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In this episode, I talk about overcoming the fear of making your first investment, especially in alternative investments like real estate. After losing everything during the Great Recession, I had to rebuild my wealth and confront those same fears many of you might be experiencing. I share my personal journey of how I cautiously got back into real estate, starting small, and how our clients have done the same.
I also discuss why it’s important to not let fear paralyze you from moving forward. Whether it’s real estate or other investments, there are ways to minimize risk while still growing your wealth. I emphasize the importance of education, surrounding yourself with the right people, and starting small. You don’t have to dive in with everything—take that first step, and it gets easier over time.
Throughout the episode, I share stories of my clients and how they’ve overcome their own financial fears to achieve financial independence. If you’ve been hesitant to start investing or are worried about losing money, this episode is for you.
I’ll show you how to take action confidently, even in the face of uncertainty.
TRANSCRIPTS
Speaker 1 (00:00):
Do you have fear making that first investment or even just getting into alterna investments like real estate? That was exactly the fear I had to deal with. After losing everything and trying to come back again, I’m going to show you how I got through it as well as some of our clients have done the same way. Tune in. Hello, my fellow Ripples. This is Chris Miles, your cashflow expert in anti financial advisor. The show is for you, those of you that work so hard for your money and you’re now ready for your money to start working harder for you today. You want that freedom and cashflow right now. You don’t have to wait 30 or 40 years for it to maybe happen, but you want it today guaranteed, so you can live that life that you love with those you love. But most importantly guys, it’s not just about getting rich, but living a rich life because as you were blessed financially, you have a greater capacity, the blessed of lives of those all around you.
(01:01)
Hey, one big favorite I could ask of you if you would be so kind is that if you’ve been listening to this show or watching this show, you’ve enjoyed it, you’ve loved it, I haven’t already, just like and subscribed, if you’re listening to this on Spotify or Apple’s podcast or whatever, please leave us a review on Apple Podcast. I would love to be able to get a good review. If you hate us, don’t worry about it, don’t waste effort. But if you love us, please give us a shout out there. I know it’s not often I ask for things like that, but if you really do enjoy this show, please go there and do that today. So just the other day I mentioned that we had this annual mastermind that we have with our clients, and I noticed a common theme is that a lot of people were a little bit gun shy and granted our clients are still investing, but of course the biggest question that keeps coming out, and even with this one particular client that I even had spoken with one-on-one, he said, Chris, for me, I’m just nervous.
(01:53)
We know that apartments have had a hard time, but maybe it’s not quite the right time to get in. Maybe it is, but we’re not sure there’s turnkey rentals. And those have been okay, but the cash flow has gone down as interest rates have gone up. He’s like, you could lend money or you could do other types of syndications, but what if that person doesn’t do well? What if we could lose money? And you know what? That’s such a good question to have, and I bet you a lot of you have thought the same thing because thought I could go do real estate investing, but I’ve heard some things where I might be able to lose money there, but at least the stock market over time, it generally goes up. So I usually won’t lose everything, which is very true. Usually almost any case. I do agree that the stock market, even mutual funds especially won’t just go down to zero.
(02:37)
Stocks could go to zero, but mutual funds where you have multiple types of companies, it generally doesn’t go to zero. Now it doesn’t make you rich either it kind of mediocre risk or mediocre returns with maybe mediocre at high risk depending on what you’re invested in. And so it makes it a little bit tougher so you don’t lose all your money necessarily, although you could lose a lot and it could take years to get it back, but you really may not a lot either. On the real estate side. On the other hand, you’ve got great potential for returns way bigger than the stock market. But yes, depending on what kind of investments you do, you could lose money. In fact, it’s possible to lose everything. Anybody who says otherwise, it’s pretty much lying to you. Now, there is one kind of investment that’s not likely to lose all of its value, and that’s buying real actual property.
(03:23)
If you go into a syndication and that’s where you pull your money with other investors, you go invest in a ownership into an apartment building or you invest into something like self storage or businesses or whatever it might be, yes, it is possible you could lose everything, especially if they have a lot of debt on that property. And even if they don’t have a ton, as we saw more recently when banks won’t let them refinance because they now require double the equity in the property after the values are already come down of the interest rates and things like that, they don’t appreciate or they don’t have values. Just like typical appraisals with single family homes, those multifamily type things could be riskier. And so if you buy a single family home, for example, the likelihood of it ever going to zero is only if you don’t buy insurance on it and the property gets destroyed.
(04:10)
And even then you sell the land, you could sell off for a fraction of what you own. And so if you’re looking for something that’s kind of similar to stocks, yes, owning your own property could be something where you can actually have it. Now if you have debt on it, of course, yes, if you stop making payments, you could lose the property to the bank. But then again, how often does that really happen? If that were the case, you probably would try to sell it. It is possible to lose money. I did. It happened to be in the great recession where values just tanked and I was over leveraged in the sense that I didn’t have a lot of equity in those properties except for my own home, which of course, ironically because of the way the situation worked out, I ended up having to foreclose on it.
(04:50)
I couldn’t make the payments because the payments were definitely bigger, a place I live in, it wasn’t a rental where I was making money. And so it’s a valid thing to have because remember I went through that recession, I lost so much. And so to relate to if you’re having this kind of fear, here’s what I had to go through myself. I remember talking to this client, I said, it wasn’t like I just woke up one day and said, yeah, let’s just jump back in that real estate game that I just lost hundreds of thousands of dollars in, because remember, I took gambles, I took big risks, things that I don’t teach you to do on this podcast I was doing back then.
(05:28)
I remember the very first time I met, I guess I’ve seen Ron Phillips on this podcast before RP Capital. He was somebody I met actually about 11 years ago just after I started Money Ripples. And as I met Ron, I remember thinking, man, this sounds good. And I remember thinking also the way that they do properties with turnkey real estate properties, meaning that I don’t property manage it, which was part of the problem with my rentals that I was a very bad property manager, meaning that I was very bad at collecting rents. I was also very bad at screening tenants, kicking tenants out, and you name it, right? Anything deal with the tenants and trying to enforce any rules I was horrible at. I wasn’t very good at doing that. And so when he’s talking about here’s properties we can help you find, you know what you’re going to make up front, you know what he could rent it for pretty much with the mortgage rates, if you have the mortgage rates and about how much cashflow you’re going to create, appreciation is always a bonus.
(06:22)
But you don’t count on appreciation. You count on cashflow. And when he came from that perspective, I said, you know what? I could probably do that. And I was still scared. And I’ll tell you why, because funny enough, it was actually easier for me to buy my own rental property than it was for me to buy my own house. So with the rental property, I’ll talk about that here. I mean, I just started with one. You start with one. That’s the answer for you guys. If you want to figure out how do I overcome that fear, start small. Don’t have to go big. Even if you’ve got hundreds of thousands, if not millions of dollars, start small. If it’s that type of fund or syndication, instead of starting with $300,000, start with $50,000. If you’re starting with real estate, you might start with one, maybe two properties at most in the beginning and then stop and then feel it out, see if you like that kind of investing, and then you can add more later.
(07:10)
And that’s what a lot of our clients are doing right now. So for me, I came in, I started out with that property. I said, let’s go buy that rental property. And I did it and it was paying us awesome rent and I loved it. Here’s the crazy thing, guys. I actually bought that before I got back into buying my own property for my own family because yeah, I had the credit to do it, but I was so scared about losing my own home where my family lives. See, if I lost a rental property, it wouldn’t be fun, but it’s not like it’s going to affect my day-to-day life, but if I lost my own home, that’s a different story. And so I remember that it got to the point where my wife and I were renting. I had gotten remarried. We’d actually moved five times in six months.
(07:53)
You might think, how is that even possible? One, we took over somebody’s lease and then two, the next place we moved into was actually for somebody who was going out of the country. So we decided to house sit and pay them rent. And while we did that, we went to California, stayed in Oceanside one month, Carlsbad the next month just to try it out in the wintertime. And then we came back and we moved back here to Utah and we found a rental that was actually up in the mountains, and we kind of enjoyed it up there, even though we eventually did move from there. But we enjoyed it so much that we started to keep our eyes open for houses for sale specifically on a particular street. And lo and behold, we go walking on that street and what do we see? House goes up for sale.
(08:30)
We thought, oh, we were thinking about buying the year prior, but it’s like, okay, maybe we’re not quite there yet. My credit’s still not great, because remember, my credit was beat up even in the early 2000 tens from the recession and everything else. I was trying to recover from that. So my credit wasn’t great. So we waited another year and then was like, okay, here it is. And again, my credit was still recovering. I think I was in the high six hundreds by that point, maybe seven hundreds. I can’t. So anyways, we knew we could qualify for the mortgage at this point. And then one day it dawned on me, I start to realize I’m sitting down at my desk actually on this computer, and as I sat down there, I started to panic. I started almost sweat and had this anxiety, and I’m not the kind of person to have anxiety attacks very often.
(09:16)
It’s very rare. But I was having a legit anxiety attack. And the reason is this, because that property I put an offer on was for 625,000. The property that I purchased, no, this is in 2000. I think it was 18 or 17, something like that, 17 or 18, 2018 I think it was. So I made an offer for 625,000. The house that I lost in 2009, I had purchased in 2006 for 600, 12,000, almost the exact same price of home. Granted prices were definitely higher. That bought me more house. I wasn’t buying as big of a house this time around. But man, I started to panic and my wife’s saying, well, what’s wrong? I said, this house is almost the exact same price as the house I had purchased that I lost my dream home. Like, so what if it happens again? What if I were to lose this again?
(10:12)
And so she had to walk me through rationally, and of course the emotional brain has to calm down a little bit, but rationally she just walked me through. She said, Chris, listen, are you in a better financial position than you were? Then? I said, yeah, I am. Okay, great. Okay, what’s the rent, the payment we’re paying now? I said, it’s 2,600 a month. What’s the new mortgage payment going to be about 3000 a month. She’s like, and that’s almost the same payment as the rent payment. I’m like, yeah, but what if we lose it? She’s like, are we in a place to lose it? Are you the same person that you were back in 2006, which was over 10 years ago? No, no. I’ve learned a lot of lessons since then. What are you worried about? And she was Right. What am I worried about?
(10:53)
See, all that was manufactured in my brain. And the question you have to ask yourself is how many times do I manufacture fears in my own brain? Just even the fear of unknown. Maybe you just don’t feel like what’s going to happen? Well, if you don’t know what to do or how to do it, great, good help. Just like I did when I bought my first rental property, which I bought before my own home. I bought rental properties before that because again, I felt like I had support. I had somebody else helping me through that process. So sometimes it takes another person’s perspective, somebody to kind of get you out of your own head, get you out of your own emotions to do that. And that’s one thing I’ve noticed that with our clients lately, especially recently in the last year or two, because hey, we saw real estate get kicked in the teeth.
(11:34)
For some people, especially those invested in apartment buildings, this was the worst period they have seen in decades. Some of ’em, their entire careers being in this like 30, 40 years. This is the worst time in real estate back in 2022 when interest rates rose too fast that they couldn’t make moves, they couldn’t adjust fast enough. And of course, some of them are still dealing with the fallout to this day, trying to figure out what to do with the property, how to get it rented, see if it can cashflow enough to be able to pay for the higher mortgage payments if they become variable or not. Or they get fixed rates, but still they’re having to figure out how to get the cash out to renovate, which they’re going to do with the refinance anyways, and they can’t do that anymore. And then some of these guys, because they weren’t well prepared or they didn’t have a lot of experience, some of ’em were getting their butts kicked left and right, and they’re like, I got to lose the property and we’ll get zero out of it.
(12:22)
So legitimately, it’s okay to have some fear. Fear is there to protect you from real life threatening situations to deal with. It’s good to have some fear to prevent you from doing stupid stuff. But there’s the other part of this anxiety, what I was experiencing, which has no rational part behind it, or at least not a lot, it’s just more manufactured because we create these scenarios in our brains. Remember, I created a scenario when I had more than enough money, guys, I had more than enough money at this point. I was already financially independent and I was freaking out about buying my own house all because it reminded me of a trauma that I had earlier. Now I know these of you guys have done psychology and stuff, you get it. For me, at that time, I didn’t realize there was such thing as almost like PTSD or financial trauma that you can have that still carries with you even years later.
(13:14)
And the thing is, I remember I had somebody who I also reached out to as a mentor, and she was going through some of my fears and blocks and things like that, and she said, Chris, here’s the thing. You’ll make millions and millions of more dollars if you just get past the fear and letting go of the past, forgiving the past and moving to a new future. She’s like, you’re not the same person as you were then. Why do you fear it today? Now, you might be saying to yourself, okay, Chris, but I feel like I’m still the same person. I don’t feel like I know enough. Maybe I don’t know. I have the right resources or things available. Well, good. That’s a good place to start to build the education. That’s why you’re listening to this podcast. That’s why you’re learning about these things.
(13:54)
It may not even be my podcast. You might be listening to other podcasts too. Great. Whatever it takes, you feel comfortable. And it might just be you just have to have that extra perspective. Just like our clients will use us often. They’ll say, Hey, I’m a little bit nervous about this. Are you sure this is good? I’m like, Hey, there’s risk with anything. And they’re like, I know that’s the problem. And I know you can’t advise me, Chris, but is there, what kind of reassurances do I have? And so we have to walk through it. Okay, what can we do to protect it? For example, if I buy a turnkey property, I can always back out at certain times. I can back out when they do the home inspection report and I say, I need these things fixed before I buy, before I close on this.
(14:35)
And they’ll say, no. Okay, great. Well, then I back out. What if the appraisal comes in low? Even better, if the appraisal comes in low, I’m going to tell ’em, Hey, listen, I want to buy it at appraisal, not the price that we negotiated. Well, I need you to buy at the higher price. Well, then I’m out. Give me my earnest money back. There’s so many ways to get out of those deals and you can’t tell the future. Of course, things could happen. I had a property that, seriously, the first month that I bought the property, the fence blew down. It was a property in Alabama. The fence blew over. We had to pay a thousand bucks to get it up even before we had a renter. That stuff can happen. But don’t let that fear, don’t let the possibility of something going wrong keep you from doing something that could be going right.
(15:18)
You’ve got to make sure that you’re always working towards a future. Yes, have a good offense, but no, you can have a good defense. This is why we teach about having good cash reserves, infinite banking, which is a great place to store money and still make better than point nothing percent of the bank, and it’s tax free and it’s protected from lawsuits. Creditors, do you have a good amount of money sitting in a place that’s safe like that? If so, awesome. You got some money there that you’ll never lose. You can never lose money with an infinite banking policy. Banks, you’re not supposed to, but it’s possible, but you’re not supposed to. You can keep money stored there and then say, let’s just use a little bit of money. Lemme just try that one property now. And that property could end up being a lemon.
(15:54)
And you might be able to say, what do I like this or not? And you might decide you don’t want to do that at all. Great. Every investor has a different formula, a different recipe for how they get to financial freedom. And there’s not just one path. Anyone who says differently is just trying to sell you some kind of crap and say, this is the only way, guys. There are so many different avenues and different investments you can do to get you to the same point of that financial independence, that financial freedom is possible. That’s why you can custom make your own plan. That’s why you can actually build it out step by step, brick by brick, build the way that you want it to be. And even for the investments, the best thing ever, the question you have to ask yourself is, is that an investment I want to be in?
(16:33)
Even if I were financially free, would I want to be in these kind investments or not? If not, then don’t do it. Then we find another way. That’s the beautiful thing about this. There are so many options. I never had that kind of feeling when I was a financial advisor, when I felt like, well, what are my options? Annuities, mutual funds. That’s pretty much it. There wasn’t a whole lot. It was like there was one path, and if that path didn’t work, you were screwed. You have more options available to you, so many more that you can be taken advantage of. But I’ll tell you, the number one thing that prevents people from being able to become financially free is that level of fear. And the way to overcome that fear is one, knowledge can help you overcome that fear. Two, taking action because that first piece of action is great.
(17:20)
And three, you don’t have to do it alone. You can always do it with somebody else helping hold your hand so that you could take that first step. I’ll share you one last story. I had a client that literally waited about two or three years to do his first investment. He was amazing guy, very intelligent, very engineer minded, and that was part of the problem. He would overthink. He would overanalyze, and then he would wait so long that he would just never take action. And I remember there was a time he came to one of our annual events that we did our annual mastermind, and he started talking to other clients who of course had the same fears. He did, right? The same exact fears. They were worried about it too. Even if they’ve done it before, they’re still a little bit apprehensive. They were still hoping it worked.
(18:01)
They didn’t know if it was going to work. They had to see proof of concept, but they had faith because one, I had faith because it worked for me and two other people had done it too. And so he started to borrow their faith. He started to borrow their confidence because they had to go through that same fear, overcome those same things and do it themselves. He borrowed the same thing. And guess what guys? He did it and he didn’t just do it once. He then bought another and another and he got into more investments. And guys, that’s how it works is that you just got to try it out. It is just like you had to try out something for the first time. Every time in your life, think of every good thing you have in your life. Did it take a little bit of risk?
(18:37)
Did it make you nervous? That first date that you might’ve had with your partner, even the first proposal if you had to propose to them, was that nerve wracking, the amount of faith to think, I hope this works out. And you might’ve had relationships that didn’t work out, but that stop you from having relationships. Well, maybe some of you it did, but for others of you, you probably didn’t. You kept trying, didn’t you? Even if you fail a little bit, even if you failed at a test, even if you failed in sports, you failed in anything in life, you kept trying. It’s the same thing with investing. You just keep trying. You keep going. And I’ll tell you, that’s some of the best advice I got from one of our own clients when they were talking about the fears they’re having as they got together in this mastermind.
(19:19)
They said, yeah, the thing is you just keep going. You don’t quit for other stuff. Why quit for this? If you’re diversified well enough, which is what we teach a lot of our clients to do anyways, Hey, even if something does happen to go wrong, which is a vast minority of the time, you’ve got everything else that’s still going right? And in many cases, we have one client that 25% of his money was actually lost in some the investing he did, but the other 75% we connect him with that 75% was still working. He said, I’m still better off than I was in mutual funds. I’m still making way more cashflow and returns than it was in the stock market. Guys. That’s the beauty. But remember, it’s always nerve wracking. So last summary of this advice. If you want to be able to try something, you got to be able to willing to try it, learn about it.
(20:06)
Definitely get the education. Don’t go in blind, but definitely learn about it. Surround yourself by people have actually been there and done that. And then of course, the third thing is try even just a little bit. Just try a little. Get that little test and try it out. See if you like it. If it works, then do a little bit more and then a little bit more. And that’s how you build up your portfolio. Same way I had to do it, especially when I had to test my own faith. Heck, even buying my own house, which by the way, I did buy my own house and then I bought another that was even bigger than that and still had to deal with fears. But I overcame that because I now had a different perspective. I could say, you know what? I’m not the same person.
(20:42)
I have more knowledge than I had then. More wisdom than I had back then, and let’s submit it. My finances were way better than they were back in 2006. I was more prepared. You probably are not any different than I was or any different than a lot of our clients that also had dealt with those fears. They had money saved up. They knew they could do something with it, but they weren’t sure. But you’re just willing to take those first steps. So my advice to you is be willing to take those first steps because once you try the first steps, it just gets easier and easier every time you try it. Guys, we’ll go and make it a wonderful and prosperous week. We’ll see you later.