We’ve had hundreds of clients go through our one-on-one passive investing program, and everyone has slightly different goals and focuses for their investing.
Today, I have our master coach, Craig Feldmeier, who has consulted over a hundred clients of Money Ripples on how to create lasting passive income and wealth. Craig will tell us about two specific clients with different goals for passive investing and how they are approaching their strategic game plan.
Listen now and hear about their EXTRAORDINARY results!
Want to start making passive income like the clients we talked about in this episode?
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TRANSCRIPTS:
Speaker 1 (00:00):
Hello, my fellow Ripples. This is Chris Miles, your cashflow expert and anti financianal advisor.
Speaker 2 (00:07):
Chris Miles was able to retire twice by the time he was 39 years old, but he’s not content to just enjoy his own financial freedom and peace of mind. Chris wants you to have your own ripple effect so you can live free today. He’s not the financial advisor you expected. He’s the non-financial advisor you deserve. He’s jumping behind the mic right now, ready to make waves. Here’s Chris Miles.
Speaker 1 (00:38):
I’m going to show it’s for you. Those that work so hard for your money and you’re now ready for your money, start working harder for you today. You want that freedom and cashflow right now, not 30 or 40 years from now, but you want it today so that you can live that life that you love right now with those that you love. But most importantly, guys, it’s not just about getting rich because it’s about living a rich life. As you are blessed financially, as you have greater prosperity, you have a greater capacity to bless the lives of those around you. That is exactly what the show is here to talk about today. I’m so excited that you guys have been here, and thank you for allowing me to create a ripple effect through your lives as well. As a reminder, go to our website, money ripples.com.
(01:14)
Check that out. And by the way, if you haven’t done so already, go ahead and check out the whole website has been revamped. Not only do we have the passive income calculator, but many of you guys have been asking about infinite banking. How does that work with real estate investing? How do you get that double dip where you get money working in two places at once? There’s a whole section on infinite banking you can check out there today. Okay, guys, so I am bringing on a special guest back again. This would be, I think the third or fourth time that I’ve brought Craig Felmy back on. We just had him on last fall. He is the guy that coaches all of our money Ripples clients, so when people come through, they’re our VIP clients. They get that one-on-one assistant and consulting. Craig is the guy I talked to.
(01:50)
And so I want to bring Craig back again. I want to hear more stories about what people are doing right now because I know many of you guys have been asking me and others in our company as well. You’ve been asking. Yeah, but right now it seems like it’s been rough. The real estate market’s been a tough game in 2022 and 2023. Now the fallouts have been happening in 23 and 24. What do we do? And so I want to talk about some real life experiences, what people are dealing with right now. All these people want to be left anonymous, which we always respect people’s privacy for that very reason. But definitely it’s great to hear firsthand what people are doing right now. So Craig, hey, welcome back on the show,
Speaker 3 (02:27):
Chris. Thanks, man. Great to be back.
Speaker 1 (02:29):
Yeah, I know, man. For people that haven’t heard your background, give them a brief story about your background everywhere from Wall Street to a client to where you are today.
Speaker 3 (02:39):
Sure, yeah. I was your typical finance guy, right? So I was, I’m a Penn State graduate from 2008, and I took my career to Wall Street shortly thereafter. Spent 10 years at one of the big investment firms working with ultra high net worth clients and became an expert in terms of asset allocation and portfolio construction from a stock market and a fixed income perspective. And quickly realized I was helping the ultra wealthy build portfolios, and I was thinking to myself, they can do it with $20 million invested. What am I going to do? Am I going to just continue to fund my 401k fund, my brokerage account and hope that I have a few million dollars and that we don’t have a black swan event that wipes out 50% of my portfolio when I’m ready to retire? And when I had that realization is when I came across your podcast.
(03:38)
So this is probably, gosh, back in 20 15, 20 16. And so then you and I connected, you became a mentor to me. I became a client of yours myself, and then really kind of jumped in with both feet into the passive income pool. And so I started off with as many investors do with real estate. So really kind of jumped into the single family world, got into some multifamily, got into some apartment complexes, so really scaled my real estate portfolio. And then also have jumped into the fund and syndication world since then. So really kind of have an expertise in both the passive income side as well as with the stock market side. And so it’s great when I speak to clients who are very stock market 401k focused, who want a different path, just they’re not quite sure how to get there. And I can give a lot of recommendations because I was in their shoes at one point.
Speaker 1 (04:36):
Absolutely. Yeah. Well, this is great, Craig. So I know you’ve worked with, I don’t know how many dozens if not into the hundreds of our clients up to this point. What is it you’re seeing in general, just in general right now? What is it you’re seeing happening right now? What’s the sentiment? I mean, are they similar, do you think our listeners are right now? Are they cautious? Are they optimistic? I mean, what’s going on right now?
Speaker 3 (04:59):
It really depends on the client and their experience level, but I would say a general consensus right now is trepidation in the marketplace. There’s a lot of syndicate investors who have run into problems with their deals, luckily,
Speaker 1 (05:18):
Especially apartments
Speaker 3 (05:19):
For self
Speaker 1 (05:19):
Storage and those kinds of things, right?
Speaker 3 (05:21):
Exactly, exactly. Yeah. Luckily not any of the investment operators that we connect people with, but there’s a lot of operators who people have found on their own, they’ve run into some problems. And so when they come to us, they’re generally, there’s some skepticism there. They’re cautious. They really are concerned about principle protection, which is what we focus on. So when I talk to clients from call number one, a lot of the focus obviously is around goal setting and risk management. So what is going to be the right type of investment for you and your situation? And it’s going to be so dependent on individual clients, where they’re at in their investing journey, what are their short-term goals? What are their long-term goals? And then it’s about finding the right types of investments that meet their return criteria as well as their risk criteria.
Speaker 1 (06:14):
Yeah, good point. And of course, as a reminder, we never give investment advice, but what you’re talking about is we’re really narrowing down options, right? Because sometimes people will hear something from some podcast, maybe our podcast, maybe somebody else’s where they say, oh, that sounds exciting. I’m going to do that investment. And you might be just saying, well, you could, but you want cashflow, and that’s a growth play, so you’re not going to get much cashflow there. So if you want cashflow, that may not be the best fit. Is that kind of what you’re saying?
Speaker 3 (06:43):
Absolutely. Right. Yeah. A person’s balance sheet. So the investments that they own need to be aligned to what their goals are. And it’s very common that someone’s brother or somebody’s cousin introduced them to an investment that they’ve done well with in the past. That person wires some money to that investment operator and the deal goes south. And then even in we dig deeper into what you’re just saying, Chris, that investment might not even provide any cashflow, and that person doesn’t even know about that. So we really look at different investment opportunities. What are the criteria? Are they more cashflow focused? Are they more growth focused? And then based off of what people want, and we will work with people who don’t even know what they want, they think they do. And then we will sit down and chat for a couple hours and they’ll come out our conversation with a completely different perspective on what their long-term goals are. So it’s really important to do a lot of digging. What do you really want in the short term? What are your long-term goals? And then let’s explore some investment opportunities that are going to meet your criteria.
Speaker 1 (07:47):
Absolutely. Amen to that. Well, let’s talk about some of these examples here. I know the most often question we get, even though we have people on the podcast, of course, we’ll talk about the things they’re doing, their experience. It’s almost like everybody wants to know, yeah, but what are these clients actually doing? And so let’s dive in. I know you gave, you brought two examples. We keeping ’em totally anonymous here, but let’s talk about the first one. Tell us about their situation, what were their goals, their desires, their fears, that kind of thing, and then what are they doing?
Speaker 3 (08:16):
Sure. Yeah. And to your point earlier, I love specifics and I love examples. There’s, you listen to these podcasts and oftentimes there’s a lot of theory discussed, but there’s not hard concrete numbers. The two clients that we’re going to be discussing today, these are actual results, a few months old, each of them and these clients are actually seeing and living what the investment returns are providing. So these are hard numbers
Speaker 1 (08:41):
With us. Out of curiosity,
Speaker 3 (08:44):
Both clients just about a year.
Speaker 1 (08:46):
Okay, good to know.
Speaker 3 (08:47):
Yeah, so just about a year, they both moved, I’d say a little bit slower in the beginning and then picked up the pace. That’s going to be true of a lot of clients. Some people will jump in with both feet right away, start putting capital to work. Other people take a little bit more education, a little bit more experience, really understanding what the risk is, what the return potentials are, and then they’re ready to move forward. So both of these clients have been with us for about a year and have just started to see some pretty significant results. So our first client, she is a chiropractor and she is working part-time now, and she is nearing retirement. So she’s in her early sixties and has a decent amount of assets. She came to us with about 650,000 to invest. She had about $400,000 in cash that was from the sale of a home. And then she has some money in retirement accounts. So when we spoke, there was some assets in traditional retirement. There was a Roth, a traditional IRA as well as an old 401k. So all in all about 650,000. And her primary goal was cashflow. She had done a great job saving and investing in the past, and she said, I am ready to start making some money from the assets that I’ve generated. So with that in mind,
Speaker 1 (10:21):
Just not to interrupt you a little bit here, but what percentage of people that you work with would just say that their goal is cashflow?
Speaker 3 (10:28):
About 90%.
Speaker 1 (10:30):
Okay. So just about
Speaker 3 (10:31):
Everybody, it’s high, it’s high, and that’s not always the best case. So I mean, just the general audience that money ripples attract. People want cashflow because how do you get to financial freedom? You need cashflow to pay your bills, right? That’s key. The stock market, people don’t want to have to sell out of their brokerage account every month. It’s hard to predict taxes. There’s volatility there. So in this specific instance, we looked at what I would call certain debt funds that have predictable monthly cashflow that clients can rely on. So I was saying too before most people want cashflow, but as we’ll see in client number two, we’ll get to them in a second, they’re on the younger side kind of just starting their investment journey. So maybe focusing more on some growth plays was the right move for them with the anticipation that they can generate more cashflow in the future. So really important to kind of make distinctions of where you’re at and what your goals are. But for the most part, people are looking for that cashflow, which I am too. So we practice what we preach, that’s for sure.
Speaker 1 (11:41):
Great. And then with this person, she had 650,000 you said, right? And you said she mostly did debt type of investments, debt funds, things like that. Is that correct?
Speaker 3 (11:49):
So we reviewed just about 10 different types of investments, and this was over a series of a couple meetings where we spent a lot of time on education where we talked about physical real estate, we talked about debt funds, equity funds, short-term lending, oil and gas opportunities, opportunities with land opportunities with self storage, syndications funds. So it’s really important that our clients have a very solid overview of all the different opportunities there are. And then based off of that education, we were able to narrow it down to 10 operators that we really focused on. We spent a lot of time learning about the different operators, talking about what the risks are, what the return potentials are, track records, and then based off of those discussions, we set up investor calls. So our clients then meet with our investment operators. Based off of those conversations, I put together two different scenario analysis.
(12:48)
We looked at a very diversified analysis where we used a lot of the operators and we looked at a little bit more of a concentration analysis where a little bit more risk in terms of asset allocation diversification, but a little bit of a higher yield. So with our clients, it’s really important that we give them options. We look at different scenarios, what’s possible, talk about the risk, talk about the return. And then with this specific client, she decided to go with four different operators, and they are collectively generating $3,900 a month in cashflow across those four operators. And this has been pretty consistent now for the past few months. And so it’s also too, I want to point out that this is just with the cash that she had on hand. And so we also had some IRA assets in play too. So what we did there is we opened up what’s called self-directed IRAs.
(13:48)
So how a self-directed IRA is different from a traditional IRA is you can invest in cashflow products under a self-directed account versus a traditional IRA that most people are familiar with. You can just invest in the stock market. It’s a non-taxable transfer because it’s going from one qualified account to another. But in her IRA assets, we actually focus more on growth. She needed just about $4,000 a month in cashflow to meet her living expenses. And so in the IRA assets, we focused on growth opportunities that are going to give her some nice yields, some nice growth over the next four to five years. And then when that time period is up, she’s going to take the additional growth that she got from those investments and then deploy those into additional cashflow plays. So that 4,000 she’s getting now will be closer to really six to seven when she’s ready to deploy the qualified funds.
Speaker 1 (14:42):
Wow, that’s great. And to clarify for anybody listening to this right now, when Craig said they set up a self-directed IRA, we don’t ever set up the self-directed IRAs. There’s actual companies, there’s custodians that do that. We are just connectors, just like we don’t invest in people’s money, we’re just connecting ’em with different people that have investments. So the nice thing is that we’re actually not attached to any of these investments. It’s not like we get the kickbacks and all that kind of stuff from trying to push that on to certain people or raise capital for ourselves and our own fund, which I know there’s a lot of conflict of interest when I see a lot of people doing that. So that’s one thing we are kind of standing apart from that. So when he’s doing that, he’s more saying, all right, here’s a company you can talk to, help get that self-directed IRA set up. Correct.
Speaker 3 (15:28):
Absolutely. And that’s a good clarification. So when people work with me, and I always use this analogy, think of me as your financial quarterback. I’m helping you drive the ball down the team. I’m kind of your center to educate and to make introductions. And then I can introduce you to a few different, in this case, self-directed IRA companies. You can tell me your feedback and then I can make suggestions on who I think could be the best fit and then connect you with the right individual and they’ll help you obviously set up your accounts, make the transfers for you to be able to start investing in cashflow products. So yeah, think of me as kind of the quarterback to help you drive the ball down the field.
Speaker 1 (16:14):
Perfect. Now with this woman, before we move on to the second example here with her, how is she feeling now? I know she was a little bit, you said she was a little bit hesitant, slower to move, but how is she feeling now about the money that’s coming in about where she has her money? Is she feeling comfortable? Is she still a little bit like when’s the shoe going to drop? What’s her overall sentiment?
Speaker 3 (16:36):
Yeah, she’s very happy. She feels a lot less stress in her day-to-Day life. And I think part of the reason is we educate clients on the possibilities and they take it upon themselves to really get to know the investment operators that they’re working with. They themselves are very educated on the risks, on the returns, and so she understands what the risks are in her different investments, and she’s comfortable with what those risks are. She’s comfortable with how the operators present their risk mitigation plans, and she’s very confident in how her capital is deployed versus a stock market type of investment where you don’t know what’s going to happen, right? You’re not on the board of directors of these companies. You don’t know what’s going up, what’s going down. So she has a lot more control over her assets, and now she has the knowledge and education to grow and expand her portfolio.
Speaker 1 (17:37):
That’s fantastic.
Speaker 3 (17:39):
It’s great. It’s great to see.
Speaker 1 (17:40):
Absolutely. Yeah, I mean, that’s what we want. It’s one thing to have income coming in, it’s another thing to have an abundant mindset going with it where you feel confident, you feel assured you can never be financially free if you live in fear. And so it’s really good to hear that. Absolutely. I know we only have a few minutes here, so tell us about the second client as well.
Speaker 3 (17:59):
Sure. So this was a really exciting example too, kind of contrasting to client number one. This young gentleman is 30 years old and he’s a therapist. He came to us kind of initially for similar reasons as client number one, he said he wanted cashflow, but after we spoke for a while, he doesn’t need the cashflow right now, has a nice margin between his income and his expenses, and he’s planning on working for the next 20 plus years in his field. He loves his job, which is also really nice to hear. And so when we were discussing, he came to us with about $300,000 in assets. He had $150,000 in cash and then 150,000 in a company, 401k. So after talking to his plan administrator, this is pretty common for people who have 4 0 1 ks and that are tied to their current job, you’re not able to move those funds until you leave that job.
(19:01)
So we kept the 401k as is for now and focused on the 150 he has in cash for him. He was really interested, obviously in cashflow, but he wants his money to grow. And so we focused on physical real estate. We also focused on a debt fund as well as a short-term lending fund. So three different options. We didn’t introduce him to as many people as client number one just because he didn’t need to have that many conversations. He kind of knew after a few discussions with me what was going to be the best fit for him.
Speaker 1 (19:37):
And he had less money to invest too, so there
Speaker 3 (19:39):
Was less. Exactly. Yeah. So less options in terms of the capital he’s able to deploy. He had purchased one property and we’re actually talking about the next property he’s looking to buy now, because now going through the process once, obviously I provide a lot of the education, we match ’em up with the right real estate developers. He feels a lot of confidence in terms of the first deal went really well. He knows how to underwrite the deals, how to finance them. So he’s pumped to buy the second property. Obviously, when you have limited capital, using leverage can be a big way to grow your portfolio. So that means this
Speaker 1 (20:17):
Is hands-off property. This is not, it’s a
Speaker 3 (20:19):
Turnkey property. He’s got a property manager. It’s cashflowing about $400 a month, and he’s seeing a lot of growth, a lot of growth on the asset as well. And that’s $400 a month in a high interest rate environment. We’re ready for when the fed starts to cut. If we see some nice relief in interest rates, we’ll be ready to refinance. And that 400 could easily be five or six. So we’ll keep our eye on the market. And then we connected him with a short-term lender. So our short-term lender does some business in the Midwest. He likes the short-term lending because his capital is tied up for less than a year, and he’s still going to get about 11% return on his money. And then he also wanted just some predictable cashflow as well. So it’s not his whole portfolio invested into these cashflow deals. But he said, I do want some money coming in through the door where I’m not having to deal with a property manager on the real estate side. I want to spread out my risk a little bit. So he also went for a debt fund that has some predictable cashflow coming through the door. So very different type of scenario, kind of more on that growth mindset. He’s reinvesting all of his cashflow versus client number one is spending. And so we will take a look at some financial modeling to see how his assets can grow and what his portfolio can look like three to five years down the road.
Speaker 1 (21:39):
What’s his current passive income now?
Speaker 3 (21:42):
He’s at 1900 a month.
Speaker 1 (21:44):
Awesome. Wow, that’s really
Speaker 3 (21:45):
Good. So he’s doing really well.
Speaker 1 (21:48):
Yeah, that’s almost 24 grand a year. That’s awesome. That was more than I expected.
Speaker 3 (21:52):
Yeah. Yeah. He’s doing pretty well, so we’re happy and excited to have him reinvest those dollars as well as continue to contribute.
Speaker 1 (22:03):
Yeah. Well, and kind of give people some perspective there. I mean, if you have 150,000 you can actually use, because the 401k with the company, we never count that in the numbers of how you can create passive income. If I just look at 150,000 making 10%, that’s 1250 a month, it would say 15,000 a year basically, or 1250 a month if you make it a month to month type thing. Well, I mean still 1900 is definitely better. Not guaranteed. All results do vary, but that’s why I was like, I was pleasantly surprised to hear about that. That’s really good.
Speaker 3 (22:34):
It was a great number. And again, we went through different scenarios of how we could allocate the funds. His numbers will shift a little bit more month over month because he does have some real estate in the portfolio. So if there’s some repairs that he’s going to have to do if a tenant’s late on rent one month, that’s going to affect some of the cashflow there. But he’s well educated in terms of what those risks are, and he’s also excited to see the appreciation on his property. His property when he closed actually came in about $15,000 higher via the appraisal than what he signed his contract for as well. So kind of some instant equity there as well that he was not expecting.
Speaker 1 (23:14):
Yeah. Well, I wouldn’t expect it either, but that’s amazing. When you get it, you take it, right? Absolutely. So not only that, almost 2000 a month, but that extra 50,000 equity boost of instant equity you walk into with a deal. That’s incredible. That’s awesome.
Speaker 3 (23:29):
Yeah, that was a welcome surprise for sure. Yeah.
Speaker 1 (23:32):
Well, Craig, I appreciate you being on. That’s awesome. Lovely stories, everybody watching this today. Of course, if you ever have questions or you wonder how your situation might add up, there’s always that passive income calculator you can try out at money ripples com just to see what your number would be. So definitely recommend you guys. Go check that out. Again, Craig, thank you for your time. We’ll definitely have you back on here in the near future too, so I appreciate you being here.
Speaker 3 (23:55):
Yeah, thanks Chris. We’ll do it again soon.
Speaker 1 (23:57):
Everybody else have a wonderful prosperous week and we’ll see you later.
Speaker 3 (24:00):
So we really look at different investment opportunities. What are the criteria? Are they more cashflow focused? Are they more growth focused? And then based off of what people want, and we will work with people who don’t even know what they want, they think they do, and then we will sit down and chat for a couple hours and they’ll come out our conversation with a completely different perspective on what their long-term goals are. So it’s really important to do a lot of digging. What do you really want in the short term? What are your long-term goals? And then let’s explore some investment opportunities that are going to meet your criteria.
Speaker 1 (24:34):
Absolutely. Amen to that.