Let’s talk about cash flow today. Our guest is Chris Miles, cashflow expert, “anti-financial advisor”, and the founder of Money Ripples. In our conversation, we talk about how to analyze investments, the relationship between cash flow and appreciation, and how to make sure that cash flow is king – as we all know.
Whether you’re an active or a passive investor, this episode will help you assess your cash flow better.
Learn more about Chris and his journey at reiclarity.com!
“The next thing I know, I went from a millionaire to an upside-down millionaire in 2008. I actually ended up being over a million dollars in debt.”
Chris started his career as a financial advisor, but he learned that the traditional way of advising people about their finances just didn’t make sense for him. So he pivoted to real estate investing in 2006.
Soon, Chris became a very successful investor. His strategy was appreciation play so he acquired many higher-priced properties, waiting for them to appreciate. However, during the 2008 financial crisis, he lost almost all his investments and ended up being over a million dollars in debt. This taught him a lot of lessons. The two most important were to not count solely on the appreciation of a property and to track his money.
“One of the worst things I did was locking up my equity in my house when I could have kept that money in cash reserves.”
Chris started a company that provides financial advice, Money Ripples, in 2012, using the lessons he has learned during his real estate career. He shares a few tips on how to create more cash flow.
- Get your money out of “prison”. Get out of the equity of your home, the stock market, and especially 401(k)s and IRAs.
- Invest in real estate, as that is one of the safest true assets that not only give you great tax breaks but massive cash flow as well.
- Be diversified to a degree, but make sure you’re still able to manage your investments. Don’t be overly diversified.
Chris talks about unconventional ways to invest. One of these is investing in life insurance. If the whole life policy is set up correctly, it not only has the common death benefit but also acts as a kind of bank account. It generates around 3-5% interest, it’s not getting taxed, and you can borrow from it.
Chris’ advice is to have a limited amount of equity in your properties and use that cash instead to purchase more and grow your asset base. Low-risk equity is better than high-risk cash flow.
“Don’t make one-year, two-year, three-year goals. Just focus on the next step, that’s all you need to know.”
At the end of the episode, Chris picks an action step from the REI Clarity Framework that is the most valuable to him. This is “Forecast Your Future”.
According to Chirs, the biggest problem people have is that they don’t really understand where they’re going in life. You have to be clear about the direction you’re headed so you can always plan the next step.
Mentioned in the show:
Learn how to grow your portfolio and reach incredible success the right way! Visit us here for everything you need to know: www.shineinsurance.com/reiclarity.
Special thanks to Chris Miles for taking the time to share so many great insights with us
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