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Today we had the privilege of sitting down with the incredible Adam Carroll. Adam is a true financial literacy expert, celebrated author, and captivating speaker, having delivered over 1,000 speaking engagements worldwide.
He is the visionary behind The Shred Method™, a fintech company that empowers individuals and families to achieve remarkable debt freedom at an exceptional speed. This innovative approach to financial freedom is reshaping how people perceive money, education, and personal growth.
Throughout the conversation, Adam shared his wealth of knowledge and his dedication to revolutionize financial literacy. We delved into Adam’s journey and the pivotal role he’s played in the field of finance, particularly through his thought-provoking TED talks, which have garnered a staggering 6 million views on YouTube.
One of the highlights of the conversation was Adam’s vision behind The Shred Method™. He detailed how this fintech company empowers individuals and families to liberate themselves from debt quickly, providing practical strategies to achieve financial freedom.
Don’t miss this empowering conversation with one of the most influential financial experts of our time.
In This Episode
- The importance of financial literacy. Emphasizing the crucial role of money as it sets the foundation for a secure financial future.
- Uncovering The Shred Method™
- Adam’s personal principles for financial success and independence.
- The significance of smart financial habits and informed decision-making to build lasting wealth.
Welcome to another episode of Wealth Strategy Secrets. Today, we’re joined by Adam Carroll, a renowned financial literacy expert, celebrated author, and captivating speaker. Adam has delivered over 1,000 speaking engagements worldwide.
With his thought-provoking TED Talks, which have amassed over 6 million views on YouTube, Adam has become a prominent figure in the field of finance. His groundbreaking documentary Broke, Busted, and Disgusted aired on CNBC and continues to be screened in high schools and colleges nationwide, inspiring young minds to take control of their financial futures.
Adam’s expertise extends beyond the stage as he is the visionary behind The Shred Method, a FinTech company that helps individuals and families achieve remarkable debt freedom at exceptional speed. Adam, welcome to the show!
Dave, thank you for having me. I’m super pumped to be here. And let me first say thank you for your service to our country. I appreciate it.
Thank you, Adam. I’m grateful for that.
Absolutely. I think the folks are in for a treat today. A lot of what we talk about in terms of wealth strategy and building and preserving wealth revolves around financial engineering. If you think about it, it’s all about how we solve problems and find ways to address them. I come from a consulting background, so I always think about, “What are the problems, and how can we solve them?”
In the world of finance, there are so many tactics and strategies that people may not know about. Financial advisors often don’t talk about them, but today I’m excited to dive into The Shred Method and share some pearls of wisdom. But before we get into that, for those who aren’t familiar with you, Adam, can you share a bit about your background and your story? How did it all start for you?
I love telling this story because I tried to make my mess my message. I was a debt statistic when I graduated from college. Growing up, the mindset in our household was, “We’ll figure it out.” So we’d buy things, not realizing that my parents were putting everything on credit cards. At the end of the year, there would be this massive credit card bill that had to be paid off.
When I graduated from college, I had over $30,000 in student loans and $8,000 in credit card debt. I was upside down in my car, and I realized this wasn’t where I wanted to be. Then, in my senior year, I met a woman who said, “Get rid of your debt, or I’m going to get rid of you!” Together, we learned the lessons we needed to blast away that debt in the first couple of years of marriage.
As you know, Dave, and probably teach your clients, it’s amazing what happens when you have a significant amount of discretionary income at the end of every month. We aimed for that, and once we achieved it, I realized it was easier than most people think. So, I decided to teach others how to do the same.
That was back in the early 2000s, and since then, I’ve spoken on over 1,000 stages and been a guest lecturer at over 700 colleges and universities. My passion is really about helping people create freedom in their lives because I’ve gotten to experience so much of it in mine.
I love that. And, you know, that word freedom—that’s really what it’s all about, right? If you dig a little deeper into concepts like financial independence, retirement, and all those things people talk about, isn’t retirement just about having enough income coming in so that you have the time and freedom to do what you want?
Exactly. It’s about having the freedom of purpose to spend your time how you want to, and the freedom of relationship to choose who you want to be with. So, I agree with that.
It’s interesting that you not only recognized this at such a young age but dared to take it to the next level and teach others. When you look at the trajectory of learning, true mastery comes from teaching others.
Absolutely. That’s when you’re truly at the top of your game. And I’ve been able to turn that into a great career. So, kudos to you for that, it’s cool.
Tell us about your business today. What does it look like now?
Today, I have a fairly even split between speaking engagements and consulting work, mostly in the field of financial education. This past year, about 30% of my business has come from the agricultural industry. I’m not entirely sure how that happened, other than once you get into one niche, others start to hear about you and request you to come present. I’m also based in the Midwest, so there are a lot of ag companies around.
And this might not come as a surprise to anyone, but families everywhere are struggling because they don’t know what they don’t know about money. There are so many people striving to get ahead or create wealth, but they may have been raised in families that never talked about money. So, the core message I focus on when I speak is: What is our psychology of money? How did we grow up? Did we grow up learning that money is abundant?
In reality, money is one of the most abundant things in the world. I mean, they’re printing more of it every day. All we have to do is figure out how to dip a teaspoon into the river of $4 trillion a year (or $4 trillion a day) that’s flowing through society, and we can become multimillionaires. The key is figuring out what that teaspoon looks like for each of us and how to find it.
So about 50% of my business is speaking and consulting, and the other 50% is spent building The Shred Method. This is a cash flow technique and technology that we leverage to help people pay down debt and ultimately create massive, passive, permanent streams of income. This allows them to have what you’re talking about—money freedom, time freedom, relationship freedom, and purpose freedom.
That’s kind of my world in a nutshell. Oh, and we try to take about a month off for vacation each year. I’m also a big fan of mini-retirements. If I can get all four weeks off in one lump sum, I can work hard for six months, take those four weeks off to recharge, and then come back refreshed, ready, and purposeful about what I’m doing in my life.
That’s excellent. Being able to reconnect with your vision and purpose is so important. I just had the opportunity to take some time off with my family as well, and it’s just so rejuvenating to be able to unplug and recharge.
It’s almost like putting on a different pair of glasses. You come back, and now you can see the world a little differently. You can reprioritize things. You just have this new level of thinking, which I think is very powerful, especially in today’s world, where we’re constantly inundated with information and being reactionary. There’s so much coming at us. But if we can unplug, we can scale, grow, and learn a lot more. It’s cool that you’ve been able to do that.
Before we dive into the Shred stuff, what do you think is at the root of the problem with financial education in this country?
It goes back to what you just said about all the messages flying at us every day. I’ve heard that we’re exposed to as many as 5,000 to 6,000 marketing messages daily, many of which are subconscious. It could be the ad playing in the background on the radio, a series of ads on TV, or the content we see online. Even Instagram’s algorithm is showing us what it believes we want to see.
We’re getting all these messages whether we realize it or not. A guy I used to work for called any kind of digital distraction device mental chewing gum. Whether it’s the radio, TV, the internet, or social media, it’s just there to give you something to distract your mind with.
A friend of mine, who’s a Silicon Valley entrepreneur, affirmed this by saying, When we build an app if you’re distracted, we win. Our goal is to distract you. And I think when it comes to financial education, the problem is that people are relying on the ads they see as legitimate financial advice.
If you trust the ads, they tell you debt is normal, natural, and even good. They encourage you to go into debt, buy the biggest car you can purchase as much house as you can afford, keep up with the Joneses, and take lavish vacations. Instagram itself often celebrates lavish, rich lifestyles. But as you and I both know, many of those lifestyles are either financed through debt or completely fake. People rent jets, and Ferraris, and post about their first-class experiences, but we’re only seeing the highlight reel, not the behind-the-scenes reality.
One of the things that really sets my family and I, as well as our clients, apart is that we teach them to critically evaluate the messages they’re getting from the world. We urge them to look critically at what the bank is telling them or what their banker wants them to do. Banks, for instance, are building these massive $10 million buildings all around my neighborhood, and I can’t drive a two-mile radius without hitting one.
That made me question: If the banks can afford these $10 million buildings and it takes them years to be profitable, who’s paying for it? The answer is us. And what if the banks know that we don’t know this? If we start digging into that, maybe we can flip the script and start acting like a bank—creating wealth the way banks do.
To sum it up, the simple answer to your question is that the messages we’re getting aren’t designed to make us wealthy. They’re designed to keep us trapped in debt.
I love what you said about the psychology of money. I think a lot of people don’t spend enough time thinking about it, and as you said, we get pulled in different directions. It becomes aspirational—wanting that new car or the next thing. As part of our wealth strategy and framework in the book, we always talk about creating your vision first.
What does that vision look like for you? It could be as simple as wanting more time to spend with your loved ones. It doesn’t always require a lot of money to make that happen. What steps are you taking today to make that vision a reality?
I think starting with your vision and understanding your target is a key place to begin. There’s also another aspect I touch on in the book—limiting beliefs. I grew up hearing things like, “There are starving children in Africa, so you need to eat everything on your plate.” We were vegetarian because we couldn’t afford to buy meat at the grocery store.
These things get drilled into your head. You’re raised with this scarcity mindset rather than an abundance mindset. It takes time to process that and figure out how to bridge the gap to the other side, to find the right examples.
And another point I want to emphasize, Adam, is that mindset is everything. What’s the difference between people like Elon Musk or Steve Jobs and the people you went to high school with? People who are still in the same town, same circle of friends, doing the same job for 20 or 30 years?
It’s the mindset. To that point, I have a story that supports what you’re saying. A friend of mine grew up in a household where the mindset was, “We’ll never have a lot of money, so we might as well spend it now.” If you grew up hearing that, or in your case, if it was, “We’re vegetarians by necessity, not by choice,” what happens is people fill in whatever lack they’re experiencing—whether it’s insecurity around housing, food, or education.
When people finally have a little bit of money, they might fill their pantry or prepay a car loan for a few months. It’s a psychological reaction to that previous insecurity. And that mindset—the mindset of what you’re after—is key.
Your point about vision is spot on. I believe that people tend to overestimate what can be done in one year, but they underestimate what can be accomplished in three years. If we truly set our minds to it, most people could achieve a level of financial freedom or security within three years.
When you see other people do it, you realize it’s possible. But when you’re surrounded by people who say, “We’ll never have a lot of money, so we might as well spend it now,” it’s hard to imagine that kind of change is even possible. That’s why I love shows like yours—they expose people to stories that show it is possible to change your financial situation quickly, but first, you need to change your mindset.
Exactly. So, let’s dive into the Shred Method. Tell us what it is, and how you developed it, and let’s unpack this.
This is one of my favorite things to talk about because of the difference it made in my life. And when I started sharing the method with others, we found so many success stories. It all started in 2009, one of the coldest winters on record in Iowa. We had snowstorm after snowstorm, and my wife and I were living in a house that was about 1,600-1,700 square feet, but about 800 square feet of it was unusable because it was so cold. It was a split foyer, with part of the house downstairs that was freezing. I had to use space heaters in my office all day just to work in there—it wasn’t usable space.
We had three kids at the time, and we were bursting at the seams. So, I said to my wife, “We need to find somewhere else to live.” I drove around a neighborhood I thought we could never afford, found a house we loved, made an offer, and it was accepted. The sellers even allowed us to rent back because our home sold quickly.
We moved into this house, still hadn’t closed on the mortgage yet, and we were feeling very grateful to have so much more space for the kids. But I was in a business where my income wasn’t provable—let’s just say I had a very creative tax person at the time.
I was making money, but it didn’t show on my taxes that I was earning much. The underwriters had an issue with me getting approved for the loan. One night, my wife was crying in bed, saying, “They’re going to make us move out, Adam. They’re going to make us move out.” The next day, I swallowed my pride and called my father-in-law, asking if he would be willing to co-sign on the loan.
Graciously, he agreed. We closed on the loan, but it was in his name and my wife’s name — I wasn’t even on it. At that moment, I made a vow to myself: I would never be in this situation again. First, we’d figure out how to verify income so I could qualify for loans. And secondly, I never wanted to be in a position where I had to ask someone to vouch for me or ask for money.
About six months later, I was introduced to the Shred Method, Dave. The method itself is widely known, with many variations available to the public. What we’ve done is take the software that powers the algorithm and make it very user-friendly. The system simply guides you through the steps. Follow the prompts, do what the system tells you to do, and you’ll be out of debt in no time, with serious equity, and leverage that into other investments.
Fast forward nine months: I was qualified, and my name was on the loan, along with my wife’s. This was around 2010, and by my birthday in September 2012, I made the final payment on a mortgage of $260,000. We had wiped out $260,000 in debt and saved about $180,000 to $200,000 in interest over the life of the loan, which would have otherwise gone to the bank. Instead, that money started accumulating in our accounts. We realized the power of having an extra $2,000 a month now that we weren’t making that mortgage payment. It got us thinking: How can we create massive passive income streams?
Since then, we’ve shared the Shred Method with thousands of people. Hundreds of shredders are using the system, and we’ve had close to 100 people who have either paid off their homes or are nearly there.
That’s amazing. Can you give us an example of how it works?
The best example is almost a metaphor. I ask a lot of people this question when we first start working with them. Play along with me, if you would.
If you woke up on a Saturday morning in Sarasota, drove to the grocery store, and knew you were going to come home, put the groceries away, and then head to the post office — but it would probably be 3, 4, or 5 hours before you went to the post office — would you leave your car idling in the driveway for that entire time?
No, I wouldn’t.
Why wouldn’t you?
To save the environment, to save on energy. I was raised to be efficient. It just doesn’t make sense to leave it idling.
Exactly. Efficiency. And we care about the environment. It would be crazy to leave a car idling for that long. But here’s the thing: what most people do with their paycheck is just as wasteful. The money gets deposited into their checking account, and it sits there for days, weeks, and sometimes months. Little by little, it’s drawn down by debit card transactions and ACH transfers. Essentially, that money is idling.
Nine times out of ten, when I speak with individuals, particularly high-income earners, I ask, “Do you have a significant amount of money just sitting idle in an account?” And they’ll respond, “Well, yeah, it’s my emergency fund, or it’s for this fund or that fund—sinking funds, vacation funds, whatever it may be.” I then ask, “Do you have any amortized debt hanging out there?” And they’ll say, “Of course. I’ll always have a mortgage or a car loan or whatever.”
I ask, “What if there were a way to maximize efficiency and get rid of all those debts? What if you didn’t have to change your spending at all, but you could leverage the system like a bank does to save tens of thousands, or in many cases, hundreds of thousands of dollars in interest?” And they immediately say, “No brainer. That’s an absolute no-brainer.”
The difference, though, is that we’re not taught to do this by the bank. The bank wants us in debt—they want car loans, they want mortgages. We’re their compound interest vehicle. It’s an asset for them to have that loan on their books, but it’s a liability for them to have money just sitting in checking or savings accounts.
But understand this: the money we deposit into checking, savings, and money markets is what enables the banks to lend the way they do. So when a bank increases its CD rates or money market rates, what they’re saying is, “We need more liquidity so we can lend more because we have loans coming in.” Meanwhile, we get excited about earning 4% on our money market accounts, but the bank sees it differently. They’re saying, “This person just deposited $50,000, and we can now loan out $500,000 based on that deposit.” It’s called fractional reserve banking.
When you understand that concept, you realize how inefficient it is to have money just sitting idle in an account. What we actually want is available, accessible money—not money sitting there, insured by NCUA or FDIC, which benefits the bank, not us.
We teach people how to alter their cash flow by routing income into a simple line of credit. The software tracks how much is coming in, and how much is going out, and then calculates, based on interest rates, the lump sum to send toward the mortgage—let’s say $7,258.36 for that month. By doing this month after month, you can accelerate the amortization of your mortgage by years, even decades. The average American could be out of their mortgage within 3 to 7 years, depending on their debt level and discretionary income.
Now, let’s say you have a predetermined amount you plan to pay toward a mortgage, car loan, or other debt. But if that money were sitting in your checking account, it might have been earmarked for something like a vacation or medical expenses coming up in the next 90 days—let’s call it a quarterly basis. So, how does that affect your flexibility and liquidity for cash flow?
Great question. What I hear in your question is, what if you’re earmarking funds for future expenses like travel or car repairs? In the Shred system, we view the line of credit—whether it’s a HELOC (home equity line of credit), a personal line of credit, a BELOC (business equity line of credit), or even a cash value line of credit taken against a life insurance policy—as a liquidity pool.
It’s no different than having $5,000 sitting in a money market account, waiting to be spent on a Hawaiian vacation, versus having $5,000 available against your mortgage, but accessible in your line of credit whenever you need it.
Candidly, that $5,000 sitting in a money market account might earn you, what, 3.5% or 4% on the high end annually? But if you applied that $5,000 to your $400,000 mortgage, it could shave off 5 or 6 months of payments. And those 5 or 6 months could save you thousands of dollars in interest that you would have otherwise paid on the mortgage.
Here’s an analogy to explain: If you wanted to borrow $100 from me and it would cost you $5, but you knew it would save you $2,000 in the long run, would you pay $5 in interest to borrow $100? Most people would say, “Yes.”
Now, let’s consider your question. Our audience is very sophisticated, right? High-net-worth and ultra-high-net-worth investors. We understand that debt can be a double-edged sword. On one hand, it can accelerate failure, especially in real estate, where people get over-leveraged. On the other hand, it can help reduce liabilities and shorten repayment timelines, freeing up cash flow. But let’s compare that to an investment: what if you could make 15-20% on a particular investment, and the cost of deploying that money is, say, 6-7%?
Does it make sense to focus on reducing mortgage liability when you could make 20% on that money elsewhere? The answer is yes, it does. It’s not an either-or situation; it’s a both-and strategy. I don’t disagree that some people may say, “I could make more if I deployed that money elsewhere.” And I wholeheartedly agree with that. However, there’s usually some discretionary income flowing through a household. Most high-income families, especially those earning six or seven figures, are not living paycheck to paycheck. There are typically 10, 20, or even 30 grand sitting in an account somewhere.
That’s the money we can leverage. If we flip a switch on efficiency, we can start shredding some of those loans. In the current environment (2023), we could take a mortgage with a 6-6.5% interest rate and effectively reduce the APR to about 1.5% due to the speed at which we’re paying it down.
And when people tell me, “But I have a 3% mortgage rate. Why would I ever pay it off? This is the cheapest money I’ll ever have,” I often tell them that with our strategy, we can bring even a 3% mortgage rate’s effective APR down to 0.6% in just 24 months because of how quickly we can pay it off.
Here’s a little secret, and I hesitate to share it because it’s one of the key elements of our system: we provide a strategy where, for instance, if you bought a $1,000,000 home and your mortgage payment is $8,000 a month, you may feel that it’s a bit of a stretch—$8,000 a month is still a lot. And out of that $8,000, about $6,000 is going toward interest each month.
That’s $72,000 a year you’re sending to your banker instead of keeping it for yourself or building equity. There’s a common misconception when we say, “Oh, the interest rate is 3%, that’s super cheap money.” Yes, it is, but on a $1,000,000 loan, it’s not just $30,000. That’s all front-loaded on the mortgage’s amortization. As a finance guy, you know that when you look at a 30-year fixed mortgage, the first 10 years are like a red light in a traffic signal, the next 10 years are yellow, and the final 10 are green.
This reflects how much principal you’re paying down. If in 18 to 24 months we can accelerate this process and take you from $1,000,000 to, say, $600,000 or $500,000, you could then recast the mortgage—not refinance, but recast. This means you’d reduce the loan balance and have the lender calculate your new payment based on the lower principal, say, $500,000 over 28 years. The lender would say, “Your new payment is $3,685,” which is much more manageable than $8,000 a month.
At that point, you could even afford to buy a rental property or a second home. Plus, you now have the equity in your property, which you can leverage through a line of credit. If you want to borrow at 6 or 7% and deploy that at 15-20%, by all means, do it. The majority of your payment is going toward the principal of your primary mortgage anyway. Does that make sense?
Yes, totally. What you’re talking about here is efficiency and velocity—using your existing capital more effectively. And this point is so crucial, not just in personal finance, but also for businesses.
As a business owner, you’re always keeping cash on hand for operational expenses, right? But a lot of that cash is “lazy” cash—just sitting there. You’re paying for that liquidity. So, let’s say you’re sitting on 90 days of capital for equipment or vehicles when you might only need 30 to 45 days. If you could optimize that, it would improve cash flow efficiency. Is that right?
Yes, you’re right. We work with business owners all the time to help them strategize their equity and debt. A lot of them end up sitting on excess cash—3 to 6 months’ worth—while they’re in the early stages of paying down debt for equipment or other expenses. What we often show them is that in just a few months, they could pay down that debt without risking liquidity.
Another question we ask is: “What does your aging report look like? Are clients paying on time?” If you’ve got 6 months of receivables coming in and 3 to 6 months of expenses in the bank, then do you need to keep that much capital on hand? What if you re-engineered things to focus on paying down debt more aggressively? How much extra cash flow could that free up for you? Many business owners are shocked by the numbers they see when we show them this.
I can imagine. It’s interesting because having run four businesses over the last 15 years, I’ve always struggled with managing cash flow. It ties directly into your economy as well, and it does come down to efficiency. That’s what drives me crazy—seeing all that “lazy” money just sitting there.
We have a lot of investors using infinite banking, particularly cash value whole life insurance, which is a great way to multiply your capital. You can achieve some efficiency, maintain liquidity, and let the funds compound tax-free.
But if I’m understanding you correctly, what you’re saying is that this can be a complete amplifier. You can use your cash value life insurance policy as your store of capital, and then make strategic allocation decisions to pay down debt quickly, using algorithms to free up cash flow.
Exactly, you nailed it. Furthermore, for most people who are being presented with an insurance product—whether it’s pitched or offered—there are a lot of agencies that will say, “It’s only $3,000 or $5,000 a month to put into this premium,” or offer quarterly or semi-annual premiums. I prefer, and we coach our clients on, paying a lump sum once a year—$25,000, $50,000, or even $100,000 at a time. This comes from your HELOC or line of credit, and because of the cash flow strategy we’re creating, with your income cycling through that line of credit, even though you may ramp up the balance right away, over time, it trends down. So the interest expense is negligible and doesn’t feel burdensome.
And with this, you’re creating a compound interest effect quickly in your policy. The key, as you know, in infinite banking is getting to compound interest velocity as quickly as possible. If you’re earning 4.5%, 5.5%, or more on $100,000, $200,000, $500,000, or even $1,000,000, the faster we can get there, the better.
With Shred, what happens is that people who normally would say, “$50,000 is a stretch,” will use Shred for 6, 12, or 18 months, and then they realize, “This is a no-brainer. I’d put $50,000 in here every 6 months if I could.” And that’s when they see the real power.
I’m sure you share this with your clients, but when you realize you have buckets of money available to invest in opportunities that can return much higher than the S&P 500 averages—think 12%, 15%, 20%, or even 30% returns—and you don’t have to make payments on the money you’re borrowing because you’re borrowing against a policy that doesn’t require payments, that’s when you’re stacking efficiency and productivity. It becomes a complete snowball effect.
Exactly, it’s like putting nitrous in your gas tank.
We’ve helped clients build calculators, and we’re even developing a software product right now—a wealth strategy dashboard. But when you look at it through the lens of a CFO, analyzing your financial position over time, especially over a 20-year period, it becomes clear how powerful this strategy is.
And as you like to say, I love the concept of creating multiple permanent streams of income while reducing your debt burden. The snowball effect is exponential. I also remember hearing you mention a fascinating quote about Warren Buffett on another show. You talked about his $5 billion at 65. Do you remember that?
Yes, at 65, Warren Buffett was worth $5 billion, and by 85, he was worth something like $85 billion or $100 billion. His wealth grew 12 times during that period.
The idea and this is a typical Warren Buffett philosophy, is to reach compound interest velocity as fast as possible. And what this really boils down to—this ties into the mindset—is that if our goal in making money is simply to accumulate wealth for the sake of “stuff,” then we’re missing the point. The idea isn’t just to have stuff, but to have plenty of money left over so that your money is making far more than you do.
I remember reading a book years ago, The 4-Hour Workweek by Tim Ferriss—I’m sure you’ve either read it or have it on your bookshelf. When I read that book, the question I kept asking myself was, “How do I make as much money in an hour as most people make in a month or even a year?” The answer that kept coming back was public speaking. If I could present and make $2,500, $5,000, $10,000, or even $20,000 in an hour, I was going to do that. Over time, my income from speaking has continued to rise.
But then I started thinking, “I still have to travel. I still have to be away from my family to do that.” So, I asked myself, what would it take to make that kind of money without working at all? What would it require? How much would I need to invest, or what kinds of deals would I need to find to get there?
And I encourage your listeners to think about this, too—not just, “How much less could I work to make this?” but, “What would it take for you to not work at all and still live the lifestyle you want?” Is it $10,000 a month, $20,000 a month? The key is putting the right systems in place to generate that money.
Going back to our earlier vacation conversation, we recently spent two weeks in Italy and a couple of weeks in Hawaii. While I was there, I was listening to podcasts, reading books, and just disconnecting, but also thinking at a high level about what I wanted. I saw a video that said you can live pretty comfortably anywhere in the world for $10,000 a month.
Honestly, creating $10,000 in recurring passive income is not that difficult. There are methods for doing that, and if that’s your goal, you could reach it quickly. This is where our mindset is today, and where we want to guide people: What’s your vision? How much does it cost? Let’s start creating it and get you to that lifestyle as quickly as possible.
Exactly, Adam. One thing I love about this is that it’s low-hanging fruit. Even if you’re not an accredited investor or wherever you are in your financial journey, whether you’re in your twenties or beyond, this is something you can take advantage of to drive greater efficiency and accelerate your wealth. It’s fantastic.
My mind is really lighting up with ideas—there are so many use cases for our audience. For example, folks with short-term rentals, like Airbnb, or single-family rentals—this concept applies to them. You could use it to reduce debt on those properties. You could apply it to your own home—whether it’s your mortgage or other liabilities.
Let’s not forget about potential college payments or other obligations. The idea is to create efficiency in your business and magnify the results of your cash value life insurance policy—basically, put it on steroids by using this method. These are really powerful ideas.
I want to dive into one of those topics you mentioned—short-term rentals, specifically for someone with properties. What we often see when working with real estate investors is that they’ll say, “I’m just stockpiling cash, waiting for the next opportunity.” But what they’re doing when they stockpile cash is creating a pool of money that’s liquid, but not efficient. It’s just sitting there, not doing much.
You would still have access to the funds if you’re paying down that debt over time using the Shred Method, while you wait for the next deal. This way, you can access the capital and equity you’re building in the property by having a line of credit on it.
To your point, this is low-hanging fruit. No matter what you’re doing—even if it’s just for 3 to 6 months, or even a year—you’ll be years ahead of where you would be otherwise. When people start to see the potential in this, they realize, “Oh, I don’t have to lock into this for seven years.” The key is to do it for some time to achieve the goal you’re after. For my wife and I, though, this has become a lifestyle.
We’ll never stop using the Shred Method or a technique where money is continuously going into a line of credit. Every 2 to 3 months, there are tens of thousands of dollars being deployed somewhere because money is always coming back in. I know you understand this—you teach it to your clients—but if you’re in a syndication that’s 3 or 4 years long, the money coming back in needs to have somewhere to go.
Exactly. And with Shred, once you get started, it’s like a flywheel that’s always moving. I don’t mean to make this sound simpler than it is, but it becomes like a video game you can’t lose. Do you remember those cheat codes in Nintendo games? Yeah, that’s how it feels.
It’s a rinse-and-repeat strategy for sure. Once you get your head around some of these concepts, it’s not that complex. You just need to take action and get involved. You’ll start seeing the results for yourself. It’s the same with investing in alternative assets or real estate. Once you see the results, you think, “Wow, let’s see how much better we can do than we were before.”
Exactly! It all builds from there.
Awesome stuff, Adam. If you could give listeners just one piece of advice on how they could accelerate their wealth trajectory, what would that be?
If I had to give one piece of advice on accelerating your wealth trajectory, it would be this: The first thing you should invest in is yourself. Take the courses, buy the books, and study them intently. I say this from personal experience.
I’ve always been a fan of Phil Town, who wrote Rule #1 Investing and Payback Time. I went to one of his programs and watched him dissect how he was investing in the market. He’s an equities guy, so a portion of my wealth-building plan involves equities. But I’ll never forget watching him go over a stock analysis of Chipotle Mexican Grill. At the time, Chipotle was trading at around $300 per share, but Phil saw that it should be valued at around $600 or $700 per share based on all the metrics. And I remember thinking, “It’s a burrito company, how is this stock worth that much?”
But Phil’s whole mentality is that if you can buy a dollar for 50 cents, you’ll never lose money. So, he’s always looking for those kinds of deals. Fast forward to today, and Chipotle shares are trading at $1,300 to $1,400 each. On that day, Phil bought 10,000 shares at $300 per share. We were all watching him do it, thinking it was a huge bet—and it paid off.
This is a guy I’ve followed and studied, and I think the key piece of advice, simply stated, is: Find the experts you want to live like or those whose methodology you appreciate. Track them, follow them, and do what they do. The people who have reached that level of success know what they’re talking about. Success leaves clues, so invest in yourself by following the people you want to learn from or emulate.
Success leaves clues, invest in yourself by following the people that you want to live like.
Awesome. I appreciate that, Adam, and I’m grateful for your time today. Thanks for coming on the show and sharing your wisdom and sage advice with the audience. It’s something worth investigating further. If people want to learn more about you or the Shred Method, what’s the best place for them to reach out?
Thank you for asking. The best place to find us is our website, theshredmethod.com. On the site, we have a master class that will teach you everything you need to know about the Shred Method. You can also schedule a 20-minute call where we’ll run your numbers to show you the kind of savings you could experience or what potential opportunities are available to you. So, theshredmethod.com is the go-to place for that.
If you want to learn more about me, just Google my name. You’ll find plenty of information online. One of the first things you’ll probably come across is my TED Talk from the London Business School, which went viral. I’d encourage people to watch that as an introduction to who I am. It’s all about a game of Monopoly I played with my kids using real cash. We had a $10,000 Monopoly game, and the lessons we learned were profound.
Very cool. I love it.
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