Epic Real Estate Investing - The EPIC Problem! And YOUR Options | 354

Episode Date: March 9, 2018

If you're simply "saving up" for retirement, regardless of your age, you may be in for an unpleasant surprise. The good news is, there's a way to prepare for retirement that doesn't involve scrimping, saving, and wasting the best years of your life away. Today, Financial Freedom Friday shares the epic problem that's plaguing the country and what you can do to achieve financial independence, avoid regret, and enjoy life while you're young. Learn more about your ad choices. Visit megaphone.fm/adchoices

It's time for Financial Freedom Friday with Matt Terrio. Hi, I'm Matt Terrio at Epic Real Estate and just kind of wanted to clarify what it is that we do over here because the more of our audience that we talk to, the more people that inquire in our office, they all kind of seem to have us grouped into this, this category of gurus and coaches and educators and, you know, we do some of that. But we're here working on something much bigger because this world particularly this country we've got a big problem you see 99% of today's 65-year-olds are not prepared to retire and if you hear that word retirement you just kind of zoned out real quickly because you don't think it's relevant to you or you've got plenty of time yet you might be incorrect you need to watch this in fact in my opinion you can't afford to miss this here look at this when I say

I said 99% of today's 65 year olds aren't prepared to retire. That's not a made up statistic. Look at this pie chart. This comes straight from the Department of Health and Human Services. You'll see 54% are still dependent at the age of 65, either on family, church, or state. 36% are still working. Jobs like, welcome to Walmart come to mind. 5% are no longer with us.

4% the government deems financially free, meaning you could support you could support you yourself off of $40,000 a year. I mean, that hardly represents freedom in most parts of this country. But 1% defined as having a net worth of $5 million or more. That's how the government defines it. They actually make it to this wealthy status. But it's just 1%. So how did we get here? How do these numbers get so lopsided? Well, I'm going to give you something to consider. We all got here by following time-honored financial advice straight from Wall Street. Here, look at this article from the Wall Street Journal from back in September 1996. A good friend of my Jason Hartman turned me onto this article.

It's an older one, I know, yet there are countless articles just like it that have been written since, but I chose this one because it covers the longest time span that I could find this bar graph it tracks the performance of the most common investments that are available to the average person that make up the vast majority of people's retirement portfolios. You know, it shows stocks right here over time averaging an annual return of 13%. Shows real estate a respectable 12% with bonds and T bills pulling up the rear. And the reader of this article is really led to believe that if they just bought stocks and left their money there, they would have done better over time than any other asset class.

I mean, would you expect anything different from the Wall Street Journal? What this article fails to mention is that when people purchase an investment property, they typically use leverage to do so, meaning they put 20% down of their own money, and they leverage 80% of someone else's money, typically a bank or some sort of financial institution and that's the norm and what that does to this investor's return is it multiplies it by five you see over the same period of time using leverage a tool that is not available to the average person with any of these other investments this bar graph would more accurately look like this and we're not done either you see in addition to the real estate's appreciation there are three other profits

centers of real estate, the Wall Street Journal failed to mention. Profit centers that are not available with these other asset classes either. There's amortization, depreciation, and cash flow. When you factor these into your returns, real estate, we're off the charts. Real estate, it's what Wall Street doesn't want you to know about. Well, unless you invest in their own real estate stocks and funds. Oh yeah, Wall Street. They invest in real estate too.

They don't recommend it to you because they want the off-the-chart returns for themselves and they'll be glad to share with you the 13% return in their real estate stocks that they showed you here. So that's how most of the 99% of today's retirees are getting their results by following and applying information like this.

But even so, it's still a 13% return, right? And that should work over the long term, shouldn't it? You'd think, but the stats that I showed you earlier, they tell a very different story, don't they? Here, we can interpret this information in many different ways, and we can choose to take different actions based on our interpretations. And there are really four primary paths people will choose to follow. Here, look at this. This is what I mean. This is the live or die matrix.

You see, we're all living on this planet, and we've got a short amount of time here, right? it's a finite time and it's a short time life is short we hear that all the time and it's absolutely true and we've got one of two options and how it's going to play out we can make money and live now or we can make money and delay life now now most people they delay to save enough money to carry them through until they die so most financial plans consist of trying to hang on until you die. What I'm all about is we're all going to die but in the meantime did you really get to live? So there are two different ways people approach their finances in order to live their life. They either live life to the fullest now

or they play it safe to retire and live later. So real quickly before I go on would you say you are playing all out and living life right now or are you you making sacrifices and saving hoping to live life later here's what I mean in terms of the two ways to go about it there's save money the traditional way live below your means and save the difference or there's streaming money turning the money you do make into streams of income again real quickly would you say you've been saving more or streaming more what most people do is they save money to get through life. That's the strategy. What smart people do is they stream money. They build income streams.

Instead of sacrificing to save piles of money high enough to last them until they die, they go to work to live now building streams of money that will last forever. So from the pipe chart that I showed you earlier, most of the people are living in this lower left quadrant. And the strategy here is to work, save, retire. The next biggest portion of the population strategy is up here in the upper left quadrant where the strategy here is to work, spend, repeat. And then there is a small portion of the population, the frugal-minded people down here in the lower right-hand quadrant, the group of people made popular in the book Millionaire Next Door, where the strategy to wealth is to work, save, invest, die.

Up here, however, the 1% that's referenced in the Department of Health and Human Services chart of today's 65-year-olds, that chart I just showed you, where the strategy that gets them to society's wealthy 1%, the strategy to get here is to work, invest, live, grow. So those are the primary strategies of today's population. And here are the results of those strategies. You see, those that work, save, retire down here is typically, regret. There was so much sacrifice made down here in order for this strategy to actually pan out. For the most part, people in this quadrant, they look back on their lives with regret, spending a lot of time wondering if it was really all worth it, thinking about how much of their

life they gave up in order to live their golden ears in comfort. The result of the work spend repeaters, this result, they're trapped. They are literally stuck and never really see an end to their working lives. I mean, if they love what they do, maybe there's nothing wrong with this. But if they don't, they are indeed trapped. Now for the frugal millionaire next door types, that work, save, invest, die strategy, for the most part, the result here is a wasted life. I mean, so much effort was put into building their nest egg that they never stopped to enjoy what they built and for the one percent that deployed the work invest live and grow strategy the result here is independence so look at all four of these areas which quadrant

do you see yourself operating in most of the time and what's the consequence if you stay there i want you to know that there is a fifth option and this is what we do with our clients is that we move them to this area up here. Freedom. You see, independence, that's good. Freedom is better. Independence means you don't have to rely on anyone. Freedom means you get to do whatever you want.

And the strategy up here is live, leverage, invest, multiply. So how do you get into the freedom zone? Well, to do that, we need to build income streams so that we can enjoy life while we're still young enough to do so. We need to build income streams, multiple income streams. And when I look down here to this lower left-hand quadrant, I think of my father. I can't help but think of my father because he lived here and he subscribed to this strategy of work, save and retire, quote-unquote retire, until he did a little of assessment on his life. I don't know, about 20 years ago.

And he did the math. I mean, he was an engineer. He actually did the math. And he says, wow, this is not going to pan out. This is not going to work. And he felt a little frustrated to say the least. Defeated was probably a better word. And he just kind of gave up.

And tragically, he spent those last years of his life, those last 20 years. two full decades, really kind of bitter and resigned. And he wasn't the most pleasant person to be around. And I don't know. I see that, and I think he just felt, he felt a little bit betrayed because he just kind of did what he was told to do and the math didn't work.

And I don't want to pass that mentality or that ideology onto my son because it's still being taught today. There has been no real breakthrough in the type of financial advice that's doled out to the masses. And I don't want to pass that on to my son. I want my son to live each and every day of his life to the absolute fullest. And that's what I want for you too. And on the other end of the spectrum, because there is a bright side, there are my clients.

And I'll choose one specifically, Corey. I'm going to choose Corey to demonstrate some alternate paths to what my dad chose. And per the statistics, there are alternate paths to what the large majority of the country chooses to follow themselves. Here, let me show you what I mean. This is the now or later creator. The vertical line here represents your monthly cash flow. The horizontal line represents your time here on Earth.

And where they intersect, this is where you are right now. So let's say $10,000 a month is our monthly cash flow goal, of which when you hit that number, you don't have to work for someone else anymore. This is our independence number. I mean, maybe it's 10K for you. Maybe it's a little more, maybe it's a little less. If you'd like, you know, just draw this with me and use the number that works best for you. All right.

Below on our timeline, let's put 65 right here. This represents the age of the people on our Department of Health and Human Services pipe chart. For all intents and purposes, this is really, it's society's accepted retirement age, give or take a few years. Now, follow this red line, as this is the most common path people choose to experience retirement. They spend the most active years of their life, work. working, sacrificing, exchanging five days a week for two, living for Fridays, dreading Mondays, clipping coupons, paying down debt, so that they can sock away a little bit for retirement. And they do this for 40 to 50 years.

And when they reached the age of 65, if they did everything right, if they were able to save a pile of money big enough to produce $10,000 of monthly residual income, And we know that's a big if, as the stats show that 95% of the people don't make it following this plan. But for those that do make it, the big prizes, they get to finally really live life the last 20% of their years they have here left on Earth. 80% plus years of their lives, it's behind them. And they can't get them back. Let me show you an alternative plan. Rather than working to save a pile of money that will hopefully create a stream of money

to support your remaining years after you reach the age of 65, let's flip it. Let's flip the equation. Let's first work to create a stream of money. Let's do that part first so that you can enjoy life while you're still young enough to really enjoy it. And then if you wish, you can allow that stream of money to then create your pile of money. just flipping the equation there or another optional trajectory is the epic path my student Corey chose to follow you see when we met he was 21 years old and he buckled down and he focused solely on this concept he put in 12 months of focused hard work and he blew through this

$10,000 mark and he decided to lift his head up around $12,000 a month and then he embarked on a little mini retirement at the age of 22. After several months of fun and travel, he put his nose back down to the grindstone, went back to work, and after another year or so in the books, he lifted his head again and embarked on another little mini retirement at the age of 24 of where he is now. And this is the trajectory he sees for his future. The point I hope you walk away with is you have options. That's what I really want you to see. You have options. You don't have to do what Corey did. But at the the same time, you don't have to do what the masses are doing either. You see, it's your life

and you have options. Look at this chart and decide which path you want to take or draw your own path. I mean, how quickly do you want to get to your independence number? Here, let me give you some ideas on how to get there. And these are simple concepts to adopt. I mean, 95% of the population has adopted the idea of saving your money until the age of 65 years old. And they follow it. It's a simple concept. They follow it. If you don't like that idea, just follow a different one, one that's just as simple. And that idea being, shift your focus from making piles of cash to creating streams of cash. Shift your focus from making piles of cash to creating streams of cash. And from this point forward, anytime you have a transaction,

in life where there is money actually coming to you in that transaction. Ask yourself, how can I turn this money into a stream of money? I mean, sometimes you'll have an answer and sometimes you won't. But at least ask yourself the question. Make it a habit of always asking yourself that question. How can I turn this money into a stream of money? And then follow this new idea of creating streams of money by working full time on your active income and part time on your passive income.

You still need active income to pay the bills to eat to keep a roof over your head. So work full time on your active income and part time on your passive income because that's what's going to get you to your independence the fastest. Now it won't be the most exciting path to your independence number, but it will be your most certain and fastest path to your independence. Now this will work with any form of income streams you may choose. You could write a hit song for the residuals. You could author a best-selling book for the royalties. You could invent something and license it. You could build an online automated business, maybe something with Shopify or Amazon or an offline automated business like a car wash or a laundromat. You know, as long as it creates a stream of income, it will work. You can even choose more than

one or you can choose the one option that has proven to create more and bigger streams of money for more people than any of the four mentions combined and that would be investment grade income real estate real estate it's the final frontier where the average person has a legitimate shot at creating real wealth and how you define wealth that's up to you If you're looking for just independence, real estate will get it done. If you're looking for freedom, real estate will get it done. If you're looking to create wealth, real estate will get it done. And that's what we do here at Epic.

We show people how to become badass real estate investors in eight weeks or less and how to escape the rat race in the next 12 months. And to do that, we use this. This is the REIACE model because when this model is executed correctly, the result is a badass real estate investor where you have the confidence to take action. You receive money from your actions and you know how to put your money to work so that it works harder for you than you did for it, providing you the freedom that real estate promises. The REIACE model, it's built on three pillars. attract convert and exit because if you can't attract leads you have no opportunity and if you can't convert those leads to contracts you have no

control and if you can't exit your contracts you have no profit so with our clients what we do is we build their lead machine to attract leads we install their deal driver system to systematically convert those leads into contracts and we give them the ROI maximizer so that they are routinely exiting each contract with the highest and best profit for them at that time, whether that's a pile of cash, a stream of cash, or both. I designed this new partnership program called REIAs to create badass real estate investors. We've been running our real estate investing business for more than a decade,

and in a nutshell, how this works, we copy and paste the business and business, systems that we've perfected into your business so that within 24 to 48 hours you are up and running and within 7 to 10 days of implementation your phone is ringing and your inbox is receiving leads you get to bypass all of the business building and focus on what actually pays the real estate itself so if you see the value here and you want to take the most impactful action you can to becoming an ace real estate investor, you've got some options. You can take what I've shown you here and build your own real estate investing business, or you can partner with someone and leverage theirs, or we can build you one of your own.

Or you can do nothing and stay the course you are traveling. My goal of this time with you today is to merely reveal that you have options on how you choose to live the rest of your life as it pertains to your finances. If you like our help, you can apply at r-e-i-a-a-a-a-a-com. I'm Matt Terrio. God bless to your success. Take care. This podcast is a part of the C-Suite Radio Network.

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