Why Real Estate Is Key In Achieving A Financially Secure Retirement With Marco Pfeiffer

When your income exceeds your expenses, you are financially free. But how can we achieve that? In this episode, Marco Pfeiffer, Financial Freedom Coach, shares how 401(k) prevents you from building cash flow and becoming financially free. He also expresses his insights on why 401K is a scam and investing in real estate is a far superior vehicle when it comes to retirement. Having a rental property is a good retirement plan because even though there’s a fluctuation in the market, you rarely see a 4% drop in valuation. Don’t miss this opportunity if you are interested in cash flow building. Seek financial freedom with a financial freedom coach today!

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Why Real Estate Is Key In Achieving A Financially Secure Retirement With Marco Pfeiffer

My guest is Marco Pfeiffer. Welcome to the show, Marco.

It’s good to see you.

Your title on LinkedIn is Real Estate Investor and Recovering CFO. That's a very interesting title. You have Financial Freedom Coach over there also. I want to start by asking you to walk us through your background. How did you start pretty much in a dual life and how did you work your way up all the way up to a CFO position?

I was born and raised in Germany, suburbs of Frankfurt, and grew up lower-middle class. I grew up in an apartment with my brother and my parents. I shared a bedroom with my brother until I was sixteen. Along the way, I got into college in Germany. I did my undergraduate there in Accounting and Finance. When I was 26, I had an opportunity to go to the US to work for a German company. They transferred me over.

I started in Ann Arbor, Michigan. That was where my first location and I'd never been to the US before. I didn't know anybody in the US, not a single person. I took a chance. It was a chance to go over there. It was a small company so I didn't have some nice expatriate contract where they take care of everything.

They said, “You have a job as a financial analyst and you take care of the rest.” I had to get my own flight. I had to learn how to get an apartment in the US, how to get a cell phone, how to build a credit history, and all these things and you are a foreigner too, so an immigrant. I'm sure you can relate to some of the issues that it brings.

What I learned is having no credit history is much worse than having a bad credit history. It took me two years to get my first credit card. Getting a cell phone was a pretty big deal too, but I managed it. Unfortunately, the company I worked for three years later went bankrupt. I had to look for a new opportunity. I joined another German company, it's called Siemens, which is a much bigger company, a German version of GE. I worked there in the automotive division initially as an internal auditor and then was promoted two years later to become a controller for one of their divisions.

I took the corporate route. When I came to the US, I was working hard. I was working harder than anybody next to me. I was working 60, 70, to 80 hours. Every vacation, I took my laptop with me. I went all in and was rewarded. I climbed the corporate ladder. In 2010, I had the opportunity to become a CFO. My first CFO was in 2010 for a valve company in Baton Rouge.

I did my MBA along the way. In early-2010, I graduated from the University of Alabama with an MBA, which was very helpful to get the CFO position. I kept doing what I'm doing, just working hard. In 2014, I switched companies. I became CFO of an oil field service company in Houston. I moved from Baton Rouge to Houston, Texas, and kept doing what I'm doing.

Unfortunately, in 2015 and 2016, there was a crisis in the oil field. Price collapsed and in 2016, I was out of a job. At the time, we had a house that was supposed to be sold. We bought a new house outside of Houston, Texas. One week after I got let go, the contract on the house we were selling fell out of contract and I was stuck with two mortgages.

We still had an income. However, it was an annoying feeling or bad feeling to be stuck with two mortgages on one single income, and I hate it. I hate the feeling in my stomach. I hated every minute of it. I was looking for ways to build cashflow. My goal was to never ever depend on a W-2 again. I was like, “I want to build cashflow $4,000 or $5,000.” I figured that was going to cover expenses, mortgage, food, or whatsoever. If I ever get let go again, I'm not going to worry about it. I'm going to be, “That's fine. I'm going to find another job, so be it.”

In 2016, I went all in. In hindsight, it was a blessing in disguise. I was unemployed for three months and I was going all in on real estate. I listened to any podcast I could find. I read any book I could find. I went to any Meetup networking event I could find. I engaged a coach. I got coached on investing in real estate and then, when I found a job again, I moved back to Huntsville, Alabama. While I was still working, I started investing in real estate, buying rental properties, and initially single family. That wasn't my thing. I started investing in the Huntsville area and also the Fort Myers, Florida area.

I believe you invest as well. I love the area. It was for me a good excuse to go for a vacation to Fort Myers but also believed in the fundamentals of it. I believe in Florida. It is a booming stage. There was a lot of influx and business going there. I believed it was a strong fundamental but I love going to Fort Meyers also. I killed two birds with one stone and then started investing in Fort Myers.

I kept doing what I do. In 2018, I became a CFO of a firearms manufacturer, another German company in Columbus, Georgia, but also got into multifamily. I started buying multifamily initially in a 9-plex and later on a 12-plex, both in Huntsville. I sold those at one point, getting the gains and reinvesting. I flipped a few houses. I reinvested into business buy more rental properties and always measured my cashflow.

At any given time, you could have asked me how many rental properties I have. I probably would have to think about it. If you had asked me what's my monthly cashflow, I could have given you the number on the dot. That was what I was shooting for. I was getting that $5,000. Then when I reached the $5,000, it was like, “I can do more,” and I kept piling onto it.

In early-2020, I went into a joint venture with a business partner. We bought our first 40-unit and then later on with that business partner, I bought an 18-unit and a 36-unit, all enjoying venture syndications. That was my biggest acquisition in multifamily. In mid-2020, I was making more money. My cashflow out of rent properties exceeded my income as a CFO, and I decided to retire from the corporate world. That was the deciding point. September 2020 is when I called quits.

In 2016, you started investing. Am I getting the timeline right?

You got it right. I need to say one thing. I had one rental property. In 2019 when I left Huntsville, Alabama, I moved to Louisiana for a job. I kept the house I left and turned it into a rental. However, at the time, I did not know what I have. I kept it as a rental, somebody was paying my mortgage. I was happy. I was making $50 a month. In 30 years, somebody paid off the mortgage for me. That's great.

Unfortunately, I didn't buy any other rental properties after that. I was enjoying that one property and that's it. In 2016, I learned how to scale up, how to leverage properties, and how to be more focused on building up that cashflow. In 2016, when I started, I had one rental property which in hindsight turns out was probably one of the best rental properties I have, and I still have it now.

Between 2016 and 2020, you still worked as a CFO, and at the same time, you start building your portfolio from one property to wherever the number was. You worked in parallel. You did both for four years until in 2020, you felt comfortable enough to say, “That's it. I'm walking away from the corporate world and I'm doing this full-time,” correct?

Yes. When I retired, I had 28 single-family properties.

Was it something by accident? Was it by design? How did you decide to invest in real estate? People invest in many things, but what made you decide, “Real estate is going to be for me, that's what I'm going to do?”

There were several factors. One was I still was wired to have a corporate career. I lost a job but I want to be back in the corporate. I want to be CFO. I love being a CFO. There are a lot of things that I don't like about corporate, but I love numbers. My niche where I was in was turning around companies and I love doing that. For me, I was still wide like, “I have to advance my corporate career. I have to go back.” I want to build that cashflow so I need to find something I can do on the side and passively. The alternative would be buying a franchise or something. I felt like you have to be involved in that. You have to manage the company.

When it comes to stocks, you have to buy a lot of stocks to generate enough dividends to live on them. That was not an option either. I like precious metals, but they don't pay you monthly cashflow, gold or silver. Looking at the different options, the most compelling was real estate. I knew already I had some experience that this one rental property.

I knew already some of the basics, rent, managing a property, and how to refinance it. I knew the basics of real estate investing. Every house I ever bought was a foreclosure or needed some work. My way to build up equity was I bought these houses. I live in them for 2, 3, or 4 years. I renovated them, I increased their value, and then sold them or later on kept them as a rental.

I understand the basics of renovating houses and how to improve the value of houses. It comes naturally. For me, it was all about cashflow. How do I get $2,000, $3,000, $4,000, or $5,000 in cashflow? What drove me was this squeezy feeling in my stomach. I hated that pain. I didn't want to feel that ever again. It was what was driving and I felt the best way to do it is real estate. Looking back in hindsight, it is the best choice and decision I ever made, and it allows me to live the life that I live now. I'm very appreciative of real estate and I love real estate.

I want to touch on a topic that has to do with everything in society, the corporate world, and with outside of the corporate world. When I first started in the United States, when I first got a job, I was with a number of friends. Before I got a job, they were saying, I need to work fifteen more years and I will be retiring and I will get a Social Security check.

My Social Security letter that came in told me that if I earn at this rate, I'm going to get $800 or whatever the amount was. At that time, my first thing in mind was, “I got to work for 20 or 30 years. I could be making how much these guys make or maybe a little more.” When I got my first full-time job in the corporate world, the charter about retirement was 401(k) is the best thing out there.

Go and put your money in it, invest, your money will grow, and you will be retiring. I have done that for about 16 years and then 16 years later, I got enough of it. I said, “Either I sucked at investing in 401(k) or this is a scam. Whatever the situation is, it’s not working for me.” With that being said, I started to invest in real estate. I cashed out everything and I bought a rental property. That's my story. I wanted to ask you. 401(k) meat versus reality. Talk a little bit about 401(k). What's the reality versus how people perceive 401(k)?

I feel strongly about 401(k) in a negative way. I'm more than happy to talk about it. I personally think 401(k)s are a scam. 401(k)s, and this is my personal opinion, and it might sound controversial for some, but I look at the results. Same to you. It's like how did your portfolio or net worth improve after not using a 401(k)? I'm assuming it went up, didn't it?

It went up 3, 4, or something like that in a very few years like this. The economy has to be a certain way. You are not going to get into a downturn economy.

There are certain things at the fault. Yes. Was I lucky to some extent that real estate appreciated a lot over 2016 and 2022? Yes, I was lucky, but I put myself in the position to be lucky. I went and studied. There are millions of other people in 2016 who did not invest in real estate and invest in the next six years. Yes, I took advantage of it. It benefited me. However, I positioned myself.

I'm from Germany. I love soccer. Every Saturday morning, I watched German soccer. That's what I did religiously because of the time difference. Live German soccer every Saturday morning. Then I went to the University of Alabama. I watched college football every Saturday afternoon. My Saturday, morning soccer, afternoon American football, and on Sundays, I watched NFL. I stopped these things. In 2016, I canceled all TV.

I watched TV when I'm in the gym or something or when I'm sitting somewhere, but I personally have not watched TV since 2016. On my weekends, I went to seminars. I drove around cities. I looked for properties. I positioned myself. I was willing to sacrifice my time instead of sitting there and watching some football game or something. I was willing to invest my time and learn, do deals, find deals, and position myself to be lucky.

That's in general. I got lucky to some extent, but I also positioned myself to be lucky. Coming back to your question for 401(k) which is related. I personally think 401(k) is a scam. It's got designed by the government and Wall Street to extract more of the middle class or taxpayer money and funnel them to the big guys.

One thing why you should question 401(k) in general is, what can you invest in 401(k)? I'm going to work for a company. I put 3% of my salary in. They might match it so I get another 3% from the company. Let's invest in the future. What can I invest in? Every company is a little bit different, but in general, they give you 7 or 8 mutual funds, 2 or 3 bond funds, and that's usually it.

Once in a while, they might throw in a read or something, but that's as much exposure as you would get to real estate. Why can you not invest? If it's for my retirement, the money that I'm going to live off if I don't work, why can I not choose where I'm investing? Why can I not buy real estate with my 401(k) money?

You are very limited. You cannot only invest in one thing and that's Wall Street. There are all these companies out there. It's a billions of dollars of industry. If all these companies manage 401(k) plans, doing this, selling 401(k) plans, and whatsoever, who pays these people? Who pays this billion-dollar industry? It's you, me, and the people who invest in 401(k).

They pay for all these bonuses, all these commissions, and all these things. Where's that money coming from? It's coming from your returns. It limits your returns. It's all the things. Everyone is like, “It doesn't cost anything. Do you think these people work for free? They have to somehow get paid and it comes from your returns. They mitigate your returns. That's why I personally think it's a scam because I can only invest in Wall Street-related options and there's a $1 billion industry behind it.

They got to live off something. They got to make their money somehow. They make it of your investor. I personally prefer to be in control of my money. Think about it. If you retire, let's say you retire at 65 and now you have $1 million in your 401(k). Now, you got to manage that $1 million for the next 30 years to somehow pay yourself $50,000 or $60,000 a year plus still accumulate interest on it.

You try to somehow manage that, stretch it up, and plus you get your Social Security to manage that for the next 20 or 30 years. Imagine instead of that, you own ten rental properties and they pay you cashflow. They cashflow $500 each by the time you retire. Now you are getting $5,000 every month in your retirement on top of your Social Security.

You don't have to manage anything. You are getting that cashflow in. You'd know it's coming and the rents go up. That $5,000 might be $5,200 for a year. It might be $5,500 a year, so you are still keeping up with inflation. I personally think a rental probably is a much better retirement than a 401(k), mutual fund, or whatsoever.

Think about the fluctuation. Real estate can drop. With the exception of 2008, you rarely see more than a 2%, 3%, or 4% drop in valuation. The stock market can shoot up 20%, but as you saw last few years, it also can drop 20%. Now, imagine you retire in 2022. What you thought, “I'm going to have $2 million in my 401(k). I'm going to retire.” Suddenly, it's only $1.6 million. You are like, “Maybe I cannot retire. Maybe I'm going to retire next year. I'm going to hope the stock market is going to come back.” It might not come back then you cannot retire in ‘23 now you got to wait for ‘24.

I personally feel investing in real estate is a far superior vehicle when it comes to retirement. I think 401(k), as I explained to you, is a scam. I'm the same as you. I cashed out. I pulled everything out of my 401(k)s. I use self-directed IRAs and invest in real estate or real estate-related. I not only do parental properties. I only also do owner finance. I also do lending out of all of my IRAs. There are different ways to generate returns out of it in a tax-free environment, and that's the other piece. I even forgot to mention that 401(k) all you save on taxes because you take the money out and it lowers your tax liability because you take it out of your salary right away.

However, later on, when you pull it out when you are 65, you have to pay taxes on it. This whole like, “Your tax rate is going to be lower when you are 65 than when you are now. You get an arbitrage advantage out of it.” First of all, I don't know what the tax rate is going to be in several years from now. They will never go down. The only time they went down was in the Trump era for 1 year or 2, but other than that, they always go up. I don't know what it is in several years. You make an assumption that my tax rate in twenty years is lower than it's now or the same. Chances are it's not.

The second is, why does my tax rate have to be lower? Why do I have to accept that I make less money when I'm 65? Why cannot make the same money or can make more money when I'm 65? My goal is when I'm 65, I want to make substantially more money than I make now. I have several years to generate. Buy more assets and generate more cashflow. I would be mad at myself if when I'm 65, I make less money than I make now. I would consider myself a failure for being in a situation.

Here, we get taught in society, “When you are 65, you are going to retire. You are only left with your Social Security, so you have less income. Your tax bracket is lower.” I don't want that. It's brainwashing and indoctrinating people. It doesn't have to be that way. I don’t want to make less when I'm 65. I want to make more. That's my answers on 401(k).

Next topic, I'd like for you to talk about that. Why don't you educate us about the difference between good debt and bad debt? What's the difference? What debt is good debt and what is the type of debt that we should stay away from?

I can tell that you follow my LinkedIn post. That was a topic I feel pretty strongly about it. The problem is there are different levels of where you are in society. If you are poor, then you live paycheck to paycheck, and sometimes you live beyond the paychecks. You got payday loans and all these things. That's one thing. There's not much. You cannot save much.

You get into the middle class. When you are in the middle class, you make more money. You have a better lifestyle. You get a better job. You buy a nicer house. You buy a nicer car and all these things, but you’re also taught that debt is bad. When you buy a house, you should pay off that house as quickly as possible. I'm making up a number. I don't know the exact numbers, but they tell you, you buy the house for $300,000 but over 30 years, you pay another $500,000 in interest for that house.

I don't want to do that. I'm not stupid. I'm going to pay off my house as quickly as possible because I saved that money on interest. The bank calculates it for you. If you pay quicker, that's how much you save. Why would the bank tell you that you can't pay off your mortgage quicker and how you can pay off your mortgage quicker? Their interest is that you pay for the full 30 years. Why would they be interested in you paying off quicker?

Those are the things you have to think about. It doesn't make sense. Why would they be interested for you to pay off quicker? The other thing they don't tell you is that $500,000, it's $500,000 in nowadays’ money. That's not $500,000 30 years from now considering inflation. I'm making up a number. That might be $300,000 in nowadays’ money.

It's oversimplified. Just say, “You save $500,000.” That's $500,000 in nowadays’ money. Here's the other thing. Interest rates are going up. It's 7%, 6.5%, or whatsoever for a mortgage. If I find something, I can generate a 10% or 12% return. Instead of paying off a mortgage, why would I not take that money and use it for other investments?

That's, in general, the perspective on debt. Debt is bad and everybody has to pay it off as quickly as possible. In America, not many do it. People are paying for a lot of things in consumer debt, buying nice cars, and going to Disney. I read an article about people going into debt just to go to Disney, which is absurd. My point with that is, there's consumer debt and that's bad.

Anything that's not generating some income, anything that's not appreciating value, that's depreciating, you should avoid any cost. I pay off my credit card every month. I don't have any balance on my credit cards. I pay them off. My car note paid off as quickly as possible. Anything that's depreciating, anything that's not generating some income, you should pay off as quickly as well.

However, if it generates, that's bad debt. If you use that to buy something that generates income for you, that's depreciating and that's cashflowing, that's what I consider good debt. Good debt is good debt because it helps you to grow your net worth. It helps you to build additional cashflow. In addition, on good debt, somebody helps you. Let's say it's for rental property. Somebody else is paying that debt for you.

The other thing you have to consider is inflation. As the value of the money goes down over the years, the US dollar lost 96% of its value since 1913. It's a depreciating currency. That same applies to debt. If I have a debt liability of $1 million in nowadays’ money, the next year, that's a debt liability of $900,000 something. Why would you look at it? Whatever you consider as the inflation rate.

I use inflation to lower my debt liability. I consider inflation to lower my debt liability. This is what the Federal Reserve and the US government do. They need inflation as they blow up the deficit. $32 trillion is not that bad of a deal. It was a bad deal several years ago. I don’t know what bank it is but $32 trillion, that's not that big of a deal nowadays. It's the same concept.

You have a problem. You have people like Dave Ramsey who tell you every debt is bad and to avoid any debt. I like Dave Ramsey from the perspective of if you cannot balance your checkbook. If you don't live within your means, Dave Ramsey is a great guy. He’s a guy you should listen to or you should follow. It’s great advice, but that's where he should stop.

I help you to balance your checkbooks. Stop. His investment advice is not good advice, or if you buy a house paid all in cash. Why? Why not leverage? If I have $200,000 and buy 1 house or use $200,000 and buy 4 houses with $50,000 down, I always buy the 4 houses. Now I'm building equity on 4 houses instead of 1 house. Let's say on average, real estate goes up 4% a year. It goes up 4% if the house is paid up in full or if they have 75% leverage on it. It still goes up 4%.

When it comes to rent increases, 1 house goes up $100. Four houses go up $100 each. Now I'm getting $400 more in additional cashflow every month. It has to make sense. It has to be for a good asset. It has to cashflow. There are certain criteria. I don't buy anything, but in general, I take on as much debt as I can. If the US dollar loses value, why would I not take on debt? That's how I look at it.

You mentioned cashflow. I know that you are very big on cashflow. That's your main focus. Tell us about other things that you are looking at when you go to assess a property that you want to buy. What would make a property attractive to you besides cashflow?

One is the location. I will start with the location/state. I would never buy in a state that's not landlord friendly. What does that mean? It's like a state like California or New York where if a tenant doesn't pay, it's very hard to evict that person. I know people have properties in Portland, Oregon. They are waiting for a few years now for their rent payment and they can't get them out. This is still a business. You mentioned cashflow. I need to cashflow to live and reinvest. I would never invest anywhere that's not landlord friendly. That rules out half of the states in the United States.

When you break it down, you look at states that have population growth and employment growth. Right now, the Southeast sees a lot of population growth and a lot of employment growth. If you look at Texas, Florida, and Georgia, that's where a lot of the growth is right now in the United States. All three of them are landlord friendly. When I say landlord friendly, it doesn't mean you can't take advantage of tenants or whatsoever. I treat all my tenants nicely and respectfully.

However, if you don't pay rent, you cannot stay at my house. It's not. I'm not a charity. I have a mortgage to pay. That's my line of business and that's how I make a living. This is how I buy food, through rental properties. If you cannot pay the rent anymore or don't feel like paying the rent anymore, you cannot stay in my house. You can feel free to live anywhere else. You cannot stay at my house.

If the government or state tells that tenant is okay for not to pay the rent for two years, that's not landlord friendly. When I say landlord friendly, that's what I'm referring to. Within the state, you break it down into cities. I personally like Alabama, but I don't like all parts of Alabama. There's Huntsville, Alabama. There's a lot of growth. I like Huntsville, Alabama.

In between, there are smaller rural cities. It has this growth. That's why I don't like rural cities. It has to have strong rank demand. I like Mobile, Alabama and then there are a lot of other cities I like. You can’t invest anywhere in that state. You still have to be selective within that state. When you choose the city, you still have to be selective within that city. You go into an A, B, C, and D neighborhood. A) is the high-end neighborhoods, B) are nicer properties, C) is workforce housing, and D) is challenged neighborhoods, war zones at times. I would never invest in D. I don't invest in A because I don't get the cashflow, but I invest in B and C. That's my area.

I look at the house. If I break it down into the city, then I look for the B and C areas. Location is a big driver, and then also the type of houses. I personally like newer homes. I'm not a big fan of the 1940s, 1950s, and 1960s built homes. There are certain other criteria that go into the equation, but the main thing is probably location and the type of houses.

The next question that I have for you is, would you name a few things? If we have someone right now reading, and they too want to move away from the corporate world and follow a path of financial independence, what are some very valuable pieces of advice that you would share with them from your personal experience? What should they do practically to get there?

One is to generate as much income as possible. That means working your job. Assuming, you work in a corporate job. I'm still a big proponent of working hard and trying to climb the ladder. Every time I switch jobs, I got a promotion. I got more salary. The more money I made, the more money I had to reinvest and use to generate additional cashflow. That's how I looked.

I was still pushing hard in the corporate world but with the whole goal. My goal switched from, “I want to climb up the ladder in terms of being CFO of a bigger company and put that on my chest.” It changed to, “Even if the company is smaller, if it's less prestigious, I still want to make more money because the more money I make, the more I can reinvest.”

Live within your means. As I make more money, I'm having my CFO salary. I'm generating $4,000, $5,000, or $6,000 as an additional cashflow. That didn't mean for me now. I'm going to go out and eat Ruth’s Chris steaks every night. It doesn't mean I have to buy myself a G-Wagon or something. These are all things I could afford, but I'd rather take that money and reinvest it. Truly the definition of financially free is when you have your money working for you and your income exceeds your expenses.

You don't have to go to a job anymore. You don't have to show up at 8:00. You are free in terms of your time and in what you can do with that money you make. As long as you keep your expenses and check, a deal that number keeps going up. It's enough to let you live the life that you desire. It doesn't mean sitting by the beach all day long.

I like the beach. I love the beach. I love margaritas, but I do that for two days. I get bored. Everybody has different beliefs about being financially free. People are like, “When I'm a millionaire, I'm going to sit by the beach all day long.” That's boring. I could do it but it's boring. I still consider myself financially free, but I enjoy what I do. I love real estate. I enjoy building things. I enjoy building safe and nice spaces. I like increasing my portfolio. I love what I do but I do it on my own time.

Speaking of doing it on your own time, what does a regular day look like for you?

First of all, I don't live in the Monday-to-Friday world anymore. Any day is as any other day. If I have to work on a Sunday, I work on a Sunday. If I don't have anything to do on a Monday, I don't work. All days are equal. I got two dogs. I walk my dogs in the morning and look for new deals. I look for opportunities and invest in real estate.

For two and a half years, I post quite extensively about my journey on LinkedIn and have people reaching out to me. It's like, “I love what you are doing. I am tired of the corporate world. I hate my job. I hate sitting in meetings all day. I would love to do what you do.” A lot of people reached out and asked me to help, coach, and teach them. Out of that, I developed a coaching program where I help people in a corporate job to build that cashflow to ultimately retire one day. I worked on that idea. I built this whole thing but now, I'm doing also some coaching during the day.

There are other ideas I have. As you can tell, I feel strongly about the education system. I feel very strongly about government interference and things. I feel very strongly about us being indoctrinated that 401(k) is the way. You have to pay your taxes because you have to pay your fair share and all these things. What's a fair share of my labor? What's fair share to somebody who doesn't work with my hard-earned money? I feel very strongly about these things.

I'm working on creating a mastermind where I want to invite or bring together like-minded people who want to create financial freedom or have achieved already financial freedom but all outside of Wall Street, outside of the middle-class advice on what you should do. This is no shade on the middle class. I grew up in the middle class. My parents are middle class.

I respect it. However, if you follow the advice that you get, “Penny saved is a penny earned. Pay off your house as quickly as possible,” and all these things, you will always stay middle-class. As you said, you put money in 401(k). It doesn't tilt the needle much. You do all these things you are told to do but then you reflect on it, you see there are these millionaires and billionaires, how did they become those? They didn't become billionaires b, going to college, getting a good job, getting a raise, and putting their money in 401(k).

That's not how they became millionaires and billionaires. They went out. They started businesses. They invested. They took out debt. Jeff Bezos would have never been able to build Amazon if it wasn't for debt, high leverage. He went to the stock market. He got all this money. He used debt to create this company. One of the things that what I'm working on right now is building this mastermind or setting up this mastermind of like-minded individuals who seek freedom and want to invest outside of the common beliefs.

I like to travel as well. I'm in the positive right now of planning for a road trip. It's one of the nice things about financial freedom. I'm probably going to go on the road for 4 to 6 weeks, maybe 8 weeks, and take my two dogs with me. I can work from anywhere. I'm going to do a long road trip towards West California, maybe even Mexico. We will see, but that's what I do. I live in the South now. I live in Florida so I live close to the beach. I love jet skiing. Right now, it's not the best weather, but in the coming spring, I want my jet skis quite a bit and enjoy life as much as I can.

How many hours do you work a day on average?

On my current portfolio, maybe 1 hour or 2. I work a lot on what I built where most of my hours go to but of what I have, I have automated a lot of things. I hired myself a VA now. I have a Virtual Assistant in the Philippines who takes on a lot of my manual tasks and interference with things. Even without her, I probably would work 1 or 2 hours on what I have. I spend a lot of time researching, brainstorming, thinking about different things, and doing coaching now. I took on a few clients so there are other things. My core business is probably 1 or 2 hours a day, and then there are a bunch of other things I enjoy doing.

To recap, your current portfolio keeps you busy for let's say two hours a day. This allows you the rest of the day to do whatever you see fit for yourself. Whether relaxation, hobbies, or investing in other things that you are passionate about in other projects. Am I saying this right?

Correct. That's the beauty of financial freedom. You choose what you do with your time. You are the owner of your own time. You choose how you spend it. Like I said earlier, if I like sitting by the beach, I could be sitting by the beach for 6 to 7 hours a day. It's not something I enjoy, but it would be an option.

For a young person getting ready to enter the real world, they graduated either high school or college. They are ready to take their first job and be out in the world, what pieces of advice would you have for them?

I don't hate the corporate world. It grew on me. There are a lot of things I despise sitting in long meetings. We have created a culture in corporate where people don't like to make decisions anymore because everybody's afraid that it's the wrong decision. They get fired for it. What happens is there are a lot of circles of these long meetings.

I have to sit in so many meetings where you sit there for three hours and the only tangible outcome of it was, “Let's have a follow-up meeting.” It's like we spent three hours and went in circles. I didn't like that part. However, corporate is still a great training ground. It's still a place where I learned a lot. I learned a lot about business.

As I advanced my career, I was part of different talent programs within those companies. I went worked on projects in China, Eastern Europe, and Brazil. I learned a lot in corporate. You know a lot about business and whatsoever. The advice for young people is to find something that you enjoy. If it's finance, sales, or whatever it is, make sure you enjoy it.

Don't do it because, “I can make good money in accounting so I'm not going to study Accounting and become an accountant.” Ultimately, you will hate it. Do something you enjoy and even if it doesn't pay the most money, just do what you enjoy doing, and then in that job, try to excel. Try to go beyond what is asked for. Be the guy who goes the extra mile and advances in your career. As you advance in your career, there’s more salary and responsibility. You learn more. You become a manager. You learn how to manage and interact with people.

A corporate or W-2 job is an excellent training ground. I don't hate it. I hate some of the things that come with it. As you grow in the corporate world, as you make more income, use that money to build your exit strategy. Use that money to invest in cashflowing assets or whatever you invest in. I personally believe it should be something cashflowing because then, with cashflow, you can manage around it.

You know what your expenses are. You know how much you need to live on and then you can target. Rental income is not necessarily passive but somewhat passive. “If I make $6,000 in passive income, then I can quit my job.” Quitting a job, you still can do other things. You might like yoga and want to be a yoga teacher or something, but now you have $6,000 coming in. I have no idea how much a yoga teacher gets paid, but let's say it's $25 an hour.

That’s $25 an hour in addition to your income. You can do what you enjoy and have that $5,000 or $6,000 coming in. That $25 you make an hour is just icing on the cake, but you do something that you enjoy. That's how I look at it in corporate. Would I recommend someone to stay for 40 years in corporate? Absolutely not. It's going to kill your spirit. It's going to drain you. It's going to eat you. It's a great draining ground for 10 to 15 years and then build the nest egg, cashflow, and do something on your own.

In closing, I want to give you the opportunity to maybe say something you didn't have the opportunity to say during the conversation. Answer a question you wish I would have asked that I didn't ask, whatever you want to close our conversation with.

You asked a lot of good questions and then sometimes, I didn't address the question right away, so I digress some, but it's something I feel strongly about. I answered most of it. What I said as advice for young professionals, it's the same advice for a 35-year-old or a 40-year-old if you are not happy in your job. For instance, people reach out to me for coaching. They are all late-30s and early-40s. It goes from 39 or maybe 44 something. That's the range. There are a lot of people in that range reflecting on their life. They are 15 to 20 years into the job. They have another twenty years to go and it reflects like, “Where am I at? What am I doing right now? I'm doing this job that I don't like, but I have the golden handcuffs so I cannot leave.”

That's one of the things that the W-2 hooks you and makes you addicted to it. The paycheck is coming in every other week. For me when I quit, even though I had all that cashflow line up, it was such a weird feeling because you are used to every other week, that money drops in your checking account. It’s automatic. It was a weird feeling not to have that. I still had the rent checks and everything coming in, but it was a weird feeling. I understand people who have a hard time moving on.

When you have kids, a family, and a house and you probably make six figures. If you make $100,000 or $150,000, it's hard to walk away from that. Your happiness should be worth it that you at least work on getting out of it. When you look back when you are 60 or 65, you never did anything. You just kept working at that boring job that you hated.

Do you think when you look back when you are 65 and you finally can retire, “When I was 40, I wish I would have invested in some real estate. I wish I had bought myself some cashflowing assets?” How many people say, “I'm happy I worked a boring job for 40 years. I hated what I did, but I'm happy that's now, I can finally retire?” Who says that?

A lot of people have regrets. It’s the same advice for 40-year-olds and for young professionals starting at 25. Start gradually building that cashflow or start a business. Even if you decide, “Real estate is not it,” you cite something where you generate some cashflow. You are selling something on Amazon. You are good at programming. Sell a course on programming or whatever it is. Start building that additional cashflow.

Here's the other thing. You want to be financially free, but also there's no loyalty in corporate anymore. You might think you have a great job right now. You might think you are sitting pretty safe. Things can change pretty drastically. I read that Amazon is laying off 17,000 people. It's probably not a big number considering how many people they have, but there are 17,000 people who thought, “I'm safe. I work for Amazon. It’s one of the biggest companies in the world and one of the most successful companies in the world.”

There are 17,000 people who learn the hard way. There's no guarantee. It's not only financial freedom, but it's also what you owe yourself. Build some safety net. Have some additional revenue stream, some additional income that if things happen, if something goes south, you are not going to be stressed out when it happens.

Thank you very much for coming in now. It was a real pleasure chatting with you.

Thanks. I appreciate and enjoyed it. I love to connect with other immigrants. There's always a special connection.

Hopefully, we will do a number two later down the road, an episode follow-up about you telling us about your coaching business how things are going and everything, and how's everything going in life. Everybody, thank you very much for reading. I hope to see you back here soon. Have a great day.

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