Are you waiting for a sign before investing? What if that’s costing you years of your life? What are some of the best investment opportunities right now? Our guest is one of Money Ripples’ clients, Eric Vanetti, who offers his experience of overcoming his fear of the unknown and investing, where he can retire his wife and work because he wants to, not because he has to. How did he become financially independent? What is his secret sauce? Find out where Eric is excited to invest his money right now!
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What Investments Did This Client Do To Become Financially Independent In 2023
I’ve brought on a special guest today. He is someone that you may not have heard of. I have Eric Vanetti. He is one of our clients here at Money Ripples. Many of you guys always keep asking me, “What does this look like when the rubber hits the road? How do people create passive income?” I talk about the concepts all the time, but I figure it’d be valuable to bring on somebody who has been there and now doing it so you can get that feel.
A little background on Eric. Besides being an awesome guy, he and I have been talking back and forth whether through email, phone, Zoom, or whatever for the last few years. The one thing that’s amazing about Eric is that he went into the field that I was planning to go into. He went into organizational psychology.
He worked for Xerox for a couple of decades there and now, as a consultant being able to help companies and consult with them and things of that nature. He’s now empty-nested. It’s someplace that I’m still hoping to become someday. He got a dog, living a wonderful life, and has a big focus on not only the money, but I love that he has a focus on health, longevity, and happiness within his family. Eric, welcome to our show.
Thanks, Chris. It’s a pleasure to be here. As you know, it has taken us a while to make this happen. I’m looking forward to our conversation. I had no idea that you wanted to be an I/O psychologist. That was interesting.
I told people I always go into business consulting but I was going to organizational behavior. I was going to get my MBA in that and try to consult companies. I’ll tell them what they’re doing wrong so I can walk out with a big paycheck and they can fix their employees and things like that. You took the path that I almost took myself. Tell us more about you. Give us more about your background, how you were raised growing up, and even with your career and everything, just your life path here.
Most people would say it was an interesting upbringing. It’s just life but my father was a physician. He’s passed now, but the interesting part of it was he was married 9 times to 8 women. One of them, he married twice. As I got older, he and I were always best friends. It wasn’t like it damaged the relationship or anything. I learned to appreciate him for who he was and it helped me try to appreciate others in life in a different way, even though they may not have the same perspective or values that I do.
I was the opposite. I wasn’t going to get married until I got my education out of the way and I was situated and stable. I was only going to do it once and that was it but life is not that easy. That’s from a family side. Most people would say that was not a normal upbringing, but it never felt that way. It felt the opposite.
You mentioned I worked for Xerox for twenty years. I got my PhD in I/O Psychology and then I went to work for Xerox. I worked in the US and abroad for a few years as well, which was a great experience, and then shifted into HROD consulting. I’ve been doing that for the last few years. My wife Gigi is someone that I’ve known pretty much all my life. We went to high school together and in high school, I dated her best friend but we went our separate ways. After both being divorced 32 years later, we came back together and ended up being married. We’ve been together for a while now. Life is funny. The twists and turns it takes.
You can’t say you married your high school sweetheart. You married your high school sweetheart’s friend.
She was always in and out of our house. I knew her as another one of the gang. It was interesting. I had a work gig in Boise, Idaho, and I was living in Charlotte, North Carolina at the time. She and I had connected through Facebook, which I don’t even do anymore. At the time, we were friends on Facebook and I reached out to her and said, “I’m coming to Boise for some work.” She said, “Let’s get together.” We had dinner and it was like 32 years previous. We never skipped a beat and we’ve been together ever since. It was awesome.
Where do you guys live now?
We live in the Phoenix area in Tempe.
You were going down this corporate path like many have and even many that are tuning in to the show right now. When did you first start to think, “I need to get my mind around doing something different?” Maybe trying to do the whole get out of the rat race or something more in the alternative investment space. What turned that on for you?
Maybe a combination of things. I always had an interest in investing. It’s something that I’ve always found fascinating. I love reading about historical investors, the John Templetons of the world, and the Warren Buffetts that everybody knows. Also, even more common, or maybe some folks don’t know like Howard Marks who started Oaktree Capital. He’s a brilliant financial mind. He has a wonderful newsletter every month or so.
I’ve always been fascinated by it. I’ve always stuck my toe in the water and dabbled with stocks and bonds, more so with stocks. I never fully understood bonds until I got a little older but it was always from the standpoint of accumulation. I never thought about it from an income perspective. You’re working and you’ve got the income you need. It never occurred to me that maybe I needed to think differently about that as I progressed through different phases of life.
It started to resonate with me more in the last few years as my wife and I started thinking more about, “We don’t want to do this forever.” She’s still working. She’s talking about retiring. I still like what I do in a way that I can still add value and I don’t have to work that hard to make a decent dollar. The problem with my work is I’m always on the road. It does impact my life in a significantly detrimental way at times because I don’t have enough time at home. That’s the big downside for me.
When I got to the point where I said, “I don’t want to do this all the time. I don’t want to be living in a hotel.” I started thinking more about, “We’ve got to shift from accumulating money to how are we going to draw that money and live off of it or try to make it work more for us as opposed to us working for it.” It was a mindset change. When I became introduced to you initially, you and I started talking and you exposed me to some potential opportunities that I had no idea or anything about.We must shift from accumulating money to how we will draw that money and live off of it or try to make it work more for us as opposed to us working for it. Click To Tweet
I had never gotten into this space of private equity type of investments. I became more intrigued about it and realized that this is a time of life where we need to start shifting how we think about things and how we’re utilizing our money. Not to get too long-winded on it, I read a book not too long ago too that impacted my thinking and it’s called Die With Zero.
I don’t know if you’ve heard of that one. The gentleman who wrote it, Bill Perkins is his name. He’s a former hedge fund manager and maybe still is but it is an interesting book. I had always been raised that you save, earn, and then die and everything gets passed to your heirs. You’re saving to almost build up this pot of money that other people are going to then enjoy and benefit from.
I watched my grandfather die from a stroke after working all his life and hardly ever even taking a vacation. I watched my father die from a stroke and he was semi-retired at the time. I said, “I don’t want that. I don’t want to go that way. I want to start enjoying life.” That book shifted my way of thinking because it’s not so much that he’s saying, “You should die with zero.” He’s saying, “You should start to think about how you’re going to spend your money.”
At some point, you’ve accumulated enough, and now it’s time to shift to thinking about how I can spend this money and start providing money to my heirs now so they can use it as they need to in different phases of their life versus dying. They’re 60 years old and they’ve got all this money that they’re probably never going to utilize. I thought, “He’s right. I need to shift my mindset.” It got us thinking more deeply about it and that’s where I transitioned to more of an income-based type of approach and I have very little money in the market these days.
That’s probably good, especially after 2022. It was brutal, wasn’t it?
Back in 2018, and I posted this on Ripple’s Forum, somebody asked a question about precious metals and I provided my two cents. I know you read it because you commented and so did Craig. In about 2018, I got into precious metals because I thought at that time the cut was coming, but nobody could tell you when. No one has a crystal ball but I was preparing for that.
I started shifting money into gold and silver and investments related to that and still have it sitting there because it’s done so well. It protected us during the last year. We ended up about 1% ahead of the year versus people losing 20% to 30%. That doesn’t account for your income in private equity investments because you don’t know what the returns are on some of those things initially.
If I recall, the very first time you and I got connected was through Brian Fouts who was a previous guest on this show from The Elevation Group. Our first conversation was even about infinite banking, but then it evolved from there into the investing side.
It is one thing that we haven’t done. Greg and I went to work with Parker and got quite far down the path. I then decided I’m not going to do it at this moment in time because we were trying to do some other stuff with the money. However, I need to go back and work with Craig and Parker to revisit that because we still want to establish 1 policy or 2 that way. I can see the benefits of it.
Also, with the investing side of things too. What were some of the obstacles or even the challenges mentally for you to have to shift? As you said, you’ve been in that accumulation mindset. Shifting to that passive income type mindset, although it shouldn’t be very different, it’s such a night and day difference. What were some of the challenges you had and how were you able to overcome that to bridge that gap and say, “Now, I see it. I’m looking at my money differently?” What was that for you?
For me, it’s fear of the unknown. Let’s put it this way. If your investments are through the stock market, in our minds we believe, at least, and I did because I would study stocks. I’d study companies that I thought I was interested in and so forth. I thought that through that type of analysis, I could determine what a good investment is or what’s going to be a safe high-quality investment that might throw off a dividend every month or a quarter and you can earn some income that way
There’s truth to that but when you start thinking about doing stuff like working with land acquisition and oil and mineral rights for example, it almost feels like you’re speculating. In your own mind, that’s the process you work through. It’s so much safer and it’s so much more predictable to invest in a stock that you know is a high-quality company than to do something like this where you don’t know anything about the sponsor necessarily.
What I trusted and for me, what helped to be honest was you, Craig, and your team vetting the sponsors before you ever even brought them forward. That was huge for me because I didn’t know what I didn’t know. I’m much more comfortable now having met some of the sponsors and talked to them multiple times. My wife and I went out on an Oklahoma City field trip. It was a great learning experience and also a lot of fun.
I am looking forward to their partner conference in San Antonio next week, which we’re going to go to. I know some of the Ripplers are going to go. You start to get a comfort level with them as a team and as a sponsor and you realize that this is not only a good investment opportunity given the macro environment that we’re faced with these days, but these are the real deal. These people are the real deal and they’re working hard to try to not only protect our money but help us grow it and generate income.
You can’t help but like Troy. He’s a personality with high energy and a very likable person. That’s what got me over the hump. I had done a little bit of private equity investment prior to coming to meet you. There were two multifamily investments that are in my backyard in the Phoenix Valley. They are no-brainers when you looked at them as a value add multifamily in that market because of the way that market was growing and continuing to grow. Also, the demographics were very favorable.
We’re still invested in those, but those aren’t income investments. They’re meant to be value-add and then flip it and earn some return from that flip. We also did a very small investment in a ground-up apartment complex in Park City, which seemed like a no-brainer to me too based on the locale and the growth in that area. Also, a very small investment too in a medical office type of portfolio, which seemed low-risk as well, but none of those are income investments.
That was my exposure and I realize I’m putting all this money into either stocks or these types of growth types of investments, but I’m not doing anything to rebalance it into getting me closer to my goal of not working so doggone hard. I am spending more time with my wife and my dog. I am traveling and doing things that we want to do as life experiences that we haven’t done. It’s partially that type of change in mindset. It was partially knowing with confidence that you guys had vetted these sponsors prior to even bringing them to us as potential investors.
You’re saying this is an opportunity to consider and it’s partially getting to a point in life where my dad used to tell me all the time, “S*** or get off the pot, son.” That’s what he would say. That’s where I was. It’s like, “It’s time to do that.” You got to make a decision. Are you going to start taking this seriously or are you just going to do what you’ve always done? That’s what resonated with me.
It’s a very true statement. My dad has said the same thing to me before too. I can resonate with that quite a bit. That was going to become the lead to my next question for you. There are some people right now because you turn on the news and you can’t tell if it’s a recession or if it’s a boom time because the government says everything’s great and we have the lowest unemployment ever.
We got other people saying, “There’s so much going on in the market. Real estate settling down. The stock market’s not sure where it’s going.” There are a lot of uncertainties. There are several people reading this right now maybe like you were where you’re like, “Where do I turn, or is it even the right time right now?” Knowing what you know now and having been in that place before, what would you say to somebody today, in the year 2023, about investing?
It’s a scary time in a lot of ways, but if you have a historical point of view on the markets and just life in general, you realize every generation that preceded us has said the same thing for some reason. We always think our time is different, but there isn’t much new and different under the sky or the sun when it comes to markets. There’s always a risk. There’s risk associated with any investment. I’ll give you a perfect example. What did I do right before the Ukraine war started? I invested in Russia in a fund, in an ETF. “That was a brilliant idea.” The fund got locked by the government and you couldn’t trade on it and then lost every dime I put in there. You live and learn. That’s the nature of life.
I have learned too, with these investments that we’re talking about now the type of investments that you and your team bring forward, you have to have patience. If they don’t pay out from day one, they’re not going to. It doesn’t work that way. It’s not the structure of the investment. You have to have some trust. You have to have some patience. As an example, in the last year, we invested in three mineral portfolios as well as their debt fund.
The debt fund is a steady fixed income, which is guaranteed, but the mineral investments are now starting to pay out two of them. One of them is too new to pay out yet but last month, we saw a nice bump for the first time. It was starting to feel like, “This is getting real now.” We did another turnkey investment, a real estate investment through Melissa Hamaker and her husband. I don’t know what they’re branding themselves as now. I haven’t seen that.
We also did a carwash portfolio through PassiveIncomeInvesting.com. We’ve done those six investments through Money Ripples bringing those to us. They’re all at different stages. It’s something that you got to have some patience and realize this is going to build and over time, it’ll accumulate the monthly income that you’re looking for. We are still picking our spots. We want to do some other things. You invested in land, correct?
We got lots of those things.
We’re on the waiting list for getting into land. I’m looking forward to trying to do that. At some point, you got to take the plunge and have some faith. Once you start to see the rewards come out of that, it makes it easier.
That’s a great point because even if somebody decides to get off the pot next year, they may still have to wait another six months before they see some real results and that’s after they’ve already gone and they got comfortable. They got to know those operators or those people doing those deals. You might be waiting another year. You might be waiting 1.5 to 2 years if you keep delaying and procrastinating where even if you took action right now, you can be easily waiting until late 2023 before you start to see that money coming in and getting that momentum that most people are missing out on right now.
The other thing that helped me at least is I did a little bit of analysis on, “What’s our net worth and how much money do we need?” You make some assumptions. There are tools out there that can help you model based on how long you think you’re going to live, how you want to spend your money, and “retirement.” You going to front load that spending. You’re going to backload it. How much do you want to save and pass on? You can model and do some projections on all those kinds of things.
I did that and it gave us an intelligent way to look at the reality of the situation and feel more comfortable that we have enough money. That’s not the issue. The issue is, “What are we doing with it to earn the income so it’s working for us to live versus me and my wife working a job to continue to earn more income to live?” That’s the shift in mindset that got us over the hump.
That’s a good point. By the way, congratulations to your wife. You guys will be able to get her to retire by the end of this year, it sounds like.
Yeah. The sooner the better.
She probably feels the same way, I’m sure.
She likes to do artwork and she does encaustic art. I don’t know if you’re familiar with that medium, but it’s wax-based. It’s cool. She wants to do that full-time and I keep telling her to do it. She’s selling her stuff on Instagram and on Facebook. Make it a business if you want to make it a business or just have fun with it or whatever you want to do. That’s what gives her joy.
I know you’re at that point too. You’re not only looking just to retire. You’re looking to work optional because you love what you do as well but it’s nice to know you have the option to work or not to work.
We started thinking more about, “What are some life experiences that we haven’t experienced?” Things that we want to do that we haven’t experienced. A good example would be, my wife wants to walk the Camino de Santiago in Spain and Portugal, the famous pilgrimage trail or some part of it, at least. I’m 62 years old. I keep in shape, but at some point, I’m going to be too old to even want to do that and that’s not that far in the future.
Is it realistic to think you can put that off until you are 75 or 80 and still be healthy enough to do it? That’s a gamble. I’d rather do it now. It’s starting to think about that. What are the things that we could wait to do later in life when you’re potentially less mobile but still able to do it versus the things that you’d want to take advantage of now while you’re still healthy and perfectly fit enough to do those kinds of things?
That’s one of my bucket list items as well. You got to block off that good minimum of 30 to 40 days to do that if you want to do the entire walk all the way to the Portugal coast.
There was a good article in the New York Times that I read. He’s done it twice. He’s probably about my age or maybe a little bit younger, but he’s done it twice and he did it recently with his son who has just graduated high school or in college. He was talking about how it was such a life-changing experience to do that with his son. They did the whole thing. After the walks, his son said, “That’s the only 10 out of 10 life experiences I’ve ever had, Dad.” I was like, “That’s pretty cool.”
Eric, I appreciate you being on. You add such great value and so many good nuggets of wisdom you have here, especially with what you’ve experienced already. What would be one last piece of advice you’d give to people here?
I would say do what you love. Life is short and it goes faster, it seems, the older we get. Do what you love, otherwise, what’s the meaning?Do what you love because life is short, and it goes faster. Click To Tweet
Again, I appreciate your time and great experiences. It’s been a pleasure to have you on.
Thanks, Chris. I appreciate it. Hopefully, somebody will get some benefit out of what we’ve chatted about.
It’s guaranteed. I can already tell.
I look forward to meeting some of the Ripplers in San Antonio at the conference.
Same here. I love the advice that you said. You can either just keep sitting or get off the pot. That’s what it’s about. You have the choice, the power, and the control to do it. When this feels right, go for it. Even if it’s scary, that leap might be worth it. You’ll never know. You can always reach out to us if you have any questions at MoneyRipples.com. Go and make it a wonderful and prosperous week. We’ll see you later.
- Eric Vanetti
- Die With Zero
- Brian Fouts – past episode
About Eric Vanetti
Eric has a PhD in Organizational Psychology and after working for 20 years for Xerox Corporation, he has now practiced HR & Labor Relations consulting for the past 15 years. He’s always loved traveling, exploring new places and cultures, outdoor activities and lifetime learning. These days he’s particularly interested in longevity research and taking more control over his health and wellness. He and his wife, Gigi, are “empty nesters” with two daughters and their dog Gus.