BiggerPockets Money Podcast - 165: How 'Finance Ninja" Daniel J. Mills Started at $30k a Year and Grew a US Rental Empire from Japan

Episode Date: January 25, 2021

While living abroad, it can be very difficult to invest in assets in your home country, especially if you’re an American. Daniel J. Mills found this out early in his professional career. As a English teacher living in Japan, he had to jump through a sizable amount of hoops to find a way to invest in American stocks, index funds, and later real estate all while overseas.  Growing up in southern California, Daniel knew that there was money to be made through entrepreneurialism. He saw his father grow a business that was profiting millions each year, only to see it later become liquidated. Daniel didn’t really think too much about money or growing his personal wealth until years later. After college, Daniel moved to Japan and became an English teacher making a salary of around $30,000 (USD) a year. He met his wife, settled down, and bought an apartment in an appreciating part of the city (contrary to many other parts of Japan). Daniel was saving around $1,000 a month, and realized he didn’t want to be making $30,000 a year forever. So, he started investing in index funds and stocks, which grew his net worth and allowed him to invest in other asset classes, like real estate. Daniel even shares a tax loophole that allowed him to write off 100% of his 6-figure income while he was in Japan (solely from real estate depreciation)!  Flash forward to today, Daniel has rental properties in Idaho, Alabama, and Tennessee with partners from Japan and the United States. Daniel agrees with many other real estate professionals in the fact that you need a tried and true team in cities where you’re investing. Living in Japan, he doesn't have much to worry about in the US, thanks to his fantastic property managers, handymen, partners, lenders, and real estate agents. In This Episode We Cover The challenges and benefits of investing in American assets while abroad Getting rid of debt fast so you’re able to scale your investments  How money is easier to make as you become more educated and experienced  The ins-and-outs of Japanese real estate compared to American real estate  Converting bonus rooms to bedrooms for higher rent  Forming partnerships with real estate professionals who can help you And So Much More! Check the full show notes here: https://www.biggerpockets.com/moneyshow165 Learn more about your ad choices. Visit megaphone.fm/adchoices

Welcome to the Bigger Pockets Money podcast, show number 165, where we interviewed Daniel Mills, a U.S. citizen living in Japan who gives long-distance real estate investing a whole new meaning. I think the big thing is not to get overwhelmed and to keep things as simple as possible in the beginning. I see this so often. People that are just don't get started because they think it's a very complicated situation. And it's almost like once they make a decision, they can't change it. Hello, hello, hello.

My name is Mindy Jensen. And with me as always is my rock and rollin'clock coach. You always drum up these great interests, Mindy. Thank you. Scott and I are here to make financial independence less scary, less just for somebody else. to introduce you to every money story because we truly believe financial freedom is attainable for everyone, no matter when or where you're starting. That's right, whether you want to retire early

and travel the world, go on to make big time investments in assets like real estate, start your own business, or just invest in real estate from literally the other side of the world. We'll help you reach your financial goals and get money out of the ways that you can launch yourself towards those dreams. Scott, today's guest comes from our Facebook group. If you're in the group, you have seen Daniel Mills commenting on every single post that's up there. He is one of our top commenters. And when we reached out, he's actually a very interesting guy. We talk a lot about foreign tax and investing in this episode,

but we did feel it was really important to share this story because so many people want to retire outside of the country or somehow take advantage of geo-arbitrash. Yeah, I think it's a fascinating story. It's a completely unique perspective. But I think it also, you know, if you're not living in Japan, highlights how great we have it here in the United States in terms of applying the basics of building wealth. Because when you listen to this show, think about the hurdles that Daniel has to jump through

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Welcome to the Bigger Pockets Money podcast. Konigua. Is that right? Japan Mills. I bet that's that what the J stands for. Okay. Probably not. Yeah.

It's great to be here. It's great to have you. I am so excited to talk to you. You are all over our Facebook group. Thank you very much for your contributions. And I would like to know about your money story because you're in Japan. Why are you paying attention to money in America? Well, I'm actually from America, and that's where I grew up.

So, yeah, I mean, my money story really didn't begin until I came to Japan, but it's probably a good idea to back it up a bit to show how that all came to fruition. But basically, I grew up in Southern California, typical middle-class household. My father worked for Hughes Aircraft, big company out there. but he always wanted to be an entrepreneur. So he was dabbling in a lot of different things, including real estate. None of them really worked out until I was about 14. And he started a company where he used his own money to get FDA approval on high-pressure tanning beds in Europe.

And he brought them out to the States and started selling them. And it was amazing. Like, you know, first year, I think it was $6 million profit. And, you know, next year it was just going. up amazing levels. Now, our lifestyle didn't change at all, but this was, you know, an incredible business. Don't they already have son in Southern California? They do, they do, but he was selling them all over the country and he was getting distributors to, you know, that had their own area. And it was just a great model. And all of that was wonderful until it wasn't, which is at

some point, which is probably when I was in my senior year of high school, my father decided he wanted to break away from the company he was working with and start his own company and make his own tanning beds. And they were a much larger company and he started getting sued. And right at this point, you know, I knew things weren't looking good, but I actually joined the Marine Corps right after high school. So a few days after I was in boot camp and I had a plan, you know, I was going to get into federal law enforcement and everything. But actually, I was only in the Marine Corps for less than a year because I got injured. So I received an honorable medical discharge.

I came out and by that time, my parents had lost everything. The only thing they had left was their house. And we were living in Virginia at the time because my father had an office over there. But that kind of started me off. I didn't have any way to pay for university at that time. I blew through a lot of the money I got when I was at the brain court, as you can imagine, a 19-year-old who gets 20% disability paycheck plus their paycheck for the year. And basically, through my 20s, I mean, I think it's a good story of somebody who got started late because I just was not focused. I didn't know what I was going to do.

I think I went to three different universities. I did a lot of different jobs. I became a certified massage therapist at one point, which, you know, was a good job. I did a lot of different things, but it all ended up when I was, I think, 27 years old is when I graduated. I was back in California. I had a degree in Asian religion, so very marketable. I had about 20,000 in student loan debt that I didn't need because I pretty much worked my way through, but decided one year to not work and party. And that's where I got all of that debt. And yeah, I was actually working as a martial arts teacher in my hometown because I've been doing martial arts all my life.

And I love the job, but I decided at that point that, you know, it was sort of a now or never to go to Japan because I always wanted to live in Japan for at least a year or two, do martial arts, you know, learn the language. And that's when I headed out to Japan. And luckily, right before I left, I realized, I'm almost 30 years old. I haven't gotten this money thing together. And I bought a book called The Complete Idiots Guide to Getting Rich. And it was a great book. It was fire before fire, right? So, I mean, they went through the wealth stages.

They talked about how, you know, where you're going to hit financial independence. It started off with saving and then earning more money, index fund investing, and then real estate or business. And I followed it like a blueprint. I still have, I think, this little plan. that I made from that book, I saw it the other day. And I remember my big goal at that time was to get just, I think I thought if I could earn $20,000 a year in passive income, I was set. You know, so. What was your financial position at the time that you read the book? Your 28, you're heading to Japan. What was the net worth, I guess? So negative 15,000. I had 20,000 in student loan debt,

and the only asset I had was a car, which I did sell before I left for $5,000. Nice. Yeah. So what happens? So you read this book literally on the plane or right before or right after you move out there and how do things evolve from there? Yeah. I mean, I think I was reading it all the way on the plane before I came out and just taking notes.

And it was the first time that something clicked about finances. is, you know, you would think coming from a family who lost everything, you sometimes hear people on this podcast say, oh, I was so motivated to make money. But I really wasn't. I was kind of a hippie in my 20s. You know, I was studying Buddhism and just, I did martial arts and that was it. And I didn't, I really wasn't interest in money. I'd picked up a few books and never got into it. And so this was the first one that really clicked. So when I came out, to Japan. One of the first things is you have to get an apartment. And in Japan, it's a little bit different than the United States, or at least I think it is. We have something called key money, which means,

like, so basically you get an apartment. I have to pay first and last month's rent, but I also have to give a gift to the landlord, which is great now as a landlord. But in Japan, it's, you know, so most of that five grand was gone just moving into my first apartment. What kind of gift do you have to give them? A money gift. You give them a couple thousand dollars. I like that a lot. Right?

You should implement that in the U.S. It's first and last month's rent a gift and then I'll go ahead and rent after that. Yeah, yeah. Wow. So, yeah. But, you know, one thing is apartments in Japan, the cost of living is a lot cheaper than people think. So I think people have this mindset that Japan is like the 80s and 90s, which the bubble economy. It's not like that. There hasn't been, I think it's, there hasn't been any

inflation in Japan since that time, right? So, you know, you can rent an apartment. I think my first apartment here was $400 a month. And, you know, where specifically in Japan are you? So when I first moved, I was living in the suburbs of Osaka. And now I live in somewhere called Shiga, which is about 20 minutes from Kyoto, maybe 45 minutes to Osaka. It's actually where the ninja are from. If you've heard of Koga Ninja, they're from Shiga. So anyway, yeah, so I, you know, apartments are pretty inexpensive. There's no tips that you have to pay. So the living expenses are not that bad. And that was really my first step in the process, right? Because it was the first time in my life that I was going to save money. And I did pretty well at it, I think.

How were you, sorry, I was cracking a private joke to Mindy about how you're the finance ninja, if that's true. So anyways, that's going to be my blog. That's what I was thinking. Yeah, that's awesome. But going back a second, how are you making money at this at the time? Oh, yeah. So I got a job teaching children English basically. It's really easy, as I said earlier on to you guys, that if you're a native speaker of

English to get jobs teaching English. And usually you teach it something called an Ake Iwa, which is a conversation school. You teach kids during the day, a couple of adult classes at night, but the pay is about 30,000 a year. And it's pretty much the same. I mean, this is one big wake-up call is you'll sometimes meet guys who are 40 years old. They got married, had kids, and never did anything else, and they're still at the Ake Iwa and not very happy with their... their situation. They're still teaching there or they're still learning there? Still teaching.

I mean, there's teachers that have come over, started that job. Maybe they were thinking, like me, I'm going to leave. I'm going to go back to the United States in two years. But they end up meeting somebody. They get married. Have kids. And they're stuck at that job because it's really hard to get something else. So it's easy to get that job, but it's hard to get involved in the economy

me in other meaningful ways besides teaching English. Yeah, exactly. So, yeah, so the first year, I mean, basically I was saving. I created two bank accounts and this was my method. I just, I got my paycheck in one bank account. I pulled out about $1,000. I put it in the other one, and I just lived off the rest. And for the first year, that's all I did. I just saved money, about $1,000 a month, all in Japan. In Japan, we have pretty much a 0% interest rate, right? So the banks give you like 0.005% return. So we're not getting very much on that, but it was the first step.

And then after I've been working for a year, I met my wife. She was actually, this is going to sound bad, but she was a student, an adult student at one of the schools that I taught at. I always have to clarify that. Thank you for clarify. Yeah, an adult student at the school where I worked. So we met and we actually, we got married maybe six months after we started dating. So it was quick. But we've been married for over 12 years.

So I think it's worked out. But the great thing about my wife, and I think this is kind of an interesting point too, because if you are moving abroad and you are single and you're looking to date in your country that you're staying at, one of the issues is cultural issues around money, cultural differences. In Japan, the basic culture around money is that women control all the money. So men work, and they work tremendous hours, usually. All the money goes to the wife, and she takes care of it. The husband gets an allowance. I like that a lot. Yeah, well, lucky for me, my wife was not like that at all. She didn't like that system. And I think on our first date, we were talking about stocks and how I was starting to invest and

everything. And she told me later that this was one of her little checkpoints that she was like, okay, this is good. So she's not very traditional in that sense, but we kind of hit it off right away with our talk about money on the first date. So. Wow. I love that you talked about money on the first date. Was it in English? Yeah. In Japanese. So probably the first two years with my wife, we, we only spoke Japanese. And then her English has gotten way better than my Japanese because she did a master's degree in a U.S. school. So now she's much better. But yeah, so it was right after we met, I was able to open my first brokerage account in the U.S. And I started investing. And just following along exactly what the book told me to. I think I just did VT. Sacks, the Vanguard, Total Stock Market,

index and those were my first investments. Wait, the complete idiots guide said you put it into VTSAX? Yeah. Oh. This is a great guide. I've never heard of this book. Yeah, I don't like those books because of the title, like the complete idiots guide. I'm not a complete idiot, so I'm not going to read the book, but I'm going to read the book.

Apparently, we're reinventing the wheel over here. Yeah. I followed their stock picks, you know, their index funds were, you know, VT Sachs and they told told you at certain dollar amounts, go to the bond, put a little bonds in there, do the vanguard real estate one. They just went through the whole thing. And that's what I followed. Just put it in like they told me to. Did you, you said you had 15 grand in student loans at the time. Did you invest or pay those off? Or how did you think about the balance between those? At this point, I didn't pay them off. I just kept investing. In the following year, I did pay them off. And the reason,

is that when I got married, first of all, my wife is bringing in extra income. She worked as a university administrator at the time. But the exchange rate dropped. So it became very favorable to the yen, right? And I kind of, at that point, went into my next phase of investing. So it wasn't just saving. I wanted to make more money. And this was around 2008. And it was like a perfect storm for me. I know it wasn't great for everybody else. But the yen increased in value. A lot of Japanese companies started to suffer because they couldn't do their exports. So what happened was one of the companies I knew somebody who worked there, they had a grant from the government where they would pay half of their employees' salaries for every hour of training they got. And because they

weren't making any money, they decided to hire me for 12 hours a week to teach English to 300 students at one time for $100 an hour. So in addition to my full-time job, I was doing that. I eventually had to, I started kind of a little business. I started hiring people to do the classes and taking 50% of the cut because I couldn't do it all myself. And then in addition to that, I found a few other companies that wanted the same deal usually in the evenings. And I started teaching there. And I was receiving, you know, $100 to $200 an hour teaching students at that time, in addition to my $30,000 salary. So that was the part at that time in 2008, I believe is when I paid off my student loan entirely. And my credit fell. So at this point, 2008, you're married, you're debt-free,

you're beginning to invest in these in these assets. How are things feeling and what happens next? Yeah. So, I mean, I at that point, I realized that I needed, I didn't want to be like one of these guys that got stuck in the Akeyewa life, you know, $30,000 a year. Because I knew some of them had had some good years too where they had these great extra income or something. So I knew that I had to go back to school if I was going to stay in Japan. So I went looking for a master's, program at that point. And, you know, especially even at that time, a lot of degrees are offered online. So I found one that didn't cost a lot of money. Shenandoah University in Virginia did a master's in education there. And they had a grant where if you got selected to the program, 50% of your tuition was paid. So I was determined not to get any more student loan debt at that

point. So I did that. I started my classes and working full-time and of course doing these extra classes. Like, you know, Scott mentions it a lot with a lot of the guests. There's this period of like hustle that's, you know, for a period of time. Mine was about eight years where I just went crazy. And I'll tell you a funny story at the end of what happened at the end of that eight years of what I ended up doing. But I've become much lazier since then. But, But it was necessary for those eight years, I think, to really put in the work. You're living in Japan, teaching English to Japanese students. Yeah.

And taking classes at an American university in English for eight years. Well, for the master's degree, it took me three years. Oh, okay. The eight years is then I started my doctorate degree. Oh, well, of course. Yeah. So the reason I did that is after I got my master's degree, that qualifies you that and some publications to get a university job. And that was life-changing because going from $30,000 a year to a full-time university lecturer position, I think it was $55,000 or $60,000 a year.

And I'd never earn that much in my life, you know. So it was great. And in addition to that, a lot less work. You know, you're teaching 10 classes a week. There are hour and a half classes and they're all pretty much the same class. So you don't need to do a lot of preparation. So, you know, we're talking 15 hours a week of actual in the class work, maybe another 10 hours of preparation or whatever else grading or something. So, you know, I hit the jackpot. I think that's a very interesting comment that you made. was a lot easier. This higher paid job was a lot easier. When I was younger, I worked at Dairy Queen. And that is not a cushy job for all of you who are thinking, wow, she's got such a glamorous

life. You run when you were at Dairy Queen because I was working there in the summer and it was very hot outside. And there was this huge line all the time. And it was just constant, go, go, for $3.35 an hour. And I have found that as I get more educated, my jobs are easier as I have more life experiences. I have more everything. My jobs are easier. And I'm making way more money. It's like, and I'm talking to my husband too.

He's like, yeah, my first time was at McDonald's. And it was like, you run. I think everybody should have to work in food service because you will learn. What a delightful job that isn't. But you work really hard for that $3.35 an hour. But when you're up at the $50 and $100 an hour, it's more mental than physical. I don't come home from work exhausted. But when I worked at Dairy Queen, I came home from work exhausted.

So I just think that's funny. I think you'll find this interesting. My wife's first job was Dairy Queen in Japan. Oh, mine was in Portland, Park, Illinois. Yeah. I didn't even know. They had Dairy Queen because I've never seen it here. And my wife comes from a pretty small town.

And I was surprised because whenever we go to Hawaii, that's the first place she wants to go is Dairy Queen. So she still loves the food. She just, she didn't like working there, though. It's an interesting experience. Brandon Turner gets started at Coldstone Creamery. So we've got a, we've got to like a cold stone cream. One job that leads to successful investing at first.

What was your first job, Scott? my first job was working for my friend's dad as a real estate who was a real estate investor and I would have odd jobs like one time he gave me a set of keys and I had to go to one of his housing developments and it was a bag full of keys. It was like, try the keys in all the doors and tell me which one goes to which. It took me like four hours to do this. It was like 150 keys. I was like, nope, not that one. Nope, not that one. And then the lock, you know, click the cash. I click $10,000 in cash and, you know. Wow.

Wow. Yeah. That was your first job. How have I known you for a hundred years and I never even asked you what your first job was? Yeah, I was a strange utility guy for, you know, I was a little, I was bigger. So that's what me why I had to collect the tent. Yeah.

Scott's a big dude. Yeah. I didn't intimidate anybody for the rent, but hopefully I guess that would, I don't know, like I got a shot. Okay. Moving on. Okay. Okay.

Back to Japan. Yeah. So you have a master's degree, you got your doctorate degree. Yeah, so at that point, I got that first job. I realized how great it was, and I found out that if I wanted to get a tenured position, which is even better, I need a doctorate. So I immediately enrolled in a doctorate program. So all the way up until 2016, I was basically doing the same thing.

I was working full-time, but less, because not only are the hours, hours less, but we also get summers and spring off. So, you know, we're talking, you know, almost seven months a year of actual work, and the rest is paid vacation. Of course, we have obligations to do research and whatnot, but it's still a lot, a lot better. So I graduated in 2016 with my doctor degree and just everything worked out. My university needed a tenured professor, So I got hired there, which doubled my salary. And, you know, it's just the best job in the world. I can't imagine doing real work.

I hope none of my bosses are listening. But during this eight-year grind, you were able to avoid debt, it sounds like. But were you also able to build wealth during that period? Yeah. So we were doing the same thing. My wife was mainly the money in Japan. So she kept her money in Japan. I sent everything back home I could.

And it was all index fund investing. The first breakthrough into real estate, though, in 2014, first of all, we purchased our apartment where we live in Japan. And that was a big decision because I'll tell you a little bit about real estate in Japan. It's a very interesting market. It's basically like, and this is a generalization, There's some different real estate that might work differently. But basically, if you buy a house, it's like buying a car in the United States.

The value just depreciates over the course of time and even the rents go down that you could charge for that property. So I was very worried about that. I thought, why do I want to invest money in Japan when the value is going down? Now, they do offset that a lot in the way that you can a lot of times, get zero percent down loans, and the interest rates are below 1%. So when you start weighing that, it starts to make sense. And luckily, I also have a very money-savvy wife who realized that buying a brand-new apartment, which is what most Japanese people do, is not the best way to build wealth.

And instead, we bought something that was 15 years old that had already depreciated pretty much to its bottom, but it was right next to... to the station. It's five minutes from the station and five minutes from a big shopping center and everything. So we bought that. It was about $170,000 for a three-bedroom. And this was a lucky break. We found out, my wife didn't even know it, but she had actually received an inheritance from her grandmother when she passed away. So we used that money as the down payment. So we didn't even come out of pocket for that. And amazingly, this property, and this never happens in Japan, is actually appreciated.

So it's worth about 210,000 now, and that's six years later. Why did this one appreciate? So most of the population in Japan is going down, almost everywhere. For some reason, this small town where we live in, called Kusatsu, people wanted to move here, and people are having children here. So it's a little different than the rest of Japan. And because of that, the money is sort of poured in. And they've built, you know, wonderful parks and facilities and all this type of thing.

We live right behind a really nice park area that has restaurants and, you know, walking areas and cherry blossoms and everything you can imagine. So it's, we just really lucked out on this. And I will, you know, of course, concede that we inherited the money that we put in here. But when you look at my net worth, this really hasn't helped build it because in Japan, there's no helix. There's no cash out refinances. So I can't tap this cash. We're just living here.

It's trapped money, but it's a great place to live. So I'm very happy with it. You know, it's just funny because I wasn't thinking about this prior to our chat here. But yeah, like the, okay, the population is declining in Japan. There's all a bunch of reasons for that, which I'm sure it could be a whole podcast or several podcasts and describing it. But that's the fundamental difference. I think between Japan and the United States and real estate in general. And here, you know, there's a lot more people coming into the United States on an annualized basis. Population growth is pretty stable, predictable.

And the land is, you know, and there's not enough land or there's not enough housing supply. There's plenty of land. And so that's what we're seeing there. And that's driving all of these fundamental truths. we have, or fundamentals that we take for granted here in the United States around real estate investing. So that's fascinating. And I also think it's fascinating that you took money out of Japan and invested it into the United States. Were there mechanical, is that mechanically challenging or is, you know, simple conceptually? But is there a difficulty in doing that as a

foreigner or living abroad? And is it financially difficult? Like, does it cost you money to send it over here. It does. It does. There are some really great services. I've sort of evolved as I've been here, but I currently use something called transfer wise. It seems to be the cheapest way to send things over. And yeah, one of the biggest issues that we have is after 9-11 with the Patriot Act has made it very difficult for United States citizens abroad to deal with money. in many ways. So, you know, just to give an overview of what goes on, basically in Japan and in foreign countries, a lot of times they don't want to work with Americans because the U.S. government requires

that they do an exceptional amount of reporting on those Americans and what they're doing with their money abroad. So it can be very difficult to open any sort of thing here. I was able to open bank accounts. That was fine. but you can't open a brokerage account, and it wouldn't be tax-wise to do that anyway, because the U.S. is one of the only two countries in the world, and the other one is a very small, I believe, African country,

that requires its citizens to continue to report and file taxes while living abroad. And there's restrictions on that with investing in foreign passive investment companies. So you're kind of stuck. You can't invest there, But then when you go back to the U.S. and you try to open a bank account or try to open a brokerage account, most of them will say, well, if you have no U.S. address, we can't service you. So there's no way to do that. I was actually the first brokerage account I opened. I did that. I used at the time my parents addressed when I had opened it. And then my parents moved abroad. They moved to Thailand. And yeah, my father had another company there. and I called the company and I said the brokerage company. I said, yeah, we're living abroad and they immediately shut my account down. And so I was upset and shocked. I was thinking, what am I going to do?

Like, can I not invest as an American? Do I have to go back? After talking to different people, you know, I'm definitely not giving advice here. I'm not a CFP or CPA, but I've talked to a lot of different specialists in the area And what I was told, first of all, is the first option you have is that you can create and establish an address, a residency in the United States. And you can do that in a variety of ways. Like, you know, if you do have family living there and you're visiting and you have a driver's license and you pay maybe the bills and things like that, this is a bit of a gray area. But I've talked to them and they said, you know, there's nothing really against, there's nothing illegal about doing that.

But it's one option. You can have my laundry room for $1,000 a month if you like. You could rent mine for $900. Maybe this is a good business. We should talk about that. So, you know, that's one option. The other one is you invest through a broker. So like in Tokyo, you'll find American stock brokers.

But of course, you're handing over a lot of fees there to do it. And they're registered in the United States. And then the final one, which is probably the best option, there's a few brokerages that will deal with you. Usually only if you've opened your account in the U.S. first and then you move abroad. So Fidelity is one that I've talked to and they said it's completely okay to have a Japanese address. There's some countries that are restricted, but Japan is fine. So my parents live in an RV and they travel around the country building churches.

They don't own a house. They have a house on wheels. And they have residency in South Dakota, which doesn't have state income tax. And South Dakota's residency requirements are you have to have like an address, like mailboxes, et cetera. Do you know what that is? Yeah, yeah. So you have to have an address there. It's like a P.O. Box or a suite or something.

And you have to sleep in their state at least one out of 365 days a year. Yeah. And that's it. You just have to sleep over. And you don't even have to sleep over in like a house. My parents sleep in a hotel one night every year in South Dakota. And then they have a South Dakota residency. They have South Dakota license plates and South Dakota driver's license. I wonder if North Dakota does that too, because they have very low population. Yeah. So, I mean, those are all probably good options that you could do if you're in the situation. But I mean, it's just something you're going to have to research. We've found. so many things in the 14 years that we've lived here, you know, our estate planning was something that was a nightmare. I initially went to do estate planning and asset protection through an attorney in the U.S. and he promised me. He was like, oh, we know what we're doing. It's fine. You just need

to do this, this, and this. And luckily, I didn't listen to him because, you know, you're paying taxes in both countries. So one of the things, of course, he wanted me to do was to transfer my real estate, my rental real estate into LLCs. Well, in Japan, they don't have an LLC like we have it. So that's a sale. So if I send it to my LLC, even if I own it, I got to pay the capital gains tax and the recapture. So it would have been ridiculous, you know, and you can't do it. So there was a lot of little things like that. In the end, when I did my estate plan, And I had to get a Japanese CPA, a Japanese attorney, a U.S. attorney, and a U.S. CPA to work together to come up with the plan. And it was very expensive. Jeez. Yeah. So we're going back to your story for a second here.

Mechanically, how did you, have we ever solved this? How did you invest in the United States? Mechanically. What option did you choose? Yeah, I do. I maintain residency in the U.S. So I maintain a residency in Idaho. Got it. Okay. So you said earlier that we were going to hear something funny at the end of your story. You said you spent eight years grinding it out and you became a tenured professor. You solve all these ridiculous, crazy problems or residency investing out of state. Just trying to maintain the very basic simple approach to wealth we tout here on the money show all the time from Japan. What do we got? What's the fun part here? Yeah, so I did my doctoral defense, right? And I was absolutely exhausted. And I had all these plans of what I was going to do when I finished, you know, travel. I had other research I wanted to do. I ended up, it was summertime. So I had no work teaching. I sat on the couch and I started watching friends. And I did not leave that couch until I watched all 11 seasons of friends. Yeah, my wife used to leave in the morning Because she had a more 9 to 5 job And I was still on the couch when she came back

And I was just, I was mentally exhausted So for those few months, I didn't do anything But yeah, I was on a break There you go, I'm well-earned sabbatical after An enormous cried, that's awesome God doesn't get it, did you ever watch Friends Wasn't out yet, yeah So God, did you ever watch Friends?

I watched a handful of friends, yeah. So when Ross cheats on Rachel, she's upset at him and he says, we were on a break. Oh, yes. Okay. Now I get it. Yeah, I didn't mind. I don't know friends well enough to, yeah, go back to that kind of stuff. I know friends well enough. And my girls are starting to watch friends. Tax season is one of the only times all year when most people actually look at their full financial picture, including income, spending, savings, investments, the whole thing. And if you're like most folks, it can be a little eye-opening. That's why I like Monarch. It helps you see exactly where your money is going, and more importantly, where your tax refund can make the biggest impact. Because the

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You finish up with your break, which I didn't know. And then I didn't get it. And then what happens next? What's your wealth position in a general sense and what happens in the next couple of years? Well, a little bit before I got the tenured position, I started investing in real estate, but it really ramped up once I finished my doctorate and everything. So in 2014, I had been putting feelers out. I think it was on Facebook saying that I wanted to invest in real estate. That was the next step in the book that I told you about, right? So invest in real estate. So I was following that book. I didn't.

read a few other books at the time about the subject. And a friend reaches out to me and he's actually a lawyer in Los Angeles. And I went to high school with him. And he said, me and all my partners are all investing in Boise, Idaho. And this is in 2014. He said, we got a property manager. We've got a real estate agent. If you want to tag along, you can. And, you know, I just thought to myself, this is the best thing ever. This guy, this property manager is not going to pay. piss off a bunch of lawyers from LA. So I'm going to go in with them. And I didn't know anything about the market. Luckily, you know, Boise has been one of the largest growth markets in the country, if not the largest. Yeah. So I got in there and I got great advice. The guy that I worked

with, they're a real estate agent. He was also an investor. So he recommended a town right outside of Boise called Caldwell. And what the strategy he gave me, which I think was just a one-off strategy, but I sort of capitalized on it, was to find four-bedroom, two-bath houses with a bonus room, and then turn the bonus room into a fifth bedroom because there was a lot of large families that were living in that town. And you could rent it for the highest price. And that's what I did. I found two of them, like one after another. And did the same strategy fix them up. And at the time, it was a bit of a deal, but I could buy it at the 1% rule. Let me interrupt for just one second here. You're coming out of this eight-year period,

and you're able to avoid debt, but you're also able, it sounds like, to generate enough of a liquidity position in addition to your investing to support this. Is that right? Is that just a result of grinding it out over eight years to accumulate that liquidity? Or is there any other forces at play in allowing you to come up with the financing for this, you know, the cash for the for these investments? Yeah, it was just saving and investing. Everything I invested in was in a taxable brokerage. And that's maybe another component here, because as somebody living abroad, if you don't have

earned income in the US, you can't invest in an IRA or a 401k or anything like that. Everything is going to be taxable unless you can start generating an income in the US. Or you go over, there's the earned income exclusion on taxes. So if you get over that earned income exclusion, over like 110,000 for an individual or something, you can start investing that into an IRA. But I wasn't at that level. So everything was taxable brokerage. And I did cannibalize my brokerage quite a few times over the next couple of years at this point

in order to buy real estate because I was getting so much better of a return. So you shifted money out of your index funds basically into real estate. Okay. Yeah, exactly. So yeah, so we did the two in Idaho. At the time I could buy them at the 1% rule pretty much, 120,000, rents for 1,200. Those properties are now worth 300,000. And that's, so I did kind of a long-term burr, right? Eventually, I was able to take that money and continue to grow. But the first properties were in Idaho. I was still chasing the 1% rule. I think that's kind of an interesting thing that I've learned over. the time. I had it in my head so much that 1% rule is what you need to go for, that once prices started to rise in Idaho, I stopped buying. And I wish I never did, but I did. And I moved to another market at that point. So throughout 2015, all the way up until actually last year,

I bought a number of properties in Memphis. Were you using bigger pockets as part of that process to invest in the United States? Was that, and I'll explain why I'm asking that. It's not just nepotism or me plug in. No. Yeah, I was definitely using bigger pockets. I was looking up things and people. It was after the Boise investments that I started to get involved in bigger pockets,

because when I did Boise, I didn't have any idea what I was doing. I just followed along with what the real estate agent said, and I'm just lucky that it all worked out. Well, I just want to chime in that I think that the community, especially, you know, in 2014, 15, 16, I would say that the 1% rule was just kind of like a sacred number within the bigger pockets community. I think it was a big disservice to a lot of investors because as interest rates fall, you can still cash flow on a lower than 1% rule situation. And that's a reality. And so, and that's a big lever that I think some people miss. And I just wanted to chide in with that, that I got kind of sucked into that as well.

And it's been hard to fathom investing. a lot of people have lost money by not sticking to a formulaic approach long-term investing rather than attempting to chase that higher 1% rule. Anyways. Yeah. It's something I tell a lot of people on the Bigger Pockets Forum because I've sort of learned that lesson. It depends on your situation. If you need cash flow, you need cash flow. But if you have a great job like I do, and there was other factors in play. And I think this is sort of I told you about why I didn't invest in Japanese. real estate because the prices are falling, but that actually created an incredible loophole,

which we ended up taking advantage of. My wife and I didn't even know about this, but the first time we went to file our taxes in Japan, we went to the Ministry of Tax, and we showed him our tax return. We said, you know, we've got this U.S. real estate. We don't really know how to calculate it. And the guy's like, you've done this all wrong. He's like, all of these houses are over 20 years old. So in Japan, we have a rule that if it's over 20 years old, the entire structure can be depreciated in four years. Because in Japan, the structure is worth nothing, right? And you can take that directly off your income. So if you have a structure that's worth $100,000 and in one year, $25,000 can be cut from my income.

So my income goes from $100,000 to $75,000. And if you buy four houses in a year, you're paying zero taxes. And rich Japanese people have known this for years. And the thing is, next year, they caught the loophole and it's being closed. And I'm really wondering how it's going to affect markets like Hawaii, like Honolulu. Because Japanese people have been investing there and they're doing it for a tax purpose mostly. And that's why they pay premium prices. They don't care.

They just want the tax loophole. But I think I found a better deal with it because I was buying cash flowing properties that were giving me the tax loophole. And all that cash flow, I was able to also write off because of all the other expenses. That's awesome. And you've already won with that. Now you have a great problem where you've got all this benefit from depreciation. But now you're going to be not being able to offset your income with depreciation like a lot of other real estate investors. So is there a strategy in place for that challenge when they catch the loophole in the next year or two? We are working on it. So my wife is, she's actually in Japan, she's taking the certification exams for like certified financial planner and tax preparer and all these type of things.

So she works a lot on our Japanese side. And they haven't written the law yet. So we don't know what it's exactly going to say. but we've brainstormed some different strategies. Like one thing my wife thinks is that they're going to still allow depreciation of capital expenses. So she's wondering if we can do some sort of big burrs, like, you know, do some burrs where we have a lot of capital expenses up front. Maybe it's going to be a longer period of time, but we'll still be able to depreciate it. But there's a possibility that they'll just say no foreign real estate, because there's no.

benefit to the Japanese government to allow people to buy foreign real estate and then depreciate off of your income in Japan, right? So we're going to have to see. That's fascinating. I wonder what that's going to do to the Hawaii real estate market and even some Southern California. Yeah. So I'm looking at that. I don't know how much it's going to affect because there's other foreign forces in play. There's still Chinese investors and whatnot that want to keep the market afloat and they also

have their own reasons. This is one thing I often say on the bigger pockets forums because people say, I don't understand why these people are paying so much for real estate, especially in multifamily. And it's because if you're a rich Japanese business

person, you're making a lot of money, you can just depreciate everything. So the play is different. And you have to know what you're investing in. It's not all about cash flow. It could be about appreciation. It could be about tax advantage. And for us, that was a big part of it. So going back, that's just absolutely a fascinating discussion around that and a perspective changer. It's just going to make me think about the world slightly differently. And so thank you. It's super valuable. But jumping back to the fundamentals here.

You've got a position now where you're, you know, comfortably employed. It's something that you seem to really like and that you really enjoy and are thrilled to be doing. I think, you know, you've described it as like, I get to do this. So that sounds great. You're, you're, you're, you have dual, dual income with with your wife. You have investments in aftertax brokerage accounts and real estate. You're mentioning, I think when I interrupted you, that you have investments outside of Boise as well. What's the fundamentals of your portfolio and, and, and, and, and that product. I that progression from that point where you shift out of Boise to wherever you are now. Yeah. So just to give an overview first, so I have a couple of different portfolios, I guess. My personal portfolio, which are all in my name, because part of that tax advantage is you had to have them in your name. You can't have them in an LLC. Those are tax different in Japan. So I had the two properties in Boise, and then I started buying in Memphis, Tennessee through a turnkey company. And you hear some bad things about turnkeys. I, again, must have hit the jackpot because to this day, I'm getting 20% cash on cash return on every one of those properties. And they're

my most trouble-free properties. I've had the same tenants from day one. I think only one of them have changed. And I own five in Boise. I'm sorry, in Memphis. Yeah, so I have five in Boise and then I actually own one with my mom there once I ran out of loans.

Which I can talk about in a second. But just to kind of cap it off. And then I moved into Alabama. I bought one in Fultondale, which is right outside of Birmingham. That was also a turnkey. I wasn't as happy with the experience. And then, and this is sort of the big moves, I went into Huntsville.

I started to learn a lot more about real estate, and I realized that market is key. And I did a lot of research, and I chose Huntsville. And that kind of is what set off my bigger portfolio, because later on, I did partner with people. And we now own about 50 units in Huntsville. So those are, that's a different, maybe a different conversation. but the first part is my own property. Can you walk us through very briefly the how of the financing piece? Because, you know, the real estate story, we might have to just get to another time with all this stuff.

But the how of the personal financing was this at the expense or did you have to liquidate large portions of your investment portfolio in index funds and brokerage accounts? Or were you able to kind of snowball it or what did that look like? and then how to getting loans work for you in the United States? Yeah, so it's a little bit of everything. So at first, we did have the cash. The first house we bought, my wife actually had the cash saved up, and we did that. Then I think the next one, it was my cash that came in. And then we started liquidating a little bit of our funds.

But after a while, you know, the cash flow is coming in. We still have a high enough income and everything. like that, and eventually we're able to start refinancing some of these properties that allowed us to keep buying, especially at that time. The thing with the financing, this is very interesting. So I mentioned that one of the negatives of being an American is that you have to continue filing taxes in the U.S. One of the positives is that we can still get conventional financing on U.S. homes because we're filing taxes in the U.S. So there's a lot of mortgage brokers that won't want to work with you or not experienced enough to do it. But when you find the right ones, it's the same

process. The only issue here is that I have to translate a lot of documents. And depending on the mortgage broker, they might want you to get those professionally translated or, you know, you could do it yourself. That can be a big difference in expense. And then when you do the actual notary, it's much more expensive in Japan because you have to go to the consulate. And consulate charges $50 per seal. So a typical house will be $350 at least $400 maybe. Yeah. So a few times we actually flew to Hawaii to do it because it was cheaper to go and have a vacation and then do three refinances at once. So those are some of the issues. Yeah. That's that very fie of you to fly to Hawaii to refinance three houses.

Yeah. I may have been there on a business trip when I did it. Yeah. So depreciate these types of things. Yeah. But yeah. So that's the, that personal portfolio that I'm talking about in my name are mostly single family.

The newest one I did is I actually built a duplex. And I bought that with a friend of mine here. So most of them are single family. except for one duplex. And then the big portfolio is kind of where we went to next. Do you want me to go on to that or do you have a question? Well, just a quick question. We talked about how Japanese real estate is tending to depreciate. But you imagine that there's a way in there, especially with the gift and all that kind of stuff that you talk about. Was there any consideration around investing in Japanese real estate and applying some of that skill?

there or was it, why stay away completely? Yeah, so I think there is, and there may be something in the future that I do, both for diversification, but also maybe there's some tax benefits. Maybe that's the only place to get those tax benefits. One of my business partner, who I eventually bought the Huntsville properties with, he actually owns two large buildings in Japan. And he was able to do that, because at the time, which was a few years ago, the banks were giving 110% loans for people to buy apartment buildings. And so he had no money out of pocket to buy these apartment buildings. And it's getting paid down. Even though there's some depreciation and rents could go down, he's still making a lot of money on it.

Unfortunately, there was a little bit of a bank scandal that happened here. And after that, they stopped with these zero percent down. loans, and now we're at like 20, 25%. And I'm still very interested in it, and I know people who are making good money in Japanese real estate. There's a lot of little techniques you can do. I know some people, for example, that are looking to buy houses and rent them to foreign, to American, mainly military here, because they get a stipend for their housing and you can rent it at higher rates. There's all sorts of things you can do. But whenever I do a one-to-one comparison of what I'm getting in the U.S.

with the cash flow plus the appreciation. And then I look at Japan, I just almost always come back to, I think the U.S. one is going to be a better investment. Love it. Okay. So tell us about the big investment now. Okay.

Yeah. I've been chomping at the bit to tell you this one, because it's also another funny story, I guess. So I got to credit bigger pockets for this because I met my two business partners on Bigger Pockets. One of us has actually, let me say, I've met both of them face to face, but one of my partners has only met me.

And one of the partners, the same one, has never ever been to Huntsville. So we formed this partnership on BP because we were some of the only people that had a big Japan connection. So we're all married to Japanese women. Two of us were living in Japan at the time. one of us is in Hawaii, but my partners, one is a real estate attorney and the other is a commercial lender. So it's great. I'm kind of the odd ball out. They used to call me the Kanban Musume, which in Japanese means the poster girl, because I was making all the connections.

Like I had discovered Huntsville. I had made tons of connections there with people and I knew the market. And so we teamed up and we were just going to buy a fourplex. That was the plan. We tried to buy, lots of things fell out, and our realtor came to us with 19 duplexes. And just one portfolio, 1.5 million, owner financing, 4% on the owner financing. But here's the deal. We weren't allowed to inspect before we buy. Yeah. So, of course, we're like, we're not going to do this.

Like, there's no way, but we were really having a hard time finding it. And our realtor who is like a third generation realtor in Huntsville and he's a big investor, he said, guys, I believe in this one so much that I'll invest with you on. And we were like, really? Okay. I will consider it. And we did a dumb thing. But I think the market saved us.

We basically went into it. I mean, it really wasn't a dumb thing, especially for my partners who have gone on to be syndicators in the area. because it really broke us into the market. But once we got hold of the property, not only did we get the properties, we also got three workers. We had a full-time property manager that lived in the area. He looks like Yosemite Sam carries a six gun on his hip, and he's been working there since he was 15 years old. Then we had two maintenance guys that were full-time, and we had two trucks. So we got a big package of stuff

And it's been a complete adventure. When we finally went in to inspect those properties, one of them had a hole in the floor to the ground. And when we told the tenant, like, we got to fix this. They were like, no, it's okay. So that was sort of the level of what we were dealing with, you know. And our initial plan was we were going to, and again, this is a big mistake.

stay because we thought we're going to get a lot of cash flow coming in. We're going to use the cash flow to fix up the properties. So we were undercapitalized when we went in. And basically, two and a half years later, we have changed our strategy and it's worked because of the market. You know, the market just went up and we've been able to sell them one at a time. Right now we have five under contract for much, much higher prices. So we're basically have done a long-term flip. And we're not going to just make our money back. We're making a great return on those properties. But it's been a big adventure for like two and a half years now. That's awesome. That's a huge risk that you guys took and a gut check, but it seems to have paid off

really well. Yeah. So, you know, it's really funny. And one of the things is with my partners, we call each of our properties after a Japanese food. So, Those ones are called Gyoza. I don't know if you know what Gioz are, but they're little dumplings because they're 19 duplexes. So those are our Gioza. And yeah, I mean, as I said, it was a gigantic risk. It's not something I'd recommend. But it got us into the market.

And everybody knew us. And so right after that, we got offered a 12plex, which was almost brand new. So we were able to buy a 12plex after that. And that was our next purchase. I only own a small portion of that. 12plex because I couldn't add much to the deal. And my partners have now moved on. At that point, I realized that, you know, I didn't want to be a syndicator because of all the work we'd been doing on this other stuff and sleepless nights and everything. So they decided to be syndicators and they're

syndicating two deals currently in Huntsville. They were already closed on one. And they're doing really, really well. So it's great that we got into this. But a crazy story. I just want to point out that, you know, yes, sure, there's some luck involved in that stuff. But let's be real here. You spent, you're not like some, you know, a hot shot executive or whatever with all this stuff. You taught English and now you're a professor and you saved your money and you built a financial fortress and grounded out over a very long period of time, constantly referring back to, I think it's the idiot's guide to getting rich along the way. And built this financial position, took a couple of risks as you got more comfortable, built a sizable financial position,

and then found yourself in a position where you're like, you know what, this could be an opportunity, and this is what opportunity can smell like with this. This is what risk, and you were able to do that. If you gotten wiped out on that deal, what would have happened to you? Not much. I'd be set back about a year. You know, I mean, it was money that we had refinanced out of our original Idaho properties. So, you know, I think my initial investment was 75, thousand. I've invested a further 50 since then. But, you know, my total net worth right now is probably about 1.2 million. So it would have, it would have hurt, but it wouldn't have wiped us out. And I'm also really lucky. I have a, like, I'm a little bit high strung and I get stressed out.

My wife is so calm about these things. And she's just like, you know, it's okay. We learned a lesson. Don't worry about it. And luckily, it's worked out. So, yeah. Yeah, I want to point out that you invested, you bought properties that you were unable to inspect and forbidden from inspecting, I think is the better way to say that. So that is not a rookie move. If you were listening to this and you have $10,000 and you get this, ooh, here's 19 duplexes, but you can't look at them before you buy them. That's not a good idea. That is an incredibly bad idea.

That's a great way to lose all your money if you don't have a financial cushion. But because you have spent so much time investing and saving, it sounds so crass to be like, oh, what's $50,000 or $75,000? Like, it's not going to ruin me. But that's investing from a position of financial strength, which is something Scott harps on all the time. Yeah. I mean, you just did all the fundamentals, right? Yeah, you had all your fundamentals.

Yeah. Yeah. So, I mean, again, I always tell people, don't do what I did in this case. But the market is also another part of that. If we had done this in somewhere like Memphis where you have a flat population, it's one thing. But Huntsville has now been nominated as the next space command, right? I mean, it's the rocket city. It's the population is growing like crazy. The properties that we bought, I think they've almost done. Some of the of them have almost doubled in value since we bought them, even the ones we weren't able to fix up. So we have lots of people exiting like 1031 exchanges in California and they want to buy property in Huntsville. And we got in there three years ago. And a big part of that was me learning how to analyze markets. You know, as I said, I don't bring a lot to the deal with a lawyer and a commercial lender because they know way more than me. But the one thing that I did bring was the market analysis. And so that really helped us. Yeah, that's it. So sometimes it is rocket science. Yeah.

Okay, well, we've talked a little bit about what you're investing in real estate-wise, but we haven't talked about what else you're investing in. And I know in advance that you invest in crypto. So I want to talk about where you are putting your money besides your index funds and besides your real estate investing. Yeah, so there's not much more than that. I do, I mean, just to add one little thing to real estate, this year I have invested in some syndication. So I'm an LP in a few different syndications. But besides real estate and index funds, the only other thing is I started to dabble in cryptocurrency.

And one of the things that did it to me is maybe a couple of years ago, a friend of mine who doesn't invest very much, he said to me, hey, are you going to invest in Bitcoin? and I kind of almost regurgitated what Scott says quite often on this show of why I wouldn't invest in Bitcoin. And of course, it exploded. And I thought to myself, you know, if I had maybe up to 1% of my net worth in crypto, it wouldn't be such a bad deal. It's a black swan event. You know, you can capitalize on it. And in addition to that, there's some really interesting things that are going on with crypto. banks, big banks, are starting to approve the stable coin as a means to transfer with blockchain.

There's a lot of large brokerages that are buying into Bitcoin. So, you know, we can't really know if Bitcoin's going to win out, but I thought, you know, a small position. And currently, I think I'm at like 0.5% of my net worth right now. I might bump that up a bit and that's all I'm doing. Yeah, I have a tiny amount in Bitcoin as well in crypto because it's I don't view it as an investment. I view it as a part of the cash position and the cash position involving dollars involving gold, involving crypto involving whatever other currencies they have in there. And look, I'm skeptical of inflation.

I'm skeptical of crypto in a general sense. Like who knows if Bitcoin is actually going to be that there's a whole bunch of problems. All these people losing their passwords, all these other, you know, issues. So who knows what crypto is going to win out at the end of the day with that. If there is, if there is even is what, you know, with that kind of stuff. But yeah, I just think it's not really, you're not going to get rich investing in a currency or storing, you know, in a store of value. You're going to get rich investing in an asset that appreciates and, you know, that

appreciates in real value against whatever currency you're trying to live on, and then also produces that cash flow. Yeah. One thing I don't know about my strategy, because I've never really invested in single stocks or anything, is that at what point do I harvest the returns? Do I just let it ride? Right now, I'm just letting it go, because I don't have that much in it. but, you know, it's very volatile.

So is there a point where if it does triple or double, it already has since I've had it? So I pull my original capital out? I'm not sure. I think it's going to be super volatile, but I also wonder if the dollar is going to be very volatile. So that's where it gets hard. Yeah. Yeah, I wonder if I can optimize or if I can capitalize on that as somebody who's earning in yen. We'll see.

Yeah, we'll see. Very interesting. So could you give us a quick overview of your portfolio? Yeah, so I don't have the percentages actually in front of me, I think, anymore. But cash, I think I'm at about 7%. That includes cryptocurrency. I think I have 1% bonds. After listening to you guys, I used to have about 20% bonds. And I think after a few of the shows, I was like, you know, there's no reason I should have that much in bonds right now. So that's gone down to about 1% of my portfolio.

I think I have about 25% or I'm sorry about 20% currently in stocks. I want to beef up that position. I feel like I'm at a point right now where actually I am on lean fire right now with what I earn. I'm not planning to retire, but I could do it right now with that. And I think within three to five years I'm going to be in a fat fire position and I don't want to be so overweight in real estate. But then I think, you know, somewhere in the 50, 55 percent. is my kind of personal real estate that's all in my name. Again, that was a big part of that's for tax reasons. And then joint ventures and limited partnerships. I don't remember what I'm in there,

but maybe like 18%, or I'm sorry, like 10% or something. And then finally, I have a couple of hard money loans that I have that are great. I mean, I'm making like 12% return on those. I don't have the numbers in front of me, but here are super specific percentages of ID debt worth. I love it. Yeah, I said, I just don't have the spreadsheet in front of me, but I do. This is one thing we do. I do with my wife every, every month. We go through all of our bank accounts, all of our accounts, our passwords, you know, all that type of stuff. And we have it set up. Yeah, we do the money date and we look at everything and decide what we're going to do next. Awesome. Yeah. Oh, look, another successful investor who does a money date. If you

want to learn how to do a money date, you can go to episode 157, where Scott and I talked about the steps you can take to do a money date with a spouse specifically, or not specifically, more geared towards a spouse who is not on the same page financially. And I say spouse, I mean partner. I'm sorry. I'm old. This has been awesome. Thank you so much for sharing the story. The story was just so fun to be a part of and to hear about this. Thank you for being so generous with sharing the details and the numbers as well. I think it's about time to move on to our famous four, though. What do you think, Mindy? I think it is about time to move on to our famous four. Are you ready, Daniel? Yes, I'm ready, I think. Okay. Question number one,

what is your favorite finance book, which I think we've already talked about? Yeah, I think I have to plug the complete Idiot's Guide to Getting Rich by Stuart Welch and Larry Washka. That's so, it's so funny. What a great title. She never heard of any of that. What was your biggest money mistake? Oh, I've had a few. But I think the biggest one is taking out the student loan debt. I mean, I had no reason to take it out.

It was just one year where I decided I didn't want to work. And I took it out and just didn't make sense at all. And I spent a couple years paying it back. Yeah, it seems like it followed you for a little bit there. That's a great mistake. Followed you around the world. World. What is your best piece of advice for people who are just starting out?

I think the big thing is not to get overwhelmed and to keep things as simple as possible in the beginning. I see this so often, people that are just don't get started because they think it's a very complicated situation. And it's almost like once they make a decision, they can't change it. And I tell people all the time, you know, if you start investing in, you know, Vanguard S&P 500 index fund and you decide later on you want to pull some of that out and pay off some debt or whatever it may be, you could do that. You can change your position later on. So the important thing is just getting started and not to be overwhelmed by all the different advice you're going to get. What is your favorite joke to tell at parties? Okay. I've written this down because every time I try to tell it, I make a mistake.

Here we go. How do you tell the gender of an ant? You throw them in water. If it sinks, girl ant. If it floats, boy ant. Ah, fantastic. And because Mindy has laughed, Kathleen told me she's buying me lunch. When I go to Hawaii, I got that from a professor at my university. And one thing I will ask, is that in Japanese, these type of jokes, I'm going to teach you one Japanese word, or maybe two here, to say a dad joke in Japanese is Oyaji Gaggu. Oyaji Gago. Yeah, so it's like old man is Oyaji, and Gaggu is like a gag, you know, old term for a joke. And I do them all the time in class, and I get lots of groans.

And I do them in Japanese. You can do, there's some great ones in Japanese. Do you know what the Pink Panther said when he sank all those ants? No. Dad-a-d-d-a-da-da-da-da-d-da-da-da-da-da-da-da-da-da-a. Okay. I look up jokes in case our guest doesn't have one. And I'm like, ooh, dad jokes, Japanese.

And it says that, oh, yeah, Oiaji, jagu. Yeah, good. And then it said ambiguous word separation. Japanese can be very tricky when it comes to word separation. Where does one word end and one word? The next would begin. So this phrase is, oh, you can turn a relatively innocuous phrase into something dirty and or hilarious. I made bread, pan, sukata.

I ate underpants. Pansu Kada. I'm sure my... Pansu, yeah. Yeah. Yeah. So bread is pan and underpants are ponsu. So yeah, yeah.

Look at that. Now I learned Japanese. Exactly. I'll give you a Japanese joke. So I always tell this to my students and I get really great groans. So, and I'll have to explain it. But what is the smelliest city in Japan? And almost all my students say Osaka, because Osaka is a little bit, you know, kind of an industrial city. But the answer is Nara.

And I don't know if you know where Nara is, but Nara is this old capital of Japan with deer and everything. But the thing is, Onada means fart. So, yeah, that's the answer. It's much better in Japanese. I love it. Well, this has been just fantastic. Your story was awesome.

Your jokes were awesome. I learned so much. There's a lot of perspective changing that goes on. But I love that even though there's a lot of challenges that go along with the investing from a foreign country, the fundamentals don't change. And you literally built your wealth, your financial freedom from the complete idiot's guide

to getting rich from Japan. I just think that that's like, it's a phenomenal take on the personal finance story. And thank you so much for spending some time with us today and sharing this. I learned a lot and really enjoyed it. Thank you so much for having me on. I love bigger pockets in general,

but bigger pockets money is like my jam, you know. And especially since you guys had the Facebook page, that's been, I love spending time there and helping people out, hopefully, and sharing my story. Yeah, so a little surprise for folks listening. One of the reasons we in the ways we found Daniel here is because he's one of our top contributors in the Facebook group. And so we were just thrilled to be able to reach out and invite him on the show.

It sounds like you were going to apply at the same time, but we beat you to it. or Mindy Beach to it. So anyways, thank you so much for your contributions to the Facebook group and on Bigger Pockets. I know you're active there as well in the forums. And we just really appreciate it. Hope you stay a part of the community. And thanks so much for sharing the story. Thank you.

Yes, this is wonderful. Thank you so much, Daniel. We'll talk to you soon. Okay. Talk to you soon. Okay, that was Daniel Mills. Scott, what did you think of the episode? I loved it.

I had a lot of fun talking with Daniel. I thought his money story was incredible. Again, I mentioned this in the intro, but I feel like the fact that he had to jump through these hoops to invest in index funds and invest in real estate and the creativity that he's applied, I think make you appreciate the things that we've got here in the U.S. in terms of real estate investing in those types of things. And the relative simplicity of being able to do things like invest in index funds, not hard. And that's a challenge for a lot of people. And I think that, yeah, I think it's just impressive the way he was able to go about this. I do too. And, you know, his story really kind of, not really kind of.

That makes it sound like it's very and sort of at the same time. His story exemplifies the where there's a will, there's a way. He wanted to invest. So he did. And there are a lot of people who live in America, who have the ability to invest and just decide not to. And here's a guy who had to jump through hoops to do it, and he still did it. And I love his dedication and his determination. And he's just going to reap so many financial benefits from being determined to do the investing thing. Yep. And I also want to point out the tail and the compounding nature of wealth building here. You know, his wealth, he'd been doing a lot of things for a long time. But it was kind of a slow pattern at first. He wasn't making as much progress until the last five, six, seven, eight. years when that slope of his, you know, that the compounding nature of investing really began to kick in

and propel his wealth past that million dollar mark. And so just keep that in mind. Like, if you're slogging through that first debt payoff period or building that first liquidity position, it gets better and it begins to accelerate. And the pace of that acceleration is going to differ for people. And yes, it's been influenced by the bull market we've experienced over the last 10-ish years here. But I do think that that is the norm on an average basis. It's not going to always be that way. But just know that that's the game. It may not be, I mean, I feel like you're close to a million now, but you may not be that far away from it if you're beginning to invest in accelerating that savings rate. Watching the snowball is so fun. Like, I'm saving a

little bit. I'm saving a little bit more. I'm investing. I'm investing a little bit more. But then all of a sudden, the exponential growth, what is it, hockey stick growth, it's a little, a little, a lot and just through the roof. And that's so much fun to do. Absolutely. Should we get out of here, Scott? Let's do it. Show notes from today's episode can be found at biggerpockets.com slash money show 165. And with that, Scott, from episode 165 of the Bigger Pockets Money podcast, he is Scott Trench and I am Middy Jensen saying we're moving out, Brussels Sprout.

Thank you.