
Bank on Your Neighbor: The Audiobook Podcast
Building wealth doesn’t have to mean Wall Street. In this exclusive audio series, Mel Dorman brings you Bank on Your Neighbor — a practical, people-first guide to seller financing. Learn how to create ethical, win-win deals rooted in relationships and strategy, and start building financial freedom right in your own community.
https://meldorman.com
Bank on Your Neighbor: The Audiobook Podcast
Bank on Your Neighbor: The Audiobook - Chapter 6
Is your money really safe in the bank? In this chapter, Mel pulls back the curtain on one of the most dangerous financial myths we’ve all been taught: that parking your cash in a savings account is the smart, “safe” choice. Spoiler alert—it’s not.
From inflation that eats away at your dollars like ice cream in the sun, to banks profiting off your deposits while giving you crumbs, Mel shows why leaving your money in the bank isn’t protecting it—it’s shrinking it. You’ll learn how inflation actually works, why 2023 was the worst year for bank failures since 2008, and how to reclaim your financial power by putting your money in motion.
This episode dives into appreciation vs. depreciation, sweat equity in real estate, tax strategies like depreciation and cost segregation, and the importance of cash reserves. Mel makes the case that real safety doesn’t come from hoarding—it comes from moving your money with intention to build freedom, purpose, and community wealth.
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Hi, friend. I'm Mel Doman, real estate investor, former social worker, TEDx speaker and financial activist. And this, this is Bank On Your Neighbor, the podcast. You're probably here because you felt it too, that the system wasn't built for us. That building wealth shouldn't mean selling your soul to Wall Street or crossing your fingers every time a bank says no. That there has to be another way. Well, there is, and this podcast is my free gift to you. That's right. Free, no paywall, no audible subscription, no gatekeepers standing between you and the knowledge that can change your life. Because here's the truth, just because something's free doesn't mean it isn't valuable. Sometimes the most valuable things, clarity, empowerment, freedom, don't come with a price tag. They come with purpose. I created this podcast because I'm on a mission to decentralize wealth, to take power out of the hands of billionaires and put it back into our communities. Each episode is a chapter from my book Bank on Your Neighbor. Read by me. It's my way of making sure this knowledge reaches the people who need it most without a single algorithm getting in the way. We'll walk through the real strategies I use to go from dumpster diving in my twenties to building a multimillion dollar portfolio in my thirties without banks, without credit, and without compromising my values. We'll talk seller financing, community centered investing. And creative ways to build wealth that actually serve people, not exploit them. But this isn't just a podcast, it's a movement, a radical reclaiming of power, a blueprint for creating more community-minded millionaires and fewer billionaires extracting from our neighborhoods. Every chapter builds on the last, so I recommend listening in order. I'll drop links, visuals, and extra resources in the show notes to help you take action. Not just absorb information and if something in an episode strikes a chord, send it to someone you care about. That's how we spread financial literacy. That's how we grow a movement. That's how we rise together. Welcome to Bank on Your Neighbor. Welcome to the movement. Let's build something together. Chapter six, money. Myth number five. Money is safe in the bank. It is well enough that people of the nation do not understand our banking and monetary system. Or if they did, I believe there would be a revolution. Before tomorrow morning, Henry Ford standing before a room full of curious eyes, I reached into my bag and pulled out a thick wad of a hundred dollars bills, a fat stack. I dropped it onto the podium with a satisfying slap. Eyebrows lifted, heads tilted. Then came the twist. I raised one crisp bill in my right hand and in the other, a shiny pair of scissors. I paused just long enough for the tension to rise. You could feel the nervous laughter forming in the room. Was she really about to do it? One of the biggest money myths in America today, I said, is the belief that your money is safe in the bank? I let the silence land. Then I began to cut a tiny corner fluttered to the floor. Last year we lost 3.4% of our dollars buying power. I said, slicing the bill again. In 2022, we lost 9%, another slice. And in 2021, 7% snip, snip snip. In just three years, we've lost 20% of our dollars total value. And while you may be worried that I'm cutting up a fake a hundred dollars bill, the truth is our real money is disappearing the same way. Just more quietly. Mic drop. That day. I wasn't just making a spectacle, I was making a point. Inflation is a thief, and when you leave your money in the bank, you're letting it get robbed in slow motion. This is the fifth money myth I stumbled into as I increased my financial iq, the myth that money is safe in the bank. In this chapter, I'll show you why this myth persists how inflation actually works and what it means to reclaim your financial power by putting your money to work. Not just for banks and Wall Street, but for you. Let's rewind. There was a time when every dollar in America was backed by a real piece of gold. That gold sat in government vaults, and the dollars we held in our hands were simply paper receipts. That said, I own a piece of this, but in 1971, everything changed. President Nixon officially took the US off the gold standard. From that moment forward, our money wasn't backed by anything tangible. Not gold, not silver, not a single ounce of metal. Just trust. Today, the only thing backing the US dollar is our collective belief in it and our government's ability to enforce it. And here's the kicker, when money is no longer tied to a real resource, the government can print as much of it as it wants. Every time they do, the value of your existing dollars goes down. That's inflation. Most of the time we talk about inflation as if prices are going up. But another way to say it is like this, your dollars are quietly shrinking in value. Here's the proof. During COVID, the US government printed more money than any time in modern history. Roughly one in every $5 in circulation today was printed in 2020 alone. That's a 27% increase in the money supply in one year. When there's more money chasing the same number of goods, prices, skyrocket, rent, gas, groceries, it all gets more expensive. We call it a recession, but really it's a symptom of trust-based currency. Being overused. Inflation doesn't just erode your purchasing power. It creates the illusion of financial stability while quietly draining your wealth. So when you park your money in a bank for safe keeping, you're not protecting it. You're letting it melt. An ice cream cone left in the sun. The longer you leave your money sitting still, the smaller it gets. Appreciating depreciation, I've always been a saver. Even as a kid, I hoarded my Halloween candy like a tiny accountant. But as an adult, I confused. Saving with security, I clung to my hard earned cash like it was a life raft. The idea of risking it that felt reckless. Conventional wisdom says to play it safe. Sit on the sidelines. Guard your treasure. Here's what it doesn't tell you. If you never put your money in motion, you guarantee you'll fall behind. It wasn't until I truly understood inflation that I realized I had it backward. Keeping my money in the bank wasn't safe. It was like setting an ice cream cone on the sidewalk and hoping the SUD wouldn't come out if my money was losing value just by sitting still. Then the only real safety was to get it moving, to put it to work, to own things that gained value faster than inflation could erode them. So what actually builds wealth appreciation, that's the word for when something goes up in value. Over time, think stocks, real estate, or assets that become more desirable as time goes on. The opposite of appreciation, depreciation, that's when things lose value like a car. The moment you drive it off the lot to remember the difference, think of appreciation as gratitude. Thank you house for being worth more than I paid for you. Building wealth means trading your dollars for assets that appreciate faster than inflation creeps in. The more your money grows, the less of it you'll need to become free. And yes, sometimes that means investing in things that seem pretty risky on the surface, but carry long-term potential stocks, bonds, real estate. Even Taylor Swift tickets, if you time it right, five x returns in six months. No joke, but risk doesn't always equal reward. Not every investment appreciates some just evaporate. That's why prudent investors don't gamble. They learn the game. They ask hard questions. Study the market, make smart measured moves. Because wealth doesn't just belong to the bold, it belongs to the informed Real estate has a secret weapon. Unlike stocks, you don't have to just sit back and hope the value rises. You can force it to, this is what's called value add opportunity. When you make smart improvements to a property that directly increases its desirability, and as a result its market value. Maybe you finish a basement, split a lot, add an accessory dwelling unit, or renovate a tired kitchen and bathroom. These upgrades aren't just cosmetic. They raise rents, attract better tenants, boost resale value. They create what investors call sweat equity wealth built by effort. Not just time, but not all upgrades. Pay off. I've had clients proudly show me every inch of their painstaking renovations, custom tile designer lighting barn doors made from reclaimed wood in a Pinterest fever dream tens, sometimes hundreds of thousands spent on their forever home. Then comes the part I dread telling them that the market doesn't care, their five layer cake masterpiece. Turns out the party is gluten-free. It's one of the hardest truths in real estate. The value of your upgrades is only as strong as the neighborhood's ceiling. You can pour your soul into a marble shower, but if you're in a zip code that only supports laminate floors, you won't get that money back. That's why market research matters. Before you pick up a sledgehammer, ask yourself, does this area support the price bump I'm aiming for? Are there comparable sales to justify my vision? Will renters or buyers actually pay for what I'm building? Because when you get it right, the return can be massive. That's how real estate becomes more than an appreciating asset. It becomes an engine one that you can fine tune, rework, and use to generate long-term wealth on your terms creating tax shelter. Let's talk about one of the best kept secrets of real estate tax perks. I know I just lost half of you. Stay with me. This might sound like the boring part, but when those boring perks turn into fat stacks of cash, courtesy of Uncle Sam, it's anything but dual. Here's the deal. When you're an employee, the money you earn is taxed before you spend it, but when you're a business owner or a real estate investor, you earn your income, subtract your expenses, and then get taxed on what's left. It's like getting a discount every time you spend strategically. Thanks Uncle Sam for the Unexpected Cashback program. Why does the government reward business owners and investors? Because they're fueling the economy. They're taking risks, creating jobs, providing housing. So the tax code is designed to encourage more of that. Enter one of the most powerful tools in that toolbox. Depreciation, it sounds like something only accountants care about, right? But stay with me. This is the golden ticket wrapped in boring math. What is depreciation? It's the IRS acknowledging that things wear out over time. Roofs, age, pipes corrode. Buildings need repairs. Even if your property is performing great, the government lets you claim a paper loss every year just for owning it. That's depreciation. A legal way to reduce your taxable income without spending actual money. Let's walk through a simplified example. You buy a rental property for say 600,000, the land is worth a hundred thousand, can't depreciate dirt, and the building is worth 500,000 For residential real estate, the IRS says you could depreciate the building over 27 and a half years. So 500,000 divided by 27 and a half years equals $18,181 per year in depreciation. Now, let's say you are in a 35% tax bracket.$18,181 of depreciation deduction saves you about $6,363 in taxes just for holding the property. You didn't swing a hammer, you didn't spend the money, but you get the write off anyway, that my friend is tax shelter, an umbrella shielding your rental income from the IRS's rainstorm. How to get paid to buy a fourplex. If you thought depreciation was powerful, wait until you hear about its big Sibling Bonus Depreciation, also known as how I got the IRS to help me pay for a fourplex. But first, a little background. When you buy a property, the IRS normally assumes the building wears out evenly over 27 and a half years for residential real estate. But in reality, not all parts of the building age at the same speed. Some pieces like carpets, appliances, or HVAC systems wear out way faster than the walls or foundation. That's where a cost segregation study comes in. It's basically a detailed inventory of your property, roofs, windows, fixtures, flooring. Each component is categorized and given its own depreciation timeline, some as short as five, seven, or 15 years instead of 27 and a half. And here's the kicker. Thanks to bonus depreciation, which has varied by year, you can write off those shorter life components all at once. In year one translation, you front load the tax benefit instead of waiting decades for it. Let me bring this to life with a story. A while back I put $60,000 down on a $1,225,000 fourplex. We ran a cost segregation study and discovered that nearly $200,000 of the building could be depreciated on an accelerated schedule. Thanks to bonus depreciation, I was able to deduct almost that full amount in the first year when the dust settled, uncle Sam handed me a $65,000 tax refund. Let me say that again for people in the back. I put down $60,000 to buy the property, and my tax refund was $5,000 more than that. Naturally, I named the LLC that owned the building plex because, well, the tax strategy basically paid for it three years later. That same property was cash flowing.$3,300 per month contributing significantly to my financial freedom. That's the power of using the tax code intentionally before you get too excited. Let me clarify. This isn't about tax evasion, it's about tax strategy. You still owe the taxes eventually, but by deferring them. You get to reinvest those pre-tax dollars and accelerate your wealth. Instead of playing defense, you play offense. And with the IRS surprisingly cheering you on. Yes, the wins can be big. Yes, the math can feel magical, but here's what I want you to remember, especially as your confidence grows, it's not just about building fast, it's about building smart. Before you chase the next deal or pull out equity like a boss, there's one more layer of protection you need Cash reserves in finance reserves are the emergency stash, a safety net that keeps you afloat. If life takes a turn, I recommend saving at least six months of your essential expenses. Housing, food, insurance, transportation, not your brunch habit. Just the basics and the same rule applies to your properties. Each one should have its own reserve fund, enough to cover principle interest, taxes, and insurance. A-K-A-P-I-T-I. In fact, if you use a bank loan, they'll often require proof of these reserves to even qualify. Why? Because reserves buy you options. When something breaks a roof, a furnace, a sewer line, you won't panic, you'll respond. When a tenant loses their job and needs a payment plan, you can be flexible instead of fearful. And in your personal life reserves gives you the freedom to walk away from toxic jobs. So you know, to clients who drain you and take a strategic risk without gambling your safety. I like to say reserves in the bank mean you don't have to be so reserved in your life. It's amazing how much power returns to you when you know you're covered both as a human and as an investor. Once your cushion is in place, that's when you move. That's when you direct your dollars with purpose, not just to protect the past, but to invest in the life you want to build money for rent. Let's talk about what really happens when you leave your money in the bank, because most people think of their savings account as a vault. Safe, untouched, waiting patiently until they need it. But that's not how it works. When your money sits in a bank, it's not sitting at all. It's already been lent out to somebody else. The bank is renting your money and they're getting a much better deal than you are. Let's say I deposit a thousand dollars in a savings account at the end of the year. The bank pays me 1% interest, a whopping $10. Meanwhile, they lend $900 of that money out to someone else at 7%. That earns them $63. After paying me $10, they net a clean $53 in profit off my deposit. The bank made 6.3% using my money while I earned crumbs. Now, here's where it gets even sketchier. Historically, banks were required to keep a certain percentage of deposits in reserve just in case customers came to withdraw cash all at once. But in 2020, the Federal Reserve dropped the reserve requirement to zero. Yes, zero. That means banks can now lend out every dollar you deposit. If they fail, the FDIC might bail them out. But guess who pays to replenish the FDIC? We do through lower savings rates and higher loan costs. So the next time you feel proud of playing it safe with your cash, remember, banks aren't playing it safe. They're playing it smart with your money, playing loose with my money. Now let's talk about what happens when banks don't play it safe and what it means for the rest of us. In 2018, the Trump administration rolled back critical portions of the Dodd-Frank Act, which had been passed after the 2008 financial crisis to prevent another meltdown. Originally, banks with $50 billion or more in assets were subject to rigorous oversight, think stress tests, capital requirements, and liquidity rules. But under the 2018 rollback, that threshold was raised to 250 billion translation. Hundreds of mid-sized banks were suddenly exempt from the very protections designed to keep them in check. Huh? What could go wrong? Well, everything fast forward to 2023 Silicon Valley Bank. The 16th largest bank in the country collapsed in a spectacular mess of bad bets and poor risk management. Silicon Valley Bank wasn't regulated under the stricter rules because it was just under that $250 billion mark. When its tech savvy client base started withdrawing cash and mass. This bank didn't have enough liquid assets to keep up. It ran out of money. The government had to step in. It became the largest bank failure since 2008, and it didn't stop there In the months that followed four more banks failed making 2023 the worst year for bank failures in US history. Banks weren't designed to protect us. They were designed to extract from us. They're not evil, but they're engineered to maximize shareholder profits, not preserve your purchasing power. And unless you plan to become a shareholder yourself, that system doesn't serve you. True financial safety doesn't come from storing money. It comes from moving it with intention. Money is called currency for a reason. It's meant to flow. When it flows towards ownership, it builds. When it flows towards purpose, it liberates. When it flows towards community, it multiplies. But when it sits stagnant in a bank, it feeds someone else's machine. And still, we keep chasing safety inside a system that was never meant to hold us. We keep handing over our dollars and our power believing we're being responsible, but real responsibility isn't hoarding it's movement. It's learning to move money like a river, not trap it in a dam. It's directing dollars towards what we value instead of parking them in someone else's portfolio. It's remembering that money isn't just math, it's energy, and when you move it with purpose, it grows. Yes, keep enough in reserves to sleep well at night, but once your safety net is in place, don't just protect your money. Position it, deploy it. Let it build the world you want to live in. And if that world includes real estate, if you're ready to stop renting your life and start owning it, let me tell you something radical. You don't need a bank to buy a property. You need creativity. You need clarity. You need a relationship, a pen, and the courage to ask for terms that actually fit your life. That's where we're going next. Because the next money myth is so deeply ingrained you might not even realize it's a myth. I can't buy property unless a bank says yes. Let's dismantle that idea piece by piece and rebuild something more powerful in its place.