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Today’s episode delivers an eye-opening, educational journey with 
guest Chris Miles. Chris is the founder of Money Ripples and a former traditional financial advisor who underwent a dramatic transformation after seeing firsthand that mainstream advice from Wall Street couldn’t even help his own father retire. This pivotal realization led Chris to abandon the conventional path and rebuild his approach from scratch—eventually achieving financial independence twice by prioritizing cash flow and passive income over traditional accumulation.
Host Dave Wolcott welcomes Chris to unpack the myths and “sacred cows” of the financial world that often keep investors trapped. Chris dives deep into his inspiring story, from his early days navigating business, to training as a stock coach and then ultimately rejecting the standard Wall Street playbook. He sheds light on why real financial freedom isn’t just about building a nest egg, but creating accelerated, recurring passive income that lets you become work-optional and live life on your own terms.
Throughout the conversation, Chris and Dave break down the real numbers behind 401ks, the “4% rule,” and other advice that just doesn’t add up—and reveal smarter, more practical ways for entrepreneurs and professionals to take control of their wealth. If you’ve ever questioned whether traditional strategies are serving your best interests, this episode is packed with actionable insights, real-world use cases, and empirical wisdom.
In This Episode
- Chris’s origin story and why he left traditional financial advising
- The biggest myths and misleading advice from Wall Street
- Why passive income and cash flow outperform the “accumulation” mindset
- Practical strategies to break your money out of “prison” and accelerate your wealth trajectory
1974, we got taken off the gold standard. Inflation was not the same as it is today. It’s much, much higher today. You’ve got to pull out less money to last if you’re going to do that kind of method. But there is a better option. And that’s what got me so excited by the time I quit being a financial advisor—when I started to see the light, that it wasn’t about accumulation, it was about acceleration and passive income.
Welcome to the Wealth Strategy Secrets of the Ultra Wealthy podcast, where we help entrepreneurs like you exponentially build wealth through passive income to live a life of freedom and prosperity. Are you tired of paying too much in taxes, gambling your future on the stock market, and want to learn about hidden strategies for making your money work for you? And now, your host, Dave Wolcott, serial entrepreneur and author of the bestselling book The Holistic Wealth Strategy.
How’s it going, everyone? And welcome back to Wealth Strategy Secrets of the Ultra Wealthy. Today’s guest has one of the most eye-opening financial journeys you’ll ever hear. Chris Miles started as a traditional financial advisor, teaching the same Wall Street gospel we’ve all been fed, until he realized that the very strategies he was selling couldn’t even help his own father retire. That awakening led him to leave the industry entirely, rebuild his approach from the ground up, and ultimately retire twice by focusing on cash flow over accumulation.
In this episode, Chris pulls back the curtain on the myths that keep most investors trapped—from the 401k “free money” illusion to the 4% withdrawal rule—and reveals the strategies he uses today to help clients free up capital, create passive income, and become work-optional in record time. If you’ve ever suspected that conventional financial planning is designed to keep you playing someone else’s game, this conversation will give you the tools to take control of your wealth and your life.
And on to today’s show. Chris, welcome to the show.
Hey, it’s a pleasure to be here, Dave.
Yeah, great to have you on the show. And I know we are definitely aligned in terms of our thinking and our strategies. What’s really unique is you have such a unique perspective, really having that traditional financial planning background. You saw the light and transitioned over, as I did. Once you start to unpack some of these myths or sacred cows that are out there, and really look at the numbers, quantify the data, and make smarter decisions for yourself, you start to realize that some of what Wall Street is talking about are truly myths.
So I’m excited to unpack some of those things and help investors uncover what Wall Street myths are and what smarter ways exist to actually build your wealth, hit financial freedom, and achieve those goals people really want. Why don’t we begin with a little bit about your origin story and how this journey started for you?
Yeah, you know, I never intended to go into finance initially. Besides the fact that as a kid, I wanted to be a physicist, an astronomer, or even a Motown music producer at one point. I had a lot of aspirations. But eventually, in my senior year, I felt like I should major in sociology. I had no clue what sociology was, but I said that’s what my major would be. I went down that path, then realized I wanted to move toward business because that’s where there was more money and freedom.
So I said, well, I should be a business consultant. I wanted to be like the Bobs from Office Space, if you’ve watched that movie. I was on that path but decided to listen to my dad’s advice. He always said, “Get real-world experience. Don’t just get book smarts—get real-life smarts too.” So I thought, I’m going to take a sabbatical from college and start a business. I didn’t want to be the guy with an MBA telling people how to run their businesses while having no real authority. So I took a sabbatical from college.
I was looking around, didn’t know what to do. Then one of my friends said, “Yeah, I just got interviewed and I’m interning with this financial firm. It’s really cool.” I thought, kind of like Adam Sandler in The Wedding Singer: “I like money. I like to get more of it. I have a jar on my refrigerator. That’s where you come in.” That was me. I thought, I’ve taken banking and accounting classes, I think I’d like to try this out.
So I interviewed, not knowing they’d hire anybody off the street as long as you could pass a test with 70% and not have robbed a bank. I got hired—100% commission only. I started to buy into the whole methodology, the whole aspect of investing and finance. But even more than that, I realized I loved being my own boss. I loved being an entrepreneur.
So I ended up dropping out of college, never went back. I was one paper away from getting my degree but I dropped out and stayed on that path. For four years, I was a financial advisor. I even became a stock coach, training people how to trade stocks and options on the side.
In fact, in 2005, my broker-dealer required me to drop my Series 6 and 63 because they said, “You can’t do this and that at the same time.” I said, “Well, I’m not giving stock recommendations.” They said, “It’s too close. Pick this or that.” I picked stock coaching, because I could already tell I’d make way more doing that than selling mutual funds. So I kept only my insurance licenses.
Later that year, my dad reached out. He said, “Chris, when are you going to advise me?” I was shocked. This was the guy who changed my diapers, the penny-pinching saver, the cheapest guy you’ve ever met. Depression-era mentality. The kind of guy Dave Ramsey would look up to.
So I sat down with my dad over Thanksgiving and reviewed his finances. I said, “Dad, you’ve done a great job. You’re debt-free. You even paid off your house years ago. You’ve been stuffing money into your 401k, getting the match, doing everything right.” But then I told him, “You’re 61. If you want to retire today, based on where you’re at, you better hope you die in about five or six years, because that’s when you’ll run out of money.”
He said, “That’s not the answer I wanted. I’m tired of this job. The stress is killing me. I’ve had heart attacks and strokes. I want out. What do I do?” I said, “I don’t know. Work longer, save more. That’s your option.” That really bothered me because I thought I could help him. He did everything right, and it wasn’t enough. Even worse, I realized I was on the same path as him because I was drinking the Kool-Aid.
I thought if I kept scrimping and saving, turning off the AC in the summer, heat in the winter, just to save a couple bucks to put into mutual funds, maybe I could retire in my 40s or 50s. But I started to see that wasn’t true.
The next month, I spoke with a friend I had trained as a financial advisor, who left to do real estate investing. He asked, “Chris, how many of your clients are financially free, where they don’t worry about money?” I said, “None. They all worry about running out.” He said, “Great job, Chris. Way to help no one.” Then he asked, “How many of you financial advisors are financially free—not off commissions, but doing the same investments you recommend?”
I thought about it and realized guys in my office had been there since the 1970s and weren’t slowing down. They looked broke. So I said, “Maybe none.” He said, “There’s your problem.”
I asked for a recommendation. He said, “No, you just told me stocks are better than real estate. I’m not going to tell you.” I insisted, and he finally said, “Okay, if you’re serious—and I don’t think you are—read Robert Kiyosaki’s book Who Took My Money? It basically says mutual funds suck. I just saved you three hours on audiobook. And listen to this AM radio show from some real estate investors in Utah.”
So I did. After a couple months, I faced a choice: stay in the business, put blinders on, and ignore the truth, or quit and keep my integrity. I chose the latter. I vowed never to teach money again. I decided to stick with stock coaching and be a mortgage broker—because in 2006 anyone could be a mortgage broker, like in 2021.
But I wanted to know how these real estate guys were becoming multimillionaires in their 20s and 30s. I started following that same path. Later in 2006, at 28 years old, I had enough passive income to be work-optional. I could quit everything. That shocked me. Working just a few hours a week, I was completely retired.
Of course, friends and family were like, “What’s this guy doing?” I didn’t know how to explain it, so I’d joke, “I sell drugs,” just to buy time. Really, I was focusing on cash flow and passive income instead of accumulation.
By the end of 2006, I partnered with Garrett Gunderson to create a company, the predecessor to Wealth Factory. We wanted to save the world, help people get out of the rat race. But in 2007, we got hit hard. He wanted me to cut off income streams outside the business and go all in. Meanwhile, our market—real estate flippers—were hit first and hardest. Suddenly, no income. Our business tanked. My personal real estate tanked. Banks stopped giving cash-out refinances. Overnight, I went from millionaire to upside-down millionaire, over a million in debt.
I stopped teaching people how to get out of the rat race because I couldn’t teach what I wasn’t doing. I started focusing on what I was doing: finding money. I helped people find and free up cash, pay off debt, save on taxes, track money. That became my new path.
By 2009, we started pulling ourselves out of the hole, especially working with chiropractors and dentists. That helped me personally too, because I was making money to dig out of debt. I didn’t file bankruptcy—though some days I wished I had, it would’ve been easier. But I was too stubborn.
Fast forward: I created my own company in 2012, went through a divorce in 2015, and by the end of 2016 I had enough passive income again to retire a second time. That’s what I teach now—how to become work-optional. Because most people don’t want to retire completely. I know I can’t—I’d get bored and depressed. But I love knowing I have enough passive income that I don’t have to work. And that’s what I help other people do too.
Quite a journey you’ve spent there. We’ve had Garrett on the show and he’s definitely been leading the charge since Kiyosaki with some other big thought leaders out there in terms of certain strategies around thinking about your wealth differently. And I like what you said.
I think that’s what it’s all about, right? Financial freedom. And we talk about that a lot on this show.
What does wealth actually really mean? What does financial freedom actually mean? Just having enough of that—whatever you want to call it—passive income, mailbox money. It’s creating freedom in your life to be able to spend time the way you want to spend time. Freedom of relationships, who you want to actually work with and spend your time. And then having that purpose, even if you are still working. But increasing the purpose of your life is exponential. Maybe you’re trying to create impact or do other things, but you just have a lot more choices being able to get there.
Of course, this has been my journey. I’ll hit financial freedom number, but then I don’t want to stop working either. I like what I’m doing, and then I’ll actually put pressure on myself to increase fixed costs because I want to live a bigger life and I want to do more things. So then you go up, and you try to drive more ways to increase income.
So let’s go back to the beginning, and I think this is helpful for listeners to really understand: what are some of the myths out there from Wall Street and maybe traditional planning that just really don’t make sense? What are some of those myths? One of them we talked about with the 401k match. Maybe that’s a good one. But any other top ones that come to mind for you?
Passive income isn’t just money-it’s freedom of time, freedom of relationships, and purpose.
It’s interesting because on my Money Ripples podcast right now, I’m going through the different myths you have to overcome to bridge and become financially free. I see financial freedom and financial independence differently. Financial independence is you have enough passive income to replace your income or pay for expenses. Financial freedom is where money is no longer the reason or excuse that you do not do anything.
Right.
It’s almost a state of being or mind that goes along with the freedom. What’s so interesting is that I thought I might come up with five or ten myths. I’m well over 20, and I keep adding to the list. Every time I’ll be in the middle of talking about a certain subject and I’ll say something, I’m like, “Ooh, that’s another myth I’ll have to address later.” There’s a ton. But really, it comes down to this overall theme: it’s always deferral. Set and forget it. Spend nothing, save everything, save it forever, save in these mutual funds, and hopefully someday you’ll have something. That’s really what it comes down to.
It’s always about locking your money in prison. If you think about financial advice, everything that’s been taught is about locking your money away in those retirement accounts and your 401ks and your IRAs. You can’t touch it. If you try to touch your own money, you get slapped with penalties and then taxed on it.
Right.
Assuming it’s a 401k or IRA, not the Roth. But even then, you can still get penalized in a Roth. So you’ve got all these stupid things that go with that. And then the other advice is pay off all your debt.
Right.
Just like my dad did. He was told to do it. He did all the stuff that he was recommended to do by all the financial gurus at the time. And even today, people are still saying the same crap. Lock your money in equity in their house. I learned firsthand locking money in equity in a house is a bad thing. Because what happened in the last recession? I was actually doing the Dave Ramsey method with my house. I bought a new house in 2006, but I was paying equity down.
Why? Because I was a mortgage broker. I figured worst-case scenario, I can always just do a cash-out refinance to get the money out. But after 2007, I had all this equity in that house. I couldn’t get to it. The banks wouldn’t let me. Which just said, well, do I want to really sell my house? And it was my dream home. I didn’t want to have to sell it until I got desperate. But by the time I got desperate, guess what happened to real estate values? They tanked.
Pretty soon all that equity was gone, and now we’re talking about short-selling the house. The bank wouldn’t let me short-sell the house where they’d sell it for less than what you owe on the mortgage. They said, nope, we refuse those offers. To give you context, the house I had appreciated up to $740,000, which back then was a lot, and then it depreciated down to about $500,000, give or take. I was trying to sell it because I owed about $500,000. We had an offer to sell for $515,000. The bank refused it because the bank was owned by Lehman Brothers, so they were doing all their mortgage fraud practices at the time. Eventually, I had a foreclosure in 2009 on that house, and it sold for $342,000. I mean, I wish I was the guy that bought that house.
So I learned firsthand keeping equity in a house is a bad idea. I’m not saying having a paid-off house is not a good thing. I think you can definitely pay off homes. But I learned locking your money away is risky. If I had that equity in my hands during that period, I could have weathered that storm.
I had my six-plus months reserve too. So it wasn’t like I didn’t have savings. It wasn’t like I was deeply in debt. The deeply in debt happened after I was negative cash flow for so long because I was in the hole like $16,000 a month. It was horrible. So when people say, “Oh, you got to pay off your home, lock it away in 401ks and IRAs,” the only people that benefit are the financial advisors who get paid whether you make money or not, and the companies they work for. When you realize all the information you’ve been taught has come from those financial companies, taught through financial advisors, and even the financial experts and channels—who are paid through sponsorships by these big companies who literally put billions of dollars of marketing into it—you see where it comes from.
I remember learning “high risk creates high returns.” But then, you know, we have to renew our licenses every couple of years with continuing education. It always comes back to that same old question: what’s the definition of risk? Chance of loss. When is a higher chance of losing equal to a higher chance of winning? A 90% chance of losing does not mean you have a 90% chance of winning. It’s a 10% chance of winning. But they’ve led us to believe that we take all the risk while they take none of it.
Even with the 401k, some people will say, “Oh, the reason I do the 401k, even though maybe it’s not the best, is I get a match.” Okay, cool, you get a 100% match. Well, that 100% match— is it truly a 100% compounded return? And the answer is no. If you ever put into a calculator someone saving $10,000 a year in their 401k, getting a 108% return like in the stock market, you’ll find out you’d be richer than Bezos in just a few decades. And never have I seen anybody on the media saying, “Hey, I got wealthy and famous because I saved $10,000 a year in my 401k and got my company match too.” It never happens.
Long term, what’s interesting is that match might add about a 3% compounded return at the end. All it does is double your money in the end. In the beginning, it’s awesome—it is a 100% return at the beginning. But the longer you have it, because of how compounding interest works, that rate of return declines over time because it’s only on the new money. So it ends up being about a 3% difference long term.
What’s crazy is I decided—and here’s the thing, I got blasted on my YouTube channel. People were like, “Who is this guy? This has got to be the worst financial expert I’ve ever heard of. Come on, it’s a 100% return. He’s stupid. He’s using girl math.” I was like, no, I’m literally using a compounding interest calculator to figure this out.
But then I researched Fidelity. I went to their target date funds because right now about 86% of people use target date funds. I wanted to know the performance compared to the actual S&P 500, because everybody tells you, “Oh, it’s just like the S&P.” Well, guess what? The ten-year performance on those target date funds, if you go out beyond to the longer-term ones like 2035 and beyond, they’re pretty much all the same return. They’re almost all the same investments. The return was 2.1% less than the S&P.
The S&P over the last 30 years, if you look at the actual return, has been about 8.4% since 1995. That’s the average compounded return using the S&P price. Well, that’s 8.4%. Take away over 2%, now you’re down to around 6%. That does not include fees. In those target date funds with Fidelity, it’s a minimum fee of 0.75%.
I was shocked when people were like, “No, you pick the ones that you pick. These indexes and target date funds, they don’t have those fees.” I’m like, they have those fees. Fidelity literally put it right there: the minimum fee, not including the administrative fees from the plan through your company, is 0.75%. Put it together, that’s about 3%.
So guess what? You got that 3% extra compounded return with a 100% match, but you’re doing 3% worse than if you just got an S&P 500 index on your own. So you literally just washed it out. You’d make the same amount of money saving outside of the 401k, not getting your company match, putting it in the S&P 500 index—which is not my favorite, but it’s an option.
You could do that and make just as much money as you would get in the 401k with a 100% match. And most people don’t even get the 100% match anymore. It might be a 50% match or they try to max fund it and only get up to a certain percentage, so that return actually becomes less. I’ve seen examples of people max fund their 401ks. It only adds an extra 1.5% on the performance. Well, if it’s 3% worse, you’re not even making up for the bad performance. You’re just worse off.
That’s one of those sacred cows. People are like, “No, no, the 401k is awesome. It’s brainless. Nobody should question that.” Why not question it? Look up the actual evidence.
Yeah, no, Chris, you are spot on with that. I’m glad you brought highlights to that. People should really look at the numbers and do the diligence on that. And that’s just the tip of the iceberg. I got so frustrated and, frankly, I was doing so much better in alternatives, in real estate, that 15 years ago I went through the math and said, hey, what if I even take this sacred cow and actually exit my 401k? I’ll pay the 10% penalty.
We created this calculator for it. By the way, if any of the listeners want it, we’ve got a calculator we can share with you. I would break even in about five years if my assumptions were right. But then when I started to look at the compounding—because I could get tax-free compounding on real estate or some other assets—if I use an IBC policy, I can even get additional leverage on it from there.
And then over 10, 20, 30 years, it was amazing. In fact, the numbers are: if you take 100k, pay 35% taxes, 10% penalty on that, you have a net investable 55k. And if you can compound that at 20% over 20 years, it’s actually over 2 million. If you just left the 100k in the 401k, it comes out to about 385k. And that’s before taxes, fees, and inflation, which we didn’t even talk about.
Quite interesting. Yeah, it’s quite interesting. And I like your background. You’re really analytical, and you’re looking at this much like I did too. I started to run my own math and say, okay, you know what makes sense? And they hide the fees. They’re also not talking about inflation, which we’ve seen can have a massive impact on the devaluation of the dollar.
And so that kind of evolved our thesis into thinking that, hey, we need to be buying real assets like real estate, where you can get tax efficiency, drive forced appreciation, and have passive income today. Because like Garrett so wonderfully put in his book, it’s all about accumulation theory. Does it really make sense to save up for this big golden nest egg at some point in the future and then, like you say, hope you don’t outlive your money? Why not create financial independence today when you’re 35, 45, or 55 and just take back control of your life?
That’s exactly it. Now, that’s the problem: there are all these assumptions we’ve been told. We’re told the stock market returns 12%. I used to pull out the Ibbotson charts as a financial advisor saying, “Hey, look, you put a dollar in 1928 and now you’ll have $5 billion.” Not really that much, but way higher than real estate. I’d show real estate as barely above inflation because it would only be home prices. I’d show them things like inflation and—
So tell me, okay, let’s unpack that a second.
So why—
Yeah, why is that 12? Because it’s amazing. I still see it all the time, whether on social media or Bloomberg. Are they selecting the dataset to be able to get to a 12% number? Where are they coming up with that?
It’s that average versus actual return. And I’m sure you’ve probably taught on the show: if you lose 50% one year, you have to make 100% the next year. Funny enough, I actually learned that as a financial advisor, three years in. A guy came in and we all got the answer wrong. He said, “Okay, if you have $100,000 in an annuity and lose 50%, how much do you have?” We all said 50,000.
Then he asked, “What rate of return do you need to get back to breaking even?” We all said 50%—because we lost 50, we need 50 to break even. He said no, because if you go down to $50,000, a 50% gain only makes you 25,000. You only go up to 75. You need a 100% return. He asked, “So what’s the average?” We did the math: 100 minus 50 is 50, divided by 2 years = 25% return. But your actual was zero.
And that’s the thing: both are true numbers. But if you’re a financial company, which one would you rather show? The one that shows 25%, or the one that shows 0%? And then you don’t factor in fees, which means you made less than zero.
Exactly.
25.
And the other really important note for listeners is to know that this is on your compounded returns. So 2008, 2022—if you’ve been accumulating and let’s say you’re 63 and you have that big 50% loss or 20% loss—that is a massive chunk. You don’t have the time to make up for it.
And I witnessed that firsthand. In 2000, I became a financial advisor just after 2001, right after 9/11. I saw what happened with Y2K. I was right in the middle of it. I was birthed in that crisis. 2002 was the worst year, funny enough. After 9/11, the market was coming back up, but it was 2002 with all the corporate fraud like Arthur Andersen, Enron, all that stuff. That was fun because I actually had people employed by Enron in Utah. They were pretty pissed off.
So all that was going on, and I saw it firsthand. People would say it wasn’t until 2015 that they got their money back from investing in 2000. Even though the market got back up in 2013, because of fees, it took another two years to break even. That’s part of what happened to my dad.
Right.
He thought, hey, if I just keep going, especially with Y2K leading up to 2000, maybe I could retire in my 60s. But it was already way overvalued—much like today in 2025. Tech stocks were overvalued beyond what they should be, much like today with the Magnificent 7. Most people under the age of 40 have never seen a market loss. 2022 was just a blip for them.
But in 16 years, you had one down year. That’s not the Wall Street waltz we’ve historically seen, usually two years down, five years up. That hasn’t happened. We’re way overdue for correction. And when you add everything else being underestimated—returns altered, inflation understated—you realize why so many Americans, like my dad, can’t really retire comfortably.
Yeah, and what a terrible spot to be in. If you’ve worked all of your life, and you’re at that point in your life, and medical expenses are at their highest ever.
We keep seeing those increase. You know, we’ve seen crazy things with the housing market these days. So, you know, you really, I mean, you don’t want to be in a state of fear at that point.
You want to have full protection for you. Any other key myths you want, last myths in terms of things that people should really be checking, double-checking on to see if it makes sense for them.
Yeah, let’s talk about the 4% rule. That’s another little sacred cow, especially if you’re part of the FIRE movement—the financially independent, retire early. I actually joined that Facebook group because literally I did it twice. By the time I was 39, you’d think they would welcome me with open arms. Funny enough, I did not realize that the way they defined FIRE was not how I got FIRE. In reality, you know, it’s very much based on put your money in S&P 500 index funds and save as much as you can. Minimize your lifestyle so then you can live as cheap as you can, which is not necessarily always bad, but it’s not always good either.
Minimize your lifestyle so that you have so little and you just put all your money into the S&P 500. And eventually they’ll say you can live on 4% a year. So example, if you have a million dollars, 4% a year is 40,000 a year you can live on. So if they’re cheap enough, they can make it work. Well, it’s interesting because I mentioned to them, I said, hey, that 4% rule was debunked a long time ago and they kicked me out of the group for saying that. Which is interesting because there are actually legitimately big institutions that redo that number every year, and it’s right around 3% right now if you’re going to retire in your 60s.
Now if you’re going to retire in your 70s, 4% does work. But the 3% doesn’t. Interesting that the guy that created the 4% rule—which he never intended to be a rule anyways—was only looking at the market from 1926 to 1976. He took that 50-year period and said, based on all the ups and the downs, how much could you pull out per year and not run out of money in about a 20–25 year span? Well, he came up with that 4% rule. What’s interesting, he has a new book coming out now saying, oh, you don’t need 4%, it’s 5% now. So he’s now even doubling down, digging in his heels, saying it’s actually higher if you have properly managed, diversified funds in international stocks and here and here and here. I’m like, this guy is just basing this all on the fact the market keeps going up, which it doesn’t always. But most companies will say it’s 3% if you’re trying to retire early.
And this is why I told one of my friends, because he’s like, yeah, I’m 30 years old, I got over a million dollars, I’m financially independent now. I said, well, for you it’s a 2% rule because you’re so young and you have so many years to go, and with inflation being higher than they report, returns being lower than you think they are, it actually needs to be 2% for you. He’s like, are you saying I have to save up double the money now? I said, yeah, if you want to be financially independent. Like, no, I don’t want to believe it, no. Because he had worked so hard. I was like, dude, it’s not that you did anything wrong. Having over a million dollars as a 30-year-old is impressive, right? By the way, this guy actually works with a lot of real estate investors, but he keeps going to the stock market. So anyways, long story short, I just tell people, listen, you can do that.
And that’s the accumulation theory you’re talking about, right? We think we’ve got to save and just hoard up, squirrel up for this winter of retirement, and hopefully the winter won’t last too long. And that’s the problem with the 4% rule—people are living longer, much longer than they were in 1976. Also, inflation is bigger because in 1974 we got taken off the gold standard. Inflation was not the same as it is today; it’s much, much higher today. You’ve got to pull out less for that money to last if you’re going to do that kind of method, right? But there is a better option. And that’s what got me so excited by the time that I quit being a financial advisor—when I started to see the light, that it wasn’t about accumulation, it was about acceleration and passive income. What’s the actual income? That’s what we all want at the end of the day. And so for me—and I’ll give you a real-life example this time—what opened my eyes was I said, wait a minute, so I don’t even have to buy rentals because I used to think you just buy a property in your backyard. And yeah, I had those too.
But I said, wait, could I lend my money to real estate investors? They’re like, yeah, and at the time they were paying more, but let’s make an easy number. They’re like, yeah, you can get paid 1% a month. Which now, you’ll find deals like that today. Well, that means if I have that same million dollars, instead of living on 30,000 a year or less if I’m younger, I can now live on 10,000 a month, or 120,000 a year. That’s the same money, but a very different aspect. And that’s what happened with one of our clients. This guy actually heard me on another real estate podcast and started following ours, reached out, and we worked with him. He had a million dollars saved up in his retirement plan. By the way, this guy was the fourth highest-ranking general in the state of California, had a million dollars saved up, 60 years old. And the financial advisor says, cool, you can live on 3%.
So the financial advisor actually taught him well. He said, you can live on 3% at your age, that’s $30,000 a year. And he said, I live in California. Homeless people live on $30,000 a year. I can’t do that. And so that’s when he found us and we started looking at alternatives. We started diversifying things. He got some duplexes that were property managed for him, more turnkey duplexes. He did some real estate syndications, he did some oil and gas syndication, things like that.
And the next thing you know, his same million dollars, instead of making 30,000 a year, is making him over 130,000 a year.
And that I think is the biggest thing. Some people might argue, well, I can make just as good a return in the market. And that might be true, but you can’t live on the same kind of returns in the market. That’s the difference. Because of the way the market can go up or down, you have to be careful not to pull out too much. Where if I get a contractual return on my money—not saying it’s guaranteed—but I’ll tell you, I much rather gamble, quote-unquote, I’d rather bank on real assets paying me than arbitrary things like stocks. Even though I used to trade stocks and options, I learned pretty quickly no one knows what’s going to happen with those. But with real estate, I can make so much more money with more security, more collateral, and more certainty. I want predictable passive income.
And I think that’s the thing that everyone needs to understand.
Yeah, for sure. There’s a great example I like to share with people to really simplify this and just make it clear. So let’s say you take the typical path on accumulation theory and you use the 4% rule. Let’s say someone worked hard for 40 years and saved up 4 million.
And thinking they did great. So at 4% of that, that’s 160K. Now if you take out taxes, fees, and inflation, it might be more like 110K.
That you’re actually living on might be the true number in terms of cash flow. And so you start to take out that, and that capital goes down from your total nut every year. Now let’s compare that to the passive income strategy that we’re talking about. Let’s say you had the 4 million in assets like real estate, private equity, different syndications, a portfolio of different syndications, and you have the same 4 million. It would be very realistic to draw an 8% cash flow return on that. So now you’re at 8%, which would be 320,000 in income, and if it’s likely in tax-efficient real estate, oil and gas—
Some other investments. So now you’re at 320 net. And the biggest difference also is that you’re not killing your golden goose because your whole asset value continues to rise every year. You’re not killing it by 4%. This is how you can actually create legacy wealth. So which scenario would you rather be under?
Yeah, that’s right. That old scenario is always about spending down your money and hopefully you don’t run out before you die.
You’re talking about your golden goose just lays bigger, fatter, juicier golden eggs.
And that’s more nutritious for you. That’s going to do better for you. It’s true. Yeah.
Chris, any top strategies?
My mind. Yeah, I love that example.
Any top? You talked about helping people find capital, and I think that’s such an interesting topic.
We just had a guy on last week. We’re talking about using credit cards, right, and getting up to 500,000 interest-free.
As an example, you know, there’s a lot of people kind of creating. I recommend that a lot of people start creating businesses. Even if you don’t have a business, you could create a side hustle because now you can start to impact your overall tax strategy. You can create additional income that you have, but typically you need some capital sources to kind of get that going. So are there any top ones you can recommend?
You know, I’m not huge on leveraging debt and things like that, but I think the biggest thing, like I said, is get money out of prison. And the biggest areas we tend to find money is it could be home equity. That’s an area that could be taken advantage of. But again, it just depends because where interest rates are right now. Definitely unproductive savings. I know you see it. I mean, we run into people all the time that have old life insurance policies that have never been utilized because they’ve been sold as an accumulation thing, not as something you can use now.
Right.
So a lot of times people are like, oh, wait, I do have cash there. I didn’t even think it was there because they just never think it’s an asset. I’ve had a lot of times we look at things like even IRAs and 401Ks — do we self-direct them or not? Like you mentioned, I had a guy that was 52 years old that we did the math together, and it made sense to cash it out, take the 10% penalty and taxes, and then invest it. He would make more money doing that than just leaving it in the market. And so things like that.
Another area I find that people often don’t know is if they have other properties, like maybe they have investment properties already. I get people that say, well, I’m already doing real estate. In fact, my return on my investment’s awesome. And they look at their original investment and what it’s returning, and the cash flow could be amazing, which is great.
The one thing I look at is what’s called return on equity. What’s the equity in that property and what’s the net income that you’re getting from it? I’ll give you an example. I had one client out in San Diego. He had a property that he just loved. Him and his wife, it was like their first property. Their whole method again — because I have a lot of Asian clients, and Asians are like the best savers in the world — and he’s like, here’s my goal, Chris: in six years, I’m 100% debt-free.
I’m going to take all the extra cash I have, pay off my house and this rental property. I said, okay, well, let’s take a look at this. And what would you free up? And after we take out the tax and insurance, because that doesn’t count, we looked at the principal and interest. It would free up about 4,200 a month. Specifically, he had an investment property that if he paid it off, it would make him 2,400 a month. Right now it was only making them 200 a month of profit.
Guess what? He had 700,000 of equity in that house. And it took me two years to convince him to finally sell that property because they were so emotionally attached to it. And finally he did sell it, got the 700,000 out, and then he went and bought six properties out in Louisiana. Not my first choice for a location, but he did buy those six properties. Then he just reinvested the cash flow from those. He emailed me just last year, and he said, Chris, this would have been year five, by the way. So he would have almost been at the point of paying off his mortgages to where he would have made that 2,400 a month.
He said, Chris, I’ve now reinvested the money we’ve made on these properties, and now we’re making $8,000 a month, about 100 grand a year. So he went from maybe 30,000 a year, not even that much, to now over 100 grand a year just because he got that money out of that prison. So that’s the big thing that we look at there. Even trying to save money in taxes and money leaks and stuff.
I had one client that before even investing anything, we freed up about 100 grand a year, 4,000 a month, just by refinancing their house and paying off some loans. By the way, they weren’t broke. They had 5 million in Meta and Google stocks specifically, and they were making like 400,000 a year, too, as business owners and everything.
So we got them to refinance and just consolidate some of their debt. Freed up about 4,000 a month there. Saved them 30,000 a year on taxes by giving them a better CPA. And then we also sold off one of their properties. That same thing had a couple hundred grand of equity, but it was making zero net cash flow. Like, get rid of that. That’s making a horrible return on equity. Let’s get that over.
And as a result, we felt like, hey, we didn’t have to invest a dollar. We’ve already improved your cash flow by 100 grand a year. Now let’s go and invest some of these stocks, and we’ll get you financially independent within this year. And we didn’t have to sell off all their stocks to do it. That’s the thing. They still wanted to keep stocks.
The goal isn’t to die with a big nest egg. The goal is to live well today with passive income that never stops giving.
Great.
I’m not a big fan of Wall Street necessarily. I now literally have nothing in Wall Street right now. I’m like Buffett. Buffett has 30% of his money in cash right now. I’m doing the same thing, except I’m 100% out of the market because I just know that the values are ridiculous and it’s a gamble. It would just be ridiculously stupid to have any money in stocks right now.
Such great use cases there, Chris. Appreciate you sharing those and all the wisdom you shared with us today. If you could give just one final piece of advice to the audience about how they could accelerate their wealth trajectory most, what would it be?
Follow those that have been there, done that, still doing it today. That’s the thing: follow those people. Don’t follow people on social media that are 25 years old and found one little thing that worked. They bought a couple of Bitcoin or XRP or whatever it was, or they had that one trick pony that they did. But still the market hasn’t necessarily come back into balance to show whether or not they’re working. Like Warren Buffett says, it’s when the tide rushes out that you find out who’s swimming naked.
Right.
And so find those people that have been there, they’ve done it, they’re still doing it today. Those are the best people to listen to. Stop listening to the masses. Because if it really worked for the masses, wouldn’t the masses be financially free? Wouldn’t we see more evidence of that? There shouldn’t be Fidelity showing only 900,000 out of their 45 million clients have over a million dollars in their stocks after literally decades of savings. Like you mentioned the four million dollar example — there are so few people who even have four million dollars in savings because again, it hasn’t worked. So if it hasn’t worked for so long, why would you think it’s going to work today? So just question everything you’ve been taught. Follow the real-life examples of what’s actually working. And there’s tens of millions of us just like Dave and myself who have made it work.
Yeah, love it.
Thanks so much for coming in today, Chris, and sharing your wisdom with everyone. If people would like to reach out and learn more, what is the best place they can connect?
Just follow Money Ripples, right? Whether it’s MoneyRipples.com, Money Ripples on social media, or the Money Ripples podcast that you can find on any platform.
Awesome. Thanks again, Chris. Appreciate it.
Same here, Dave. Thanks.
Thanks for listening to this episode of Wealth Strategy Secrets. If you’d like to get a free copy of the book, go to HolisticWealthStrategy.com. That’s HolisticWealthStrategy.com. If you’d like to learn more about upcoming opportunities at Pantheon, please visit PantheonInvest.com. That’s PantheonInvest.com.