Mastering Finance: From College Dropout to Successful Entrepreneur with Chris Miles

Ever wonder how the masters of finance manage to retire not once, but twice? Our guest today, Chris Miles, a financial expert from Utah, will not only answer that question but will also walk you through his journey from being a college dropout to a successful entrepreneur. Miles pulls back the curtain on the world of passive real estate investing, revealing how he found financial freedom and how you can do the same.

We dive into the heart of Miles' strategies, exploring how to maximize business profits and convert them into stable, predictable passive income. He lays bare the power of leveraging money to create additional income streams and offers sage advice on navigating through complex financial concepts like 401K and IRA plans, stock markets, and property equity. From the world of real estate investing, we hear Miles' views on potential pitfalls and how to avoid them, as well as his insights on effective property management and investment options that yield a high return.

In the final segment, we discuss the importance of diversifying passive investments and understanding ROI. Miles underscores the necessity of diversifying income streams, even your emergency funds, and encourages listeners to explore avenues like oil and gas investments.

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Chapters

• 0:02 Financial Expert Shares Retirement Success Story
• 10:32 Maximizing Profit and Generating Passive Income
• 16:39 Real Estate Investing Drawbacks and Strategies
• 20:10 Diversifying Passive Investments for Business Owners
• 24:59 Understanding ROI and Diversifying Investments

Transcript

Erin Manning: 0:02

Welcome to the Dead Pixel Society podcast, the photo imaging industry's leading news source. Here's your host, Gary Pageau. The Dead Pixel Society podcast is brought to you by Mediaclip, Advertek Printing and IP Labs.

Gary Pageau: 0:18

Hello again and welcome to the Dead Pixel Society podcast. I'm your host, Gary Pageau, and today we're joined by Chris Miles, who is a financial expert, and he's joining us from Utah today. Hi, Chris, how are you today?

Chris Miles: 0:31

Hey, fantastic Gary, Glad to be here.

Gary Pageau: 0:34

So, Chris, you've got kind of an interesting story Before we get into the advice you have for our listeners on getting their financial house in order. How is it that you have already retired twice at your age?

Chris Miles: 0:48

Simply put, to retire twice means I had to screw up the first time. That's what it means, so yeah, so kind of give you some quick background on me. Actually, money was definitely not a strength for me at all. I was raised by very good, caring parents. My dad was the hard worker your word is your bond kind of person. Both my parents were born during World War II. My mom was much more the free spirit, she was the artist, she was the one that I mean. She was trained by the same master painter that Bob Ross was trained by, right? So same generation era. Always want to leave something beautiful on a planet. So when you get someone who says, follow your passions and your dreams, you get another person says you know, have integrity, your word is your bond, you get me right, you get generation X. So yeah, so, anyways. So I wasn't.

Chris Miles: 1:34

But the thing is with money, I wasn't really taught about money. I mean, the one thing I was taught was there was never enough of it, right, it was always like, hey, we can't afford this. What do you think? Money grows on trees. I'm not made of money, you know. You know those kind of things, and even my dad would talk about how work would literally kill him. He's like I will die working, because he had already had strokes and heart attacks by time he was in his 40s. Oh, my goodness, I didn't want that life and so I want something different.

Chris Miles: 1:55

So when I went to college, I was planning to become a business consultant, but I thought, as I was going through college, I want those people. I think that you should have real life experience too. So I took a sabbatical from college before I got my, my bachelor's degree and I said you know what? I'm going to find some business to do. And the first business that came up was being a financial advisor. Not realizing they take anybody off the street that has no criminal record and can pass a test. That's really all you have to do to become a financial advisor. You don't have to be money genius in any way, shape or form. Well, I did that for several years. I actually stayed dropped out of college and never went back.

Chris Miles: 2:28

So I'm a college dropout and I was doing that for a while and after several years, my dad said well, chris, when are you going to sit down and talk with me? Now? Understand, my dad had that depression era mentality right. You got to be cheap. You save everything, you pay off that debt. I mean everything that Dave Ramsey would tell you to do. You know when you're talking about living on rice and beans. That was my dad, right.

Chris Miles: 2:49

And so I sit down with him, see his finances for the very first time in my life, and as I look at his finances, he said Chris, I'm 61 years old, when can I retire? I said, dad, let's just say this If you want to retire today, you better hope you die in five years, because that's how long it's going to be before your money runs out. He said, all right. Well, what do I do then? I don't want to. That's not an option I want. So what do I do? And I said I don't know. You did everything right, because you stuffed your 401k full, you paid off all your debt. He was debt free, including his mortgage, right? I mean, you would think he had done the perfect ideal situation that you hear all the financial experts tell you to do today. That guilt you and shame you, that you should be doing more right. And he had done more, and yet it wasn't enough Right, and that really bugged me and I said, well, okay, there's got to be some other way. And I told him. I said I don't know what to do for you because you did everything right. And for weeks I was kind of in turmoil. And then, of course, when the students ready, the teacher appears.

Chris Miles: 3:50

One of my friends, Doug. I had actually trained him to be a financial advisor. You know he and I had a conversation on the phone. We started having this argument about what's better, stocks or real estate, and he finally stops me. He said, chris, how many of your clients are actually financially free, like where they don't worry about money, including running out of money? He got me on that one, because even the retired ones always worried about running out of money. Sure, that's all right. So I'm going to give you guys as financial advisors are financially free, not off the commissions you've been earning, but actually doing these investments. I said well, probably none, because the guys have been working here since the late 1970s and they're still here, right, right, there's your problem.

Chris Miles: 4:30

And it led me down this path to the point where, you know, I started to realize that there's this whole other world of like real estate investing where you can actually do passive investing. You don't have to be an active real estate investor where you're sitting, tenants and things like that. You can be a passive investor by getting your money working harder for you, generating regular, stable, predictable passive income. Sure, and as a result of that, I realized I was living a lie. Either I stay in that industry or I leave. And I left. I said I'm no longer going to be a financial advisor, I'll be a mortgage broker, I'll teach ballroom dancing on the side, and then I'll. You know I'll just do that. And so I did.

Chris Miles: 5:06

But later that year, as I started to apply these things, I was able to get to the point where I was able to retire myself when I was 28, almost 29 years old, and uh and all just by having this income, these income streams, coming in paying for it. I never thought I'd be there Right Now. Granted, the reason was twice, because the recession hit just a few years later, kicked my butt and I had to dig out of a million dollar debt hole to come back and do it again without filing for bankruptcy. So when somebody says, hey, I'm broke, I don't have any money, I was like, well, guess what? I was a million dollars broker than you were, and I still was able to come back and do it again by 2016, when I was 39. So, yeah, it was a.

Chris Miles: 5:41

It was a hard decade, or give or take, but you know it was, it was worth it and so that's the thing. That's what I'm really teaching people to do today is really like what I wanted to have for my dad. Right it's? It's to give him his life back, to give him your freedom and get that control back in your life so that you have these multiple streams of income. So you work because you want to, not because you have to, because you know this and the business you.

Chris Miles: 6:03

If you work in a business where you're stress-free like money stress-free it's amazing how many more people say yes to you. It's kind of like as a photographer if you ever notice that when you have a lot of business coming in, people just automatically keep saying yes to you. The pressure's off. You don't have that scarcity mentality. Sure, keep coming to you and you keep saying yes. But at times it's hardest people say yes is when you don't have any business coming in. It's when, all of a sudden, things dry up and then you want that one client and then they're like well, let me think about it, you work five times harder for those clients than you do when you have money. And that's the beautiful thing is, when you have, when you know you work by choice because it's almost a passion project for you, it's a totally different game changer. So the funny thing is, your business will probably grow and expand bigger than it did when you were living just solely on that income. So how?

Gary Pageau: 6:54

did it end up for your dad?

Chris Miles: 6:57

Well, he's still alive today, surprisingly. He's just about broken the record for his cardiologist for the number of stents put in arteries and still alive to this date. It's been a hard life for him because he really has been trying to stretch out every dollar he can with social security, veterans benefits because he was in Vietnam War, I mean all those things right.

Chris Miles: 7:18

He's been trying to stretch out as much as he can and it's been a struggle for him, like he's really he is always worried about how do I make my money? Last, right, and that's the hard thing we started to kind of get him to real estate but it was kind of too little, too late at that point and not to mention it was it's hard to break patterns. You know, we've spent a whole life being cheap and thinking a certain way. It's hard to break those patterns. Again. I will say this we just had a conversation a few months ago. Him and I are actually closer than we've ever been at this point, you know.

Chris Miles: 7:51

And he was talking I was just mentioning about I was traveling to a business conference and then I was like oh yeah, and then I went with my family, we went here, we went there, and he's like I don't even understand that life. Like that, the amount of freedom you have, I wish I would have had that. You know, I was like I was working hard, I was trying to raise you the best I could and it's like, yeah, you did a good job, like that's never in question. But for him he's like I wanted that life and now that he's pretty much bedridden right, he's in a wheelchair. Now at this point he doesn't have that freedom to do it anymore. You know, like he was always pushing it off, procrastinating as much as he could. I mean he'd lived still a good life, but he didn't do a lot of the travel stuff. I mean we at most went to like Tullamook, you know, to Oregon, you know we went to the coast, you know, and we would go fishing or whatever Like that was like those are great family memories though.

Chris Miles: 8:39

Oh, yeah, for sure there's great family memories, but, yeah, he never got to, you know, do a lot of the things that he still had on his own bucket list, and now he feels like he's really just waiting for the clock to end and will stop ticking and so it's tough for him. You know, and I do feel very blessed that my life is different. I take it for granted a lot of times I really don't realize that how much freedom that really is but, it's amazing.

Gary Pageau: 9:02

So it's kind of segue into what a small business owner should be looked like. I mean, you know we talked before the show about kind of who this audience is right. So there's kind of you know, two segments, if you will. There's the older small business owner who's run a camera store or a photo store for several years. They may or may not even own their building, which I think a lot of them do, right they instead of leasing their own in their building. But there's also younger generation coming into the business who are maybe young millennials who have gone into the business.

Gary Pageau: 9:33

So for someone who's been in the business for a while and they're trying to maximize their outco flow, if you will, what are some of the ideas or thoughts you might have for that person who's looking to kind of maximize? Now again, many of these folks I know they're in their fifties or even sixties, even a couple in their seventies actually who are, you know, kind of has your dad's philosophy right they're gonna ride this till they die. What are your thoughts there on maybe removing some of those money concerns?

Chris Miles: 10:32

You know, first and foremost and this was still applied to the younger generation too is in a business, profit is number one, you know, is how much do you actually can you take home? You know, I hate seeing business owners that have employees that make more money than they do sometimes. Right, because as a business owner, as a CEO of your company, you should be the highest paid employee and maybe you already are at this point if you've gotten your business to a nice lean, mean machine, right? And, by the way, when I say focus on profits, I don't mean at the expense of people. Sometimes people have that negative connotation, but that's not the case. Profit should be really a byproduct of the service you've rendered to other people, right, I mean, when you have revenue coming in, money exchange is only because you're providing us something of value that they value more than the money they pay you. Right, and that's why they pay you the money. But really focus on that profit, taking home more. That here's the big mistake, and I don't even give this to the younger generation too.

Chris Miles: 11:24

The big mistake in business that people have is that they constantly say they quote, unquote reinvest in their business, and if you're older, you probably have already figured this out at this point, because you realized, wait a minute, I just built another rat race, right, I just created a prison. Like, maybe I don't have a job per se, but if you're always reinvesting your money in business, you're not really reinvesting. Sometimes You're really. What you're doing is just spending money in your business, right? So that's why I mean that take home money is key. What do you do with that take home money when you get it? Put it to use, put it to better use, and I don't mean it to your crappy 401K plans or IRAs, because you could do those things. But the problem is most people think, if they're gonna do that, either one, they just willy nilly, throw it in some stock market or something like that, or two, they trust some crappy financial advisor who really is just a salesman in a suit. I would know as one of them, and that's dangerous, right, because those, just remember, you're taking it's like the blind leading the blind Financial advisors. I know that. I mean I go to once a year. I go to study group. I'm not a financial advisor per se anymore, but I do go to a study group that has, like these, top financial advisors in their field that usually make at least a few million dollars a year in the long run, right, and it's always amazing how, after you know, I'm the one guy that shows up in shorts and T-shirt, kind of like I'm today. You can't see me, but I got my Nike freak shirt on right now. You know, that's the kind of stuff I wear to a financial advisor meeting with million multimillionaires like myself and and the funny thing is is that you talk to those guys, there's always at least one financial advisor would come to me and say hey, chris, so how do I retire? Right, you know. You know there's a problem when even the guys are the most successful business don't even know how to retire themselves, right, always.

Chris Miles: 13:05

So for you like taking that money and then putting it to use. I call it get lean, get liquid, get out. Get lean means, you know, be profiting your business profitable at home. Make sure you're not spending every dollar you make. Take something and put it away. Get liquid means get that money away but don't lock it up.

Chris Miles: 13:19

That this is the number one problem that people have is that they've locked their money up in prison. You mentioned that might own a building, right, many you're always taught lock up your money in equity in the building, or lock up money and equity in your house, right? Well, you can't use it. It does you no good, right? Because that money's just locked away. You actually put it in the bank's hands versus your own hands by doing it that way, in the hopes that someday you'll be debt free, like my dad was, which didn't help him either. So be careful that also, when you're locking money up in 401ks and IRAs, you're locking it a place that you're not really the owner. The government is the owner, not you, right? And so you got to be careful that.

Chris Miles: 13:53

So that's why I say get liquid means. Can you get your money unlocked out of those prisons? Can you get your money out of those 401k IRA plans? Can you get your money out of those stock market where you're gambling it away, which I believe the stock market is about to tank big time soon? Also, equity in your home or your building. These are ways to use that. There are ways to get that money out and then use it to generate streams of income, passive income that you don't have to work for. That's what, ultimately, is the goal. It's how do we get those streams of income come in Because nobody cares about the retirement plan.

Chris Miles: 14:21

The only reason people do retirement plans is you hope that it somehow generates some kind of income stream for you later on. But here's the problem is that in traditional retirement planning, if you happen to be fortunate enough to save, say, a million dollars in mutual funds or stock market type stuff, right, you save up a million bucks. Do you know that they're going to recommend you live on only 3% a year? There used to be a 4% rule. The 4% rule is dead. It's been debunked a long time ago and there's still idiots out there to teach it. But 3% is always just be pulling off.

Chris Miles: 14:52

I remember I had a client in California. He had a million dollars. He happened to save. He was lucky enough to pull his money out before Y2K and then put it back in. Pull his money out before the Great Recession, put it back in. He happened to be lucky enough to have a million bucks and his financial advisor said you'll have to live on 30,000 a year. It's like I live in California. Homeless people came and live on 30,000 a year. So he came to us right, and so we started looking at different things. Like you know, this is the get out part of the get lean, get liquid, get out and said, well, how can we get that money out in other places? And so he actually got his money out in like like duplexes you know that a property manager managed for him. He got his money out and in shared ownership and apartment complexes somebody else operated and controlled.

Chris Miles: 15:32

Yeah he did some oil and gas investments that are more like leasing the land to oil companies and things like that, these alternative things that financial advisors don't know about. And even if they did, they don't want you to know about because they don't make a commission on it, right? That's why you make more money All these things he's making double digit returns on. He went from 30,000 a year what his financial advisor recommended for that million dollars now to create 130,000 a year for him with the million dollars.

Chris Miles: 15:57

Yeah, from a million dollars. Same money, just different use. And that was the thing that awakened me, even after I had met with my dad and I was in turmoil, is that when my friend Doug kind of pointed that out, he said because he had I trained him to be a financial advisor but he left to go real real, do real estate investing. We started to see it. He's like, yeah, what if you got paid 1% a month? Now that $100,000 is paying you $1,000 a month, not 3,000 a year, and I thought that's huge and I started to open up possibilities in my mind from my financial little financial advisor brain that I had for those several years as a financial advisor, sort of open up and realize it's not about how much you save up and try to accumulate, it's about what that money actually does to generate income. That's what's key and what's most important.

Gary Pageau: 16:39

Now a lot of people like real estate because it doesn't. It usually appreciates in value where the stock market has its ups and downs. What are some of the possible drawbacks of real estate? Because neighborhoods change, things change, circumstances change. Right now, for example, if you're in commercial real estate, you're probably struggling because people work from home thing has devastated that. So what are some of the red flags you might look for in looking at that type of the market?

Chris Miles: 17:10

Yeah, usually it's not market, it's more the person that invests in it. Okay, that's really. Most mistakes happen because, like, for example, when people think about I want to do real estate investing, the first thing to think of is buying that property in their backyard, right in their own neighborhood or their own town or something like that. That could be really risky because, for example, you know, I live in the western half of the United States. Anything, the western half of the United States, I wouldn't buy, like it's just not good, because prices have come up so much. Rent prices haven't caught up with that, right. So you're really gambling when you try to buy out here. But when I look at buying property, I look at like the Midwest, you know. I look at the southeast, for example, like in those markets and not in the hot, hot markets like Tampa, for example, right. Or you know places like that. I'm looking at places that are like the boring markets. You know the places like Kansas City, you know. Or places like you know, like like North in North Carolina, you know which. There's almost no city that's popular out there, you know. But you know I'm looking at places like that where it's just boring, they don't really appreciate big. They don't depreciate as a result, you know like they're just kind of steady and they pay good income. They're good low prices for the income that you get and, again, you don't have to live in those areas.

Chris Miles: 18:20

I don't own any property in the state of Utah other than my own house, and even that I think it's too high. So so I buy properties out east, you know, and I have somebody else manage them. And that's the key. If you find something good, that's a problem. Sometimes people try to manage their own properties. That's another issue too. Also another issue I find, like one of my clients in another one in California, he had a property he had out there that had 700,000 of equity in it. It was his very first starter home. He went and then turned into a rental later on, so they had it for a couple of decades. 700,000 of equity. He was netting $200 a month. Wow, that's it.

Chris Miles: 18:59

Now, his goal and this is another faulty thing that I find too is that people think, okay, the goal is, if I buy real estate, property is pay off that debt and then it'll be debt free and I'll make all this income. Well, even after he paid it off and made it debt free, he was still only netting like 2,300 bucks a month. Now if I told him, I said, listen, his name is Henry. It's like Henry, that 700,000 of equity that you have in that property. If we sold that property, moved it to other properties where you only made even just a 10%. You know what they call a cash on cash return, meaning that you net 10%. That's 70,000 a year. That you net after paying your taxes and insurance and everything. That's $70,000 versus you getting under. You know like more, like 27,000 a year.

Gary Pageau: 19:44

Right.

Chris Miles: 19:46

And for a while he's like I don't know. I was like this makes sense.

Chris Miles: 19:50

You know, and after, and finally after like it took him about four years, he finally just said you know what? Now I see it, I can do much better elsewhere. So now he's like bought a ton of properties like Louisiana and down the South Belt area and now he's seen the bigger picture, because now he's gotten that money out and using it, he's seen that he's making way more profits there than he would ever in California, right. So again, that's the problem. Like many times, you people try to do it by themselves, but you don't have to do it by yourself. There are, there are ways to have support and have people that are more experienced to help guide you along that process. Sure.

Gary Pageau: 20:20

So, getting back to like our audience, if you got someone who's running a business let's say a photo business or whatever and then they realize, man, I got to set up, start making plans, set on my retirement, now, something like this they would be thinking, well, gosh, I don't want to, I'm not, I'm not a real, I'm not in a real estate business. Why should I be doing this? Where I think your advice would be is you're not in the real estate business, you're in the liquid cash business.

Chris Miles: 20:47

That's right, exactly. You never want to do any investment that takes your focus off of your. Your really your biggest golden goose, which is your, your business, right? Your photography business. That that thing needs to be protected. Now, at the same time, you don't want to have that be your only thing, right, because you have another COVID where they say you're non essential quote, unquote, crap like that. Or you know, even though you can get around that stuff and pivot, but but still, like you know, you don't want to have being a situation where that is all you rely on. You want to have those diverse streams of income coming in, just in case, right, anyways, in the meantime, and then, of course, down the road, when you may want to sell, sell the business, right, so you know, you're right, you don't want to do that.

Chris Miles: 21:27

That's why when we talk about passive investing, we literally mean it's passive. Like somebody else does the investing or does the work. You're merely the one that's using that money to work for you, right, like, for example, going beyond just having rentals, right, rental, I would say, is like the least passive type of investment I talk about often, but, like you, can become the bank. I mean, there are people literally out there that will pay you a contractual 10, 11, 12% return on your money each year. They'll even break it up quarterly or sometimes monthly in payments to pay you that on your money. They'll pay you an interest only payments on your money. So if you give them 100,000 bucks, they pay you 12% a year, 1% a month, meaning that 100,000 now is paying you $1,000 a month, not touching the 100,000. Right, so your golden goose is still there. It's laying those $1,000 a month golden eggs, but it allows you to actually keep generating income, right, so there are lots of things you do there from, like I said, like lending. You could be lending money to those investors where they make the money off it make way more than what they pay you, which is why they pay you that much.

Chris Miles: 22:26

There's, you know, other types of investments that might share in profits. I mentioned oil and gas, like that guy had done. You know I have investment in that as well, and you know the nice thing is that we're getting paid rent from the big oil companies, because oil companies actually don't want to own land, believe it or not. They just want to have the business to drill, do what they need to do. They'll just rent and do that for decades, if they can do that. So they'll pay you for the lease on the land and then of course they'll share in the profits too. So any of the mineral rights you get. That means not just oil that they pump, but even the natural gas, that's the clean, green energy that comes off of it, almost like steam in a sense. That extra gas comes off too. You get paid on all the stuff that they sell off. So it's kind of nice to kind of get that double dip effect when you do those kind of things.

Chris Miles: 23:12

I'm getting paid over like almost $7,500 a month on raw land where there's no tenants necessarily, it's just you literally. I have a partner that does all the transactions. I financed it all, but we're taking that money and using that to buy raw land and then turn around and selling it to other people and they pay us like we're the bank. They pay us like a mortgage of over, like next five or 10 years or so, and it might be 200 bucks a month. They're paying for that piece of property, whether it's to run their ATVs, do other recreational type stuff or just have their own homestead or place to escape in case the government blows up the world or whatever you know like. There's so many ways you can make money and profit and make sure-.

Gary Pageau: 23:53

So you're saying you wanna focus on preppers. That's the market, that's right, yeah, 2020 was awesome in the raw land, the untapped prepper market is out. There is what you're saying.

Chris Miles: 24:04

Oh, absolutely. I mean even my wife. I mean she's kind of a homesteader we have, like she has like 25 chickens here and we have garden stuff, and even she's like wait a minute, there's some of these properties, can we buy these too? And my partners are like yeah, but you're gonna pay whole. You know the retail price. You're not gonna get the wholesale like we're buying it for you the other ways. But they're like, yeah, if you want a piece of property, go pick it. Like she's like oh cool, I want one. There's a creek running through it or something like that. You know lots of trees and you know that kind of thing. Right, there's just so many options that are outside the traditional mutual fund, the stock market box. That really is high risk and mediocre returns.

Gary Pageau: 24:39

So this sounds like a lot of work though.

Chris Miles: 24:42

This sounds like a second. It sounds like it, but it is for somebody else, it's not you, okay.

Gary Pageau: 24:46

No, I mean, I mean even to find partners and find people, find you know to do this. So you know, that's what I'm saying. It's like you know. I mean, you know this sounds interesting from like so many more entrepreneurial bent. Who understands ROI? They understand, hey, I'm gonna. I want my cash to work, because a lot of these folks again and if you're running a photo store, you know how to manage cash because it's it's, it's it's it's Feaster, famine Cause it's a very seasonal business. So you know, and obviously you can't go to the local Edward Jones or Raymond James guy to get help for this. So where do you go?

Chris Miles: 25:24

Well, I mean that's sound too self-serving, but I mean that's what we do at Money Ripples, right, right, right, I mean it's true. I mean that's that's why. That's kind of why I came out of retirement to do what I do, because people always ask, well, how do you do it? You know, and I spent years developing those relationships with different, you know investors that haven't been like, because there's so many people out there, like trying to get your money right now in the real estate space, that said, hey, I've been investing since 2017 or 2018. And I've made lots of money in real estate. Well, who didn't that? He could have been an idiot and made money in real estate in 2017, 18 and beyond. Right, I like the people that actually have been seasoned, those have been through at least a full market cycle, like they were investing during the last recession, or maybe even prior to that too, or previous recessions. Even so, I built kind of my own network of people that I helped share with a lot of our VIP type clients. You know where we help them one-on-one. We even help clients strategize, too. Like you know, where is that money trapped in prison? How can we get that money out? Like if you have an IRA. Could we actually use that IRA money? Most people don't know this. You can actually take the IRA money, not having the stock market, but actually invest it in these same deals that I was talking about. So you can actually use IRA money.

Chris Miles: 26:30

Today, if you have a Roth IRA, you can invest in some of these deals and then have tax-free income kicking off some really good returns, you know. So we kind of offer some guidance that way with our one-on-one clients to really kind of strategize the game plan right To help you figure out like, what strategy can you do, how can you make the most of your situation. And then, of course you know, connect you with who might be some better options for you in that game. We're not investment advisors, we don't ever give investment advice, but we could say listen, your goal is, you know, maybe want this much income per month. Here's some people you should probably look at some of their options. This other one doesn't fit your goals, but some of these other options might do that. Here's the people that I've even invested with where I've known for years. Here's the people you should talk to.

Gary Pageau: 27:11

So now most people say you should have your stuff. If you're looking at retirement planning or end of career planning, if you want to call that, you know you should have it. Very so you're saying you should have it yourself. You shouldn't be in a money market or one of those type of plans at all and no mutual funds at all. You should have it all in this type of thing. Do you think that's a great idea? I mean, obviously you think it's a great idea. But I mean, shouldn't you be insulated a little bit? Even though the returns on some of these may not be great, at least it's pretty dependable.

Chris Miles: 27:44

I mean money markets is one thing, because having liquid cash, emergency reserves is definitely a foundational thing that we teach there are ways to diversify your emergency fund, the money you're keeping on hand, to make better returns. For example, my wife wants $300,000 that we don't touch, we don't invest, we don't do anything, it's just there for case. The world blows up, whether it's our personal world or the world outside of us, right? And for that I mean, I remember she was saying, well, we can keep in the bank 300,000. I said, well, $300,000 at 0.0% even right now it's 0.1% in our credit union. That's not very good. And yeah, we got some online savings accounts, but still you get taxed on that too, so you don't even get that full return.

Chris Miles: 28:23

So I actually keep a quarter million of my money in a strategy we call infinite banking, which is actually using life insurance instead, where I make about a 5% tax-free return on that money sitting there. So instead of making, if you do the math, 0.1% on $250,000, for example, is 250 bucks a year, and then in the bank, if I already make that, I get taxed on 250 bucks Maybe I'll walk away with like 150 to 200 bucks, right? That same 250,000 is making me about 12,500 tax-free. So now at least if I have that savings, I can do that, I can diversify a little bit more, I can keep some money.

Gary Pageau: 28:58

But it's cumulative. I mean that gets compounding as it's going.

Chris Miles: 29:03

Exactly. But you can't just do any method. That's one danger of that, because most insurance agents just do a crappy job. They really just pad their own pocketbooks because they just set up these high-expensive policies. So when I say that, I say that with warning. I do have other stuff on my website and podcast.

Gary Pageau: 29:21

We talk about how to do it right, but that's an example right, yeah, so you're talking about like whole life or something like that, right?

Chris Miles: 29:29

Yeah, it's whole life, but it's whole life. That's minimal cost, whole life, which is much more rare to find.

Gary Pageau: 29:34

Yeah, I was going to say usually whole life is a little bit higher, so Exactly, it's very expensive.

Chris Miles: 29:41

That's why guys like Dave Ramsey say buy term, invest the difference because whole life. The traditional form is so dang expensive. I wouldn't buy it either. I would agree with him on that. But there's a way to do it towards it actually makes it better cost than even a term insurance policy too. Ok, so, yeah, so could you keep it in the stock market, though? I mean, I would say this If you have money, you're willing to gamble. Great, do that.

Chris Miles: 30:06

I have a client right now that she had, as a bunch of Google and Apple stock and even individual stock, not even a mutual fund, right, and the thing is, even mutual funds most of them aren't really diversified anyways, like in the market tanks, you lose money. It's not protected. Same thing with her. So we talked to her about that option. Like, listen, there's a warning here Although the stocks have surged this year, if you don't pull out those profits at some point, it could also tank again.

Chris Miles: 30:34

So sometimes it's like you could scale out of some of those things. Maybe you still keep some stock, but maybe you take some of those profits now while it's high, use that to invest elsewhere and then you make a lot more money elsewhere and then you diversify yourself better, because the truth is, people in mutual funds, iras, 401ks, are not diversified at all. Even the S&P 500, that everybody says that's the gold standard you're supposed to meet. Do you know that about a quarter of the S&P 500 is just seven companies? Actually, it's six companies. One gets counted twice because they have two different stock shares, so it's just six companies like NVIDIA, google, meta, apple, those kind of companies, right? Microsoft, those companies are swinging the whole pendulum and they're mostly tech stocks, right? So if tech ever tanks, even though the whole stock market is supposed to be the 500 companies, tech will take it down if tech goes down. So you've got to be careful, right.

Gary Pageau: 31:26

Yeah, and we just saw that recently with some of the trouble, that the banks were in right. Banks were supposed to be safe investments and people were very confident banks and all of a sudden I think I saw a chart somewhere that the amount of losses in the bank sector was almost the same as the crash in 2008 or 2009.

Chris Miles: 31:48

Yeah, and it's amazing how quiet they're being about it, isn't it?

Gary Pageau: 31:52

Well, yeah, it's crazy how that happened, and yet no, it only happened to three banks.

Chris Miles: 31:58

Well, we heard a fourth one in California just happened recently, but it's only three. Right, like that's it. No, it's all done. That's bull. We all know that. They're lying through their teeth and they say that there's something bigger coming along, and that's the big reason why the stock market has boomed so much lately.

Chris Miles: 32:14

I was like this is where all the dumb money, as they call it, like right, when there's big booms like this in the market, usually that's where the dumb money, the average investor, puts their money in, and that's when the bigger companies, the institutional, what they call institutional money, the big companies, will pull their money out quietly, without you knowing, and then it tanks, right, right, you've got to be careful. You want to be the person that's more like them, where you're like well, maybe I want to get my money out. I'm not giving investment advice right now, by the way, but I'm just saying you've got to be aware If you've got money in the stock market, that to me is more active, an active management, right, because if you're not watching it all the time, you could lose money in a heartbeat, right?

Gary Pageau: 32:51

Whereas, like you said, with something like this, it's a set it and forget it type.

Chris Miles: 32:55

It's like watching a program. Right yeah, it's more boring. Oh yeah, it is boring.

Gary Pageau: 33:00

Well, you want to have time to go tend to your chickens and stuff. I mean, that's the word, that's right.

Chris Miles: 33:08

Yes, speaking of some of the costs, more than it makes you, I'll tell you, chickens are definitely one of those investments that you're only doing because you're like, if that world ever blows up and we can't have eggs anymore, at least I have eggs.

Gary Pageau: 33:18

And you know chickens if you have to, if you have to resort to eating your egg producing machinery you eat your own golden goose.

Chris Miles: 33:27

There you go.

Gary Pageau: 33:28

There you go. So this is all very interesting, but it sounds like it's more than the scope of our conversation. Where can someone go for more information? They want to learn more about this process.

Chris Miles: 33:41

Yeah, very simply, you can either go to moneyripplescom, which is our website. Got lots of information there. I mean, you can always check out our Money Ripples podcast channel on YouTube or iTunes or wherever you get podcasts as well. We've got a lot of things that we teach on there as well, and kind of similar time frame, usually like 20 to 30 minute interviews as well, and just for in time for your drive.

Gary Pageau: 34:02

Great Well, thanks, chris, for your time. Appreciate it. I've learned a lot. You've kind of frightened me, but I've learned a lot. I'll be definitely be checking out the podcast and the YouTube channel. So thank you so much, thank you.

Erin Manning: 34:16

Thank you for listening to the Dead Pixels Society podcast. Read more great stories and sign up for the newsletter at wwwthedpixelssocietycom.