wait, that's a mythical unicorn. That doesn't make sense. It has returns on par with the stock market with a risk profile on par with the bonds. And so it's like, OK, so what we're being fed in general discourse, in financial literacy of the general public is maybe a little bit wrong or maybe entirely wrong. So, yeah, go as well

Chris Miles: [00:32:34] And invest in all kinds of stuff. But I'll tell you, I think it's so hard to beat it. And again, I'm not trying to play you guys a lot, but it's true, like those of us listening to the show right now, like you're actually listening to some of the best-proven strategies ever. If you're ever not sure, just go back to the same thing I thought. Right. Which was my Naturalizer. Like, I like to see the evidence. I want to see things work. Well, look at the richest people in the world. Right. Or even people, you know, they're just multimillionaires, not just millionaires. You can save your way to be a millionaire right now. It's not that hard. But to be a multimillionaire, that's action-free. You'll notice that even if they say they have maybe some sort of stock or something, the bulk of where they're making their money is in real estate and some kind of real estate. Right. And so why would we go for people that the average American is stuck there for weeks and IRAs for years, only to live on a budget and beg for Social Security to make up the difference or go with people that have actually become free doing real estate, it goes to show that you don't even know what you're doing. I'm not recommending that. It just goes to show the odds are probably in your favor. Doing real estate way more than going. The traditional average American path was broke

Anthony Vicino: [00:33:46] At the end of the day, who you take your advice from matters and looking at not just what they say, but what they do and the people whose actions and their words are in alignment. And they're wealthy or independently wealthy, not just because they inherited it or because they want the stock market lottery like they actually had a system that's replicable. Those are the people that you want to take advice from, the people who you look at and you say, I would trade places with you. The people that you don't want to trade places with are the ones who you look at you like, wait, you're not even wealthy. Why are you giving me wealth advice? First of all, that doesn't make sense if you're not financially free. I don't know what you can teach me on this because clearly, you haven't mastered that lesson yet. And so who you take advice from matters quite a lot.

Chris Miles: [00:34:29] A man like you doesn't ever take advice. People that roadway something about Bitcoin ten years ago is not the person that's going to be the expert. They rode away, they gambled, they got lucky. They made money. Same thing about Apple stock in nineteen eighty-four. Congratulations. You got lucky. You were not a good investor. You rode a wave and you just simply got lucky. That's it.

Anthony Vicino: [00:34:52] Yeah. Looks not a replicable strategy so it doesn't do us any good. But this has been Christesen going to kill a conversation. Man, I want to move and get your book recommendation because I have a feeling that you have something interesting up your sleeve for us.

Chris Miles: [00:35:07] Yeah, you know, I was trying to think of a book, and it's part of my head, a good one is by Jim Rickards or James Rickards, if you look it up, called The Next Great Depression. So he just released that back in January. He wrote other books about like, you know, impending doom and all that kind of stuff. Right. So he talks about his prediction now, his predictions about deflation rather than inflation based on certain circumstances with covid and everything. I mean, that may not happen, but the cool thing is if you get toward the end of the book, he actually says, here's where our diversified portfolio in both scenarios, where there's deflation or inflation, no matter which way the market goes, guess what's the one staple that's in there besides gold? That, of course, is he loves gold, crypto.

Anthony Vicino: [00:35:53] That's all that I'm going to bet my money on real estate on this one.

Chris Miles: [00:35:57] Yeah, he put real estate. He said real estate. He's like whether inflation or deflation, real estate is going to be the one thing that you can hold on to in your portfolio. So I think a great I mean, even even if it doesn't go into the deflationary market that he expects for the next few years, still a great book. Lots of good economic education there. That is different than a lot of books I've read.

Anthony Vicino: [00:36:17] I love it. I'm not I have not heard of that one, so I'm going to check that out again. Have you checked that? No, no, not. All right. We got we have a new book

Dan Kreuger: [00:36:25] For the book club. It's on the

Anthony Vicino: [00:36:26] List. We don't actually have a book club, but we are going to start one maybe. And it was really appreciated you taking the time to join us today. Before we let you out of the cage, let us know where can people get a hold of you? It sounds like you have a pretty killer podcast, Chris Miles money show. Where else can they get you?

Chris Miles: [00:36:44] Yeah, besides the Christmas Morning Show, which. Yeah, definitely. Check that out. You can go to my website. Money Ripples. Dotcoms are dotcom, not in dotcom like an entrepreneur magazine. Try to put and that was not cool but money rules dot.

Anthony Vicino: [00:37:00] I'm not totally different. I would probably click that link. I'll be honest. I'm just so curious.

Chris Miles: [00:37:07] I should buy that if it has been digging just into this little slip of the key. Right. But it's perfect for so many people's dotcom. There's great stuff on there to check out.

Anthony Vicino: [00:37:16] Well, for you guys and gals at home there, listen to this again. We want to thank you. We really appreciate you taking the time to join us today. Whether you're in the car, you're on a treadmill, walking the dog, whatever you do. And when you get home, make sure you go check out Chris over at Money Ripple's Dotcom or the Christmas Money Show. And we're going to look forward to seeing you guys next.