Disclaimer: Transcripts were generated automatically and may contain inaccuracies and errors.

---

Real estate works for you today as well as in the future. It’s not just save everything and not spend a dime of it today and just wait until the future because, with real estate, you’re generating spendable cash flow for today. And you’ve got dollars working for you in the form of appreciation and tax benefits and so on, that you get to take advantage of in the future, right?

What would your life look like if you could replace all of your working income with simple and conservative investments that could do it for you?

Over the last 13 years, we’ve helped thousands of clients transact over half a billion dollars in simple and conservative real estate transactions, allowing them to begin replacing their work income with real estate investment income.

Each week, we’ll be pulling back the curtain on the ins and outs of real-time retirement based real estate transactions that will transform your financial future. Even if you have no real estate experience. This is Replace Your Income with me, Kevin Clayson…

And Steve Earl.

All right, well, Steve, we’re back. Episode Two, how are you feeling buddy?

Sweet and feeling pretty good here.

Yeah. So thank you to everybody that tuned in the episode one. And if you didn’t tune into episode one, get back there and go listen to episode one. Because Steve and I talked a little bit about our backstory and how he got to this point. But we are so excited that you’re here. And today we wanted to talk a little bit about this thing that I don’t know, for a lot of Americans is kind of like the bane of their existence.

And I know for you and I, Steve, it’s something we talk about all the time, because of what we do with our clients and so many folks that we get a chance to interact with this word is kind of a big deal around this office, it is something we talk about a lot. It’s a little word called retirement. Steve, have you ever heard of that before?

Yeah, once or twice.

Yeah, so we do talk a little bit about retirement because you know what it seems like everybody, that’s kind of… It’s on their mind, right? Even if it’s not on their mind – it’s on their mind. Like, sometimes we kind of go I know I’m going to retire one day. I don’t know what that looks like, but I just, you know, when it comes, I’ll deal with it. So, you know, we wanted to talk about this idea of traditional retirement.

Now, traditional retirement for me, is defined as what most people do as they prepare for retirement, how they’re putting money away, how they’re saving money. And here’s what I want everybody to know. Today on the episode, we’re going to talk a little bit about some of the statistics and some of the situation facing Americans that proves that retirement is in trouble or it’s broken.

And then we’re going to talk a little bit about some stories of how to combat that and give you some really specific steps. Then at the end of the episode, we’re going to give you a link and that link is a really quick 60 second retirement assessment that will allow you to go in and fill it out and in less than 60 seconds, you’ll know if you’re on track to retire.

So that’s gonna be it. So stay tuned to the end of the episode, we’re going to give out that link. And so to kind of talk a little bit about traditional retirement, Steve, how do you… When we talk about traditional retirement, I know what’s in my mind. But what does that mean? I’m just curious, like what’s your perspective on traditional retirement?

I still remember when I was much younger, I’m 51 now, but I remember when I was in my early 20s, and I was thinking about retirement back then. And I actually sat down as, like I mentioned, in the last episode, I used to have my whole life planned out, like when I was 12 years old, right. So I always think about the future.

And so when I got into my early 20s, and I got married, and I started, you know, having a family that was definitely on my mind and the way I thought of retirement was, you know, setting aside a certain percentage of my income every single month and putting it into some into like a 401k or an IRA or into some type of, you know, traditional stock market type of an account and to you know, to watch… And then over time, you know, just hopefully watch that, that grow and so on. And I became kind of disillusioned fairly quickly, as I saw the ups and downs of the market. And as I read it, it goes up and down, like the stock market.

Yeah, a little bit. And so I started to kind of lose faith in the system, as I talked to, you know, people who were 2030 years older than me to learn that it wasn’t like working for them. And I was seeing what it was doing for me. And so I started to look for you know, different ways to figure out what I could do to plan for you know, my retirement eventually. And sometimes it’s really hard to look that far in the future right and to it just doesn’t even seem like real right when you’re when you’re not…

Half the time, I don’t know how to look past lunch because I know what I’m having.

Exactly, exactly. It’s like and that’s the thing is that it’s so hard to to look that into the future and to be thinking that I’m going to squirrel away these pennies today that hopefully will, you know, benefit me down the road, and to then look at people who have been doing that for literally decades, and to talk to them and to have them tell me that it didn’t work for them.

Well, you know, I think so I’ve never been a huge fan of traditional retirement. I don’t know, if my sanity would hold up if I had been spending 20 years to build up my nest egg in my 401k. And then there’s a mic market Wipeout, right, and like, I lose half overnight. Like, I don’t know how to deal with that. But I know it’s something that a lot of Americans are dealing with. And this is kind of my interpretation of traditional retirement.

So I feel like what we’re kind of taught to do, what’s not it’s not like it’s explicitly stated in schools, it’s just kind of like, sort of just the, it’s kind of just what runs throughout society is this is how you retire. And it’s this it’s you build a nest egg, right, you work hard, you put money away in a 401k or an IRA, you utilize the timing of the stock market over time, that money should be enough that you could then live off of it for the rest of your life maybe combined with social security or whatever.

And the way that I look at it is I think about it. I go, you know what, okay, hold on. So somebody takes an average of 30 years to prepare for retirement if they’re putting money away the whole time. What if I wanted to build my dream home? Right? Like, what if I, what if I built my own dream home board by board brick by brick nail by nail now, I’m not capable of that because I can barely.

I can barely open a ladder when it comes to home renovations. Okay, but, but let’s assume that I was going to do that. Imagine, if I spent 30 years building my dream home board by board brick by brick, it’s perfect wood at that time at 30 years when it’s completed, then imagine I start to pull it apart board by board brick by brick nail by nail, nobody in their right mind would do that yet. It’s exactly what we do and what we’re taught to do. When we look at traditional retirement build a nest egg, then deplete it to death.

Well think about it. Really think about this, Kevin. Think about those individuals who were so excited at the beginning of 2020. They were saying to themselves, that they had a retirement party in January of 2020. And they had saved all this money is in the stock market. And the timing was perfect.

Because over the last couple of years, the stock market has gone nuts. And they’re like, yeah, I am ready to retire today. And then literally, they didn’t start pulling it apart bit by bit by brick, but this little thing called COVID-19. Like literally blew it up. Yeah, the value went from it dropped by 35%. Kevin, that dream. So So part of retirement is this whole thing called timing and the fact that the market goes up, and it goes down, if you don’t time things just right.

When you begin spending that money and you begin living on it, and then all of a sudden bam, of no fault of your own. The market completely drops The bottom drops out. And even if it’s only for a few years, well guess what? Your retirement just unretired us.

Yeah, that’s a good way to put it. So I was thinking about, like, what is it that most Americans are facing? You just described it. And so I went and I found some statistics. So there’s a guy named Chris Hogan. He works with Dave Ramsey. So some of you out there may be big Dave Ramsey fans. I know a lot of people that are like, I can’t stand Dave.

Whether you like them or you don’t he’s got some good stuff to say I don’t agree with everything. But this guy Chris Hogan does a lot of speaking for Dave Ramsey, does a lot of research. And he recently put together something that was like 10 frightening retirement stats that should scare you into action. Now, full disclosure. I know that Chris Hogan and Dave Ramsey are well researched, and I know they have sources.

They didn’t list the sources. But I also know from your in my experience, Stephen, what we see every day, I know that these are accurate, right. So and by the way, they say that these came from a retirement study that Ramsey solutions commission. So I guess it was their own research so it’s not like MSNBC but but here’s kind of some of the frightening statistics. Okay, here’s number one, only 58% of Americans are actively saving for retirement can that means that 40% are not actively saving.

All right, here’s another 140 8%. So almost 50% of Americans have less than $10,000 saved for retirement. That ain’t gonna cut it, Steve, that’s not gonna get you where you need to get. Here’s another one. More than 50% of baby boomers say all or most of their retirement income will come from Social Security. Oh, awesome. So we’ll just rely on the government program that has unlimited funding. There’s never a problem for that right.

That should be totally good. Couple more, one in 10 Americans, one in 10. One 10th of us one in 10 are saving 15% or more towards retirement. That is not a huge percentage. Doesn’t mean that there’s not people saving 1% 2% 3% 4% 5% but only one in 10 are saving at least 15% which is great. Kind of the sort of accepted standard of what you need to do in order to have enough 12.

And based on what Mike, you know, our in house financial guy stated that that is the typical plan in order to make this work, 15% is kind of the minimum.

Yep, that’s right. So and then here, here’s another one. This is just kind of interesting. Close to 60% of Americans report losing sleep, thinking about retirement a little bit later in the episode, we’re going to have Mike, our customer appreciation manager. Come on. And he’s going to share a story about a guy who kind of said something really similar. One of our clients who kind of said, I used to be super afraid of retirement, but now not so much. We’ll kind of talk about why that is later.

Well, Kevin, between losing sleepover, you know, retirement type issues, and then losing sleep because your children are waking up in the middle of the night and keeping you away. I mean, that is why we should all invest all of our money into Rockstar or enter, you know, rock or Redbull or whatever. Like we are. Yeah, exactly. Because none of us are getting any sleep based on those two things.

It’s so true. So here’s the deal. You guys, look, we know, you know, that traditional retirements kind of broken. I’ve done a little bit of research. So I’m not well researched. I can’t go write a book on it. But here’s sometimes I like to like, look at storylines, like human storylines, and put together a narrative that makes sense to me. And so what i’m about to share with you, I’m not going to claim as gospel truth. But if we look at what’s actually happened, as America has sort of evolved, where did this idea of retirement come from? Like, Steve, you probably know, do you know what the original, like the original, like the very first-ever retirement plan was, you know what it used to be? Well, the founding of the country, like around that time. It’s this thing. It’s like two words on it’s called real estate. So what would happen is so often so this country was built on on the backs of laborers, farmers agriculture, there used to be people that would emit land.

You mean something like real estate?

Yeah. Oh, wow.

So like an estate isn’t something that you own, but and it’s actually real.

I think that’s it. Wow, look what you did. Their words are fun. So really though, like you think about gold do research on families and like the 1800s. The idea was to own land and to work the land. And the idea was you’d work the land and teach your kids to work the land.

Then when you were too old to work, the land, your kids could work the land and help support you. That was the original idea of retirement. And it was based on this concept of, of really being accountable and being self-sustaining, and having the ability to control your future. You know, most people nowadays, there’s two things they can’t control.

They can’t control how much they’re going to have when it comes to retirement for most people. There’s ways to do that. And most people can’t really control when they want to retire because a lot of people have to keep working. Because traditional retirement is kind of broken. Well, when you used to have landed a farm, I mean, you work until you’re tired until your knees hurt, your back hurts. And then the kids work. That was the original retirement plan.

Well, and Kevin, if I could just add to that, like, here’s the concept, right? Like you didn’t take that land that you owned, and spend it or sell it sell it off by bit. It was income-producing real estate income-producing land and and what needs to happen with retirement is your income your income can’t retire, correct. Your income has to keep going. And as you relate that back it just gets my mind thinking in terms of like the original plan as you kind of are describing it it just makes so much sense to me.

Yeah, well yeah. And I mean, you know, you think about I’m gonna retire for the day I’m tired I’m going to retire right I’m people would retire On their land and on their estate, because somebody could help them that’s, that went away. So when did it start to go away? So this is the part where I’m going to, I’m going to create my own historical narrative, but it kind of makes sense, right? So, so if you look at when people started to kind of leave the farm, it was kind of like Industrial Revolution, right?

So what would happen is you have all these farmers but this we’ve got this Industrial Revolution. We need workers in factories. And so what companies would do is they would go and they would incentivize, they’d go incentivize you to come off the farm and come work for them. They’re gonna guarantee benefits, maybe they guarantee a retirement, a pension, that thing that existed for a while, right? come work for us. That’s the idea. That’s where the idea of benefits was born, right? come work for us.

There’s benefits to work for us instead of just staying on the farm. So you started to get people moving away from the farm moving into cities moving into factories. Now, that was all fine and good. And that’s generally kind of what happened, right? You had people you know Industrial Revolution, they’re moving into factories, you have world wars, you’ve got maybe even more people leaving the farms to go and contribute to a cause of America.

And all of a sudden, over time we see this cultural shift of people, instead of being, you know, sort of self-reliant, they become reliant on employers, instead of owning real estate, they own dollars that they think will support the realness of their future retirement, and then we get to the 70s. And then Congress because they’re always smarter than us. They decide that there’s going to be this thing, there’s this guy named Ted benna.

He comes up, he kind of discovers this piece of the tax code 401 K, which was ultimately initially was designed to be a benefit for employers, right. So it was the idea that if you contributed to your employees retirement account, you could get some additional tax benefits as an employer and somehow that came that that evolved into it. The employers are doing this. So somehow everybody starts to think, well, all the employers are doing this 401k thing that must be the way you retire because most of the time retirement is not taught retirement is learned by experience.

That’s what we see across America, which is why the statistics are so bad, because there’s not like there’s a retirement class, right? It’s like, you get your econ class or whatever. But so over time, this learned behavior in Americans, it’s like, Okay, if I get a pension cool, but then pensions started to go away, right? Because that was bankrupting companies.

So then it was this reliance on the 401k. That’s what everybody’s doing. And as a result, then, oh, by the way, so now everybody’s got money in a 401k. We’re in the 80s. There’s these massive stock market run-ups, and everybody starts to go, Well, this is the way to do it. I mean, man, your employer, put some money in, you put some money in it goes in there without paying taxes. It grows over time. This is awesome.

And that’s sort of been the approach that Americans have been taking For decades and decades, and then here we are in 2020. And we’re looking at the statistics and we know darn well, that statistically and just in general, what people are experiencing traditional retirement is largely broken. People aren’t finding ways to have their income keep working for them. Like you said, You can’t your income can’t retire even if you do.

But people are looking at this thing going, I gotta rely on Social Security. I gotta rely on family and friends. Hopefully, there’s enough money in the stock market guys ended the day, we know. And the stats have proven it. We know it is. I don’t think it’s indisputable at this point. Traditional retirement is broken. So the question is, well, what do we do to fix it? So Steve, you already kind of alluded to it, right? i, you and i, we kind of like this little thing called real estate. It’s this real, tangible thing that really makes a difference for real people when it comes to their actual real retirement. So we will Like real estate for that.

And you’ve heard Steve talked about his real estate experience. Let me tell you one that’s near and dear to my heart and what I think is part of the solution to traditional retirement, which is, this is my dad, my mom, here’s what they did. So mom and dad and you know this, Steve. So my mom and dad, they bought their home in like the 60s in California, okay, in the Bay Area. And dad, we talked a little bit about this last episode, dad, dad was a sales guy worked a lot jobs. He didn’t really have like a pension.

You know, there wasn’t always a lot extra. My dad was an incredibly hard worker and great provider, but there wasn’t always a lot extra to put into a 401k or IRA. There wasn’t a pension. So kind of relying on Social Security. My mom got a small has a small retirement pension from she worked for the school district for decades.

But you know, so they’re making it right. they own their home free and clear. And they buy this home in the 60s. They pay it off overtime. They only ever have like one mortgage on it, right? And so recently here, we aren’t 2020 I said to them guys, you’re still living in California, California has fallen off the cliff. If you live in California, I love you. We love California, but also sorry. But so I said, Mom, Dad, look, you’re getting older, my dad’s 82. I’m not going to say my mom’s age because she’d killed me, but she’s older than 20. And so they’re squarely in retirement. And I said, you guys, all your kids, and grandkids live here in Utah.

That’s where we live. We live in Utah. You guys are in California. You’re out there by yourselves. I’m worried about you. I’m worried about your health. I’m worried about your age. I’m worried about your retirement. I want to make sure you guys are good. And so I finally convinced them to move back here to Utah. We got them a beautiful place in a 55 plus community where everything’s taken care of for him they have a brand new home, and they sold their home in California that they bought for between 30 and $40,000.

And they sold that puppy for well over 700,000 dollars, they have plenty of money to rely on for retirement. And you know, what did it one singular real estate investment slash purchase? So here we have somebody in their 80s, who was finally able to experience of retirement because of real estate, which is awesome. Now, is that the only way to go we’re actually going to have somebody come in and just a second. We have our customer, or, or excuse me, client appreciation, team manager, Mike Chamberlain, who has this really unique perspective on retirement.

And I want him to tell a story about his his mother in law, and also about one of our clients named Ron divac. Because regardless of where you’re at Real Estate has the ability to put you on track or make up some deficits or get you to the point of retirement without relying on traditional retirement.

Yeah, Kevin, I mean, like, like you say, at the end of the day, retirement is what it is whether you start thinking about it when you’re in your 20s way this, whether you really start thinking about it and planning for in your 50s, or whether you’re in your 80s like your parents, real estate can make all the difference in the world. In your parents case, one single property has given them the ability and the opportunity to retire very comfortably.

The story that Mike’s going to share with us about Ron divac, he got started kind of in midlife. 50s, late 50s, mid middle 50s, right around there, changed his life completely, in the course of 10 years, change what the future of his legacy will be to his family. And I kind of want to share the story of somebody younger, somebody who started the process a little bit earlier on in life, and where they discovered the power of real estate and what it can do for them now and in the future. Because real estate works for you today, as well as in the future.

It’s not just save everything and not spend a dime of it today and just wait until the future because with real estate you’re generating spendable cash flow for today. And you’ve got dollars working for you in the form of appreciation and tax benefits and so on, that you get to take advantage of in the future, right. And we have an opportunity as individuals to teach these types of concepts and principles to the up and coming generation and specifically, and most intimately to our own children.

And so, my own son got started in real estate investing when he was about 20 years old. And so I wanted to have him share his story. In his own words, he happens to be in town for a couple of weeks prior to starting a new job out in New York at the end of summer. And so I’ve invited Dallin to come and tell us kind of his story, what he’s experienced. So you can see the perspective of a young person. He got sir when he was 20. Like I say, he’s now I think, 28 or 29. I should know the age of my child.

That might be good. Yeah,

But we’re gonna have Delon kind of share his story now.

Okay, so let’s do this. Actually, let’s do this. I’m gonna go get Mike Let’s have Mike come in. I want Mike to talk because he’s got a really unique perspective on retirement. So I’m gonna have Mike talk a little bit about that. And I want him to also tell the story about his mother law and Ron, and then after Mike lets you sit down and can come by?

Yup, we’ll have Dallin come in.

Okay, let’s have Dallin come in. And let’s just keep exploring this idea of how real estate can help to kind of break the shackles of traditional retirement so it can actually create some real freedom for you. Okay, awesome. So, you know, we thought it’d be really cool to have our customer appreciation team manager come in. And this is a guy who I have grown to really love and respect. His name is Mike Chamberlain. What’s up Mike? How you doing over there, buddy?

Hey Kevin, happy to be here.

Good. And I got to tell you, Mike has a wonderful haircut. Looks like mine. Except I have male pattern baldness. He doesn’t he just shaves it.

It’s by choice.

Yeah. Wish mine was by choice. But So Mike, you I just love your background. And we thought it’d be awesome to have you on the episode because your experience is so it’s It’s so relevant to everything we’re talking to this even I are talking about. So you actually have a pretty interesting background in traditional retirement because you worked for a big sort of financial planning or retirement firm. So talk a little bit about your experience with traditional retirement.

Yeah, so I first became a licensed advisor about 15 years ago. It was when my parents were retiring, and I saw the help they were trying to get from another professional to make sense of what their future might look like, and how poor service and poor perspective really mess with their lives. They weren’t as comfortable with their futures. I wish they were I wanted to go right off into the sunset and enjoy it. So I got into the business. I always liked investing, dabbled it on the side myself as well. became an advisor with Edward Jones worked for Edward Jones and Fidelity Investments for most of the last 15 years.

How is Edward Jones, is he e a nice guy?

He’s asked to come Yeah, yeah, he’s a good, fantastic company. He died decades ago. That reminds me when I went to see Rachmaninoff with my wife at the symphony. She went intermission and asked the Usher, you know, my husband really enjoys Rachmaninoff Do you know when he’ll be coming back? And the officer just looked at her and said, Oh, honey, he’s been dead for 50 years.

So Kevin, he’s been dead for 50 years, probably, or something like that. But the Jones is a great company. But yeah, great company, lots of great experience working face to face with clients, hundreds of clients making sense of traditional investment. So my background is a licensed advisor is working with stocks and bonds and insurance products, helping them have the best chance possible to, I always describe my job is helping them live their best life as possible, you know, what the resources they had making sense of it in in trying to be in the best position to know what the future looks like, and just enjoy life a little bit more along the way. So previously did that with traditional investments.

Love what real estate does for people, you know, multiples of potential peace of mind and actual returns, you know, two, three times the kind of returns versus what most people are doing for retirement that they can do with Traditional investments, real estate investments like we have here.

So I’m going to put you on the hot seat just real quick, because I have a, there’s a couple things that I thought you ought to share, I want you to share a couple stories, because it’s just like I said, your expertise is so relevant to this topic. Steven, I’ve been spending the last I don’t know how many minutes talking about how traditional retirement is broken. So I’m going to put you on the hot seat from your perspective.

And I don’t think there’s a wrong answer here. But from your perspective, is traditional retirement broken? Or is it that traditional retirement isn’t broken, but the way people are interacting with their funds that’s broken. And so it has this ripple effect, but I’m just kind of curious what your what your I mean, I’ve heard you talk a lot about it. We’ve, we’ve done events together, but I think your perspective is so unique. So what would be your answer to that question? is traditional retirement broken? And maybe if it is, how was it broken? Or is it or is it us that’s broken, just kind of what’s your perspective?

I’d say it’s not working and it’s unknown. I mean, if people get started early and they sock away 15% have their income for decades. And they haven’t gone to work for them in smart ways it can work out. But that’s just not the reality. That’s not what people are doing.

Well, we, you know, we started the show with some statistics and what was it? I got to look it up again. Now, it was like, only 10% of Americans are saving 15% of more of their monthly income towards retirement. So you just said if they’re saving 15%, but we have we have only 10% of Americans period, that means 90% of us, according to the definition that you just kind of shared are super not on track.

That’s right. Yeah, the traditional method out there, the what most people are trying to do is you work for decades, three, four decades. You squirrel away your pennies, you save for a rainy day, you save for the future, and you build this pile of money that you’ve stopped adding to and you start subtracting from as you transition to retirement.

And the hope is, is that pile of money doesn’t run out before the living runs out. Right. That’s what almost everybody is doing out there. That’s that’s what the traditional model is in the things that are going to be the biggest factor issues in that working out for somebody is how long people live now, the longevity people just live longer now. Yeah, you’re in retirement longer now.

The average everybody eats gluten free and vegan that so is that what that is? Yeah, that makes a difference. I don’t know…

The average retired couple now though, they’re gonna have about two and a half decades in retirement one of the two of them going to live to be 92 is are the numbers. And so if you retire at 65, and you go to 92 to three decades of this pile of money needing the last in the biggest barrier to that lasting, when you live longer cost of living goes up over time. And maybe you need an extra thousand dollars a month to pay your bills as you go into retirement. But a couple decades into it, you now need $2,000 a month because of inflation.

And that’s just taking out bigger chunks of money, most likely blowing up that plan. So it doesn’t work out. And of course, you’re not traveling the world and doing other things right two, three decades into the world like you were as you ride off into the sunset, but you do have health expenses, you do have lots of other expenses that come up at that stage in life that you Be prepared for.

So yeah, the traditional model is hope that it doesn’t run out real estate turns out on the dime, it’s literally building this estate, that you have appreciation that’s gonna keep happening behind the scenes, you have the rents that are going to be going up traditionally, just beyond inflation, inflation is average to 3% a year, the rental increases been around two, three or more percent a year. And so it just simply changes that model from a pile that shrinks to a pile that expands and grow. Yeah, in combats inflation, which is one of the biggest things that blow up the traditional retirement plan.

So I kind of talked about my dad’s story you know, my dad story and now your mother in law has kind of another cool story when it comes to real estate kind of being a bit of the cure, to sort of fixing some of the traditional retirement stuff. So what I don’t know your mother in law story, so tell me I bet I know you meant I’ve heard you mentioned it, but I don’t know the details.

Yeah. I love it because it shows the power of real estate with time, you know, real estate’s been referred to as a get rich, slow investment. That’s very much I think our approach conservative, give it time it works, be focused on long term have a plan.

What my mother in law did, my wife was born into a single parent only child, mom law worked as a high school librarian for her career, great job influence lots of people’s lives, but not a big paying job and certainly didn’t have a pile of money to help her transition to retirement. She had a good pension, which is unique today. But not a pile of money.

But when my wife was born, they have this small little starter home that when they moved to be closer to my mother in law’s word they kept and then rent it out for the next three decades. So just this one little small home that was owned over three decades time having the tenants pay off the mortgage for an…

An investment property.

An investment property. Exactly. She kept one home as an investment property. Three decades later, as she transitioned to retirement, she sold that and literally had an extra $400,000 in lump sum in a retirement account that she has used literally traveled the world to support nonprofit causes.

She believes in passionately To help pay for my kids her grandkids’ college education I mean is leaving an impact created a legacy huge because one single investment properties so off over time, it took time. Yeah, right. Yeah, big time. But it made a huge impact.

See, I love that so much, because this is everything Steve and I are talking about on this podcast and why we’re doing it. Because this idea of replacing your income or utilizing real estate can be such a game-changer.

And I know it was a game-changer for one of our clients named Ron Divac. Now this is a really interesting guy, and I thought we ought to tell his story because, you know, we’re talking about look, what’s the answer to sort of combating traditional retirement we’re saying well, we really like real estate, my dad story, and mom and dad story and hanging on to home for a long time that they lived in your mother in law story hanging on to an investment property.

And we’re those are both folks that are maybe kind of in the definitely in their twilight years. But then what if I’m in the middle, like I’m in my 40s, I’m in my 50s, I’m approaching 60 or whatever. And I’m looking at it and I’m going Hey, what do I do? I don’t really have You know what I hoped I would have as I look to retirement, can real estate still impact me and one of our clients named Ron Divac. That’s been the case for him. And it’s been a huge piece of income replacement over the last what, how many years?

He’s been with us about 10 years now about 10.

So tell Ron’s story. I know you’ve worked really closely with Ron, you have a great relationship with him. But I love his story. And you know, he lives. He lives in Colorado. Now. He’s in,… He’s in Colorado,

When we when he was first introduced to us. He lived in northern Indiana outside of Chicago there and where he was an all-star Hall of Fame Player Yep. And he went to pick up his son has Down syndrome from a train ride. And when he got in the car, the two of them are driving home. And they heard one of our commercials back 10 years ago.

And Mike his son said, Dad, you should call and he thought no, I’m not going to do that. Let’s just get home but Mike said again Dad, you should call write down the number. And so while he was driving, he carefully wrote down the number gave Recall, he heard what real estate could do. He thought at the time, the home prices were expensive. You know, this was actually after the Great Recession.

And so home prices started to take a drop, but he wasn’t sure if it was a good price or not. But he knew the power of real estate, he’d always wanted to do real estate. And so he decided I’m gonna give it a try with one property. And if it works, then I’ll do more. And so he started 10 years ago with one property. And now he literally has over 10 investment properties. He’s essentially averaged one a year, over the last 10 years, he had a little bit of retirement assets that he used to start this process.

He’s expanded it with the appreciation and the growth that he’s experienced with real estate. And he got into it, because he wanted to have some kind of an estate a legacy that he could leave for his kids. So this family would be taken care of. And so now he since moved to outside of Boulder, Colorado, beautiful community, which he said he couldn’t afford to live and if it wasn’t for his real estate, positive cash flow, passive income, he enjoys the lifestyle there. He’s around more family now.

And I asked him what impact Real Estate’s had on his life. And he said before, when he used to think about retirement, he’d have nightmares. And now he doesn’t it I love that image of, you know, the unknown, you know is this pile of money going to last is taken away that that nightmare, that fear can be overcome with real estate that grows in value.

That is doesn’t take over your life, it doesn’t become a second job or a full time effort for you. It’s very much a passive approach that we help people do. And just having that extra confidence to get started. That’s been one of my favorite quotes from another client that I do annual reviews with our clients to give them some perspective on how their homes are doing, to get the feedback to hear any frustrations, you know, we’re here to help make sure the experience is better for them along the way for years to come.

And another favorite quote I heard from a client was that I never would have dared do real estate without your help. And now that I’ve done it with your help, it’s made all the difference in being able to help support my kids, my adult children, to help make a better lifestyle for my wife and I it’s just that Holding the hands or helping them dare to do it has had a dramatic impact, you know, years down the road for them.

That’s awesome. Mike, thanks for coming on. I know it was really hard to get over here to the studio, aka my office. Your office is very far away. I think I have to take at least at least 20 to 22 steps spitting distance. No, thanks for coming in. You’re the best Mike. Appreciate you, man.

Thanks.

Okay, so this is pretty cool. We have a really special guest in the studio. I’m going to refer to we’re in my office, but we’re going to call it the studio because that sounds cooler like more official. So now, you guys have been hearing from Steve. Well, we now have Steve’s son Dallin with us. Dallin, what’s up, buddy?

Hey, how’s it going? Doing great.

Good. So now here’s the deal I got I got to let you know Dallin. I’m intimidated to talk to you because I’m known for a lot of years. But you have exceeded my intelligence level by about a billion because you just graduated from Harvard Law School, right?

And you are going to go you’re about to are you took a job with some awesome massive law firm in Manhattan. So you’re basically like a movie character, right? Like a guy in a John Grisham novel, who’s gonna go crush it in the world and make a lot of money. But let’s maybe without the drama that comes from a john Yeah, we can skip that. skip that. Yeah.

But Dallin is such an awesome guy. I mean, I, I’ve been it’s been cool for me, you know, just kind of hanging out with your dad over these years to watch you grow. And watch what you’ve been able to do with real estate and watch how it’s funded.

Everything from your mission you wanted to serve all the way through now Harvard Law School going on, uh, being an attorney, you’re getting a start in your quote, unquote, real life that is so many steps ahead of most people, because you’ve not relied on traditional retirement, but you’re utilizing real estate. So you have this awesome story. You’re an incredible guy.

You’re unbelievably intelligent. You’re a great dad. You’re just an amazing guy to have. So thank you for coming in. I don’t know if your dad bribed you or not, but I’m really thankful that you’re here.

So I want but I want everybody you know, we’ve talked about like my dad who, who bought one home and you know, he waited and then that that was able to make mom and dad money for retirement, we talked about one of our clients who was, you know, kind of midlife and feeling like he was scared for retirement, but utilize simple and conservative real estate to put them on track to be able to have as income replaced.

And you’re kind of the other end of the spectrum where you started really young. And, and now that is really starting to pay dividends. So tell us kind of, what’s the story of your real estate portfolio and how its benefited you and how you’ve been utilizing it.

Yeah, well, thank you very much, Kevin. Hopefully, I can live up to the hype that you’ve given to the audience here.

If you don’t, I’m gonna look dumb. So if you could do that, that’d be awesome. Definitely.

I will do my best but uh, but yeah, it’s been quite the ride and has been an incredible experience. As at a young age. My dad’s always been talking about Real Estate he’s always been involved buying houses doing all of this, you know, starting dry. And I decided to utilize that knowledge him and I put together a sort of game plan. And the first step in that plan was save up enough money for a downpayment.

And so that’s what I did. I got a job in high school, works saved my money. And over time eventually after right shortly after I graduated, I was able to save up enough money to buy my first investment property through df y down in Arizona, it was a great time to buy it was 2011. So home prices were really low, which you know, it made the downpayment easier for me to meet to attain. I obviously did things to build up my credit, like get credit cards as soon as I could, so I could qualify for loans and whatnot.

And yeah, that property has really served me well. I bought that property and shortly after that left to serve on a mission and The cash flow from that property funded my mission was so where most of my friends were going out and they, you know, had saved up a good chunk of money, and then would spend that to kind of support themselves through the mission.

I took that money put in the investment property, and the cash flow from the home paid for my expenses. And then when I came home, the property had increased in value. So not only did I have the downpayment, still sitting in the home, that downpayment, or that money I’d invested in the home had grown. And so that was a really eye-opening experience, really a testament to the power of investing in real estate.

Real quick, what I love about that, so you just said something that’s so critically important, like real estate’s one of the few things where you can have multiple profit centers inside of one single investment. So here you’ve got this property, it’s cash flowing and funding your mission, but then without you doing anything, it is growing and appreciating and adding to your network. Right. Yeah. If it wasn’t like you were calling the property every week like, hey, property, or you’re working hard for me, it just did it, which is so awesome.

Yeah, it was incredible. I was able to be away for two years, not even worry about it. I had awesome property managers that took care of things. And it worked out really great.

So you get this one property funds your mission, you come home, and now you’re kind of starting, you know, the next phase of your life. You’re going to school, and your real estate was still playing a part. So talk a little bit about kind of what the next phase was with that first home with your real estate portfolio.

Yeah, yeah. So I came back, got a job and also started school, started working or started working and was started school as an undergrad. And all that time I kept on to this property held on to it. And at one point, I decided to refinance it, it had grown in value significantly, I decided to refinance because I had enough in there like it, pull that money out and use that to buy two more properties today. You’re in Utah, some deals, deals came up that I had an opportunity to jump on. And I was able to jump on it because I had had all this equity in this home in Arizona, but I wasn’t ready to sell it.

And so I decided to just to refinance it, pull that cash out and bought those two more properties in, in Utah. And so then I had those two properties. I got married and bought a primary residence, and that primary residence, my wife and I decided that we wanted to have a kind of lower monthly payment. So we bought a house with a mother in law apartment. We lived in the basement and rented out the upstairs, and we’re essentially living on about like $350 a month rent, because our renter upstairs was paying for the rest of the mortgage.

So So if I’m keeping track, you’re up to four properties, one investment that had enough equity, you could refi it out, go buy two more in Utah and then you You bought another then you bought another one that’s your primary residence and you’re renting part of it out so that you’re not even basically making that whole mortgage payment right? Yeah, yes.

Yeah. So yeah, we did that and it was awesome the cash flow kind of helped with the expenses, it helped with the maintenance repairs, expenses, as well as just living as a college student going through my undergrad it just kind of helped with those expenses. And so then had all those four properties and graduated from undergrad and then went off to law school. And all the while…

Harvard law so this is don’t just gloss over who went to law school. It’s not like you went to like, you know, some night law school that were you know, any they take anybody like you’re at Harvard dude, like that’s, and that’s got to be unbelievably expensive, right? Like, I’m pretty sure they don’t offer law degrees for free.

No, they happen to not offer law degrees and Harvard doesn’t even offer scholarships. So hey, It’s it’s crazy expensive.

Because it’s Harvard and you are just lucky to be there. By the way I fully anticipated now that you’ve graduated Harvard, I thought you’d come in with like a sweater like tight around your neck like with a tennis racket. And you’re gonna talk about your yacht, but I guess not so anyway, so you go to you because I guess you’re I’m it’s good to see you’re still you. Yeah. And it’s really good thing. So okay, so now you’re in college. You’ve got you still have four properties, right? Yes. So you’ve got four properties that are helping to fund your life.

Yeah, we turned our primary residence into a rental property. So we just rented out we got renters in the in the basement and in the upstairs.

And then now, so three years later, you’re graduated. And you’ve now got how many properties do you have now?

So now we have three we sold the Arizona house. We just looked at the numbers and it just it made sense to sell off that property. The equity had we had in it versus the cash flow. It just made sense to sell that last summer

And if you want it to because you’ve been so smart, you I don’t know you probably do. Sorry. If I’m asking the person. Did you go get student loans to go to Harvard Law?

Yeah, yeah. So I got I got student loans, the cash flow from the properties help pay with our monthly expenses, or rent out there was is insane. Yeah. So yeah, we had to, we had to live on student loans. But what what’s really cool is, over the past three years, those properties have appreciated in value.

So not only have we had the benefit of the cash flow, kind of helping out here and there with the our, you know, monthly living expenses, which we still need to get loans to cover the rest, because it’s crazy expensive on the east coast. But those homes have appreciated such that if I wanted to today, I could turn around, sell all the properties and cover all of my law school debt.

Unbelievable. So a guy working in high school to save up enough for a down payment, uses his real estate to fund his ability to go and serve a mission in another country. Then you use your real estate to help fund your living expenses while you go to law school. Then if you wanted to, you could sell the properties and pay off your student loans. That’s incredible. What else now? Tell me what traditional retirement account can allow for that to happen. It’s unbelievable. So let me ask you this last question, then I’ll let you off the hot seat. Okay. So you said if you wanted to, you could sell the properties and cover you know, your student loan debt. What are you going to do instead? And why?

Yeah, I’m not going to sell them right now. I have seen the value of these properties over the years. And I can, I’ll worry about making the student loan payments, I’ll get those paid off, I’ve got a solid job, I’ll be able to make those payments. Instead of just going to keep growing the real estate portfolio over time as it makes sense.

You know, I’ll I may sell a property to turn around and take that principle out and buy another But But yeah, I plan on growing that portfolio until it you know until it makes sense to to retire on all the while I’ll continue to use the cash flow to help with monthly expenses, you know, sock away money for repairs and different things unexpected. But yeah, I just think at this point in my life, I don’t need to sell off the properties and cancel all my debt because I’ve crunched the numbers, and I’m making more return on investment on my properties than the interest payment that I’m, I’m paying on my student loans.

So while it would be nice to be completely debt-free, the numbers just show that if I’m making my if my return on investment on the properties is x, and that’s higher than my interest rate on my loans, well, then I’m going to keep the investment properties and I’ll pay down loans over time with my income.

It’s so awesome. Dallin You’re such a great example. And if you’re out there listening and you’re thinking, gosh, I’m too young to be able to start investing in real estate Dallin is a great example that you’re not Right now the same by the same token, if you’re if you’re on the the maybe older end of the spectrum, you’ve heard plenty of stories where real estate Can, can be a better a far better substitute for your traditional retirement plan.

Now, we’re about to wrap the show, but I gotta say, I need to go get sunglasses. It’s a little bright in here, because your dad is in the room Dallan and he’s beaming so brightly at the pride that he has over what you’ve been able to accomplish and, and how you’ve utilized so much of what he and your mom have taught you. And it’s just cool. It’s, it’s fun to be able to hear about your life from him. You know, just as as a friend and somebody who’s watched you grow, I’m really proud of you, too. And it’s just it’s awesome. Thanks for coming on and sharing your story, man.

Yeah. Thanks, Kevin. Appreciate it.

Well, that was awesome. You know, Steve, thanks for being such an awesome dad to teach your awesome son how to do awesome things in real estate.

Well, it’s good when you have an awesome wife who, you know, actually does all the work.

That’s why he turned out so good. She raised him makes so much more sense.

So pretty much pretty much,

Steve, anything you want. As we kind of wrap the episode anything you want to share anything you feel like we haven’t covered that people need to hear about this idea of traditional retirement being a bit broken and how real estate can be the answer to some of the traditional retirement woes.

Yeah, look, you know, I’m a big believer in planning for retirement. I’m a big believer, obviously in real estate and the power of it. And the fun thing about the stories that were we were able to share today, down story Ron’s story, your parents story, Mike’s mother in law is is that real estate can benefit you at any stage in her life.

And one of the things that I’m really passionate about is that we teach the up and coming generation about this concept about this principle because they listen to the media, they listen to the news, they listen to other people talking and telling them that there’s no For them, that student loans are so expensive that you’re going to go into it’s going to take you until you’re 65 just to pay off the loans and Which is why they should all just be forgiven.

Right? Yeah, exactly. And so, you know, the up and coming generation, like, I feel like we’re beating down on them so hard, generally speaking, yeah, that we’re sucking the life out of their, their future, their thoughts for the future.

And that makes me want to just, you know, shout to the world to shout to them. That, you know, look, you know, there is this thing called real estate, that in and of itself, if done right, can provide that hope for, you know, your financial future, that although you have to work and to sacrifice and to plan, if you do those things, even at a young age, you can get involved, and we can we have the ability to show young people how to do it.

And to get into that first property. If it’s a primary residence. You don’t have to put 20 or 25% You can actually get in with very little down in terms of 3% or less. And so there is hope there is opportunity. And there is a way forward in such a big way for young people, middle aged people, older, older people, there’s there’s so much hope there’s so much brightness in this world and so much opportunity that I feel like that we have to offer.

That’s great, Steve, and I think that hope is so necessary. You know, there is a lot of bad news all the time, right? There’s financial bad news, there’s market bad news, there’s pandemic bad news. You know, you’ve got political candidates that say yes to all these student loans should be forgiven because it’s just too hard for you to be able to pay him back.

There is has been, you know, we talked a little bit about the evolution of retirement. We have moved so far away from this idea of true personal accountability and self-reliance. And if we could get back to the farm figuratively, not literally, but that initial idea that that real estate could retire you that if we could get back to the farm in our minds and realize that property ownership and owning real estate and then utilizing real estate in a really powerful way to bless you and your posterity and to create a legacy like it’s doing for Ron Divac.

Like it’s done for you like it’s gonna do for Dallin. Like it’s gonna,… Like it’s done for my parents. It is such a real opportunity. And we don’t have to rely on this traditional, conventional mentality that’s out there of this traditional retirement system that is broken. You know, I want I told you guys at the beginning of the episode that I wanted to give you guys a way to find out for yourselves if you’re on track to retire.

So here’s what you need to do. If you could go to dfy-realestate.com. That’s our website. At the top of every page on that site. There’s an orange button, and that orange button will allow you to take a 60-second assessment and that assessment will be able to tell you if you’re on track to retire If you’re a little bit behind the eight-ball and then if and how real estate based on where you’re at today, the resources you have today, how long would it take for real estate to replace your income when we take all the factors into account?

We have had thousands and thousands and thousands of people take this assessment. And I’m just gonna tell you 98% of folks that take this assessment are not on track when you look at the numbers to really retire. So are you in that 2%? And if you’re not, could real estate be the answer? I’m here to tell you that I think it could that income replacement through simple and conservative real estate is realistic.

So we hope you enjoy today’s episode, go take the assessment dfy-realestate.com click on the orange button to take the assessment. See where you stand. Thank you to all our guests today.

Next week, we’ve got another great episode for you where we’re going to be talking a little bit about how real estate can benefit you, why real estate compared to other things is so powerful. We know real estate’s powerful so why? we’re going to talk about the four primary ways that real estate beats almost everything else next week when you tune in.

So for now, thank you so much for joining us, for me and for Steve and Dallin, and Mike, and everybody who was able to jump on today. Thanks for tuning in. We’ll see you next week.

Take care.

Thanks so much for listening to replace your income with Steve and Kevin. If you’re not subscribed already, be sure to head over to your favorite podcasting platform and do that now. If you enjoyed this episode, we’d love it if you could do as a quick favor and rate and review the podcast on Apple Podcasts.

This lets the platform know that we’re doing something right and that people like the content, it’d be a huge help and we would be super grateful. Also, be sure to head over to dfy-realestate.com and request your free Income Replacement Estimate. We’ll jump on a quick call and put a free and personalized Income Replacement Estimate report together for you.

Your report will show you a step by step plan of how you can begin replacing your income one property at a time starting right away with the resources you already have. It only takes a few minutes but could change the trajectory of your entire financial future.

So until next time, just remember, income replacement for you and your family may only be one property away. See you next week!