Epic Real Estate Investing - Why Wholesaling is Destroying Your Financial Freedom | 433

Episode Date: July 27, 2018

Would you believe that wholesaling is DESTROYING your dreams of financial freedom? Today on Financial Freedom Friday, Matt Theriault shares what real estate gurus don’t want you to know - the beautiful concept of cash flow. Learn how to build streams of money instead of piles of cash, how to have fun and live your life now instead of waiting until you’re retired, and exactly why choosing cash flow will bring you your dreams of financial freedom. Learn more about your ad choices. Visit megaphone.fm/adchoices

This is Terrio Media. Hey Matt here, welcome to another episode of Financial Freedom Friday. It's time for Financial Freedom Friday with Matt Terrio. Today I want to help you achieve your financial freedom Friday, but depending on who you've been listening to, it could be a whole lot more difficult than what you've been led to believe. Because there's something real estate gurus they're hiding from you. And I can guarantee that they didn't share this with you at the last seminar that you attended

or the last webinar that you watched because they don't want you to understand how flipping or wholesaling properties is destroying your financial freedom. Because if you understood what's really happening in the background, you probably wouldn't buy their stuff. Now, if you want a high-paying job, there's nothing wrong with their stuff. I mean, I can't speak for all of them, but for the most part, I'm sure what they're sharing with you, that stuff, I'm sure it works. I mean, they wouldn't be in business too long if it didn't.

So if you want to make some good money with what they tell you to do, go right ahead because you will. I'm not going to stop you. But if you want to be financially free, if you want the financial freedom that real estate promises, it's never going to happen flipping or wholesaling properties. Here's what I mean. Here's some questions to ask yourself. First question is, what is financial freedom to you? I mean, what would that be for you?

Like just getting up every day and just kind of doing what you want to do for most people. that's what it would be. And if that was your answer, how much will that freedom cost on a monthly basis? What would that cost per month? And then the third question would be, how many houses will you have to flip to get there? Right? Okay, let's start here. I'm going to grab a pen and and kind of show you something because to achieve your financial freedom, you've got a choice between two paths. First thing is, you can go and work and save and build this giant pile of money, put it in some sort of retirement plan, and all with the intent of creating a nice stream of money that's going to pay that monthly bill for your financial freedom. Right? That's where the financial

freedom comes. This is how most people go about it, whether that's working a corporate job or whether that's flipping properties. They work, work, work, save, save, put it in some sort of passive investment and some sort of retirement vehicle, all with the intent that this pile gets high enough that it creates a residual income, a stream of money big enough to support their financial freedom or their version of it. All right? So that's one way to go about it.

The second way is to go to work and create your stream of income first, to create your stream of money first and once you get there you can start living life now as opposed to living life then you can start living life now continue to work on your your stream of income and let the excess go ahead and build your pile of money right so what's the big difference here what's the big difference between the two pretty much looks the same just kind of swapped right well the big difference is first thing I want you to draw your attention to is time. This is the strategy most people do. Or most people are the formula, the method that most people approach to creating their financial freedom. And this right here for the most part is at least a 40-year plan. Okay, so that's what's wrong with this. You put 40 years of your life

before you get to actually experience your financial freedom. The second approach, So the second option is you get to live life right now. And this is only like a four year plan. A four year plan and now the excess can start creating a pile. So there's a big difference between living your life then or living your life now. Now don't get me wrong, both of these are hard work. Neither one of them are easy to do. And actually this seems like the most conservative route is what most people

most people choose. But per the Department of Health and Human Services, 95% of the population are failing this. All right? And this is hard work too. So it's not the, it's just that one is much faster than the other. But I will show you that this one's actually a little bit easier too. That gets faster and easier. All right, let me show you this. All right, so let me show you this graph. Okay. So up here, this vertical line will say this is our stream. We'll just call it cash flow. This represents our cash flow, okay? This horizontal line represents time.

And right here where they meet, this is where we are right now. Okay, so out here around retirement age, we'll just say that's 62 years. And then this cash flow number, right? So when I asked you, how much does that cost your, how much would it cost to support to support your financial freedom on a monthly basis, what would that number be? You know, maybe it's $5,000. Maybe that's not going to take too much for you to be financially free. I don't know, maybe you have a really good job.

You make six figures a year. You need at least $10,000 a month. Or maybe you're doing really well for yourself. You need $15,000, $20,000 a month. It doesn't matter what your number is. The principle is going to be the exact same. And you'll see the bigger that number is, actually the worse of a picture it is for you by going that traditional route we talked about.

So let's just keep it really, we'll keep it really conservative and we'll say it's 5K. All right. Again, whatever your number is, the same thing is going to apply. So 5K a month in passive income. And this is the goal. Regardless of which approach we take, that's the goal. So when you go out and you start flipping houses, you're not generating any passive income.

You're generating active income and you're taking these giant sums of money and you're putting them into this retirement vehicle. with the intent to get big enough so it creates this $5,000 a month. So it's really a path that looks right here because you're generating no passive income, right? So you're traveling along here, traveling along, traveling along, putting away, work, work, work, save, save, save. You finally hit the age of, I don't know, 59.5, 65, whatever you want to retire, when you

can withdraw from your retirement vehicle and boom. If you did it right, that's a big if per the statistics, but if you did it right, I'll give you the benefit of the doubt. If you did, now you can go ahead and you can start withdrawing. that residual income. Okay, and this is kind of what your path looks like. But what I want you to really recognize, you don't really get to start living life

until right here. The age of 62, the most vibrant and active years in your life are behind you. So here's the alternative path. Rather than saving, saving, saving, we start our way working our way up towards the passive income generating that first. So it might look like this.

Once you hit that number, number, you can keep working on your passive income, but you've got enough to create your financial freedom. But you can keep working on that number and taking the excess and now putting that excess while you're living your life now having a blast, taking that excess putting into that vehicle. And boom, we hit the age of 62 and you can withdraw from that. You can get another big spike right up here and then have an elevated passive income stream like that. So, So this are your two options. This is that option one where you're building the pile to create the stream, and this is where

you build the stream to create the pile. Got it? This is your 40-year plan. This is your four-year plan. Oh, come on, Matt. It can't really be four years, can it? Yeah, let me show you how that can be. All right.

Let's say, well, let's look at it this way. To create that $5,000 a month of passive income, if you're going to save that amount of money, how much money would you actually need to save? to get there. I guess first we have to figure out what would the interest rate be, right? So based on most financial planners today, they say once you hit the age of 62, you can count on one of two, I don't know, either 4%, 5%, that's kind of the number. I don't know where you actually get that in a vehicle like that today. If you're a financial planner, you probably know. If you're not a financial planner, I don't know, maybe you do know too, or maybe your financial

planner does. I'll give you the benefit of the doubt, though. Let's just say you get 4%. So 4%, to create $5,000 a month, what does that equal in an account earning 4%? Well, it equals $1.5 million at $4%. All right? It's $1.5 million at 4%. So how many properties would you have to flip to generate $1.5 million? I guess it kind of depends on how much you make per flip. You know, one of the numbers that we use around here that, are not used, but that we're

frequently experienced around here at Epic is, I don't know, typically when we have a property, either we have the choice to flip the house for $30,000 profit, or we can hold the house for $300 a month. That's pretty routine, give or take a few bucks, but let's just keep it simple. And so that's about what it is. Now, most of us, even myself sometimes, I'm tempted by this. I'm human. You're human, I'm human.

$30,000, that's a lot of money for most people. And that's, we're all tempted. We're always tempted to take that $30,000 off the table and put our bank account, put our pocket out, and spend it on stuff and have fun. Because this $300 a month, it's kind of boring. $300 a month for most people doesn't really move the needle in their lifestyle, doesn't seem like it's going to have a big impact.

So most people choose that $30,000. So let's just say $30,000 per flip, okay? So how many houses do we have to flip at $30,000? So we make $30K per flip. And what does that equal? That's going to be 50 houses, right? You got to do $50 houses. Now, at $300 a month, if we're going to hold onto this property,

that's $300 a month rather than flip it for the 30k, how many houses would that be? That would be 17 houses, right? They're not necessarily smaller houses. It's the same house. I just ran out of room there. But you get it. So it's 50 houses versus 17 houses. So already it's easier.

17 houses doing 17 deals, that's a lot easier than doing 50 right it's less than half much less than half so what does that look on time-wise right on time so let's say say we're going to do four deals a year we'll keep it really conservative we'll do four years four deals a year and so this 50 houses four deals a year that's going to be 12 years to hit your one and a half million dollars right now if you're going to do 17 deals and you to do four a year, that's verse four and a quarter years. So it's easier, it's less than half the amount of deals, and it's faster, 12 years verse four and a quarter years. But this is if, this, it's only 12 years, if you don't spend a dime of this $30,000 that you keep on making,

right? So you can't spend any of this to make it 12 years, but we know you're going to spend it, right? You You need something to live on. I mean, you're working, you're working all this, you're working hard, and you've got to live on something. So let's just say we split this, and we'll put $15,000 to live on. We'll put $15,000 into our account so it grows. So what does that do to this? It doubles it.

So it's really 24 years versus four years, four and a quarter years, give or take. Now, this was a really quick and simple demonstration. I'm sure you've got some questions. You know, what about this? What about that? I understand. And I've got answers for all of your questions. No worries there.

But I just didn't want to take up, you know, I didn't want to keep you here too long to walk you through every detail of how the average person can realistically make this happen. But if you've got questions, you've got concerns, you've got some doubts, I understand. There aren't too many people out there that will share this information with you, let alone show you how to do it. So it might be a fairly new concept for you to go. grasp or maybe it's an entirely new one at that. So I understand. And that's why in October, I'm getting together with a medium-sized group of investors in Boston where we're going to gather in a workshop-type environment and we're going to work side by side to create your own custom

financial freedom action plan with step-by-step instructions. I mean, even if you're short on experience and you're limited on finances, I'm going to walk you through the entire plan so that you can bring a back to your market and you can put it to work. So if you'd like to join us, you can click the button below or you can go to epicintensive.com and you can come for free. And I'll ask that you place a $97 seat deposit, but when you show up to the event, I'm going to give you that $100 back. There's nowhere else that I'm making this offer. So just right here, right now.

And there aren't many free seats left. So when the final free seat is gone, it's gone. So click the link below, get the details, reserve your seat, and I'll see you soon. Epicintensive.com. Go there and we'll do this. And I'll see you next week on another episode of financial. Freedom Friday. This podcast is a part of the C-suite radio network.

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