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In this episode, we have Rich Fettke, a renowned author, real estate expert, and wealth mindset coach. With a deep-rooted passion for helping individuals grow their wealth, maximize their mental and physical capabilities and live more fulfilling lives, Rich brings a wealth of knowledge and experience to the table.
As a co-founder of RealWealth®, a company that has empowered over 60,000 members to enhance their financial intelligence and acquire cash-flowing income properties, he has helped countless individuals gain financial freedom and live life on their own terms. With a background as a licensed real estate broker and an active investor, Rich’s expertise in the realm of real estate is unparalleled.
Throughout the episode, Rich emphasizes the significance of cultivating a wealth mindset for achieving extreme success. He shares strategies for overcoming limiting beliefs, shifting financial barriers, and harnessing the power of financial intelligence. By developing a proactive and abundance-focused mindset, individuals can unlock their full potential and create a life that they want.
He also shared the importance of health and mindset and his holistic viewpoint of real wealth. He is a pioneer in the field of business and personal coaching. As one of the ICF’s first Master Certified Coaches, Rich has played a vital role in advancing the coaching profession and empowering individuals to achieve their goals.
Tune in to gain inspiration and practical strategies to elevate your financial intelligence and live life on your own terms.
In This Episode
- Rich’s health scare that shifted him and his wife’s perspective about wealth and financial preparation
- The creation of RealWealth® and how it has grown with thousands of members
- Strategies for shifting limiting beliefs and overcoming financial barriers
- The importance of continuous learning and personal growth
- Embracing a well-rounded and fulfilling lifestyle
Welcome to today’s show on Wealth Strategy Secrets. We’re joined by a special guest, Rich Fettke. Rich has a passion for helping people improve their businesses, grow their wealth, and live more fulfilling lives. He’s the author of The Wise Investor, Extreme Success, and the audio program Momentum.
Rich is also a co-founder of Real Wealth, which has helped over 60,000 members since 2003 to enhance their financial intelligence and acquire cash-flowing income properties, enabling them to live life on their terms. As a licensed real estate broker and active investor, Rich was selected as a Rich Dad author due to his expertise as a wealth mindset expert.
He is a pioneer in business and personal coaching, having served as the past president of the Professional and Personal Coaches Association. His work has been featured in numerous top-tier media outlets. Additionally, he’s the former owner of a large health club franchise and has over 35 years of experience in business startups, management, and training.
As an adventure athlete, Rich has competed in the ESPN X Games and is a record-holding bungee jumper, licensed skydiver, experienced rock climber, lifelong skier, and an avid server surfer—although he humorously considers himself a “really lame distance runner.” He enjoys working and playing in Malibu, California, with his wife, Kathy, and their two daughters. Rich, welcome to the show!
Thank you! It’s really good to be here.
Looking forward to this! I’ve really been anticipating this, Rich. As I mentioned, I feel we are definitely kindred spirits in our outlook on the world and wealth building—what that really means.
Our listeners are in for a real treat today. To unpack your bio a little more, it’s clear that the sense of adventure you bring extends beyond sports into your approach to life, business, and real estate investing. Can you share a bit about your background for those who might not be familiar with your story? I know it’s a fascinating journey.
Absolutely. Adventure is a big part of my life. It’s important in both business and my physical pursuits—almost like a positive adrenaline addiction, I hope!
If I go way back, my journey into adventure, focus, and business growth started when I was bullied in high school. This kid kept beating me up every day during my junior year. So that summer, I decided to put on some muscle; I started lifting weights and took up martial arts.
That changed everything for me. I was diagnosed with a learning disability when I was eight years old, specifically hyperkinetic disorder, which today is known as ADHD. As a result, I had a lack of self-belief because I kept receiving reports about my struggles to succeed and being placed in special classes. The combination of weightlifting and dealing with bullying completely transformed my life.
All of a sudden, I started to get bigger and stronger, but more than anything, I learned about self-discipline. Until then, I didn’t have much self-discipline; I was pretty much all over the place. This experience set me on a path of goal setting, growth, and self-improvement. Ultimately, it led me to open the health club you mentioned when I was 23 years old.
I successfully sold that business after seven years, moved to California, and met my incredible wife, Kathy. I then got certified as a business and personal coach, coaching people on business growth—something that aligns with my degree in entrepreneurship and business. I was coaching clients, and honestly, everything was going great.
I secured a book deal with Simon & Schuster, gave keynote speeches, and felt like I was on top of my game. Then, I was diagnosed with melanoma, which is a form of skin cancer. It’s the most advanced type, and at first, it didn’t seem too bad. However, they thought it had spread to my liver because a CT scan revealed four masses on my liver. The doctor told me this wasn’t good and recommended an ultrasound for further evaluation, which confirmed the four masses.
When I met with the oncologist, I asked what this meant, and he said it looked like I had about six months to live. I was just 37 years old, and at that time, Kathy and I had two daughters—a ten-year-old and a three-year-old. This news rocked our world, especially Kathy’s, as she was a stay-at-home mom. We were faced with the reality that she would need to find a way to make ends meet if I didn’t survive, and I needed to find a way to heal.
Thankfully, the doctor’s diagnosis was incorrect. The masses turned out to be hemangiomas, which are harmless clusters of blood vessels that many people have. It wasn’t until I underwent a PET scan—the most advanced form of cancer imaging—that I was diagnosed as cancer-free. We celebrated, but during the three-month wait to find out if I was going to live, Kathy was left wondering what she would do if I didn’t make it.
She decided to seek out mentors to learn how to generate an income. Through her research, she discovered that many successful people had built their wealth through real estate investing. That revelation led us to real estate. After my surgeries to remove the melanoma and receiving the positive diagnosis, we began investing.
We did a cash-out refinance on our home in the San Francisco Bay Area and purchased five investment properties in a small town north of Dallas called Rockwall, Texas. This marked the beginning of our journey in real estate investing, which has been incredibly rewarding. That was over 20 years ago, and during that time, friends and family often asked us how we were managing to live in San Francisco while investing in Texas.
We decided to form a small group of friends and family to support each other and share our investment strategies. That little group, which we called Real Wealth, has since grown to over 70,000 members today. It’s been a blessing in many ways, transforming what initially felt like a curse from my diagnosis into a positive outcome.
Wow, that’s such a powerful story, Rich. I talk about similar themes in my book—the way life-changing experiences can force us to rethink our priorities. You had to re-evaluate everything within a six-month window, which is an intense and profound experience. I always encourage people not to wait for a crisis—like a chronic illness or the loss of a loved one—to make significant shifts in their lives.
Take action now while you don’t feel the pressure. It takes a lot of courage, but it’s crucial to go for it and not wait for those wake-up calls. It’s a huge principle in my coaching. I continue to work with clients, although I only coach three clients at a time now.
A central focus of my coaching is what the Stoics called memento mori—the awareness of our mortality. Whether it’s in six months, tomorrow, or fifty years, it’s important to remember that we will die. The key is to live fully and be your best self today, making the most of each moment. That philosophy drives me.
That’s awesome, Rich! So tell us a little bit about your philosophy on wealth. I find this topic so fascinating—it’s really about the psychology of money and wealth. Often, whether it’s the media or culture, we get caught up in making more money and doing more things, but we lose sight of what it means. I love how you talk about real wealth in your book and what that truly encompasses. You have some amazing experiences that have shaped that perspective. Help us understand your definition of real wealth.
It came from that diagnosis and going through three months of uncertainty about whether I would be alive. I looked at my daughters and thought, “Wow, am I ever going to see them get married or meet my grandchildren?” That experience has driven Kathy and me, and that’s why we called our company Real Wealth. Because it’s not just about money; it’s about having the financial means and the freedom to live life on your terms. It’s about being able to spend time with your family.
Real wealth is about having the financial means and the freedom to live life on your terms.
One thing we’ve noticed, and why this purpose is so significant for us, is that when people are free from financial stress, they become better humans. They are better parents and spouses because they’re not stressed out. They feel a greater sense of abundance in their lives. Money is a huge part of it, but it’s also about how you use that money to create more freedom and time so you can truly live and show up as the person you want to be.
This mission has been with us since the beginning when we formed this company 20 years ago. We set out to help people create real wealth. We even measure it now. We track our progress because it’s our mission to help a thousand people declare that they have fully experienced real wealth. We created a Real Wealth Assessment—20 questions that people can fill out to see where they stand.
Most people score around 50 or 60 in the beginning, but over time, as they put things in the right place and invest wisely, their scores begin to increase. Seeing someone surpass an 80 on that Real Wealth score fires us up. It’s kind of our litmus test. When someone reaches that score, we know we’re doing our job; it’s working.
It’s huge. It’s really about the process, right? It’s not just about the outcome. I also find it interesting that when you get crystal clear on your vision and where you’re going, some things that drive fulfillment and freedom in your life don’t even require money. It could simply involve a shift in mindset or having the time to pursue what you love.
Exactly! That’s the biggest challenge I’ve seen: a lack of clarity. When I work with new clients or interview members at Real Wealth, it often boils down to not knowing where they truly want to go. What do they want to achieve in 10 years, in 20 years? What do they want their life to look like at the end?
I sometimes have clients write their eulogy to help them reflect on what they would want people to say about them at their funeral. It’s such a powerful exercise that often brings tears and butterflies. Most people don’t take the time to deeply consider where they want to be. They might have a vague idea of their goals for the year or where they want to be in a decade, but it starts with taking that big-picture view and getting crystal clear on who they want to be and what they want their lives to look like.
Why do you think that is, Rich? What’s holding people back?
I think it’s busyness, honestly. We get so caught up in our daily routines—juggling kids, jobs, and everything else—that it creates an overwhelming environment. I think we all have a bit of ADD because of today’s fast-paced society. Often, we don’t feel we have the time to stop and ask ourselves those important questions.
That’s why I included that exercise in my book, where the mentor takes Ryan, the protagonist, through the process of meeting his future self. I’ve used this exercise with clients for the last 25 years, and it’s incredibly impactful. It’s about having tools and a process to clarify your vision of where you want to go and who you want to be.
We focus a lot on creating what we call a holistic wealth strategy—building a process and a plan for how to build wealth. Do you have a particular wealth strategy or approach that you and Kathy follow, or that you work on with your clients?
We got clear on our expertise in single-family homes, particularly 1 to 4 units. We also syndicate, and we do residential developments, mainly building single-family homes. While there are many great ways to invest in real estate, we chose our lane and focused on becoming experts in it. Our whole model helps our members invest in single-family homes and build a portfolio of cash-flowing properties that benefit them with tax advantages, depreciation, growth, and wealth building.
It’s worked well for us, with Kathy and me, and honestly, it’s really worked well for our members who follow the process. In real estate, there are so many ways to invest and create wealth and cash flow. I think the most important thing is to pick your lane and choose what you’re most interested in. Look at all the options and then come back and say, “Okay, what am I going to focus on?” That’s what we did, and it’s what we help our members do.
For sure! Are there any other components around mindset, considering your coaching background? Anything outside of just the physical investing perspective?
The discipline piece is crucial. Before we started the show today, you and I were talking about discipline and its importance. It’s really about clarity regarding where you want to go. Many people come in and say, “Just give me the tools. What do I need to do? Where should I invest?” But they often fail to step back and look at the bigger picture.
I’m passionate about that. It’s essential to stop and reflect. Kathy is also a certified coach; she got certified back in 1996, just like I did. We’ve woven this coaching aspect into the fabric of our company, helping clients and members identify what they truly want and how to set up a strategic plan with goals and milestones to ensure they’re on track.
I think that’s a huge part of it—laying out the plan and figuring out how to stick to it. That’s where most people drop the ball. They come up with a great plan, regardless of who helps them create it, but then following through becomes the sticking point.
Absolutely. I believe having a strategy is paramount. If you look at the ultra-wealthy and family offices and how they allocate capital, they have a very distinctive strategy—typically planning over a 25-year horizon. They’re not making short-term decisions. This approach helps balance the emotions that can impact investing.
When there are highs and lows in the market, it can lead to shortsighted decisions based on fear. But having a strategy in place gives you something to rally around.
Exactly! Having those strategies helps take the emotion out of investing. When things get emotional, you can say, “Wait a minute, what’s my plan?” Having a personal financial statement in place is crucial, so you know your net worth and monthly cash flow. You should also have a clear spending plan or budget that you review regularly—at least once a month. A good bookkeeper helps keep everything up to date.
Kathy and I have a bookkeeper who sends us monthly reports on our properties and portfolio, detailing how each property is performing, our net worth, and key performance indicators (KPIs) to assess our progress as investors.
Great! Where do you see the market today regarding single-family homes? A lot is happening right now. We’ve seen one of the most historic rises in interest rates over the last six months and some recent banking failures. Real estate can be very specific too; I’m sure it varies in places like California and Florida. What are you advising investors for 2023?
Right now, we’re grateful to be in the single-family market. We have friends in multifamily who are struggling with short-term loans and floating debt, which is creating significant challenges. I worry for some of them. Some made smart moves, locking in rates until 2029, which I think was wise.
In the single-family sector, we’re not seeing significant downturns. There’s still a lack of inventory, and prices are increasing in some markets. While some areas, particularly in California, have seen drops, we focus mainly on the Southeast and markets like Florida and north of Dallas, where a lot of chip manufacturing is happening. Tons of businesses and people are moving there, and property prices and rents are still on the rise. Overall, single-family homes look strong and promising if you’re in the right market.
Interesting! Have you been involved in the latest trend around build-to-rent?
Yes, absolutely—not in the sense of full build-to-rent communities, though. We tend to steer clear of those because, in our experience, properties in these communities can suffer if there’s not enough owner-occupancy. Without enough owners, tenants may not take as good care of the properties. Build-to-rent communities can work if a single management company oversees everything, ensuring upkeep and preventing issues like parking on lawns.
However, we’ve done a lot of build-to-rent projects where our investors have purchased properties. We work with brokers we have relationships with across the country in emerging markets.
They have a lot of built-to-rent or rehab single-family properties. There was a significant shift because many foreclosures got gobbled up by flippers and turnkey property providers. Now, we’re seeing a lot of movement toward a built-to-rent model—not a community model, but a more individualized approach.
It’s been great because these are new properties that come with builder warranties, so you don’t have to worry about them. In contrast, some of these turnkey properties built back in the ’40s or ’50s can come with challenges, even after a full rehab. As investors, Kathy and I now really focus on new builds for our portfolio.
That was my next question. Can you tell us a bit about the business model at Real Wealth? If you guys aren’t doing turnkey, how does it work?
Twenty years ago, we were referring clients to agents and brokers who had new builds. It’s funny how things come full circle. Back then, people could put no money down and were getting NINA loans—no income, no assets. From around 2003 to 2007, people could secure almost any type of loan. We helped many individuals get into investment properties through that method.
Then the foreclosure crisis hit. We began partnering with brokers and property teams to find foreclosures, fix them up, and rent them out.
As for our business model, we monetize as brokers by referring investors and clients to other brokers in different states, receiving a broker-to-broker referral fee—usually around 3%, similar to typical real estate commissions.
The key for us at Real Wealth is vetting and finding the right brokers and properties. Of the 100 brokers and property teams that apply to be part of the Real Wealth Network, we accept about 5%. After they apply, we conduct thorough background checks. If they pass, we analyze their market to determine if it’s thriving, emerging, or growing.
Once they pass that test, our property team managers fly out to inspect the properties, meet the brokers, and talk to some of their investors. We also release those properties to a small group of experienced investors for about three or four months to test them out. If they come back saying, “Yep, this is good. My property is doing well, and the management is solid,” then we accept them as a property team.
What do investors own? Are they buying the entire property in their name?
In our syndications, they’re not buying the entire property; they’re purchasing a unit or several units within the syndication. But for individual properties, most people want to build a portfolio of their own. Typically, investors aim for 10 to 20 cash-flowing properties. Some of those properties in Tampa and Jacksonville, Florida, saw an appreciation of 43% in just a year, which is incredible for wealth accumulation.
What about property management? That’s usually a major concern for people, especially if they have a full-time job.
All the properties we refer to have property management in place that we’ve vetted thoroughly. We’ve essentially become like the Yelp for real estate investors focusing on single-family properties. If a member complains about their property management team not following through, we log that complaint through our resolution process. We reach out to the management company to address the issue.
If we receive multiple complaints about the same company, we’ll remove them from our referral list. This generally motivates them to improve their services because they want to keep getting clients. Over the years, we’ve had to let some go because they couldn’t meet our standards or grew too quickly. Personally, I’ve tried managing properties myself, and it can be a major headache dealing with tenant issues and late rent payments. I no longer handle that myself.
What guidance do you provide regarding debt in today’s market? Is there a specific loan-to-value (LTV) structure you’re looking at? And should investors place their properties in an entity?
I recommend putting properties into a protected LLC, specifically in the states where they are located. This is crucial; many people mistakenly think they’re fully protected just by setting up an entity in Nevada or Wyoming. It’s important to have an LLC in the same state as the property.
For diversification, I advise grouping properties by state—perhaps buying several in one state and then in another—to mitigate risks, like natural disasters. We focus on landlord-friendly states, which is also important.
Regarding debt, it’s about running the numbers to ensure you at least have some cash flow. It used to be easier with low interest rates, but nowadays, properties need to cash flow somewhat because we’re in it for the long haul. Our investing model is somewhat conservative and long-term, looking at a ten-year window to gradually build wealth.
There are ways to structure financing today, such as having sellers buy down interest rates or utilizing builder loans for new builds. For instance, getting a 4.75% rate on a 10-year adjustable-rate mortgage is pretty good because builders often put up money to secure favorable rates. So, there are options out there, and investors don’t have to settle for high-interest loans.
And how about from a tax strategy perspective? Are you just looking at depreciation on these properties, or are there any other intricacies to this?
Mostly, we focus on the typical 27-and-a-half-year depreciation. For Kathy and me, and many other investors, this strategy can significantly reduce your tax liability to nearly zero, especially if you can establish yourself as a real estate professional or if you have a spouse who can take on that role. That opens up a lot of tax benefits.
Additionally, Kathy and I have implemented a great model by investing in several short-term rentals. This allows us to take advantage of accelerated depreciation on all the furnishings, resulting in numerous write-offs. We try to acquire rentals in locations we want to visit, like Park City, Utah. We have a property there, so we often go up to check on it and maybe enjoy a few days of skiing as well.
Awesome! Gotta love it. A lot of tax benefits!
Exactly. It’s all about smart thinking.
From a personal development perspective, what’s one practice for you that has yielded the biggest results?
I know this is going to be hard for you because you have so many practices.
Right, just one.
If I had to choose one, it would be training and working out. The impact of physical fitness on mental health is huge for me. Consistent workouts build self-discipline, especially on days when you don’t feel like exercising.
There’s science behind it—when you push yourself to do something you don’t want to do, it strengthens the neural connections related to willpower and self-discipline. The more you do this, the more disciplined you become over time. I’ve seen this transformation in my own life and with my clients. Even my daughter talks about her workouts and does cold plunges. She’s developed incredible self-discipline from it.
That’s so powerful! I can relate to that completely.
It’s fascinating because there’s also a cultural pull. I remember many times in my career feeling pressured to finish a workout quickly because I had to get to work or had other priorities. I finally let go of that mindset about eight years ago and realized that exercise is also valuable thinking time.
It connects back to what we discussed earlier—creating your vision, clarifying your goals, and prioritizing what’s important. Exercise helps set you up for success each day, allowing you to live intentionally. I truly cherish my exercise time, not just for the physical benefits, but also for the mental clarity it provides.
It’s like a moving meditation.
Absolutely! And it took me a while, but I finally committed to a morning meditation practice using the Calm app. I’d start streaks of maybe 15 to 20 days, and my longest was 57 days. Eventually, I decided to really commit.
Today marks 614 days in a row of just 10 minutes of meditation every morning. It’s been transformative. As you mentioned, I used to focus so much on what was next and what I needed to do. This practice has helped me be more present, both with myself and with Kathy and my daughters.
That’s interesting. I also appreciate exercise, and I would say it’s a toss-up for me between the two practices.
And I think about some of those people who have sadly lost the use of their limbs, like veterans returning from war. What if you couldn’t work out the way you wanted to? You couldn’t go surfing, rock climbing, or cycling. In those situations, you just have your brain. So, meditation becomes incredibly powerful. It helps a lot.
For anyone out there who hasn’t tried it, we talk about this in our family. I’ve encouraged my kids to meditate, and I’ve spent quite a bit of money to help them get into the habit. I believe it’s one of the top three skills you need in life to drown out the noise, get clear on what’s important, and own your day. It’s critical.
There are so many benefits. Right now, I’m reading Outlive, Peter Attia’s latest book. It’s fantastic. The recurring message is that if you want to increase your health span, be healthier, and live a longer life, exercise is number one. It’s a no-brainer.
He emphasizes that if there were one magic pill or drug that could cure all the top killers, it would be exercise. There’s no doubt about that. It doesn’t have to be extreme; it just needs to involve some movement. I’m inspired by this information. We always need reinforcements, right? When you wake up and wonder if you want to work out, it’s like, “Yes, I do!” Reading this book reinforces that. It’s not just about exercise; it’s also about your health and getting that natural high from the dopamine boost.
Thinking back to your coaching background, this is an important point for listeners: if you’re struggling to establish an exercise regimen that works for you, get yourself a coach. We should have coaches in all areas of our lives, not just business or health, but also exercise. I have a cycling coach, and let me tell you, I don’t always want to do the high-intensity intervals he assigns me every day.
I find myself pushing my heart rate up to 190 at 6 AM. But that accountability factor is key—you know you have to perform. I think having a coach is crucial. I completely agree.
Rich, here’s the last question: if you could give just one piece of advice to listeners on how they could accelerate their wealth trajectory, what would it be?
My mind goes from money to what real wealth means to me. Honestly, I would say, work on your self-discipline. The more you can do that, the better. I’m a bit obsessed with this topic—I’ve read extensively and studied it a lot. Everything from making your bed to doing what’s best for you at the moment and challenging yourself to get uncomfortable matters.
There’s a great book called The Comfort Crisis that talks about the need for us to get uncomfortable and how vital and healthy that is. Accelerating your wealth strategy and your wealth consciousness comes back to self-discipline. It’s about making the right choices in the moment. You can have all the tools and knowledge available, but if you’re not acting on them, nothing will happen. So I’m going to stick with that.
Awesome. I love it, Rich. I can’t thank you enough for your time today. Sharing your insights with the audience is invaluable. If people want to learn more about what you’re doing at Real Wealth or connect with you, what’s the best way?
It’s pretty simple—just visit our website at Realwealth.com. If people want to be inspired around creating real wealth, check out my book, The Wise Investor. It’s a modern parable that carries key lessons on how to grow wealth and shift your mindset. I wrote it to inspire people and provide them with actionable strategies. It’s available everywhere books are sold.
Love it. We’ll put links in the show notes. Rich, thanks again!
My pleasure. Thanks for having me.