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In today’s episode Dave Wolcott, Joey Mure, and Russ Morgan delve into the transformative power of passive income and the journey towards financial freedom.
Joey Mure, a seasoned serial entrepreneur, shares his insights gained from co-founding ventures like Wealth Without Wall Street and Wake Up In Birmingham. He emphasizes the importance of financial liberation through passive income, a philosophy he explores in his upcoming book, “Wealth Without Wall Street, 3 Steps to Freedom Through Passive Income.”
Russ Morgan, Founder and Partner at Wealth Without Wall Street, brings his dynamic perspective to the conversation. Known for his innovative ideas and problem-solving skills, Russ’s trajectory from an investment advisor to a driving force behind Wealth Without Wall Street reflects his passion for creating opportunities and empowering individuals.
In this conversation, Joey and Russ elaborate on the concept of passive income as the cornerstone of financial freedom. They delve into practical steps and strategies to build passive income streams, emphasizing the importance of diversification and long-term wealth creation.
Drawing from personal experiences, Joey and Russ underscore the significance of core principles in achieving financial success. They stress the value of vision, education, perseverance, and adaptability in navigating the ever-evolving landscape of wealth creation.
In This Episode
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Strategies to develop diverse and sustainable income streams
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Importance of passive income for financial freedom
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Insights into Joey’s transition from the financial industry to co-founding Wealth Without Wall Street
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Russ’s evolution from an investment advisor to an innovative leader
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Investment tactics, asset allocation, and cultivating a growth-oriented mindset
Welcome to another episode of Wealth Strategy Secrets. In today’s episode, we are joined by Joey Mure and Russ Morgan to explore the transformative power of passive income and the journey toward financial freedom. Joey, a seasoned serial entrepreneur, shares insights from co-founding ventures like Wealth Without Wall Street and Wake Up in Birmingham. Russ Morgan, founder of Wealth Without Wall Street, recounts his transition from an investment advisor to a driving force passionate about creating opportunities and empowering individuals. Together, we discuss strategies for developing diverse and sustainable income streams.
We highlight the importance of passive income for achieving financial freedom, Russ’s evolution from investment advisor to innovative leader, and various investment tactics, asset allocation, and cultivating a growth-oriented mindset.
Joey, Russ, welcome to the show.
Joey: Dave, thanks for having me.
Russ: Glad to be here, Dave.
Dave: I’m excited to have you both on. I know the audience is going to gain a lot of value from this episode, as well as some entertainment along the way. We share some good philosophies and seem very like-minded in our approach. I truly appreciate the mission you’re on to help people achieve financial freedom by breaking free from Wall Street and conventional thinking. It’s crucial to shift our mindset, although that can be quite challenging.
We often discuss this, but people deal with various issues that might hold them back, such as limiting beliefs from their past, upbringing, or environmental influences. I commend your mission, and I think this sets up a great segue to begin our conversation for those who may not be familiar with you. Can you tell us about your background and how you got into this world of Wealth Without Wall Street?
Joey: Sure! I’ll kick it off, Dave, if that’s okay. I spent 11 years in the mortgage business, and during that time, I realized that a larger income doesn’t necessarily equal freedom. I can be a slow learner, so it took me all those years to figure it out. I had convinced myself that once I reached a certain income level in my active business, I would achieve some form of financial success.
At that time, I was making well over $300,000 in my twenties, and I thought, “This is better than I had anticipated.” However, I was also losing touch with the people I loved the most—my wife and my five daughters. I remember a specific vacation at the beach where I told my wife and kids to go ahead to the beach while I made just one more call, one more pre-approval, whatever the case may be.
Three or four hours later, I was walking down the boardwalk behind our condo, and I saw my family coming back up that same boardwalk on the opposite side. They looked so frustrated and disappointed. Even though I was physically there with them on vacation, I wasn’t present emotionally or mentally.
I remember that being a real wake-up call for me. I thought, “Wait a minute, what am I doing?” I was working so hard to create a lifestyle for my family, yet I couldn’t even enjoy it with them. Moments like that made me realize that something I was doing wasn’t giving me the results I wanted. My vision of what I wanted for my life wasn’t aligning with my actions. It took those wake-up calls, along with a book that Russ shared with me in 2009, to show me that there was a different path I needed to follow, rather than constantly adhering to traditional thinking.
Dave: That resonates. I think so many people are struggling with the grind because, in reality, we were all raised to put in the hard work, to invest our sweat equity. Those values were instilled in us when we were growing up. Interestingly, you had that reflection at such a pivotal moment. How about you, Russ?
Russ: I listened to your story, and it’s funny—I feel like mine mirrors yours a lot, Dave. You mentioned not having three kids at once; I spaced my four kids out over eight and a half years, opting for a more traditional approach! I admire how you and Joey jumped right in there. When I was listening to your story about going to the financial planner and asking, “What now?” it resonated with me. You realized that the 6-7% annual return approach wasn’t going to meet your goals.
Well, I was that financial planner! Not literally, of course, but I was a certified financial planner myself, and I was advising clients with many of the same strategies you encountered. I was familiar with the confused look on their faces when they left my office, wondering if this was truly the best approach for them.
It took the market crash of 2007-2008 for me to realize it for myself. My wife had finished dental school in 2006, and we were both highly educated and well-paid. However, the market took half of the investments that we had been relying on, and I was telling people to follow that same approach. I was eating my cooking! When the market crashed, I realized I had no idea how to protect our investments from future downturns.
All the mentors and colleagues I surrounded myself with at that time had no answers either. That’s when I understood I needed to take a more active approach. I had to seek out a strategy, and I didn’t feel that it lay within the walls of Wall Street, which was pretty daunting since that was my professional training. I had been trained to teach people those traditional methods, but I saw them fail. More importantly, I witnessed the lack of confidence in the responses of those I asked on Wall Street about preventing similar losses in the future. This realization led me down a path that ultimately, thankfully, has brought us here today, talking with you.
Dave: Well, thank God you saw the light, Russ. Many financial planners still haven’t quite recognized it, but it’s certainly a lot brighter on this side!
Russ: It is. I mean, it’s not easy, right? But I didn’t know it back then. Now, we talk about financial freedom, which is our mission—to help people achieve financial independence and stop trading time for money. It’s a very similar mission to yours. I just didn’t realize that the formula was simple. The work to achieve it is hard, but the formula itself is easy: it’s about having more passive income than our monthly expenses.
“The work to achieve [financial freedom] is hard, but the formula itself is easy: it’s about having more passive income than our monthly expenses.” — Russ
Dave: That’s fantastic! I think another key aspect that people often overlook in making that paradigm shift is the element of control. Part of my frustration was that I vividly remember the tech bubble in 2000. Everything seemed fine—then suddenly, it all came crashing down. There was no control over what I had worked for years and even decades to build. Watching that hard-earned equity disappear felt like the rug was pulled out from underneath me. For me, it was incredibly unsettling, and it pushed me to seek a different strategy and regain control.
Russ: Exactly. For some of us, it’s easy because we don’t have to unlearn much. You and I had to unpack a lot of the ideas we were taught, both professionally and personally. But others, they’re hearing this for the first time, and I find myself envious of those individuals who can grasp these concepts from the start. Joey was one of those people. He heard the message and immediately understood it.
Joey: Right! For me, it clicked right away.
Russ: For me, though, as I was trying to figure everything out, I had to unlearn all those preconceived notions about where I was putting my money and what results I expected. I used to think in terms of return on investment instead of cash flow.
Dave: Absolutely. So what do you both think in terms of an investment thesis or overall wealth strategy? I know you’ve implemented something, which is cool and shows that you’re practicing what you preach. You’ve focused on creating your passive income, right?
Dave: I don’t know if it’s a particular entity or something, but you’re looking at different opportunities to generate cash flow and create financial freedom to help show others. Maybe that’s part of your investment thesis or wealth strategy. Can you break that down for the audience?
Russ: Sure, I’ll jump in here, Dave. I think the thesis I have revolves around five major components that someone needs to address in their investment journey. We refer to these as the five pillars in our Right Next Thing process.
One of the biggest issues we find when people engage with us is that they love the idea of passive income exceeding their monthly expenses. They can see how that would transform their lives—they could pull up their calendar and find nothing scheduled. Just imagine that: your passive income surpasses your monthly expenses. That means you could go to your mailbox and pull out checks that exceed your monthly expenses, without having done anything for those checks to arrive. It would all be automatic.
Now, if that were the case, your calendar would have zero requirements on your time. You would be the one filling in the boxes on your calendar. I’m a big proponent of calendar blocking, so I enjoy putting my commitments on my calendar. My employer no longer dictates my schedule; I do. That’s what people love, but they often don’t understand that several components require organization for this to happen, and it all begins with vision.
Our first pillar is having a clear vision of what your life would look like if you were financially free. Who would you be? What would you do? What would you have? That’s one of the first things we do with everyone who works with us—they go through the process of defining that vision. To be honest, Dave, many people have given up on envisioning what is possible. Most of us have settled on doing what we think we have to do. We endure what we’ve been given or what we perceive to be our only options, expecting something different to happen.
But the reality is that if we can pause for a moment and dream, we can put a clear vision in front of us of what we’re trying to achieve. Only then should we consider what to invest in and what our money is doing.
Joey: I want to jump in here because this vision part is often talked about, but it’s rarely fleshed out in a way that many of us can truly follow. Sometimes it feels a bit airy-fairy, and if you’re impatient like I am, you want to get to the actual action steps. You might be thinking, “Shut up, Joey! Just tell me what you’re doing.” Dave asked about the thesis—how are you guys investing? I want to dive into those insights because I know there are many valuable nuggets in what you’ve done.
But let me share this insight: everything we talk about is based on what we’ve implemented. About six or seven years ago, we brought in a guy to be our fractional COO, and he asked us one pivotal question that shaped our thesis. He said, “How much money do you make?” We gave him our answers.
Russ: He said, “Now tell me, what do you need to live off of?” We shared our numbers with him, and he responded, “Wait a second. You’re making way more money than you need to live off of.” And I was like, “Yeah, that’s true.”
He then said, “Let’s develop everything else because you don’t need to spend more time making money. You should be building things that give you more of your time back.” Once we recognized that our most valuable resource was our time, it fundamentally shaped our investment thesis. Our thesis evolved from the idea that we would invest in ways that don’t require more time from us. If we do put time into an investment, it needs to be in exchange for giving up something else that takes time from us.
When we build out this vision—going back to the concept of vision that we discussed earlier—we had to start by really knowing what we wanted because most people don’t have a clear understanding of their desires. Without that clarity, you won’t know which investment strategy to pursue, especially since there are so many options out there. Some strategies are very active, while others are more passive. For us, we decided not to invest any more time into our investing approach without sacrificing time in another area.
Dave: That’s spot on, Russ. I boil it down to four freedoms. If you have more money, as Joey mentioned, what does that enable you to be, do, or have in your life? Do I have the freedom of purpose? If my calendar is clear, am I spending my days on something fascinating and motivating with a significant purpose? Do I have the freedom of time? Can I plan my day or spend it with my family as I choose? There’s also the freedom of relationships. You two chose to work together to educate others rather than being in an institutional environment working for someone else who might not share your mindset.
When we delve into investor psychology, it’s crucial to unpack these freedoms to understand what you’re truly trying to achieve. Now, let’s take it to the next level for the audience and discuss your investment thesis. You’re looking to invest for cash flow, aiming for financial freedom. There are likely components of tax efficiency and growth in there as well. Can you share more specifically about your thesis and the types of assets you’re targeting?
Russ: Absolutely. I’ll mention a couple of things we’ve learned the hard way. To your point, it’s all about cash flow, and it’s also about having a strong operator involved. When I mentioned earlier that we had to be clear about not investing more time, we realized we needed to use the cash flow we were generating to buy back our time. That shift changed everything for us.
Let me give you a quick story to illustrate this. Years ago, I bought a dropshipping company thinking it would be easy. I thought, “A dropshipping company? What could be simpler? You don’t even have to hold inventory; you just connect buyers with suppliers in China, and everything will work out perfectly.” I had good intentions behind this purchase. I have five daughters, and I thought it would be a fantastic way to introduce them to how a business works—so I bought the company 100unicorns.com. Can you imagine a better business to teach them about entrepreneurship?
I mean, unicorns are every girl’s best friend! I thought, “This is amazing! I’m going to buy this brand, show my daughters how it works, and it’s going to be so easy.” But then I realized it’s one of the hardest businesses to make money in if you don’t understand digital advertising—Google Ads, Facebook Ads, Pinterest.
By the way, I dislike social media, Dave. It’s one of my least favorite things in the world. Suddenly, after buying this brand, I found out that my success depended on being good at those things I’m terrible at and having to operate a business. To put it mildly, it has been a disaster. It was the worst investment I’ve ever made.
As a result, I’ve never taught my daughters anything about business because I couldn’t even figure it out for myself. That experience taught me a lot. It forced me to reflect on my investor DNA—who I am as an investor. It became clear that we need to align personally with the things we invest in. It’s not just about returns or tax efficiency; it’s about ensuring that the investments match our personalities. This realization led us to develop an investor DNA profile that anyone can take. It helps filter down the options that I should focus my attention and time on. I know Russ has made some of the same mistakes I did.
“Our most valuable resource was our time.”
Russ: Exactly, Dave. Ultimately, we all have natural inclinations, skill sets, and experiences that can help us succeed. You’ve heard the adage, “Do what you love,” but I believe you should also do what you’re good at, even if you don’t love it. Better yet, do what you’re great at. Up until now, Joey and I had been investing in things where we saw other people having success. We followed the old saying, “Success leaves clues.” If they’re successful there, we thought, “I’ll do that.”
But we weren’t achieving the same success, and we couldn’t figure out why. So, we started to ask ourselves, “What made them successful, and why aren’t we finding the same success?” The answer was clear: they had skill sets, experiences, resources, and relationships that we didn’t possess. They had more experience in those specific areas than we did, which is why they were succeeding.
So, we asked ourselves: “What do I have experience in? What skills do I possess? What relationships can I leverage?” We realized that Joey and I, even as business partners, weren’t built the same. While we shared a lot of the same network and experiences, our skill sets were different.
We began to analyze our investment opportunities and identified areas where we could utilize each other’s strengths to the fullest. One such area was the short-term rental business. We noticed others having a lot of success putting condos, apartments, and homes on Airbnb. We thought, “How can we leverage our skills, particularly our influence?” We have a podcast and marketing capabilities that could help us in this space.
So, who’s our network? Do we know anyone who would be a good operator for this business? We had a guy who had been running a business in the real estate sector for ten years. He went through some hardships and was looking for a new opportunity. We thought, “What if we took this guy, who has entrepreneurial experience and skills and wouldn’t need a lot of leadership from us—since we’re not great managers—and matched him up with people in our network who have built out 40, 50, or 60 units themselves?” So, we partnered with him.
We utilized our resources, our network, and this entrepreneur’s experience. We built a short-term rental business from scratch starting in the middle of 2020, which, as you can imagine, was a challenging time for travel, especially in a non-travel market like Birmingham, Alabama. At our peak, we had about 28 units and were leveraging our skills, resources, and network to generate between $20,000 and $30,000 a month in net profit after all expenses were paid. The best part was that Joey and I were using our minds to strategize, not our time, because we had a full-time operator running the business.
This was just one example of how we applied the investor DNA concept to ourselves and started exploring other areas where we could get involved. It doesn’t matter if it’s investing in a short-term rental business, running a land-flipping business, investing in e-commerce brands, or participating in private equity deals. We focus on using our existing strengths rather than trying to invent new ones just because someone else is having success in a particular area.
Dan Sullivan refers to this as having your unique ability. It’s about understanding your instinctual wiring and identifying not just what you’re good at, but what you’re truly great at. Once you define that, it’s a crucial shift to make.
It’s clear that if you enjoy real estate, it’s fundamentally a people business—investing in people. But if you prefer being an options trader, clicking a mouse all day long, you might be more analytical and technical, and that’s fine, too. There are paths for both, as you mentioned, but it’s essential to get clear on your investor DNA.
In our mastermind group, we even have an entire module dedicated to investor DNA. I think that’s spot on—identifying your unique strengths before diving into any specific investment tactics is crucial.
So, let’s talk about another key strategy that I know is dear to your hearts, which will help educate our listeners: infinite banking.
How did you guys come across it as a solution? There’s a lot of confusion in the marketplace about what it is, and I think it takes many people a long time to wrap their heads around the concept. It’s fascinating to see that for every family office or ultra-high-net-worth individual I know, infinite banking is a cornerstone of their strategy. What are your thoughts?
Russ: Yeah, I’ll jump in first. Since he keeps going first, I’ll let him correct all the mistakes I make this time. But to discuss the concept of infinite banking, let’s first clarify what it is not.
It is not a product, despite what many in the financial industry may try to portray it as—a silver bullet approach that you can apply anywhere. Joey and I learned about this from a mentor of ours who wrote a book called Becoming Your Banker. We live in Birmingham, Alabama, and had the opportunity to spend a lot of time with Nelson Nash, the author, before he passed away. He was an economist and lived into his mid-eighties.
In his book, he emphasized our need for access to cash, explaining that the biggest obstacle to financial freedom is that most people don’t have access to cash and end up delegating their financial decisions to third parties. He discussed how to use a financial product—specifically, a dividend-paying whole life insurance policy—as a place to store cash. Over time, we realized that the key was not just having access to cash, but understanding the cost of that cash. This understanding is often the biggest pain point for entrepreneurs, investors, and business owners.
We began building our infinite banking systems, or what some people refer to as becoming their banks, around 2009 to 2010. Together, Joey and I have built our systems to encompass our investing, our business, our finances, and our legacy. However, it wasn’t until we recognized the need for a structured operating system to manage it all that we truly maximized its potential.
One day, while discussing our strategy with one of our mentors—who has sold businesses for billions of dollars and advised clients as a Goldman Sachs banker—he looked at a little scribbled note that Joey and I had written on a piece of paper and asked, “What is that?” We explained that it was just our way of using the infinite banking system to manage our lives. He responded, “So that’s like your passive income operating system.” I thought that was a much fancier name than I would have ever come up with, but I agreed.
He asked us to walk him through it. I explained, “What we do is take all of our active income and funnel it through this process. Any dollars we spend personally go through it, and the remainder is used for saving, investing, and paying taxes.” He inquired whether this required a lot of moving parts, and we assured him it didn’t. We use a tool that allows us to set it up in multiple ways.
Once we set it up for the first time, it starts running on autopilot. When I decide to invest, if it’s going to create cash flow, I know exactly where to allocate it. If I anticipate a tax bill, I know where that money will come from. I can also manage premiums for our life insurance policies—like the thirtieth one we’ve purchased—because we have all those systems in place to keep our lives simple.
As entrepreneurs and investors, we don’t need more jobs or complexities. For me, discovering all these little tools has significantly improved everything else we do. How would you frame that differently, Joey?
Joey: Can I just tag into that, first, Russ? You began by discussing the issue of being product-oriented. This is a great point, especially coming from a financial services background. Many financial institutions offer some form of cash value whole life insurance policy, but these products are not always structured properly, nor are people utilizing them as you articulated. Can you help clarify the differences for our audience?
Russ: Yeah. One important point is that financial products are created by financial institutions, and financial advisors and planners work for these institutions, either directly or indirectly. The methods in which these products are sold or taught are based on the intentions of the financial institutions that produced them. In simpler terms, when an insurance company creates a whole-life policy, they have one main goal in mind: to provide a death benefit and generate profit for the policyholders. That’s it.
They train their insurance agents to sell the product based on these objectives, which is how I was trained. I was taught that the death benefit is a product my clients need to protect their families, and for high-net-worth individuals, to protect their estates. My approach was to sell them as much coverage as possible for the least amount of cost—essentially, a Walmart approach to insurance.
This is the mindset that many financial gurus espouse, the ones who appear on talk shows and promote that strategy. However, when I learned about the infinite banking concept and how to utilize financial tools like life insurance products, I did so from a different perspective. The person who introduced me to this concept was an economist. His focus was on solving the problem of how to access cash and reduce reliance on third-party banks.
He recognized that, among all the financial products he had encountered, this one product—whole life insurance—offered many of the functionalities he was seeking. The challenge he faced was that he wasn’t contributing enough money to it, so he didn’t have a substantial pool of cash to work with. He began a process of funneling significantly more money into his life insurance contracts—often five, ten, or even twenty times more than the average person would consider.
Joey and I now contribute large six-figure sums each year and maintain seven figures in cash value within our life insurance policies. This might seem unfathomable to the average person, but we approach it differently based on those teachings. When we started applying these concepts to our own lives and sharing them with others, the common reaction, as you mentioned, Dave, was, “Wait a second, I’ve always heard about it this way.”
Many people are taught by someone affiliated with an insurance company to sell specific products. We, however, recognize that tools can be used for various purposes. A hammer can build or destroy; a gun can defend or harm. The effectiveness of these tools lies in the hands of the user.
It wasn’t until we received guidance from someone with greater wisdom on wealth-building strategies that we realized the true potential of these products. For instance, when we encounter individuals who say they no longer want their whole life insurance policies, Joey and I are quick to raise our hands and initiate a conversation about purchasing those policies. We see the potential in them, understand their value, and know how to effectively utilize these tools.
Russ: Then the tool becomes that much more interesting, but the process is the most fascinating of all. Education is key.
Dave: Yeah.
Russ: Dave, let me make this practical by sharing my experience with the whole process of infinite banking. It all started when I was at the pinnacle of my career, making good money but not truly experiencing success. At that time, I began to think about saving for my kids’ college, as they were young.
I started exploring various financial products, like 529 plans. However, I quickly realized there were significant drawbacks to a 529 plan. For instance, what if my kids decide not to go to college? My oldest two, now 17 and 15, have both expressed that they don’t plan to attend college for various reasons. One is an artist, and the other wants to be an entrepreneur and start her own online business.
So, I reflected on the 529 plan and thought, if they didn’t go to college, I could face penalties. Plus, I’d be investing in things I didn’t understand, risking losing value because of a market-based approach. There were so many aspects I didn’t appreciate about it until I learned about infinite banking.
After reading the relevant book, I started to see the bigger picture: I was continuously putting money into places I didn’t understand or control, and I couldn’t access those funds when a great opportunity came my way. Imagine being in the mortgage business like I am, seeing hundreds of clients each year—many of whom are in real estate-related careers or are investors. From time to time, they would bring me potential deals, saying, “Hey, Joey, I have this great opportunity, and I just need $100,000 to flip this house.”
And I’d think, “Wow, that’s a fantastic deal for someone else.” Meanwhile, I had hundreds of thousands of dollars sitting in a 401(k), convinced it was beneficial for me due to tax deferrals and employer matches. I had all these reasons for contributing, but I was missing out on opportunities because I let someone else manage my money, often resulting in losses without understanding why.
I coupled that realization with my desire for freedom today. I wanted to be able to say no to a phone call while I was at the beach or spend time with my five daughters while helping to homeschool them and invest in one of their golf careers by traveling around the country for tournaments. I wanted to invest in businesses that didn’t require my time. But if I continued to set money aside until my sixties, none of those options would be available to me.
The idea of infinite banking was revolutionary—it allowed me to access capital that would continually grow, which I could leverage for various investments. As a result, Russ and I have built over $50,000 a month in free cash flow and passive income outside of our regular active incomes. This is all possible because we had access to a pool of capital that aligned with our investor DNA profiles. That’s the power of infinite banking: integrating and aligning all these elements together.
Dave: Yep, I 100% agree.
Russ: That’s a great articulation. You mentioned the 401(k) and my journey, which resonates with many of us. We’re taught by our employers, family, and peers to max out our 401(k)s and defer our taxes, right? It’s seen as the best vehicle available.
Let’s face it: over 90% of Americans have the majority of their wealth tied up in these vehicles, totaling trillions of dollars. What do you think is holding people back? Why do they continue investing in these vehicles?
Dave: I think it’s largely because they don’t know any different. The person who isn’t listening to this podcast might not be aware that there’s another approach. If they were tuned in to your story or heard Joey’s, they might realize there are alternatives.
A large percentage of us are simply busy. If you’re listening to this podcast, you’re likely in the 1%. You’ve decided to actively engage with your financial outcomes. Everyone has the goal of financial freedom, right? The challenge is that we don’t rise to our goals; we fall to our systems.
Everybody has the goal to be financially free, the problem is we don’t rise to the goals and we fall to our systems.
Most people have a routine: wake up, go to work, do their job, get paid, try not to get fired, pick up the kids from school, attend their extracurricular activities, come home, have dinner, watch a show or two with their spouse, go to bed, and repeat. On weekends, they enjoy some downtime—maybe going to the park or watching a football game—but they don’t take the time to reassess their financial strategies.
That’s the reality for most people. There are a few who simply haven’t been shown the alternatives. Joey and I make the bold claim that 401(k)s are among the worst investments for achieving financial freedom. We do this deliberately to provoke thought among those who are proponents of them. They often ask, “Why?”
The answer is straightforward: if you understand the formula for financial freedom, it’s about passive income exceeding monthly expenses. So, I’ll ask you, Dave: does your 401(k) produce passive income, or does it reduce a monthly expense?
Russ: No, it doesn’t.
Dave: Exactly. And I would follow up by asking, does your monthly contribution to your 401(k) reduce your monthly expenses?
Russ: No, in fact, it’s increasing my expenses because I have less access to cash.
Dave: Right. So the question becomes, is your 401(k) bringing you closer to or further from your goal of financial freedom?
Russ: It’s further from it.
Dave: We conduct this exercise on live stages and podcasts, asking these questions, and we often witness lightbulb moments where people say, “Wow, I’ve never considered that.” Maybe they’ve only heard about how their 401(k) defers taxes, but not the full picture.
Russ: They defer the tax calculation. Maybe they’ve heard people discuss the possibility of taxes going up in the future, and they’re trying to determine whether that’s true or not. They’re also trying to figure out if the stock market will yield returns of 6%, 8%, 12%, or maybe even 0% or negative 50%. All of those considerations are distraction points because those outcomes are debatable.
None of us can predict those results. But we can simplify it by asking: Is your investment producing passive income or reducing a monthly expense? If not, then it’s likely getting you further from your financial goals. So what should you do now? People start to take action when they see the clarity in those simple decisions.
It’s all about frameworks. With the right framework, most people—those with average IQs—can make sound decisions. They just aren’t provided with the frameworks, often because they’re too busy. I would also add, Dave, that one key reason people stick with 401(k)s is exposure.
There are two aspects to this exposure: First, a lack of exposure to alternative investment opportunities, and second, overexposure to conventional narratives. If people are listening to your show, Dave, and they understand your investment thesis, they begin to realize that the 6% or 8% returns that Wall Street touts are misleading. You can often achieve much higher returns through different investments that also generate cash flow and offer tax benefits. If people were aware of these options, why would they continue to just give their money away, hoping for some arbitrary return with no additional benefits?
Dave: That’s a good point. But here’s a potential objection: some people might say, “My employer offers a 3% match, which is free money.” How would you respond to that?
Russ: I’d ask, “Is it producing passive income or reducing a monthly expense for you?” Then, we need to consider whether it’s getting you closer to or further from financial freedom. We have to establish a baseline.
We need a level of agreement on what financial freedom means. If we agree that financial freedom allows us to do whatever we want, we recognize that everyone’s definition may vary. However, the path to achieving it is through increasing passive income and managing monthly expenses. Do we agree on that?
If we reach that understanding, then the employer match becomes a distraction. The return becomes a distraction. The tax deferral becomes a distraction. The key questions remain: Is it producing passive income, or is it reducing a monthly expense? If it’s not, and we both agree on that, then it’s getting us further from our goal.
Dave: That’s a simple yet effective way to break it down.
Russ: Exactly. I also think, from a philosophical perspective, I really struggled with—and eventually came full circle on—the theory that Wall Street promotes, which is centered around accumulation. We’re taught to save every year of our lives, but as you pointed out, that approach isn’t increasing our passive income or reducing our expenses.
I keep putting my money away, thinking I can’t access it until I’m 65. Then they dictate how much I can withdraw each year. And, by the way, they’re the ones controlling the tax rates. If you think the taxes today will be the same in the future, you’re mistaken.
You reach this supposedly magical point at 65, where you can start doing things with your family and traveling because you finally have financial freedom. But fundamentally, I believe that mindset is completely flawed—you end up killing your golden goose. You’ve worked for 40 years to build this nest egg, and now every year, you’re only supposed to withdraw 4%. The so-called 4% rule is even less than that these days, right?
So, how are you supposed to live on that? If you saved $4 million and hit that milestone by 65, withdrawing 4% means you’d have $160,000 a year. After ordinary income tax rates, it’s probably more like $100,000 that you’re living on. And that amount will decrease each year beyond that.
Then there’s the reality of living longer. With advancements in technology and healthcare, what if you live to 105? Will you outlive your money? The entire philosophy of accumulation is, in my view, completely misguided.
Joey: I want to illustrate your point further with a question: Are you coming from a place of abundance or scarcity? And does your strategy align with what you truly want?
One time, I was at the beach—this is where I get a lot of my stories. I’ve been telling Russ that I might just move there. I was wearing my “Wealth Without Wall Street” shirt, and all of our kids had matching swim shirts. We looked like a walking advertisement for our brand!
So, we’re walking around, and this lady approaches us and starts chatting. She asks about our shirts, and I tell her about our company. Then she says, “Well, we just retired last year, and all I can say is I hope it’s enough.” We didn’t dive deeply into what she meant, but her mindset reflects the accumulation philosophy you mentioned.
Her approach seemed to be about how much she could accumulate. It involves living on the least amount possible to save as much as she can, almost like gathering acorns for winter. Then, when she finally reaches the top of that mountain of savings, she’s left wondering how much she can withdraw each year without running out.
Are you suddenly going to start living an extravagant lifestyle after 40 years of putting it off? Those are habits that have formed your way of thinking. They don’t go away just because you stop checking in and out of your W-2 job.
You’ve built a scarcity mindset for so long that it doesn’t suddenly turn into an abundance mindset just because you retire. I don’t choose that for myself. And let’s not forget about health—your health at age 65 versus age 35 or whatever age you reach financial freedom is incomparable. I’m watching my parents at age 63 fall apart physically, and they aren’t living like they could have in their thirties.
Dave: Russ, if you could give just one piece of advice to listeners on how they could accelerate their wealth trajectory, what would it be?
Russ: The biggest wealth accelerator I’ve experienced so far is finding community and mentorship from people who are in the positions where I want to be. You’ve probably heard it said that you’re the average of the five people you spend the most time with. Successful people surround themselves with other successful people, while broke people tend to hang out with others who are also struggling financially.
If you’re not as successful as you’d like to be, find a community. Look for mentors, even if they’re just people you hear on podcasts like this one. Joey and I have connected with many mentors who didn’t even know who we were until much later, but they have been instrumental in our journey. That’s my advice to you.
Dave: Awesome! Joey, what do you think?
Joey: I have to echo what we’ve already discussed on this show: get clear on your vision. Make sure what you’re investing in supports that vision instead of working against it. You don’t need a lot of time—just take an hour or two for some introspection about what you want to accomplish. Then, take an inventory of what you’ve been doing.
Get clear on your vision. Make sure that what you’re investing in is supporting that vision and is not going against it.
Russ is a straightforward guy from Alabama, and he can quickly show how a 401(k) doesn’t support financial freedom by asking two simple questions: Does it increase my passive income? Does it decrease my liabilities or expenses? If you can apply that to everything you’re doing, it creates incredible clarity and can put you on a fast track to achieving your goals.
Dave: Sage advice. It’s been an honor having you both on the show. I enjoyed our discussion. I know we could keep going, but sadly, we have to wrap up for today. If people would like to continue their journey with you and learn more about what you’re doing at Wealth Without Wall Street, where’s the best place for them to reach out?
Russ: You can visit wealthwithoutwallstreet.com/wealthstrategysecrets. You might recognize that name. There, you’ll find all the access points to connect with us. At the simplest level, we have a free community with over 7,500 members where Joey and I interact. Joey mentioned we don’t do social media much, so if you message us there, it might take a week or two to get a response since we don’t spend a lot of time there.
In our community, you can DM us, and we will respond. That’s where we focus our time and efforts, and we encourage you to follow what we’re doing through that link: wealthwithoutwallstreet.com/wealthstrategysecrets.
Dave: Awesome! Gentlemen, thanks so much for coming on today. I appreciate it.
Russ and Joey: Thank you for having us. It’s our pleasure.
Dave: Thanks for listening to this episode of Wealth Strategy Secrets. If you’d like to get a free copy of the book, visit holisticwealthstrategy.com. If you’re interested in learning about upcoming opportunities at Pantheon, please check out pantheoninvest.com.