The Need for Financial Education | Chris Miles | EP18

Speaker 1 Yo, yo, Entrepreneur DNA, we are back with another incredible episode and an incredible guest. This man has retired twice by the time he was 39.

Speaker 1 He is the CEO of Money Ripples and he's the anti-financial advisor, Chris Miles. What's up, brother?

Speaker 2 Hey, what's up, Justin? So, so cool to be here with you.

Speaker 1 Yeah, this is going to be good stuff, dude.

Speaker 1 You and I have gone back and forth about money and how it works and real estate and passive income and what's, I mean, this was a no-brainer to have you on this, this episode of Entrepreneur DNA.

Speaker 1 So I'm excited for you to be here, dude.

Speaker 2 Yeah, same here, man.

Speaker 1 So you retired twice by the time you were 39. I think most people on the plane are trying to just retire.

Speaker 1 So talk a little bit about like the fact that you retired, said, well, I got to get back in the game because I'm bored or whatever the case was, then did it again and then retired again.

Speaker 1 Give us that journey. I think most people are just like, I just want to try to retire around 65 years old.
I think most people are that way.

Speaker 2 Yeah. Well, definitely retiring twice by the time before you're 40 sounds pretty impressive.
The only reason it had to be twice is because I screwed up the first time.

Speaker 2 And so, so let me take you back. Like, you know, I wasn't raised around a lot of money.
You know, I was raised by pretty hardworking, middle-class parents. You know, even my mom was an artist.

Speaker 2 She was trained by the same master painter that trained Bob Ross that paints his happy little clouds and trees and stuff.

Speaker 2 Bob Ross, we're both old enough.

Speaker 1 We all know Bob Ross. Legend.

Speaker 2 We all know Bob Ross, right? And so I grew up in that environment, you know, watching that stuff on PBS and whatnot. And, and, uh, and my dad, he was a hardworking guy in the automotive industry.

Speaker 2 He was, he was always about telling me like, hey, your word is your bond. My mom was telling me, follow your passions, your heart.

Speaker 2 And, and so naturally, I became a, you know, a right brain, left-brain confused kid.

Speaker 2 Um, but the one thing when it came to money is that The one thing they had in common is that we never had enough of it, right? We can't afford this. What do you think I am? Made of of money?

Speaker 2 Money doesn't grow in trees, you know, you know, those kind of things I've hear growing up. And I vowed I never wanted to be that way.

Speaker 2 And so when I went to college, you know, I was the first one in my family to do so.

Speaker 2 And as I did that, I said, you know, I can see pretty quickly that if I just follow this path, I'm not going to become free because I wanted to control my time, my destiny, my own freedom, you know, my own everything.

Speaker 2 And I knew that that path was to be an entrepreneur. And so I actually dropped out of college with one class to go before I got my bachelor's.
And it was supposed to be temporary.

Speaker 2 I figured I'd just get some business experience and then go back and get my MBA, right? Sure.

Speaker 2 Well, as I dropped out, you know, and I'm like taking this little hiatus that was supposed to be temporary.

Speaker 2 I was trying to find some business. I wasn't sure what it was.
And finally, I had a friend that he told me, he says, hey, Chris, you know what?

Speaker 2 Like, I've got, you know, I just got hired with this financial firm. It's pretty cool.
And I don't know what it was.

Speaker 2 Maybe I was like Adam Sandler and the wedding singer or something where it's like, I like money, you know, you know, when he goes in the bank for that job, he's like, I like money.

Speaker 2 I have a jar on top of my fridge. I'd like to add more to it.
That's where you come in. I was kind of the same way, you know, although I was smart.
I just really wasn't trained much in money.

Speaker 2 But good news is, if you want to be a financial advisor, it doesn't require anything. All you have to do is not be a criminal and pass a test with 70% and you're in.
So it's a pretty low barrier.

Speaker 2 That is insane.

Speaker 1 I want to stop you there, bro, because I didn't know that. That is wild that the vast majority of Americans rely on financial advisors.

Speaker 1 And what you just said is essentially what can get you licensed to be a financial advisor who is

Speaker 1 in large part responsible for advising people on how to use their money and what the best investments are, correct?

Speaker 2 Exactly. Yeah.
I mean, I think it's way harder to become a realtor than it is to become a financial advisor, even with multiple licenses as an advisor. It's not that tough.

Speaker 2 I mean, some people can pass those tests in a matter of a couple of weeks and they're done, you know? So it's, you're right.

Speaker 1 So people really need to like, do you have a word? I don't mean to cut your story out, but do you you have a word for those people who are like, they're heavily reliant on financial advisors?

Speaker 1 Because listen,

Speaker 1 you know my story and it's not about me. It's about you.
But, you know,

Speaker 1 that is insane that someone who can go past a test, just not have like essentially a felony, but then could advise people on what to do with quarter million dollars, a million dollars or whatever it may be.

Speaker 1 Like, what's your advice to those people looking at financial advisors?

Speaker 2 You know, I think at business owners, we give it, right? Like we know that if we want to follow anybody, it's somebody who's been there, done that, and still doing it today.

Speaker 2 And when you look at financial advisors, I mean, and really this is what I kind of realized, right?

Speaker 2 Because, you know, this kind of goes off my story because several years later, my dad asked me to look at his finances. He's like, become my financial advisor.

Speaker 2 Well, I looked at all his numbers and my dad was like the ultra penny pinching saver. I mean, he made Dave Ramsey look, look like he was a spender, right? I mean, that's the kind of guy my dad was.

Speaker 2 You know, he wasn't the guy that wouldn't just not tip at a restaurant. He'd be the guy, if he got bad service, he would steal from the restaurant just because they owed him something.

Speaker 2 And so,

Speaker 2 so anyways, I'm sitting down with him and he paid off all of his debt, including his house in just 18 years. He had stuffed money in his 401k for decades.

Speaker 2 So he was like the ultra saver, like the model poster child of what I was teaching.

Speaker 2 And as I sat down with him, he says, He says, Chris, what can I do? And I said, well, dad, you're 61 years old right now.

Speaker 2 If you want to retire today, you better hope you die in five years because that's how long your money is going to last before you run out.

Speaker 2 He's like, all right, well, what do I do? You know, what else can I do? I said, I don't know. You did everything right.

Speaker 2 And I don't want to just sell you something in the stock market because, you know, you're my dad. I don't want to just throw you into something just because I make a commission.

Speaker 2 And then all of a sudden, the market tanks, which by the way, this is the end of 2005. It's good I didn't just throw him in something in the stock market because that's right.

Speaker 2 2007 and 8009 crashed, right?

Speaker 2 So

Speaker 2 anyways, this bugged me. And that's where it led me to this next place, because this is the question you should be asking financial advisors.
Because just a few weeks later,

Speaker 2 as I'm kind of questioning, almost having this business existential crisis, right?

Speaker 2 I'm questioning whether I'm teaching you even works.

Speaker 2 Well, of course, a few weeks later, I'm talking with a friend that I trained to be a financial advisor, but then he went to go do real estate investing.

Speaker 2 And he asked me, we got in this debate, what's better stocks or real estate, right? Because I was even trading stocks and options and doing stuff. And he's like, Chris, stop.

Speaker 2 How many of your clients are actually financially free where they don't worry about money?

Speaker 2 I'm like, well, don't worry about money. Well, all my clients worry about running out of money at some point.
So I would say none.

Speaker 2 And he said, awesome. Way to go.

Speaker 2 Well, how about this, Chris? How many of you guys as financial advisors? And this is the key question.

Speaker 2 How many of you guys as financial advisors can actually retire off of these investments, not off the commissions you're earning, but doing these investments?

Speaker 2 And as I was really honest with myself, and there's over a hundred people on my office i said i don't know there's guys been working here since the late 1970s i would probably say none

Speaker 1 none of them meaning they actually didn't do the advice that they were given they were not investing

Speaker 2 it just wasn't enough right because the mutual funds really don't return a high enough return to make anything So all these financial advisors, they were really more relying upon the business.

Speaker 2 And this is the key thing. If there's anything a financial advisor does right, it's they have a business.
That is the best investment a financial advisor has.

Speaker 2 Unfortunately, if you're the entrepreneur listening to financial advisors, the best business you would have or best investment would be to invest in their businesses, right?

Speaker 2 Because they get paid based on your money sitting there, assets under management, as they call it, right? And they get paid whether you make money or not.

Speaker 2 They get paid a percentage or commission of that or a fee-based, you know, something like that. But even if you don't make money, they still get paid.

Speaker 2 They are the one person that gets paid, even if you don't. That to me, I mean, any other business for that matter is crap.
And even if you look at like, if you look at the statistics, right?

Speaker 2 For example, Fidelity, people talk about 401ks. If you're a business owner and you're putting money in a 401k and paying your own match, that's crap.
Because the truth is, 401ks suck, okay?

Speaker 2 They're horrible.

Speaker 2 Not to mention you're locking your money up in prison and you'd be much better putting your money in your own business versus throwing it in somebody else's companies that, again, you're going to make lack lesser performance.

Speaker 2 But they found out out of, you know, Fidelity, who's the largest 401k provider in the U.S.

Speaker 2 here, 401k or Fidelity has 45 million people with 401ks and IRAs Guess how many have a million dollars or more? You see 810,000 guessing 4,000 for it's definitely more than 4,000.

Speaker 2 That's the good news. But out of 45 million, you know, still is only 810,000.
That's like 1.5%.

Speaker 2 And of those, there was a different study done by Transamerica that's asked, hey,

Speaker 2 what's your viewpoint on retirement? 35% of those polled that had over a million dollars said they think it'll quote take a miracle to be able to retire a miracle

Speaker 1 that is think of that this is insanity D because I this is something that it's it's funny because I you know me I'm a real estate guy this is what I do now I also believe in what you do to the point where I do what you do you know I don't sell it but

Speaker 1 because I think more financially than I think like anything else.

Speaker 1 And it's just a shame to hear the stats that you've been quoting.

Speaker 1 I'm just like, man, I'm so happy you're here to shine some light on this because I think the vast majority of entrepreneurs are uneducated on how money really works and

Speaker 1 uneducated on what they should be doing when they're making money, right? A lot of these listeners, a lot of these viewers on YouTube and Instagram, they're making money now. Like shit's going.
Right.

Speaker 1 And so this kind of goes back to your retirement stories, but what the hell do they do when they're actually making some money?

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Speaker 2 And that's what I started to learn too, because, you know, like anything in business, right? Like you want to focus on profit, right?

Speaker 2 Profit is the key, like the lifeblood, not just your business, but that's what really creates freedom in business too.

Speaker 2 I've found out that really, if you look at the Forbes 500 list, I like to see proof, right?

Speaker 2 Just like with Fidelity, when you factor in the people that don't think it'll take a miracle to be able to retire comparatively, that's like 1% success rate.

Speaker 2 So imagine like you go to your business site, you have a Google review on there, and there's 99 one-star reviews, but you happen to get that one five-star review.

Speaker 2 Would you ever want to go to that place? Would you ever go to that restaurant? You know, if it has one five-star review from their mom, the other ones are 99 one-star reviews saying this place sucks.

Speaker 2 That's basically what financial advising is. And so you got to like realize that just because financial advisors seem smarter, they talk the talk, right?

Speaker 2 And I'll tell you, I was trained as a financial advisor. They would tell us, hey, you know what? Just get them to trust you.
In fact, sometimes

Speaker 2 you can blow their minds away to the point where they'll say, you know what? It sounds like you know what you're doing. I'll just turn my money over to you.
When has that ever worked in business?

Speaker 2 Maybe you've turned money over to employee and say, you know what, you just take, take it all. I I don't need any accountability.

Speaker 2 And a financial advisor is an employee for you. I mean, they're contracted by you.
You can fire them.

Speaker 2 But it's amazing that we've been so brainwashed by financial companies and advisors and gurus out there that tell you, oh, no, no, these are like, these guys are like God for you. Right.

Speaker 2 Like you got to listen to them and you, you better kiss up to them.

Speaker 2 I can't tell you how many business owners I've talked to that are like, yeah, but if I, if I start investing in like real estate, which is what I now recommend a lot of people do instead, you know, invest invest in your business first and foremost, then secondly, real estate.

Speaker 2 Well, if I do that, like, what's my financial advisor going to say? Who gives a crap? You hire them. They're your dang employee.
You tell them what to do, not the other way around.

Speaker 2 And it's like, even if they ask you why, just tell them because I want to. And they can't question that.
They got to honor your word because they work for you.

Speaker 2 Even though they make it seem like they're the authority, you've got to listen to them.

Speaker 2 You don't have to do jack squat what they teach you because the truth is you're probably more successful than they are anyways.

Speaker 1 man dude i would love i would love to have some financial uh planners like audit their own p l like i would love to have uh expose honestly transparently like one of the things that you know in my world of real estate investing you know i always say like if you're gonna hire a mentor or coach like audit what they're actually doing like do they have rentals are they flipping anything currently if they're gonna teach you how to flip do they have they wholesaled anything in the last 30 days like audit them and the same is true in financial industries right um

Speaker 1 you know the the things that i do with my money almost if i'm being honest almost a hundred percent of the time so i'm trying to think

Speaker 1 anything i'm doing with my money is typically because someone like you a friend says here's what i'm doing here literally the results here is the p l here is the the thing the track record this is my account and they say oh bro i'm in right whatever that is it's not because because you are an advisor.

Speaker 1 It's because I'm looking at the actual results of what you are telling me. Literally, friends, I have a buddy who has no financial license, no nothing.

Speaker 1 He said, look at what I've done in a sector of business. Yeah.
Justin, you got, you got to get in, like showing me results. So I love what you're saying.

Speaker 1 Like, I would love to see financial advisors show what they've done. And, and you're right.
I bet they're living on their commissions and,

Speaker 1 they tinker at best. Yeah.

Speaker 2 That's the thing is that successful financial advisors are good salespeople. They're really just salespeople in suits, right?

Speaker 2 And I'm not saying that they're bad people because there's a lot of good-hearted guys. In fact, I was just naturally chose that profession.

Speaker 1 People could be good people. Well, they just chose a profession that, you know, you're basically saying you got to audit that.

Speaker 2 I get it. Yeah, exactly.
Yeah, because it's not about them, you know, even though they're good people. There's lots of good people in the world, but it's about do they get you results?

Speaker 2 And that's what drove me out of the business. That's why in 2006, I said, I can't make this work anymore, especially as I started listening to real estate investors and such, right?

Speaker 2 I'm like, I realized that if you look at the Forbes 500 list, all the people, the one thing they have in common, they're business owners, aren't they?

Speaker 2 The richest people in the world are business owners.

Speaker 2 They're not people that said, man, like they made the corporate, you know, the cover of Forbes magazine because they saved in their 401k diligently over the last 50 years.

Speaker 2 Now they're the richest person in a wheelchair in a nursing home. You know, that's, that never happens, you know, because the truth is you can never save your way to wealth.

Speaker 2 And I learned this firsthand as a financial advisor, even before I left. I remember

Speaker 2 I was talking with my brother-in-law. Now, my brother-in-law, his dad became a self-made millionaire.
The guy was homeless at age 16.

Speaker 2 He went and got his own Chrysler dealership at age 19, millionaire by age 21. This is in the 1960s, right? I mean, this...
This is no small feat.

Speaker 2 A millionaire in the 1960s is a heck of a harder than being a millionaire now. Now you're a middle class and you're a millionaire, right? No

Speaker 2 well he uh so this family became self-made millionaires lots of money i figured as a financial advisor if i get in with my brother-in-law i get in with the rest of the family i'm set for life yeah and so i prepared like for days and getting the perfect presentation got my suit pressed got you know got everything all queued up brought even a guy from my office to back me up because you know mouth of two or three witnesses shall every word be established that kind of thing right so i go and i and i present to my brother-in-law and he says all right chris let me get this straight.

Speaker 2 If I give you 10 grand just to play with today, you're telling me you can give me 12%, right? And I was like, well, there's no guarantees.

Speaker 2 And the truth is, by the way, the market's never averaged 12% long term. It's more like eight.

Speaker 2 So I said, well, there's no guarantees. He's like, okay, Chris, even if you do give me 12%,

Speaker 2 that 10,000 made me $1,200 in a year. But Chris, I can take that same 10 grand.
And because they're in the automotive industry, like with car, you know, they own dealerships and stuff.

Speaker 2 He's like, I can say that same 10 grand. I can go buy a big rig, turn around, flip it a couple months later and make 20 grand in profit.
So

Speaker 2 1200 in a year, maybe versus 20 grand in profit in a couple months. Why would I invest my money with you?

Speaker 2 And of course, I said the same thing that I bet you guys have heard before too, which is,

Speaker 2 you should be diversified. You shouldn't put all your eggs in one basket because, I mean, business is risky.
Ironically, out of business, right?

Speaker 2 But I'm like, nah, you should put your money in business because I don't make a commission off of it. That's what I was really saying.
And that's the problem right there.

Speaker 2 Your number one investment should be your business.

Speaker 2 But I will tell you this, it shouldn't stop there because what I learned in 2006 was it drove me nuts that there was guys able to be in their 20s and 30s and they'd have to keep working because you can be a business owner, but you can get caught in your own rat race, right?

Speaker 2 You can you can make millions and millions of dollars, tens of millions of dollars. But if that business were to shut down today, the question is, would you be okay?

Speaker 2 You know, if we had another crappy 2020 where you're non-essential, all that kind of crap, right? We get that again. What's going to happen? And so that's what I learned in 2006.

Speaker 2 And so I started meeting with these guys who are real estate investors and a lot of them were flippers and stuff. But I realized, wait, I can lend my money out to people.

Speaker 2 So remember, I'm a financial advisor thinking you got to squirrel away your money for decades and then you'll live on less than the interest. You're only told to live on 3% of the interest.

Speaker 2 So even if you're lucky enough to save a million bucks in a mutual fund, you're told to only pull out 30,000 a year. That's like poverty line as a millionaire.
You're a broke.

Speaker 1 Yeah, that's where I go. Who the hell teaches that? Like, I don't even understand that math.
But anyways, go ahead.

Speaker 2 Yeah, well, it's because they run the numbers.

Speaker 2 They're like, well, if the markets go up or down, because if you pull out money when the market goes down, it's like, it's like a double whammy against you. You could lose money fast.

Speaker 2 That's why Dave Ramsey gets ripped on so much. Like, he got ripped on social media because he was telling people, you should be able to pull out 8% a year.

Speaker 2 So if you make 12% of the market, you can pull out 8%.

Speaker 2 You'll be fine. You'll never run out of money.
Well, the sad thing is on my podcast, just a little while ago, I actually showed what happens if the market goes down just once every three years.

Speaker 2 And guess what? You ran out of money in about 15 years.

Speaker 2 So based on the average returns of the market, pulling out 8%. So that's, so that's where I realized it's about the cash flow, the passive income.

Speaker 2 And so when I realized I could take my money, lend it out even to investors. I don't even have to be the active investor.

Speaker 2 Cause the one mistake that I see some people making in the business world is that they see people on social media, Instagram, TikTok, and they're like, hey, 200 bucks, I made $5 million

Speaker 2 from this. from flipping or wholesaling or whatever it might be.
And that's cool. Like it's an awesome thing, but it's a business, right?

Speaker 2 So if you're a business owner, you don't have systems in place, you go try to start a new business, you might watch that business, which is your economic cash cow fail.

Speaker 2 So you can do that, but just understand, you got now two businesses competing for your time.

Speaker 2 If you do pass investing, which is what I started getting into more eventually after I stopped doing flipping, is that I could lend my money out, for example, and make maybe 1% a month.

Speaker 2 Well, that means if I have that same million bucks, instead of pulling out 30,000 a year, I'm pulling out 120,000 a year, right? Right. I'm getting a lot more cash with less money.

Speaker 2 And when I realized that, when I realized, oh, it's not about, just about the returns, it's about what income could really come my way. What kind of income can I get? That's when it rocked my world.

Speaker 2 Yeah.

Speaker 1 Well, and so what was the pivot, you know, when, you know, obviously you're here now with a business. This is why we have you on the podcast.

Speaker 1 What brought you back into the space of entrepreneurship, business owner?

Speaker 1 You know, you've retired twice. You're no longer retired.
Otherwise, you wouldn't be here.

Speaker 1 What are you doing actively? Like, what brought you back in?

Speaker 2 Yeah. So 2006, I got to the point where I had enough passive income I could quit.
Right.

Speaker 2 And I was just like, what do I do with my time? Because I was 28 years old at the time. I'm like, what do I do?

Speaker 2 Because none of my friends can hang out with me in the middle of the day because they're all working too. That's right.
And I, I almost started like a, you know, a dinner dance business.

Speaker 2 I even opened up, almost opened up a ballroom dance studio. One of the weird facts about me, I used to be one of the nation's top amateur ballroom dancers.
Wow. So

Speaker 2 I was going to do that, but it didn't feel right.

Speaker 2 I remember almost closing on a building and at the closing table, I said, you guys are going to hate me, but I feel like I need to back out of this deal.

Speaker 2 And then just a few months later, because everybody wanted to know how I did it, right? A few months later, some partners and I got together. We decided to create a company to teach people.

Speaker 2 Hey, let's teach them how to get out of the rat race. So 2007, I came out of retirement, focused all on the mission.

Speaker 2 I mentioned like how why I had to retire twice. Notice I came out of retirement in 2007.

Speaker 2 And at the same time, I had, you know, some real estate happening as well, but I also cut off a lot of my streams of income to do that business.

Speaker 2 I dropped them because one of the partners said, focus all in. It's our mission, our passion, right? Which is stupid.

Speaker 2 Why would I cut off my streams of income if I'm teaching people how to create passive income?

Speaker 2 I don't know what I'm thinking at the time. You were young.
How old were you?

Speaker 2 What's that? How old were you?

Speaker 2 That was,

Speaker 2 I was, see I was 30 at that point. Yeah, or 20, 29, turning 30.
Yeah. Okay.

Speaker 1 Young enough that you haven't gone through what you just now described, right? Those are all lessons that you can only connect those dots looking back. At the time, you're like, yeah, all in.

Speaker 1 Let's go. Burn your boats.
But then looking back, you can say, you know, 14 years later, you're like, or whatever, 16 years, you're like, wait a minute, that's not the idea.

Speaker 1 The idea is to have multiple streams of income.

Speaker 1 What was I doing? You know, those are those lessons.

Speaker 2 And I mean, it all worked out. I mean, I did go from millionaire to upside down millionaire during the recession.
I had to dig out of a million dollar plus debt hole.

Speaker 2 I was actually in the place where I had no savings left, no credit left. My credit score looked like an SAT score if you just got your name right.
So it was like in the high 400s.

Speaker 2 You know, it was, it was horrible.

Speaker 2 But like you said, like it's those lessons you learn, right? I learned about liquidity. As a business owner, you've got to have more liquidity than you probably think you need to have on hand.

Speaker 2 Like you've got to have cash sitting there. I learned also to have multiple streams of income, not just one source of income for sure.

Speaker 2 You know, even in the real estate game, like I, I wasn't focused so much on cash flow anymore because I had so much cash coming in. I was getting sloppy and lazy.

Speaker 2 You know, I was, I was like, you know what? It's okay if this rental doesn't, you know, positive cash flow anymore because all the appreciation, I mean, the market just goes up, right?

Speaker 2 Like that kind of crap. And, you know, so I got caught with my pants down pretty badly.
And oh, by the way, the new business we started was focused on teaching flippers how to create passive income.

Speaker 2 So

Speaker 2 in 2007, all of a sudden, flipping just stopped like a rock. I mean, it just came to a screeching halt.
I mean, we, our business is going broke. I was going broke personally.

Speaker 2 It was just like the perfect storm in the crappy George Cooney movie way, right? That's that's what was happening. Um, but you're right.
I mean, so here's what happens.

Speaker 2 Like, just like everything, I, you kind of notice a theme in my life as I like to have integrity. I, I couldn't teach people how to get out of the rat race once I was back in it.

Speaker 2 And so I stopped teaching that in 2008. And then I started teaching people actually how to get resourceful, how to find money.

Speaker 2 Because the one thing I always heard business owners say, they're like, yeah, but Chris, it sounds awesome what you're teaching, but I can't even find the money.

Speaker 2 In the back of my mind, I'm thinking, your situation is better than mine. I wouldn't say that verbally because I don't want to scare them off.

Speaker 2 But I would just tell them like, well, listen, if I can help you find the money, will you pay me? And they said, well, yeah.

Speaker 2 And so I started like this like very rudimentary, but eventually started creating a whole system of how do you find and free up cash flow, even especially if you're a business owner, right?

Speaker 2 Started doing that.

Speaker 2 And we were almost bankrupt in 2009 and then by 2010 we pulled it out we were making over five million a year um just because that started to take fire especially with like chiropractors and dentists you know some of those niche markets and the practice was essentially what so if you're talking to a dentist what are you showing them what are you telling them to do yeah at that time i've i've now added more stuff to it but at that time it was just what i was doing which was how do we find the cash right so start tracking your money doing things like that what are creative ways to pay off debt that's not just like the you know the Dave Ramsey method, like ways that are based on rate of return versus just, you know,

Speaker 2 in fact, I've seen other guys teach it out there called the cash flow index. That's something I created in 2008 when I was going broke myself.

Speaker 2 You know, so the cash flow index is like a way to pay off debt faster than just going off interest rates, right? I started teaching them like ways to

Speaker 2 save on taxes.

Speaker 2 We had the CPAs we partnered up with that we would connect them to and attorneys and things like that that we a lot of times free up like tens of thousands of dollars a year just in taxes alone, you know?

Speaker 2 So just all these things to kind of help improve the cash flow situation. I mean, one business owner, I remember he was 62 years old and he had a half million sitting in his crappy IRA, right?

Speaker 2 Like just sitting there. He didn't know what to do with it.
And at that time, I was a teacher about investing.

Speaker 2 Now I talk about how you can actually use that money to go, you know, do like real estate investing, but passively, right? But at the time, I wasn't doing that.

Speaker 2 And so I remember looking at this whole situation, his cash flow, money coming in and what was going out.

Speaker 2 And I said, hey, listen, if we refinance your mortgage and then even do and then use some of this money from your IRA to not just help you refinance because the values came down.

Speaker 2 So you had to put a little extra equity in, but then also pay off these specific loans while leaving these other ones alone.

Speaker 2 If we do that, we can use $100,000 of your IRA money to free up $4,200 a month or $50,000 a year. Yeah.
He's like, but Chris, how do I retire?

Speaker 2 Listen, what's the whole point of retirement, right? You want income, right? Yeah.

Speaker 2 This gets you freeing up $4,200 a month, like it's income. Right.
How do I retire? I'm like, oh my gosh, like 50,000 a year from 100 grand. That's a 50% rate of return on your money.

Speaker 2 Does that make sense? No. Finally, it's his wife.
By the way, it's almost always the wives that like say, this is common sense.

Speaker 2 What are you talking about? This is no-brainer.

Speaker 1 Because it was a one-time 100 grand investment. And for, in perpetuity, he was going to be making $4,200 a month.

Speaker 2 Exactly. It didn't matter how many different ways I described it.
He was like, I don't get it.

Speaker 2 Because he was just so locked in by that brainwashing of financial advisors that he could not touch that money. It was only meant to stay there forever.

Speaker 2 And that was the thing that kept him in bondage. And by the way, his business for three years in a row was slowly becoming less profitable and he was burning out.

Speaker 2 He was hating his business at that point. Even though he had been very profitable before, he started seeing a downward trend.
So we did that.

Speaker 2 A month later, he freed up exactly 4,200 bucks a month, just like we said. Right.
Well, guess what happened?

Speaker 2 And this is the thing I love about when you improve cash flow even outside of your business, it creates this other ripple effect too, right?

Speaker 2 Because what ended up happening is that he started to relax. He wasn't as uptight about money anymore.

Speaker 2 So naturally, when he started meeting with patients, when they're coming in, potential new patients,

Speaker 2 he wasn't desperate for money. He wasn't like, please pay me.
He was like, hey, here's what I offer. So he relaxed.
And naturally, his closing ratios went up.

Speaker 2 So he started making in just a few months, two to $3,000 more a month in revenue just because he relaxed.

Speaker 2 So in total, that 100,000, you know, when you're, you know, think about it, most financial advisors are like, man, if you make 10%, you're doing amazing, right? 10,000 bucks off that 100,000.

Speaker 2 But instead, like you said, into perpetuity, he's making over like 75,000 a year, 75 to 80,000 a year from that 100 grand decision that he made. And that's the one thing his wife said.

Speaker 2 She's like, listen, honey, it's only 100 grand. You still have $400,000 you can invest, you know, and do other stuff with.
Right. And so that's not even investing the money, right?

Speaker 1 Which $400,000, you can easily make a 10% return off that in a passive investing world and make another 40 000 a year so in total right he could easily make you know over a hundred thousand a year extra cash flow just from the the little bit of money that he had there well let's even just talk about i think there's plenty of people watching this listening to this credit cards credit cards you know 19 24 whatever you know yeah and you have 10 grand 100 grand name the number let's keep it round figures to make it easy let's say you have a hundred grand worth of credit card debt as a business owner and you have a way to effectively pay that off.

Speaker 1 Let's just say you sell some assets, you sell some retirement, you know,

Speaker 1 stocks, crypto, something, right?

Speaker 1 But then you start to buy back or pay yourself or replace it at the same rate of your credit card.

Speaker 1 That is where you start to really see the exponential component of compounding, right? I mean, I think a lot of people get short-sighted with like,

Speaker 1 you know, I don't want to use, to your point, this guy didn't want to use his hundred grand.

Speaker 2 He didn't see it.

Speaker 1 But if someone has a hundred grand in credit card debt and they could take a HELOC at 9% or they could,

Speaker 1 let's just say, sell some assets that are just, they've done well over time, you didn't really intend on selling, well, there's always going to be dip in markets.

Speaker 1 So pay that off and buy back in at a percentage that is way better than your credit cards. Talk a little bit about that.
I mean, I would assume you would. be an advocate for people doing things

Speaker 2 like that.

Speaker 2 Yeah, it's it's always comes back to the cash flow, right? That's the big thing. Cash flow is what creates freedom.

Speaker 2 And it's really dependent upon you as a steward. You know, I teach people there's spenders and there's savers, but the one thing they have in common is they're both in scarcity.

Speaker 2 Because spenders, you know, they're always just, they have to always hunt and kill whatever they want to eat, right? But savers, that's the more deceptive one because everybody honors them, right?

Speaker 2 Especially the gurus out there like, oh, cut out that latte and, you know, and live on rice and beans for that's 50,000 years, right?

Speaker 2 you know they tell you all that crap by the way isn't it ironic that Dave Ramsey who created all of his wealth in business and real estate tells you to buy mutual funds I mean what a crock of crap right you know so anyways a little side rant there we can talk about Dave Ramsey another time but uh anyways but you're right like it's really about you as a steward a steward is saying what's the best and highest use of this money in my life right now That's what a steward does.

Speaker 2 They can stay in that abundant mindset, not in the scarcity like savers or like spenders, because savers can never save enough. They never pay off their debt fast enough.
It's never enough for them.

Speaker 2 Just like that guy that got caught with a half million, he couldn't get out of that saver scarcity mentality. He had to move into a steward investor type of mentality, which is to your point, right?

Speaker 2 That way you're thinking. And so sometimes paying off the credit card can be an awesome rate of return.
You know, it could be great.

Speaker 2 But there's other times that keeping that credit card balance might be okay. I'll give you an example.
This popped in my head here, but I had one client that he was down.

Speaker 2 He had no money, no cash, right? Nothing in checking, nothing in savings. He was depleted.
His business was struggling.

Speaker 2 All he had left was $1,000 on his credit card. That was it.
He had already used up some of it. There was $1,000 between his limit and where he was.
And I said, all right, here's the deal.

Speaker 2 You can either decrease expenses, which we're already working on, and you can only decrease them so far. You still have to spend money, right? It's like, we've got to increase income.

Speaker 2 I said, what's one new patient worth in your office? He's like, it makes me usually between $2,500 and $3,000 a year. I was like, perfect.

Speaker 2 I said, what what if you took the thousand dollars your credit card and you went and did like a it was right near christmas time like what if you did like a little christmas party invited all your patients tell encouraged them to bring other people from the community maybe even bring like massage therapists and other people in too where they can advertise their services and invite their people to come in and you can advertise your services like what if you even what if you use that thousand bucks because obviously if you get one new patient you make two and a half times that thousand bucks that's a 250 return he's like i guess i could but i'm just so scared because that's all I have.

Speaker 2 I'm like, do it. Let's try it.
He did it. He got five new patients.
So it wasn't like he had 50 new patients, but five. That's worth to him $12,500 from a thousand dollar investment.
That's awesome.

Speaker 1 Right. There's no bigger, I tell people, the best investment, in my opinion, if you have to make one investment, it's invest in yourself, right? Invest in growing your business to your point.

Speaker 1 A little holiday party, $1,000, but he invested in himself,

Speaker 1 showed a good time, talked to a couple of people, shook some hands, and it brought him five people. I mean, mean, that's, it's marketing one-on-one, right? Get exposure.

Speaker 1 And as long as the ROI, the ROAS, right? Because I would say that's marketing. If he has a three or five X ROAS like that, I mean, that's insane.

Speaker 1 He had a way higher ROAS, but then you rinse and repeat. He should be throwing monthly cocktail parties, right, for $1,000 a month to go get five more people every single month.

Speaker 2 Exactly. Heck, even if it's quarterly, if he didn't want to like, you know, burn himself out, fine, whatever.
But yeah, you're right. Exactly.

Speaker 2 Like that right there for him was like the best and highest use of that money in that moment right now i've had people where they've gotten insanely profitable in their business they're making lots of money and now they're saying okay i can only invest so much money in my business i'm getting this return of you know this diminished return if i keep pumping more money in right so if i want to max my roi on my business i can't throw all my money back in by the way you should never do that especially when you're mature business early on fine but once you mature as a business you need to take some profits home, right?

Speaker 2 Because that's where I've learned, especially with 2020 and everything else happening that's where having those multiple streams of passive income help that's where you want to have diversification of income streams coming in so if you get shut down you're okay by the way I can tell you this as a business owner this has been true in my life because eventually I did dig out of that million dollar debt hole

Speaker 2 it wasn't easy I had to like scrimp and save and work hard to do it but by the end of 2016 I retired I was able to retire again the second time and I took two months off went to California got bored out of my mind again and I came back because the thing is I just can't retire right?

Speaker 2 I can't. And

Speaker 2 maybe it's a spiritual thing for me too, because I mean, not just that you get bored, but I could go find a hobby or something.

Speaker 2 But I really believe that, you know, God's blessed us with, with, with a lot of gifts, right?

Speaker 2 And if I've been blessed with this kind of experience, where I was able to get out of the rat race twice, especially after overcoming a million-dollar debt hole, maybe I have something to offer the world, right?

Speaker 2 And I believe they have that ripple effect to give people, hence the name of your company, Money Ripples. And that's where I said, you know what? What am I doing with my life?

Speaker 2 How am I being a wise steward of not just my money, but even my time and my talents to give back to people and use those God-given talents. And that's kind of why I kept doing the podcast.

Speaker 2 I have on my podcast now for 10 years for that very reason. It's like, I love teaching.
I love giving back. And I feel like it's almost a duty that I have.

Speaker 1 So what's the podcast everyone can go? Everyone right now needs to go subscribe to this podcast. What is it?

Speaker 2 Yeah, we did years of marketing, and then we come up with the name Money Ripples Podcast after our company.

Speaker 1 Money Ripples podcast on Apple, on all the platforms.

Speaker 2 Make sure you're following Chris Melson. Sure.

Speaker 1 I tend to agree, my friend, is you have a gift. You have a financial mindset that a lot of people don't.
They may be great dentists, but they don't know what the hell to do with their money.

Speaker 1 They may be great lawyers, but they don't know what the hell to do with their money. And, you know, people like you, there need to be good people with the right, you know,

Speaker 1 the right intention, right? Not just worrying about a commission on a sale and to really help these people,

Speaker 1 you know, to be able to help with their financial literacy.

Speaker 1 To your point, whether it's real estate, whether it's lending, whether it's, you know, insurance policy, there's just so many ways that you don't need to have your typical financial advisor, stocks and bonds, mutual fund type of investment.

Speaker 2 You really don't. Yeah.

Speaker 2 There's so much of a bigger world out there and a better world with their. And like I said, come back to that point, the Force 500, right? They're all business owners.

Speaker 2 But if you look at even millionaires, what they have in common, a lot of them do have businesses, but even the ones that don't, they've got real assets. They got things like real estate.

Speaker 2 That's a part of their portfolio. Even if they don't know what they're doing, even accidentally, they create wealth, right?

Speaker 2 I mean, what better place to learn how to get your money to work harder for you? So you have to work so freaking hard for it.

Speaker 2 Because you never ever want to get caught in the entrepreneur rat race where you make millions of dollars and everybody thinks your life is amazing, but you know, in the back of your brain, you're like, if this were all to shut down today, I'd be just as broke as everybody else, right?

Speaker 2 Like I would be in my own rat race. I still am.
And that's why I think every entrepreneur needs passive income.

Speaker 2 You need to have that, that place, not just for freedom, not just for options, but gets you to a place of power.

Speaker 2 And when you come for a place of power, you know, you don't need that one customer, that one client, just like me in my business, Money Ripples, my whole team knows I can shut it down anytime because I don't need it.

Speaker 2 But because I'm on a mission, they feel a little bit more certain, right? But that power, knowing that I don't need the money, that comes across.

Speaker 2 And i'll tell you i've seen so many people when they get to that place their business explodes because they don't need the money you know it's it's that weird weird thing is that when you're not that it's indifference when you're not desperate you can actually make a real change right you're doing it for the right reasons

Speaker 2 yeah you don't have that business breath as i call it right you know where you're just reeking you know the other person that passes out the cards at all those you know networking chamber of commerce events and you're cutting people up give them paper cuts because you want those those cards passed out and in fact you're so desperate you didn't give them a stack of cards like here hand them out to somebody else.

Speaker 2 Like, please, I need business. No, that's a crappy way to live.
Like, you come from a place of power and confidence. You'll get more business.

Speaker 1 There's no doubt. There's no doubt.
Everyone, this man knows what he's talking about. I want everyone to be listening to Money Ripples.

Speaker 2 Follow Chris Miles.

Speaker 1 Where else can we point everyone to just get in your world and understand more of how you think financially? why things make sense? Where can we point everybody?

Speaker 2 Yeah, like you said, the Money Ripples podcast is great, but anything Money Ripples ripples at money ripples on social media moneyripples.com great ways to learn what would be final question what would be your top three

Speaker 1 investment strategies for someone who's running a high performing high revenue high income earner what would be your top three that you would

Speaker 1 you know obviously you're not doing an audit of everyone's financials but just a generic answer of like hey if someone's making multiple seven figures they have high income here are three great you know investment strategies.

Speaker 2 Yeah, I would say this. And again, no investment recommendations and all that kind of stuff.
But if I were to say in general categories,

Speaker 2 one is like I said, owning real estate doesn't have to be in your backyard. I like turnkey rentals where somebody else manages the property for me.
So it doesn't distract me from my own passions and

Speaker 2 time that I have in my business.

Speaker 2 Two is, you know, I would definitely look at something like hard asset, other hard assets like maybe gold, silver.

Speaker 2 I even have ownership in like oil, oil wells wells and things like that so commodities right so you got real estate you got commodities and you can actually have investments in actual like production of oil well like type of businesses and whatnot and then the third thing is is having a cash having that war chest right like having that cash available and that's where i use it's not an investment but it's a saving strategy which is called infinite banking or as we call it max roi infinite banking so that we cut the cost as low as you can go to get the higher returns on your money love that everyone make sure you go to moneyripples.com moneyripples podcast.

Speaker 1 My friend Chris Miles is here to serve you guys. That is the end of our podcast.
We will see you on the next Entrepreneur DNA.

Speaker 2 Peace.