Chris Miles discusses how to generate passive income effectively in 2023. Break free from financial constraints and make impactful money ripples!
Chris saw that the systems people follow are broken and don't let them generate real wealth. Even Dave Ramsey limits people generating wealth, and Chris advises not to follow much of Dave Ramsey's bad advice.
Instead, Chris talks about how to be a good steward with growing your money and freeing up your time, so you can make a bigger impact in the world. Hence the name "Money Ripples." Chris wants people to learn how to make more ripple effects with their money for good, and how to generate passive income to have the flexibility in their lives.
2:01 Chris's Back-story
4:08 Life as a Financial Advisor - Nobody is really Financially Free
6:58 Finding out how to Actually be Financially Free
8:24 How Chris started his real estate career & became financially independent
13:24 What it means to be an anti-financial advisor – financial advisors ask Chris for advice – how to create PASSIVE INCOME
16:38 Chris discusses different types of strategies that are prosperous and work right now for Passive Income
20:50 – Infinite Banking how it works
25:26 – Dave Ramsey is good for 101 finances, but he's bad for growing wealth
CHRIS'S BUSINESS https://moneyripples.com/
Chris Miles grew up broke. On his journey of trying to find ways to generate wealth, he dropped out of college and left being a financial advisor, to become one of the best Passive Income earners around.
Chris saw that the systems people follow are broken and don't let them generate real wealth. Even Dave Ramsey limits people from generating wealth, and Chris advises not to follow much of Dave Ramsey's bad advice.
Instead, Chris talks about how to be a good steward by growing your money and freeing up your time, so you can make a bigger impact in the world. Hence the name "Money Ripples." Chris wants people to learn how to make more ripple effects with their money for good, and how to generate passive income to have flexibility in their lives.
In this episode, we have a guest. Mr. Chris Miles is in the house with us. What's going on, Chris?
Brett, it's been good to see you.
You too. It's been a little while. You've been on the show before when I was talking a lot about real estate with a purpose. You're on our show here. It's awesome to have you. I look up to you. You're amazing, not only as a business guy and owner. You know how to build wealth, passive income, infinite banking, and all that. You're an awesome man too. Thanks for being on our show.
Birds of a feather flock together. It takes one to know one. That's for sure.
Let's get into it. Chris has a personal website, MoneyRipples.com. He has a YouTube channel where he is always talking about how to build wealth. In the past episodes, we talk about the concept of infinite banking. If you Google that, it's this craze, especially in our circles. I do infinite banking with Chris. It's been a huge tool for me and my family.
You're a very physical, active person. You do marathons. You're in four mastermind groups, traveling, and doing all that. You got a YouTube channel with 700-plus episodes. You got your podcast and had been interviewed thousands and thousands of times. We're going to dig into who is Chris Miles, first and foremost. That's your bio and highlight reel. Let's get down to it. Inner radical honesty, who is Chris Miles?
I'm like a lot of you. I started growing up in a middle-class family who taught me good values, hard work, honesty, and that kind of thing. When it came to money, I was not taught a lot of good stuff. I was taught more about the Dave Ramsey method. My dad would be Dave Ramsey's older brother that Dave Ramsey looked up to. He was always like, “You save everything. You’d be cheap like me. You pay off your debt.”
I didn't even know you could have debt. I thought you would get in trouble for having debt. I was taught to save everything, don't spend money, and be cheap. That's how I was raised in that scarcity world. Even five years of my life after my parents divorced, I lived in a trailer park for a little wait time. I wasn't a double wide. I was the fancy one. It was the luxury with things made out of balsa wood, pretty much. I wasn't raised around a lot of money or knowing that kind of stuff. We’re very middle class to lower middle class.
As time went on, I was the first one in my family to go to college. I didn't want that life. My dad was always giving me advice at the table. I was like, “I don't want to be like him.” Saying things growing up like, “I can't afford it. Money doesn't grow in trees. What do you think I am, made of money?” Everything was about money and how he didn't have enough of it. I didn't want to be that person.
I remember I want to become a business consultant. I figured if I'm going to do that, I should have real-life business experience. I dropped out of college with one class before my bachelor's. It was supposed to be a temporary sabbatical. I was trying to find a business to start to boost up my resume a little bit more before I got my MBA. As I went out in the world trying to find a business to start, I didn't know what to do.
The first one that came was to become a financial advisor. There was something about it that intrigued me. It's like The Wedding Singer. When he's going to the bank to try to get a job, they're like, “What's your experience with money?” He's like, “I like it. I have a jar on top of the fridge. I like to add more to it. That's where you come in.”
I was like that showing up. I felt like I had to impress them. I didn't realize they would hire anybody off the street as long as you don't have a criminal record and you could pass a test with at least 70%, which I could do because I was doing that in college. I became a financial advisor, dropped out of college, and never went back. I went on the entrepreneurial path because I wanted to control my time and destiny. That's always been a big thing.
As time went on, after about four years of being a financial advisor, my dad started asking me for advice. I remember I sat down with him at his kitchen table, the same one he was giving me advice at. The table, no pun intended, was turned. I was the one giving him advice. He says, “Chris, I'm 61 years old. Y2K sucked. It wasn't friendly to my portfolio or 401(k). What do I do?” I'm looking at his 401(k) and the fact that he paid off all his debt. He was very proud of that.
I said, “Dad, I'm going to be honest with you. You're going to have to die in five years if you decide to retire now because you have five years’ worth of money left and that's it. Even after saving and stuffing your 401(k), being debt-free, doing everything that you're supposed to be doing, and you're 61 years old, you only have five years left. If it weren't for social security, you'd have a little bit more.” He's like, “I don't want to hear that. What else can I do? What else can I make sure I can retire and not run out of money?” I said, “I don't know. You did everything right.” That was my awakening moment.
One of the big reasons I went into financial advising is not to just learn about money. My dad's words would echo to me, where he'd say things like, “Chris, I'm going to die working and working until I'm dead. This job will kill me.” He already had strokes and heart attacks up to this point. I went to that business thinking, “If I could give him 1 year or 2 years of his life back, that would be worth it.”
What happens is the very guy who inspired me to want to do this business is broke. I started to look around and realized that my clients were in the same position, even the ones I inherited after decades of advice from other advisors. They weren't any better off. They were still worried about running out of money. No one was truly financially free.
Even worse, you look at the financial advisors who should be the ones that haven't figured out above all else yet, they weren't financially free either. You couldn't find one. There are guys working there since the late 1970s in my office. There are over 100 guys and not one could you find that office and say, “They could retire off their investments, not just off the commissions that they're earning.” I had a choice.
I remember meeting with a friend who was in real estate investing. I met people that were living and preaching what they preached. They were financially free. I had to make a choice. I'm like, “Do I take the alternative path, the path that's been proven to work, but fewer take that road or do I take the path that the majority says to take, which is the old accumulation method of saving forever and hopefully, you'll have something someday?”
I quit. I picked the former. I went with the real estate investors. I said, “This is ridiculous. I like proof. I like to know if things work. I can't stand integrity and teach what I know doesn't work.” I left. Later that year by doing some passive investments and even some things within some business streams of income, I was able to become financially independent by the time I was 28, almost 29 years old.
That's an amazing story. It's such an oxymoron about the financial advisor. You start to look around. Not only your clients but the people that you work with weren't financially free. That's typically what you are constantly talking about. “How do we grow our wealth? How do we grow financially?” There was a huge problem there. You got into real estate. What type of real estate investor were you? What did that look like for you? Was it passive investments? How did you start to build your portfolio of that passive investment income?
The first one I started was with my starter home, the one I had renovated and put all my blood, sweat, and tears into. I eventually did a creative strategy, where I sold it to an investor at full appraisal, leased it back from him, and then went, turned around, and subleased it. I didn't even want to go the normal rental route. I was like, “I want to get that equity out. I want to strip the equity so I can invest it elsewhere and still be able to earn rent off that.” I started to do that and did some things with lending.
Another thing I did too, which was interesting, is that I quit being a financial advisor. It drove me nuts that people kept asking me questions. People would ask me like, “What are you doing?” I had no clue what to tell them. I was like, “I'm not a real estate investor.” I would put money with guys that were flippers and stuff, like short-term lending, but I didn't see myself as a real estate investor. It was interesting. They would say, “What are you doing?” I'm like, “I sell drugs,” to buy some time.” I'm like, “How do I explain this world?” To me, who was a financial advisor, it seemed like a foreign world, a world that was hidden from me. It was like The Matrix. It was unknown.
One thing I ended up doing too is one of my friends that was one of my mentors and was doing real estate investing as well asked me. He said, “Chris, you quit being a financial advisor. You're a mortgage broker.” I started doing that because I felt I could be honest as a mortgage broker. He said, “Do you like being a mortgage broker?” I said, “I love teaching them about how to open their mind to what they could do with the mortgage,” especially if you could pull out equity and invest it but I hate underwriting, applications, and paperwork. He said, “Chris, why don't you find somebody who loves that kind of thing?”
In a scarcity world, like being a financial advisor is, I never consider I could share the wealth or business. I said, “Is there anybody crazy enough to just want to do paperwork?” He said, “Yes. Trust me. There are nerds that love it.” I asked my broker. I said, “Is there somebody in this company here that would fit this profile?” They said, “Yes, that's Clark. Go find Clark and ask him.” I went to Clark. I said, “Clark, if I send people to you, teach them about the mortgage, they already know what they want to do, and you just have to do all the work, would you do it for a 50/50 split?” He said yes.
I'd spend maybe a half hour with these people and they're like, “This is awesome. How did I get this mortgage started?” I'd said, “Talk to Clark.” A month or so later, I would get a check in the mail for $1,000 or $2000. I thought, “This is great. This is way easier than being a mortgage broker before when I was doing it all myself.” I wouldn't even build a business. It wasn't even anything like that at all. There would be friends and family saying, “Do you know how I can do blank?” I'm like, “Yes. Talk to so-and-so.”
I'd have friends who were getting married. I'd say, “Don't go to this mall to buy the jewelry. Go to this wholesale jeweler. You'll pay 1/3 of the price. Here's the card.” That jeweler would send me a 5% Thank You check or a referral check. The cool thing is not only did I have real estate income coming in but I started getting all this residual income. I separate them from passive income, which is more investment income coming in that I don't have to work for versus residual income coming in. Between the two of those, that's where I was able to become financially independent. I was working maybe 3 hours a week making $4,000 or $5,000 a month. That's all I needed to take care of my family at that time.
You were almost like this connector. You didn't do a lot of the work with some of these residual checks like the mortgage brokerage or the jewelry but you were connecting people. It's a great business in and of itself. You launched Money Ripples and connect people all the time with that. It's funny. That's becoming more business. We don't think about that honestly.
We're both in the Collective Genius. I'll mention that to someone and they’re like, “I do this and this for real estate guys.” I'm like, “You should be a part of the Collective Genius.” I'll introduce him to the Collective Genius Jason and get a check in the mail. I'm like, “That was cool.” It's the same thing. That started this whole business.
I want to talk about what you're doing. We talked about you working with Penn Mutual. You're one of the top guys there. I do some infinite banking with you. You also do some real estate investing and teaching on that. What would you call yourself? You do a lot of everything. You're still doing this business. Would you call yourself a financial advisor? Is that the wrong term for you?
I refer to myself as an anti-financial advisor because I am the guy that stands against it, which is interesting. You mentioned Penn Mutual. That's one of many companies that I've worked with. I'm one of the top guys in that company because investors like ourselves have the perfect way to be able to invest in double dip with the infinite banking concept with them. It's interesting.
I got back from a study group with some of the top guys in that company, most of whom are financial advisors. It's always funny because every year I go there, there's always somebody that pulls me aside like, “Chris, your business and what you do blows me away. You do podcasts and YouTube.” If they're a securities license, they can't speak publicly without having it prerecorded, sent to their compliance department to get it approved to make sure they didn't say anything illegal, and then it comes back.
I dropped that securities license back in 2005 because it was stupid. They have handcuffs because their assets are under management. With the money that they make off and the money that you put with them, they're making a commission off that. On the low end, I was talking to a guy who maybe made $450,000 a year or so. To the high end, there are guys making millions a year and they can't quit because they don't want to lose that income. They don't have other streams of income. They'll pull me aside sometimes and say “Chris, it’s not just how you do in your business but how do you create passive income? How can I quit?” They don't know how. That's the thing.
I'm more of an anti-financial advisor in that sense because I help people figure out how to get their money working for them, how to find that cash, and be able to use it in a way that generates real passive income. I don't mean the passive income like some people will talk about, which is, “Why don't you create a side business by flipping real estate properties or doing wholesaling for 30 hours a week?” That's not exactly passive. That's an active income that can make you a crap load of money. It's a great business model but it's not truly passive.
The people that we usually teach are people that are more like the busy W-2 manager working for their job or someone that's a business owner who wants to have work optional. They work because they want to, not because they have to. That's a step away or reduced hours. They have the freedom to do that. That's the people that we serve and help.
Let's start with there. A lot of our readers maybe fit that particular profile and they want to build wealth. There are so many different ways to do it. For me, there are so many different ways that I'm doing business. I have an active income. That's my house-flipping business. I do some notes over here to try to build that passive and some rental properties. Beyond that, there are other options. We do the infinite banking model. I try to put some money into an IRA and build up tax-free types of money. What are some of the buckets that you start with that person that's doing pretty well, got some money, and wants to use it to work for them? Take us into that.
We customize it to the person because everybody has their flavor and preferences. For example, someone wants to get the tax benefits of being a real estate professional where they're able to show losses against their active income and their jobs especially, or their businesses. It doesn't even have to be them. It could be their spouse. Maybe they have a non-working spouse or the spouse is only working part-time to where we can make a more real estate professional, where they claim at least fifteen hours a week in the real estate side of things. We can do things like turnkey rentals.
In addition, maybe they have their rentals as well as short-term rentals. Rentals are an easy place to go. I would put that in the category of semi-passive because even if you have a property manager doing all the work for you, still there are decisions. You're the boss. In a lot of ways, I like having that kind of control. I don't mind having a property manager to deal with finding renters and dealing with all the hassles and stuff. I'm the one that has to deal with bigger decisions.
Sometimes, a people penny is a magical picture. You sit back and get mailbox money. The truth is that you're going to have crap happen there too. The renter decides to vacate or you have to evict. Even though you're not doing the work, still you have to deal with the financial situation because you might have a mortgage on that property and keep paying if you're not getting rent. There are things that can go wrong. For the most part, that's a great one to go through.
You mentioned short-term type lending. It’s always a great option, where you can lend your money short-term, especially when people are nervous about the market and they're not sure what to do with their money. Sometimes it's a great option to say, “I can invest this for 6 to 12 months and get paid on a per-year basis, 10%, 12%, or more.”
There are things like funds. There are different types of funds. I don't mean mutual funds or even REITs. I hate it when people say, “You want a REIT?” I’m like, “No, not a REIT. That's not even real estate.” We want actual funds. Instead of you lending to one particular project or house, they might be lending to hundreds of investors and it's spreading your risk. Those kinds of funds could be something like that.
Also, syndicated opportunities like multifamily, whether it's apartment buildings or you’re talking about self-storage. I've seen self-storage making a great comeback. Not many people are talking about it yet. There could be commercial real estate. Even though, the commercial has got its butt kicked, especially since post-COVID. You have to be careful what kind of commercial real estate you're looking at.
Even in the oil and gas space. We have a whole vetted group of individuals in our network. There are over twenty different people and different types of opportunities. One of them is in the oil and gas or the mineral rights space. You get paid on the leasing of the land to oil companies but you also get paid with royalties on anything they drill. Oil and natural gas, primarily. It's cool because you can get double-digit returns, especially if oil prices rise and you're having to pay more for the pump. You might as well make more money when the pump prices go up too.
The partnership is another great one I've done as well. I'm partnered with a guy that does raw land. It does a lot of seller financing and things like that. That's been one of my best opportunities, where I'm making roughly about 45% plus a year on that partnership. I'm passive. I'm financing it but they're doing the work. We're doing it as a partnership where we split the profits.
There are so many different opportunities. I love that you call yourself an anti-financial advisor. Typically, you walk into a financial advisor's office and it's one bucket. There's the mutual fund and some stock things. You rattled off a lot of different like, “What is your flavor?” I get excited about these other opportunities. You didn't even mention some of them as well.
Let's dive in because one of the deep flavors that you've helped out me, other real estate investors, and W-2 workers is this concept of infinite banking. This is foreign. Give us a high-level picture of this because it can get complicated a little bit. Why would someone want to look at the concept of infinite banking? What is that all about?
Infinite banking is a tax-free supercharged savings account in the way that we use it. The vehicle you use is whole life insurance, which is the least sexy type of insurance. Maybe the term insurance is less sexy than that. It's not an exciting type of insurance compared to some of the insurance out there, especially when you're investing. Whether you're a business owner, a real estate investor, or whatever you are, it works great.
Even though they have the death benefit, as all life insurance does, we minimize the death benefit but allow however much cash we're going to put in. We try to do the lowest death benefit needed to allow that cash to go in, grow tax-free, and come out tax-free. It's like a Roth IRA but you don't have to wait until you’re 59 and a half to access it. You mentioned IRAs. The problem with traditional IRAs is that you put money in and get the tax deduction but you got to pay taxes down the road.
Roth IRAs are usually preferred but then you still have all those dumb rules like the 59-and-a-half rule. You got to wait. If you pull it out too early, you get that 10% penalty and stuff. We don't have to worry about that kind of stuff. There is no 59-and-a-half rule. We can use that money now. What we do is overfund a policy by putting in more than what's needed to pay the insurance costs. That builds up in this tax-free account that's making more than point nothing percent as you get paid at your bank.
We're worried about bank failures. I never worry about bank failures because I have insurance companies that are more secure and have insurance that covers them in case of default. It’s better than FDIC. I get paid higher returns. My money is safer. It's better protected from lawsuits and creditors. In most states, you have 100% protection of that cash in there. You could have millions in there. Someone sues and wins and they cannot get to it. They can get to anything in your bank, most of your investments, and even put liens on your properties but they cannot get to your life insurance so it’s one of the few places you can store money where people can't touch it.
Beyond being tax-free and everything, the cool thing is I can use that money now. I don't have to wait until retirement. What you do is borrow it from the insurance company. You borrow from them, leaving your money in there, growing compound interest tax-free. All of it is still there. You get a line of credit from the insurance company or a bank and then you use it to invest. What happens is that the returns from that investment, you use to pay back towards that line of credit.
Have you ever heard of the strategy of velocity banking? People used to get their home equity lines of credit but not as much anymore. They would invest it and take the cashflow to pay it down. As they paid it down, they would then cash it back out and invest again. It’s the same strategy with life insurance. The cool thing is with HELOC, it will only cost you interest. Life insurance is paying you 5% to 6% interest, tax-free. You're then taking out loans. You make money off of the interest from the insurance and on your investments. You make money in two places at once versus using a savings account that only makes money in one place, which is the investment.
I've been using this strategy. It’s another tool to build wealth. I would get the knowledge by listening to Money Ripples with Chris. There are so many different things out there and what your flavor is. A lot of times, we go through life. We drift here and there. We don't surgically analyze a lot of these things in our life.
Sometimes, we're always thinking, “I need to make more money and start this other active business.” What do you already have that you can work better? You mentioned Dave Ramsey. Let's end the show with that. There might be some Dave Ramsey fans on here. A lot of people are maybe like your dad, get out of debt, save up, and don't get any more debt, no credit cards. What do you say to that particular strategy as it works for America?
For general America, that's a great place to start. When you go to college, if somebody can't quite get to the normal Math class, you take that remedial Math class so then you can get up to the 101 Math class. That's what I see in Dave Ramsey. He gives some good 101 stuff. The problem is once you go beyond budgeting, maybe paying off credit card debt, and stuff like that, anything with investing and wealth billing is not good advice at all. Telling you to gamble your money in a mutual fund, I've seen has been proven not to work and there's lots of evidence to show otherwise. It's not good advice.
He gives very old advice that way. He's good for people that are just starting, trying to get a basic foundation of money. You want to take your stewardship to another level. We all are stewards of this planet. I believe that we're here to make this planet better, leave a better footprint, and make it better than how we showed up to it. If you want to be a better steward and expand your resources and your means to bless more lives, that requires you to up-level your stewardship ability. That's something that we talk about a lot.
We get a lot of the Dave Ramsey poster children that said, “I'm debt-free. I did everything he asked. I can't retire. I'm not free.” Let's get you free, which makes you a better servant to God. It allows you to be able to be a more powerful servant and steward on this planet and have a better impact. That's why the company is called Money Ripples. It's that ripple effect you can create as you prosper financially and have greater resources to bless more human lives.
Thank you so much, Chris, for being on the show. I wish you so much success. Make sure you go check out MoneyRipples.com and his YouTube channel as well. He has over 700 plus episodes on there. It's a wrap. Chris Miles, thank you so much.
It's been a pleasure, Brett. Thanks.