Optimizing Google Ads Performance Max for Lead Generation | YouTube Q&A Replay

[00:00:00] Mike: Welcome back to The Better Than Rich Show. This episode is featuring Chris Larson. He is the founder and principle of Next Level income. Since retiring after 18 years in the medical device industry, he dedicates his time to helping others become financially independent through education and investment opportunities.

[00:00:20] Mike: Chris has been investing in the in and managing real estate for over 20 years while completing his degree in biomedical engineer. And has an MBA in finance at Virginia Tech. He bought his first single family rental age 21. Chris expanded into development private lending. Buying distress debt as well as commercial office and ultimately syndicating commercial properties.

[00:00:44] Mike: He began syndicating deals in 2016 and has been actively involved in over $1 billion. B 1 billion of real estate acquisitions. In addition to real estate, Chris owns multiple car wash locations across the southeast. Chris lives with his wife and two boys in Asheville, North Carolina, where he loves spending time with them.

[00:01:05] Mike: In the outdoors and enjoying food culture and everything that the region has to offer. In this episode, Chris does a deep dive into how to leverage your whole val whole life cash value, life insurance policy how to start creating cash deals and how to start creating a foundation for wealth for your future.

[00:01:24] Mike: Get ready for an incredible conversation with Chris Larson.

[00:01:29] Mike: So welcome back to The Better Than Rich Show. I'm your host today, Mike Abramowitz, and we are here with Chris Larson. Special, special treat next level income. This book, I'll tell you, it is a short, short, short read. It also was paired with an awesome audio book, but don't let it fool you this hundred pages Held my attention the entire time. I learned a ton. I highly recommend you to get a copy too. Chris Larson, welcome to the Better of the Rich Show Podcast. We're excited to have you here. I can't wait to pick your brain on syndications. Welcome to the show.

[00:02:02] Chris: Mike, I'm fired up and

[00:02:04] Chris: we kind of go back a long way, even though we just met,

[00:02:06] Mike: That's right. And interesting cuz I know you sold Cutco 1997 up in Maryland and we were kind of jamming a little bit about that. And how we got connected was we got Cutco connected through Rachel Richards who was on the show, and she mentioned you on the episode.

[00:02:20] Mike: And I was like, all right, this guy's the syndication deal. He's the real deal. Let's have him on the show. So Chris, if you could just walk us through, I'm just gonna dig right in. You've broken down some unbelievable content in your book. you broke it down to someone could take your book, someone can go listen to your podcast, and they could start doing some investing and start putting their capital work.

[00:02:41] Mike: How did you. Into the game. You have a billion dollars of real estate acquisitions underneath your name. A billion.

[00:02:50] Chris: That sounds big when you say it.

[00:02:52] Mike: Yeah,

[00:02:52] Mike: I mean that's huge. So.

[00:02:54] Mike: talk to us.

[00:02:54] Chris: Yeah. So first off if you're listening today, you want a copy of the book, just go to next level income.com and you can click on the book link. And as you know, Mike, you can put your address in and I will send you a copy. I'll have my assistant send one out today when you put your address in.

[00:03:09] Chris: And the reason I wrote the book is, really. Kind of at the heart of what you just asked me, Mike, it's to give you the, shortcuts to not make all the same mistakes I did because real estate, while it is a get rich, slow game, I learned a lot along the way. And how I started was I started small, I started buying single family properties, which is great, and especially if you.

[00:03:31] Chris: of the big advantages of real estate that I talk in the book, it's, leverage. And I bought my first property at 21. I was in college and I bought one of the townhouses up the road from where I live. And now we call it a house hack, right? We have all these names, that we've created around some of these strategies that are out there.

[00:03:48] Chris: But at the time I just thought it'd be, it'd be cool to own a. Of real estate that I could rent out to my friends and essentially live rent free. But my big thing that I was doing at the time, Mike, was I was day trading and I was actually doing pretty well, like I was making like $5,000 a month, some months as a junior in college day trading.

[00:04:06] Chris: But day trading is not investing.

[00:04:09] Chris: It's a job and it's a very stressful job and it's very risky as well. So. You know, the business of sales, sales is stressful, but, sales has a lot of upside. Your income is at risk, but you have a lot of upside, your downside is kind of limited.

[00:04:24] Chris: It's like, well, maybe you don't make money, but if you don't make a sale, it's not like somebody comes and actually removes money out of your pocket. Whereas if you make a bad. You wake up the next morning or you check your balance at the end of the day and it's gone down, your bank account has gone down.

[00:04:41] Chris: It's kind of like if you were a bad salesperson and the company said well hey Mike, you had poor service today and your bank account goes down in value. And I was like, this is not how I wanna live my life. I was like, there's just gotta be a better way, you know, than.

[00:04:56] Chris: And it dawned on me that was not investing. And I continued on this journey for, financial, literacy figure out how I can become financially independent as quickly as possible. And I read, during that period, over two 50 books. I was reading book a week. By the way, if you wanna read a lot of books, read a speed reading book first, that's a great way to do it.

[00:05:14] Chris: Or just get used to listening to books very quickly. So if you download my book on audible, Listen to it at 1.2, 1.5, two x speed, and you can really rip through some books when you do that. But what I discovered during that journey was that real estate provided a lot more stability. It provided the ability to provide income, and I always say, now you have to have passive income to have true freedom.

[00:05:37] Chris: It provided the ability. Increase your capital appreciation and in a lot of ways, like what we do, you can force that appreciation. And then one of the cool things is you have leverage. So that first townhouse I. It was with less than $3,000 and it wasn't expensive. It was a $90,000 townhouse. But I bought that and like I said, it took me about 15 years to really figure it out.

[00:06:00] Chris: But I think this'll really highlight it. what happened was when I sold that townhouse, I did what's called a 10 31 exchange. I paid no tax. I bought a seven unit office technically a condo , in a larger building I took that $3,000 initial seed investment, bought that property.

[00:06:16] Chris: Two years after I bought it. It was appraised for over $800,000. And today that property pays me over $3,000 a month, and I've gotten my equity back a. Of what I put into it, and I still have not paid any tax on that initial money. So, when you say over a billion dollars, there's a lot of factors that go into that.

[00:06:35] Chris: Time leverage, working with a team and working with other investors to do it have all been factors in that. But that little story I told is something that anybody can do.

[00:06:45] Mike: I'm breaking this down, Chris. so I have a couple of follow ups on this. And by the way, kudos to you, man. I mean, for you to be able to do what most people talk about doing, it's like, yeah, let me take a small investment and, put it into this house and then turn that into the next thing.

[00:06:58] Mike: It's like, people talk about this, but for you to break it down in simple step by step is what I really appreciated about your book. And I wanna get into a lot of that. But right now I wanna break down what you just said. You're 21 years old. You're getting your MBA in finance uh, your degree in biomechanic engineering at Virginia Tech.

[00:07:14] Mike: And you bought your first single family rental, which was, you said it back then as 90 grand. Does this still apply today? I mean, today

[00:07:22] Mike: it's a little different than it was back then, like getting approved mortgages, turning that $3,000 and, getting approved at 21.

[00:07:29] Mike: Like, how does that line up for today's, in today's dollars in today's market?

[00:07:33] Chris: Yeah, that's a great question. So first off man, I'm looking at some of the books on your bookshelf. You got a heck of a collection back there. And here's the thing, I don't know if you have Robert Kiyosaki's book back there rich Dad Port, but I figured that's why I was kinda, scanning, but here's the. Robert Kiyosaki says, the deal of a lifetime comes along every day. So a lot of people can listen to that story and say, oh, well, it's, yeah, Chris, well, you started when you were 21, or, yeah, you could do it back then. You can't do it now. Well, hey, guess what? We didn't have Airbnb back then. I couldn't do Airbnb back then.

[00:08:04] Chris: Right. You could do Airbnb. Now. I got a friend he makes about seven figures a year on Airbnb. He just started back in 2019. So, , it's not really important what the specific strategy is. It's the vehicle, right? So you say, Hey, there are different vehicles. There's cars, there's sports cars, there's trucks, there's dump trucks, there's jets, all kinds of different vehicles out there.

[00:08:25] Chris: They can get you from one place to the next. That's real estate. There's all different types of real estate and strategies within real estate. That being said, you can still do that today. It might not be in your back. It might not be in San Francisco, it might not be in Chicago or New York City, but there are places in the country that you can, use that exact same strategy.

[00:08:43] Chris: The numbers might be a little different but lemme tell you how I did it specifically and how you can do it today if you're trying to figure this out. So first off, , I didn't have credit. I had a credit card. I got a credit card fairly early cuz I was like, you know, a credit card to start to build credit, but I couldn't get a loan.

[00:08:56] Chris: So my mom signed on the loan with me and then I ultimately bought her out of that property is how I did it. And then, I rented out two of the rooms, so here I am. I had a three bedroom townhouse. I rented two of the rooms out, and I hear it today, Mike. We have two Airbnbs on our property in Asheville, and I tell people, Hey, we, we do well with them.

[00:09:15] Chris: It helps pay the bills. And people say, well, I would never wanna have people on my property. I would never do that. So it's like, okay, You have to be committed to your goal, know, you have to have a plan, and then you have to be educated. There are ways to do that, and there's people out there that can help you do those things, It's like, okay, great.

[00:09:33] Chris: I was basically living rent free. That did not make me rich, And it took me 15 years to get to the point where I could turn that investment into meaningful cash flow every month, so you have to be disciplined to do that. But it's just like anything else. If you have the right mindset, You're looking for deals.

[00:09:48] Chris: I just had one come along in the past couple months here. That is one of those, you know, once a year deals that comes by. It's actually not technically real estate. We can talk about that one a little bit later. But you've gotta have the right mindset. You gotta be looking for opportunities.

[00:10:01] Chris: You have to have the right network and be willing to learn and do those things. Then you have to be disciplined. So when you put your plan in place, You say, okay, great. Now I've on paper, maybe you've made a hundred thousand dollars on a property. If you're like my friend that sells his, house for a windfall and buys, a 20,000 watch after paying tax on the game, that's not gonna get you wealthy.

[00:10:21] Chris: You know, It might make you look good, for a little bit, but it's not gonna get you wealthy.

[00:10:24] Mike: So here's a, couple curiosities, the Cliff Notes version is I bought my first house when I was 20 and then 21 and 22. So I had three properties before I graduated college. Very similar path. My path ended a little differently where my path uh, for those of you that know the story or don't.

[00:10:39] Mike: This was 2006 to 2008 . So I got crushed, man. So I got absolutely crushed. I lost the properties, $130,000 in debt. My credit score went down to 400. I was near bankrupt, like my story was a very opposite of what you just explained, because I wanted to do what you said. According to Robert Kiyosaki's book you know, I read Rich Dad, poor Dad, I'm buying a house, not buying a car.

[00:11:03] Mike: And I'm like, assets not liability. So one of our listeners, if somebody's listening right now and says,

[00:11:09] Mike: okay, I got, maybe it's not three grand in today's dollars, maybe it's 10 grand. All right. And I spotted a property that I'd like to house hack, where I'd like to, do what you did and then maybe don't know if you said, borrow against the principal to be able to put that deposit down for the 800,000 or selling that property and doing the 10 31 exchange and then.

[00:11:30] Mike: Putting that down for the 800,000, if you could just maybe like break down those steps just a smidge. And then that's part one of this. The second part of it is, I know at one point in the book, and I know we had Justin Donald on the, podcast too, and we talked about the cash value life insurance and having it, , the writers written up the right way and funding that to become your own bank to borrow against it.

[00:11:52] Mike: So at what point would it make sense to do the real estate deal first? Or does it make sense to build up the cash value policy and then borrow against that first to become your own bank? So that money, that is continued growing. So I'd love to hear your strategy there and your advice

[00:12:09] Chris: Yes. Yeah. So, all right, so I'm gonna back up just a little bit and then yeah, we'll dive deep, deep into kind of how you marry the two together. So the first thing I wrote down when you're talking is LTV or loan to value. So one of the things that's important, and it depends where you are in the market cycle So you have to understand where you are in the real estate cycle.

[00:12:30] Chris: So I stopped, buying in 2005, if you're cognizant of how the real estate cycle moves. It typically moves in about 18 and a half year cycles, 18.6 year if you average it out, going back to when we started to track this in this country in the 1850s and I have a podcast, my hundredth episode.

[00:12:45] Chris: I talk about this in detail. So if you're listening and you're like, well, how did you get to that number? How did you figure that out? , it's based on monetary expansion. So land values increase, we're able to borrow on that. Banks are able to borrow we're at a point right now that's probably very similar to, 2000, four, 2005, where it doesn't make a tremendous amount of sense to go buy a residential property and run it out because the numbers didn't work.

[00:13:10] Chris: So, Mike, when you bought those houses, how much down did you put, do you.

[00:13:14] Mike: So the first one was 1 61 and I put down 10% at that point. That was 2006, 2005,

[00:13:23] Mike: 2006.

[00:13:24] Chris: Yep. And how much were you cash flowing a month? Do you remember? Like,

[00:13:27] Mike: On the property. I had two roommates that I was renting, those two that were bringing in probably 1500 a month. And then I was living rent free,

[00:13:36] Chris: yeah. Cool. Yes. You, your house hacking those.

[00:13:39] Mike: Yeah.

[00:13:39] Chris: ones you.

[00:13:40] Mike: The other one was a condo in Naples. That was two 30. And I put about 20%, I put about 20 grand on that one down. And then the other one was, was a Going into auction.

[00:13:51] Mike: So I, that one was a steal because

[00:13:52] Mike: it was, yes, that was uh, the right timing on that one. So I didn't actually have to come out of pocket and put anything down. I just needed to have just take over the, mortgage on it.

[00:14:01] Chris: And were your, rents recovering, your mortgages pretty, comfortably there.

[00:14:05] Mike: Yeah, for, that timeframe, it was from like , 2006 to 2008. I mean, it was going really good. It was definitely cash flowing and I was a college kid, so I really didn't know what the hell I was doing. I was just like, all right, let me just, I was fixing doorknobs and hot water heater

[00:14:19] Chris: like, It sounds like your loan to values weren't terrible. We typically have like 75% or less, loan to value on those. So you, so like, that's, that's one thing that's important. You know, I kind of, if you look at long term, what are kind of some things that you can watch long term to be safe?

[00:14:32] Chris: You know, You have kind of responsible loan to values. Like right now we're putting like 60%. On a lot of our proper, I'm sorry 40% down, like 60% loan to values, which is not very high and takes a lot of equity, right? So we have a lot of equity in the properties. We typically have at least six months of operating reserves in those properties and the commercial properties.

[00:14:50] Chris: So they're a little less likely to be hit by the whims of the residential market where, where values can fluctuate. And I'm not sure what type of loans you had, but the issue is a lot of the banks called, some of the

[00:15:01] Chris: loans and helos

[00:15:02] Mike: Might have been FHAs at that point. I think that

[00:15:04] Mike: sounds

[00:15:04] Chris: and there was a systemic collapse during that time, so I think a lot of people really got hit.

[00:15:09] Chris: But you know, if you have cash flowing properties, if you have lower loan to values, if you have high reserves and the problem with residential properties is if one of those tenants or residents moves out, you have a high vacancy rate, like a hundred percent vacancy when someone moves out, versus an apartment You know, we can run most of our properties at, 70% or lower occupancy and break even. which is one of the nicer things,

[00:15:31] Mike: And you said that on one of the podcasts, one of your episodes. I love that and it was like a storage units or apartment complex. You could have very minimal occupancy but still be able to break even or profit. Uh, And I really love

[00:15:43] Mike: that concept.

[00:15:44] Mike: You need more capital or other people's money or something to go behind that. So that's why I was like, if I got 10 grand and I wanna kind of get my foot in the game, and then there's some listeners who are probably like, well, I got a hundred grand, so that's why I'm trying to break it down just a smidge.

[00:15:58] Chris: Yeah. So again, I think, part of the issue when you were investing was there was just a lot of bad things happening in the market that , you couldn't help. if you were caught on the wrong side of a deal you had to be. Super low leverage, super high reserves, with a lot of that stuff , to not really get hurt if you're starting out today, two of my favorite strategies, if you don't have a ton of cash, but you have the ability to buy a home, buy something that's undervalued.

[00:16:23] Chris: That maybe, like you said, you're buying it from the bank or you can buy it and fix it up, but you have a backup plan. So you say, well, hey, if I buy this, fix it up and I can't flip it or sell it to somebody else, I can live in it and cover the mortgage. Like, that's a good backup plan.

[00:16:34] Chris: I love Airbnbs as well. Because you can typically make like 10 times the profit margins than you can if you do that, but you have to know what you're doing. We've had Kyle Stanley on our podcast multiple times, and he talks about a lot of his strategies. But you want to air at b or a short term rental that.

[00:16:49] Chris: If you don't have any occupants in there, then you're gonna lose it. So you wanna have , that backup plan. So those are two of my favorite strategies. If you're getting started today. I would not go buy a residential property today and long term credit, I just don't think the numbers worked very well.

[00:17:03] Chris: The second part of your question was the life insurance piece. So in chapter three, my book, I talk about your opportunity fund. And we actually dive really deep into this. And the concept, so if you look at chapter three here which I just opened up your Opportunity fund, which you can see on the screen if you're watching we dive really deep into this we have a webinar, a podcast, and we also have a white paper on the website under the banking link.

[00:17:27] Chris: So if you click uh, next level income.com, and that's a great book under the banking link. You're gonna see the Investment Optimizer concept and the book that Mike just showed, becoming Your Own Banker by Nelson Nash. I actually recommend that

[00:17:39] Chris: in

[00:17:39] Chris: my book. Yeah, it's fantastic. So this strategy is built on what's basically called the infinite banking concept or how you can become your own bank.

[00:17:49] Chris: So I really like this strategy, Mike, because , what you do is you actually remove a bit of the risk. Now it takes. Like anything. So if you're building a business, it takes capital. It takes time to do that. I would do that first though. So that's the short answer to your question. I would build that opportunity fund.

[00:18:06] Chris: Personally, that's what we did. We put together Some of these policies and , especially structured life insurance contract that maximizes the cash value and it minimizes the insurance. And that's where we house our cash. So let's say you say, Hey, I'm gonna buy a property.

[00:18:22] Chris: I'm gonna have six months of cash reserves. In place. So, in case something happens, I can pay, pay the mortgage for six months. If I need to, if I need to move a tenant in there, a resident in there, where do you put all that cash? know, You could have it in your life insurance.

[00:18:34] Chris: You could have a year's worth of cash, for instance, if you needed to in there. The nice thing is you can actually put this money into your insurance policies and then you can actually move it right back out the other side, typically within as little as 30 days. So, It's a little bit more complicated than that, but, you know, you were saying, what would you do first?

[00:18:52] Chris: You could almost do 'em at the same time, depending on how you align 'em. Again, there's, there's a cost to setting up these policies on the front end, but typically that cost is incurred in the first couple years. And then you can get out dollar for dollar, which you put in. We can dive deep into

[00:19:06] Chris: that if you want.

[00:19:07] Mike: And that's why I ask you, because I had conversations with Rachel around this too, and there's, there's a lot of the stigmas that you talk about in the book that a lot of these sales people will wanna try to sell you these whole life policies because it's like they get a higher commission. So there's like everyone, there's like people who say, Do not waste your money.

[00:19:24] Mike: That's terrible investment because they're considering it an investment. You'd rather put it into the market, you know, rule of 72 and let you know, get the gains on it. And this is not an or, it's not put it in the market or put it in the policy. , it's an end. It's just the policy is a holding tank that you could borrow against for these investment deals.

[00:19:42] Mike: But it's gotta be structured correctly. And I know you talked about this in the book, I don't know if it's talked about. In our society, because the stigma of these sales people who try to sell these whole life policies. So I just wanted to give you a place to just kinda speak to that because you did such a great job in the book and,

[00:19:57] Mike: I don't think it's talked about enough.

[00:19:59] Chris: Yeah. So first off you have to look at, you know kind of the history of life insurance and we, we can go back. There's, there's some books written out there and we can go through it. But here's the thing. Life insurance, whole life insurance has been around. Longer than the irs. Okay. It's been around a long time.

[00:20:13] Chris: It's been around, actually hundreds and hundreds of years in some way, shape or form, and there's terrific tax benefits to life insurance for, for a lot of these reasons. It's such a big industry. They're actually so good that they restructured the tax code in the, in the eighties to remove some of these tax benefits because they were basically a tax shelter at that.

[00:20:34] Chris: But what happened was when the financial industry came up with mutual funds and my MBA's in portfolio management, so I, I know this industry really, really well. But when this industry. Came up with

[00:20:47] Chris: mutual funds. They came up with this concept, well, hey, if we sell term insurance, because back then before that whole life insurance was the primary means that families saved for retirement.

[00:21:00] Chris: This was before qualified plans. So let's walk through this step by step. So first off, the insurance company says, We can sell term insurance. That means we can take more of your money and put it into mutual funds that we get paid a commission on. We get paid front load, which is a commission to sell it.

[00:21:16] Chris: We get paid a fee. why the investors in it? And then we get paid a back end load. And the problem is these fees are woven in. They're very complex. A lot of people don't understand. They're like, oh My advisor makes me money every year. Now, I'm not saying that financial advisors are bad or are good, but when I was in medical device sales, I worked for a company and we sold implants, and we would be in surgeries.

[00:21:40] Chris: Now, if a surgeon looked at me and said, Hey, Chris, what product would you recommend for this specific surgery? What do you think I'm going to recommend? I'm probably going to recommend. My company's product, right? If, if a customer called you, Mike, when you were with Cutco and said, Hey, what kind of knife would you, would you say, wooo off, or hes, or would you probably say Cutco?

[00:22:04] Chris: And if you wouldn't say Cutco, I would question, your conviction is a salesperson, right? So I'm not saying that's good or bad, but you have to understand that people are getting paid. Now you can say, well, Chris, you are a licensed life insurance agent, and you would get paid by. Okay, fair enough. At least you understand, how these things work.

[00:22:24] Chris: And do that. So that's, step one. Step two, let's say, what are you going to do with the money? So if you're gonna put it in a qualified plan, which means a tax deferred plan, like a 401k, an ira, you have to understand some basic math. If you put money in a qualified plan, you are betting that your taxes will be lower in the.

[00:22:44] Chris: Let me repeat that again. You're betting that your taxes are gonna be lower in the future. If you pay a 25% tax rate and you get a 10% rate of return and you don't pay the tax on the front end, it accrues tax free for say, 20 or 30 years, and then you pay that same 25% tax rate after that as you take that money out.

[00:23:05] Chris: There's no difference as if you paid tax in the beginning and then you didn't pay tax on the end. So you can do the math on your own. You can test, test my math if you, if you choose to, but, That's the deal. So you're betting that your tax rates lower in the future. So if you're one of these people that says, Hey, I'm gonna buy term and invest a difference, and you're probably maxing out your 401ks, that means you think you're going to be poorer in the future in some way, shape or form than you are today.

[00:23:30] Chris: I'm not that kind of person. So if you say, Hey Chris, I'm not gonna make as much money in the future. I'm gonna spend all my money before I die. I'm not gonna leave a legacy for my. That is not who I'm talking to. Okay? Now, if, if you talk to people and they say, Hey, Chris is wrong, you know, you shouldn't buy a whole life insurance.

[00:23:48] Chris: You should buy term, invest the difference. Ask them a couple questions. One, are you financially independent? Two. How much are you worth? Are you worth eight figures? Are you gonna leave nine figures as a family legacy? Like you need people that are, that are really wealthy? Ask them what they do. You're gonna get different answers.

[00:24:03] Chris: Okay, so that's the second piece this.

[00:24:07] Mike: Before, you go to third piece, the age bracket of starting of buying whole life. Because if we're talking to someone who's in their thirties, they're not really thinking about, oh my gosh, I gotta go have a life insurance just in case. Cuz they're still like accumulating their wealth and maybe they don't have as large of a net worth.

[00:24:21] Mike: That's kind of a little bit of the argument against why do I even need life insurance at. If I don't have as much assets, but we're talking about if you want to get into the investment arena, you probably don't have as large of a net worth yet to protect yourself against. So I just before you go to number three, could you kinda speak to that psychology just a little bit?

[00:24:42] Chris: Yeah. And actually that's gonna be,

[00:24:43] Chris: that's kind of, that's gonna be kind of core to the concept. No, that's okay. Cuz you can't read my mind here, but, so we talked about the history, like how this came to be and why, why this, this talk track came up. And then we talked about some of the assumptions, right?

[00:24:56] Chris: So, if you're thinking, hey, by term invested difference, like what. How did that whole concept come to be? And like why would people be drawn to that? So, if you understand that and you say, wait a minute, I think differently. I just did a piece for my my coaching clients here last weekend, and I talked about how my insurance returns inside my policies have beaten the market over the last three years.

[00:25:16] Chris: Like with a guaranteed rate of return.

[00:25:18] Chris: I

[00:25:18] Chris: mean,

[00:25:19] Mike: that four to 11%.

[00:25:21] Chris: Yeah.

[00:25:21] Mike: range.

[00:25:22] Chris: Four to 6% is, is, yeah, is typical. Now there's a way to supercharge that. But here's the thing. I'm now gonna stop , everybody's thought processing your tracks. Insurance is not an investment, okay? It's not an investment. So my best friend calls me several years ago and says, Hey Chris, what do you do for insurance?

[00:25:41] Chris: And I told him, so he says, okay. So he calls his. They set up some whole life insurance policies. He starts funding 'em, pretty significant policies. Three years later, his wife dies at 40 years old. Okay. What was his return on that investment in life insurance? The answer is,, if you have any empathy whatsoever as a human, you're probably not gonna ask him that question. And the reason is he didn't buy it in hopes that his wife would die. He bought it as a tool to protect his family. So if we agree that insurance is a tool, not an investment to be profited when someone dies, we need to set it aside and we need to stop saying, Hey, let's compare this as an in.

[00:26:25] Chris: To the stock market. Cause if you buy term and invest the difference, quote unquote, your term insurance runs out. It runs out at some point and it becomes too expensive as you were alluding to. So the first question you need to ask yourself is, do I need this tool? Do I need this insurance to protect my family?

[00:26:43] Chris: If the answer is yes to that, then you should look at this strategy and yes, , the younger you are, The more it's gonna make sense if you're younger than 50, it's almost a no-brainer. That'll probably make sense from a financial perspective. But if you're, if you're uninsurable, if you have health issues, if you're too old, you can use the same strategy by insuring.

[00:27:04] Chris: A younger, healthier individual, but still be the beneficiary. So that's the cool thing. You can actually use this strategy and you can ensure a grandchild, for instance, or a child, and you can do a lot of the same stuff. So that's what's nice is the concept is not nullified. If you can't get insurance or you don't necessarily quote unquote need insurance, which is pretty cool.

[00:27:26] Chris: And. Once you have these, policies structured, which you'll typically see you hear a lot of people say, oh, they'll break even in five to seven years. But that's using those assumptions in that thought process of, Hey, this is an investment. It's not an investment. what I encourage anybody that I work with to do is look at.

[00:27:43] Chris: When do you start putting a dollar into the policies and getting a dollar out? And let's say it's after a couple years, you can look at the cost that you pay for that insurance over those first couple years and look at how much insurance you get. And then you just ask yourself a simple question.

[00:27:56] Chris: You say, well, Mike, does this make sense? And if the answer is yes, Now you have a tool that's gonna protect your family, and you have, as Nelson Nash wrote in that book, you have your own bank set up. So now every dollar that we invest, for the most part, goes into our policies first. Now, what's cool is I'm earning that four, five, 6% over the past three years.

[00:28:18] Chris: It averaged 5.88%. . So nearly 6% over the past three years. Compare that to the s and p. Compare that to the Dow. Compare that to, the international stock markets. They all underperform that, that number by about 150 basis points, if not more. If you look at like the Dow for instance. So okay, you got a nice stable return and then what's cool is I can take that money out as I talk about in my book and I can put that.

[00:28:45] Chris: Real estate investments and let's say my real estate investments are making 15%. Well, now I have my money inside my insurance policies making, five, 6%. I have my money in my real estate making say 15%. And they're working in both places at once. Now there's some nuances there. And we talk about that in the webinar that we have on the banking page, on my website and in the white paper.

[00:29:07] Chris: But basically the difference is it talks about compound versus simple interest. Mike, if I would lend you a hundred thousand dollars and you had to pay me back simple interest, but you could invest that money and compound it, at, at the same or a higher interest rate, would you borrow that money from me?

[00:29:24] Mike: I want my compound interest. that, that's, that's

[00:29:26] Mike: what I

[00:29:27] Chris: There you go. that's right. So think about it this way, what does that sound like? It sounds like buying a piece of real estate, right? You buy a piece of real estate, you pay down your mortgage over a period of time, and that piece of real estate. Increases in value at a compounded rate.

[00:29:42] Chris: And the overall value. Whole life insurance is basically the exact same thing. You pay for it over a period of time, like a mortgage, seven years, 20 years, 30 years, whatever that period might be. You pay that at flat rate, just like paying a mortgage, which again, a mortgage is gonna be higher than rent when you start paying it.

[00:29:59] Chris: But over a period of time it starts to go down, just like when that term insurance starts to rise. So if you like the concept of buying real estate and using. You should like the concept of buying whole life insurance and using the same type of leverage as well.

[00:30:13] Mike: Wow. I mean, and listener , what Kris shared with you is something that I've been studying now for. The better part of maybe six years, seven years or so, and trying to freaking unlock the code of why is there so much noise around this topic. Why is there so like discrepancies from this person, this word like, because it wasn't broken down the way Chris just said that it's not an investment, it's really just a holding tank and it's just money is coming through that.

[00:30:40] Mike: So I'm doing a syndication deal with Chris and the, money that. Giving to Chris for this syndication is coming from my insurance policy, so I'm putting the funds through my insurance policy and then I'm just, like Chris said, giving Chris the money from that policy. So therefore , my insurance policy is like the bank, but at least that money that Chris is putting to work for me.

[00:31:04] Mike: Is also growing inside the policy. And there's also tax benefits by going through the policy as well. I am nowhere near an expert on this. I've read the books, I've read your book. I'm talking to you right now. I listen to the podcast and what you've done so methodically as you've broken it down to , as simple as we possibly can it's not that it's black and white, but you're not learning this in school. You're not learning this inside education. So the only way you're learning this is through trusted advisor and counsel. And not everyone has that. I know if I went to anyone in my family and talked about this, they're like, what are you talking about, man?

[00:31:36] Mike: Just, we don't know what you're talking about.

[00:31:37] Chris: No, and it's, it's not taught, , it's actually fairly complex, you know, if you look at how to put it all together, which is why we, put the educational pieces together and my motivation, I was licensed as life insurance agent with State Farm over 20 years ago, I got relicensed during Covid I, one cuz I had some downtime. And two, because when I learned about this concept, I learned that my agent hadn't taught this to me. Even though he'd structured one of these bank on yourself or an infinite banking policies for me, he didn't teach me how to use it as an investor.

[00:32:06] Chris: And when I told him what I was doing, you know what he said to me, Mike,

[00:32:09] Mike: Hm.

[00:32:09] Chris: I wish all my clients were doing. And I was like, well, I kind of pulled the phone away from my ear and I thought, why aren't they? And then I. Why aren't you telling them this? So it made me a little annoyed and I said, well, hang, I need to be able to convey this to people.

[00:32:25] Chris: And then again, it's, life insurance gets a bad rap. I mean, I love the movie Groundhog Day. You got the guy chasing somebody down the road trying to sell life insurance. We don't try to sell life insurance. If it makes sense for you, great. If you need the insurance, we have a concept that you can put in place.

[00:32:39] Chris: And like you said, Mike, you take that money. Did that affect the value of the insurance that you have in that policy? Yeah, and that's the beautiful thing. It basically pays for itself and over the right timeline, you're investing for 10, 20 plus years, you know it's gonna be something that, adds a lot of value, not only to you but also your family and it's gonna protect you.

[00:33:00] Chris: And again, my father died when I was five, so I'm acutely aware, you know, of kind of the risks that are out there

[00:33:04] Chris: when it comes to those sorts

[00:33:05] Chris: of.

[00:33:06] Mike: Yeah, , I wanna make sure that this is double clicked on as well because we're taking the money, the cash value from the policy to create more cash flow. So you own multiple car washes you own. You know, These syndication deals and these commercial investment properties, you know, like you're finding these distressed debt type of commercial office buildings, so you're taking, cash value outta the policy and reinvesting it to create more cash flow.

[00:33:32] Mike: Because if it was a long term investment sitting in the market, Maybe it does grow. , maybe it does double every nine years. But you have to wait until you're

[00:33:42] Mike: 65 and a half , right?

[00:33:44] Chris: yeah.

[00:33:45] Mike: So, so what your strategy is, let me put this cash value to work for me now in making me some of those higher returns.

[00:33:53] Mike: I mean, Rachel was talking about some of the syndication deals on her episode are somewhere. 12, 15, 18% , type of range where if you're, you can cash flow instead of cash flowing. Or instead of getting an 8% return, let's say each year, and you can't touch the money.

[00:34:11] Mike: You can get a, 15% or even 8% return, and you can touch the money within like two or three or five years. So if you could kinda speak to this, but like this idea of cash flow investing or the syndications or the car wash and businesses or any of that type of stuff.

[00:34:25] Chris: Absolutely. So, It kind of goes hand in hand with this big flywheel, that we talked about with the life insurance. So and I just got back from a mastermind we were literally focused on this for the last day we were there. And, you know, you build this system right where your, your money, your income is flowing into your, your own bank, you know your policies, which it doesn't have to, it could just flow into your opportunity fund, which, may just be a check in your savings account.

[00:34:48] Chris: Which is okay, if that's what you're comfortable with. But that money, again, I say you can't have true freedom without passive income. Right? you can't each your 401k, you can't even touch it without a penalty until you're 59 and a half. That doesn't. I have coaching clients, they're like, Chris, I got seven figures in my 401k.

[00:35:04] Chris: I feel like I'm broke. I'm living paycheck to paycheck. So that's really tough. So, we focus on cash flow investments. So our number one thing when we find an investment, Mike, especially if we're bringing in other investors through a syndication, is we want capital preservation.

[00:35:18] Chris: So we're looking for a safe recession re. Investment. Number two, we want income. Because if we're getting income, that is a return. If you get a check every month, you're getting, you're getting a return on that money. If your capital is protected by a real investment, a real like inflation hedged asset, like a piece of real estate, like a multi-family asset or a car wash, you know you are.

[00:35:42] Chris: An inflation resistant asset and you're getting cash flow. And then number three, appreciation. So, it's like, then we're going to try to force fully increase the value of that and people might say, do you just stand in front of it and wish it goes higher?

[00:35:54] Chris: No. You improve the business. All these are businesses. And then the cool thing is everything that I've mentioned, everything. That we talk about in the next level, income community is wrapped in depreciation benefits, there's wrapped in tax benefits. So that's the other really nice thing that you can get out of this.

[00:36:09] Chris: But if you try to do this and you say, Hey, I'm gonna, use this strategy, I'm gonna put this, investment optimizer strategy, or infinite banking strategy in place, and then I'm gonna go buy a. Or I'm gonna um, buy a bunch of cryptocurrency or NFTs and hope it goes up in value.

[00:36:24] Chris: that's probably not an

[00:36:26] Chris: optimal way to do it.

[00:36:27] Mike: or, getting

[00:36:28] Chris: Yeah, you typically, yeah. I wouldn't combine the strategy with speculative investments because the key is you, create additional income streams and then those income streams flow back into your life insurance, which creates more value and more cash that you then can reinvest if you choose, and then you can, you can kick that out.

[00:36:48] Chris: Now, some of you might be thinking of this concept as new to you. Well, how do you get the cash out of your, of your life? I. You can take it out anytime. You can take it out tax free up until the amount you put in and then you could even take it out tax free above that value as it increases in value.

[00:37:03] Chris: But you have to take it as a policy loan. Um, And most people are thinking, ah, there's the catch. And that is the catch. You're gonna pay an interest rate, and by the way, all of your capital has a cost associated to it if it's sitting in the bank. What did you lose in the last. Nine, 10, 15% to inflation. So don't fool yourself in thinking that, hey, if my money's in the bank, I'm not paying anything for that.

[00:37:24] Chris: You certainly are. So

[00:37:26] Chris: my money

[00:37:26] Chris: is growing.

[00:37:27] Mike: Yeah, that's like the hidden. And I know you mentioned depreciation. I have my engineer degree. I don't know shit about economics, finance, like I just self taught reading these books, listen to podcasts. So can you just hit on real quick why the depreciate, you said depreciation benefits are important.

[00:37:43] Mike: Why is that something that's important and you just hit on the inflation component.

[00:37:47] Chris: Yeah. And I,

[00:37:48] Mike: to cla capture

[00:37:49] Chris: absolutely. So, I mentioned depreciation, kinda as that rapper, right? It's not really one of the main features or benefits of real estate. It is, but whenever an investor talks to me and they're like, oh, I can get a lot of depreciation, say, I'm gonna, tax savings, I'm gonna spend a dollar, I'm gonna save, 25 cents in tax.

[00:38:05] Chris: That's not a great tax strategy, right? If you gotta spend money to save money that's not really saving money. But here's the cool thing. If you have an asset, and I talk about this in my book, right? So real estate depreciates, it's according to the irs. Well, anybody knows that if you have a piece of real estate over time, Over any given period of time, it goes up in value.

[00:38:26] Chris: Yes, real estate can go down in value, . But it goes up over time, especially if you understand how to run that business and it's income producing. But the IRS says, Hey, you can write off. Depreciation. So if you own a $300,000 piece of real estate and the land's worth 25,000, it's residential.

[00:38:45] Chris: So that means the building's worth two 75,000. The IRS says you can write off $10,000 a year in straight line depreciation. Now we use a lot of accounting rules. I mean, you specialized accounting agencies that help accelerate that so if you're making $10,000 off that piece of real.

[00:39:01] Chris: And you can write off 10,000 in depreciation. You pay zero in tax. That's beautiful. This is how Trump did it, right? Everybody's like, oh, president Trump, you didn't pay, or Donald Trump didn't pay any tax. Okay. He followed the rules. Would you be upset with me if I beat you at Monopoly? And I read the rules and understood the rules, and then you lost to me?

[00:39:17] Chris: You might be upset, but I would say, well, whose fault is that? You shouldn't have, should have read the rules yourself. So when I hear stories like that, I say, how did they do that? And when you look into it, you find that they're ultra rich. Know how to use things like depreciation

[00:39:32] Chris: to to offset their income.

[00:39:34] Mike: it's interesting you even mentioned that because, regardless of, politics or religious beliefs or whatever, or you know, this book, why we Want You To Be Rich by Donald Trump and Robert Kiyosaki, I,

[00:39:45] Mike: got this book at the Dollar Store, like, I don't know, probably 10 years ago at this point.

[00:39:51] Mike: It was way, way more probably, but it was probably, 15 years ago. I got that hardbound beautiful black book at the dollar.

[00:39:59] Mike: store and that. For a dollar and I read the book and that was the first time I learned about like gold standard and what happened back in the eighties.

[00:40:08] Mike: Like I didn't know any of this stuff, like how things, the currency was backed by gold. That's the, that to what you just said. Chris is so gold and listener. I want you to make sure you understand what, what it. What are the rules of the game? So if you don't know what the rules are, it's kind of tough to play the game.

[00:40:24] Mike: So you need to learn the rules. So if you leave this conversation that I'm having with Chris right now and just re take a hundred pages and, and learn from Chris I think that's a great place. Plus your podcast a hundred episodes of the uh, what's the name? Next Level Income?

[00:40:37] Mike: Is that the name of the podcast?

[00:40:38] Chris: , yeah. Next level income. You can find that@nextlevelincome.com. It's actually a next level income show, but yeah.

[00:40:44] Mike: Next level income show. Before we head for the exits here, I just wanna say thank you, number one, Chris, , for giving us really a masterclass and how to create a flywheel, like you said, right?

[00:40:53] Chris: Yeah. yeah. You create a big flywheel, man. Once you get that, thing rolling, it doesn't have to take 15, 20 years like it took me. You can learn the shortcuts through the book.

[00:41:01] Mike: Yeah, this is great. I have three quick questions I want to ask before we head for the exits today. And then if people wanted to follow along with you or get in touch if they want

[00:41:09] Mike: life insurance support,

[00:41:12] Mike: how could they reach out to you if they want to, learn about your 250 books you finished or.

[00:41:15] Mike: What speed reading books to, to check out, where you could take them. So let me, uh, start with these three questions. So, and then , we'll have you wrap up with calls to action for our audience. So, number one,

[00:41:23] Chris: Sounds great.

[00:41:24] Mike: do you think the world needs most of today?

[00:41:27] Chris: Yeah. I mean, we need, we need a lot of love, that's for sure. But I do think that something we don't talk, about enough is financial literacy in this country. And, you know, when you hear things like, Hey, we're gonna forgive 10, $20,000 of student debt, that, okay, like, you may agree or disagree with that.

[00:41:43] Chris: And it's like, that sounds nice for somebody that's gonna get that, but are we teaching them how to avoid those decisions that got them in that place, in the first place? Dan Sullivan. Who runs Strategic Coach that I was a part of for a long time. You got probably his book

[00:41:56] Chris: back there too.

[00:41:57] Mike: Who not how It's

[00:41:58] Chris: Who, not how. One of my favorites, he says something, he says, if you can write a check for it, then it's not a problem. And if we teach people these concepts, you don't have to take money from somebody else to make money. All of these things can actually create wealth, not only for you. But also for other people.

[00:42:16] Chris: So if you're listening today, we just wrote a kids' book, parenting book collaboration. You can check it out Next level income.com/kids. You can get the five tips that I talk about in that book for free. I was Amazon bestseller, that book, and the reason that I contributed to that is because, parents need to learn about financial literacy.

[00:42:33] Chris: We need to pass that onto our children.

[00:42:34] Mike: So beautiful, man. I love your heart. I love how much you're willing to help people uh, in this, wheelhouse of education. So uh, last two questions. uh, question number two, what are one to three books that you think people should read right now?

[00:42:47] Chris: Yeah. So actually above Wealth, if, it doesn't matter how much money you have, if you don't live, to have an impact or you can't enjoy it uh, lifespan is a terrific book out there. I would highly recommend that. It's a great book. Oh man. We've mentioned so.

[00:43:00] Chris: books today. Yeah, I mean, you can pick , any ones of the ones that we mentioned today, but if you like the concept of, the infinite banking, , read Nelson Nash's, become your own Banker, read about that, it can totally change not only your life, but it can change, the way you think and it can change your, next generation of your family as well.

[00:43:19] Mike: By the way, David Sinclair, he's on my

[00:43:21] Mike: my dream guest list to have

[00:43:23] Mike: on this, on this podcast. So, unreal. Unreal. So that's a great one. Last question before we uh, get, give a call to action. What does it mean to be better than rich?

[00:43:31] Chris: To be better than rich is to really be able to do what you want with your time when you want to do it. And, that means how you spend your time, who you spend your time with. But also, do you have the ability to give not only your time, but even more than your time, , your money, all those things.

[00:43:47] Chris: So if you're watching the devastation from the hurricane as we record this, just happened, it hit multiple properties that we own and you wanna help. Do you have the time to go down and do that? Do you have the ability to write a check, you know, to help out, those people to do that?

[00:43:59] Chris: If you're in the path of the hurricane, do you have the ability to move your family and protect them? These are things that money can help you do, but ultimately it's what you do with the gift that you've been given. Once you have that financial independence, that really determines the impact that you make in this world.

[00:44:15] Mike: It's beautiful. So tell us, Chris, they wanna learn about you, real estate, life insurance, syndication deals. where could they find you? Where could they learn more?

[00:44:24] Chris: yeah. Great place to start. Next level income.com. You can subscribe to our podcast for free. You can get our book for free by clicking on the book link. You can even learn about the whole real estate. I'm sorry, the Life insurance concept, our investment optimizer, clicking on the banking link.

[00:44:36] Chris: No charge for any of those things. If you wanna learn more about our investments, we focus on multifamily self storage, hotels, mobile home parks, and our latest asset class car washes, express tunnel, car washes. You can click on the link and schedule a time to speak with me.

[00:44:50] Mike: Awesome. I'm really excited about my first deal with you. I thank you, Rachel, for the recommendation if you're listening to this and thank you Chris for willing to help me. I've had a goal of getting becoming an accredited investor and getting it official. Getting a little blue check mark and you helped get that done for me and I'm forever grateful for you cuz I've wanted to get that going from a 400 credit score and negative $130,000 to 10 years later being accredited thanks to your help.

[00:45:15] Mike: So thank you and listener. Assuming this episode helped you, it's your turn to help others by sharing this with a friend. Subscribe on YouTube. Leave a rating and review on Apple and Spotify. And remember, leave today better than you found it. Until next time.