446 - Money Ripples Newest Coach - Craig Feldmeier
https://moneyripples.com/2020/12/02/446-money-ripples-newest-coach-craig-feldmeier/
In today’s episode, Chris Miles has a special guest in Craig Feldmeier.
About a year ago, Chris launched a financial program for people who are either financial advisors or looking to become more like anti-financial advisors, one of the participants that really stood out was Craig.
Craig is one of the few people that Chris knows who practices what he preaches. He is getting himself out of the rat race by doing investments.
In the beginning, Craig always tried to follow “the script” to become successful. Study hard, get good grades, find a job and open up a 401K. He then realized in his first month of having a 401K that he can’t even choose what he can invest in.
A couple of years in his job at Premier Investment Bank on Wall Street and working with ultra high net worth clients, (meaning people with 5 million dollar net worth and more), a light bulb moment hit Craig. He started to learn how his client’s portfolios are designed, he came to know that people with 5 million dollar net worth, are only able to generate cash flow on those assets about 10 to 15 thousand dollars a month pre-tax.
He came to a realization that he is nowhere near having a 5million dollar investment portfolio, then he started tracking his 401K and learned that it wasn’t growing as much as he thought it would be. This is a stressful moment for him because he knew he was doing everything right, what the “society” wants him to do.
With this he takes a grand shift by educating himself. He looks for great mentors and tries to do what they are doing because Craig knows that there are people who do not struggle in their retirement years. This way of thinking led him to Chris Miles and other people who are buying, investing in cash flow and producing assets.
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Chris Miles (00:08):
Hello! My fellow Ripplers. This is Chris Miles, your Cash Flow Expert and Anti-Financial Advisor. Guys, welcoming you out for a wonderful show that’s for you and it’s about you. Those you work so freaking hard for your money and you’re ready for your money to start working harder for you. Now! You want that freedom. You want that cash flow. You want that prosperity today, not 30 or 40 million years from now, right? For right now, so you can live that life that you love doing what you love and do it with whoever you want. And on top of that, guys, not just you’re here for your own financial prosperity, but you’re here to make a difference in life. You’re here to make a difference in other people’s lives. As a Rippler, you want to create that “Ripple Effect” by blessing more lives as you are blessed too. Guys, thank you so much for allowing me to do that through you.
Chris Miles (00:50):
Thank you for allowing me to teach and to guide and to inspire you guys to live and create something greater than the status quo. Here’s a reminder, check out our website, WWW.MONEYRIPPLES.COM There’s great stuff on there. There’s blogs and videos, and you can even go check out YouTube on our Money Ripples with Chris Miles page as well. So subscribe there and check it out. So today guys, I’ve got a special guest for you. Last week I kind of teased about him a little bit, mentioning that, you know, as you know why I’m here, why I’m doing what I’m doing, right? Like I really had to have kind of my own little come to Jesus talks over the last several months, you know, of what do I really want to do? Because I recognize that as Money Ripples grows and gets bigger and it’s just naturally getting bigger.
Chris Miles (01:34):
You guys, I mean, that’s all because of you, right? Like the fact you guys are, you know, bingeing on these episodes, you’ve been sharing with other people. You’ve been having conversations. And this is even becoming not just nationwide, but even global too. And I realized that, you know, I have a choice I can either grow or I can shrink, right? I can either try to go back to what’s comfortable just focusing on what’s good for me, or I can really create that “ripple effect” I keep talking about with you guys and that “ripple effect” can go way beyond just a small even audience of what you guys are now. Although there’s thousands of you, I know it could be millions of you. And I know that I can’t do that alone. And that’s exactly why I brought on a special guest here.
Chris Miles (02:16):
So if you guys went back to the episodes about a year ago, I launched a financial program for people that were either Financial Advisors or looking to become more like Anti-Financial Advisors. Right? And that’s exactly what I did. And so there was about a dozen people that went through this training program. And one of them that really stood out was my guest here today, which is Craig Feldmeier here right? Now, I’ll tell you like a, you know, the one thing is I love people that practice what they preach, you know, and Craig’s doing that. Like, he’s the guy that’s getting himself out of the rat race already doing these investments. He’s a sharp guy. He’s been doing this a lot and I really just want to introduce you guys really introduce him to the world! You know, here to talk about that. Like no pressure, Craig, you know, but, really just to kind of introduce him to you guys. And so Craig welcome our show!
Craig Feldmeier (03:05):
Yeah. Thanks for that intro, Chris!
Chris Miles (03:07):
Yeah you bet. So, give everybody your background, like, you know, what leaving led you down this path to be where we are today right now?
Craig Feldmeier (03:14):
Yeah, sure. So I kind of we’ll start back from the beginning. And I think a lot of people, I think my story will resonate with a lot of people in terms of, you know, I was always trying to follow the script of what you’re supposed to do to become successful. You know, at least what, you know, your parents teach you what the media teaches you. And you know, even going back to my high school days, you know, I was a really good student. Tried really hard in school, got a good grades, you know, went to a good college when I was in college. My goal was to get a great job and make a lot of money. So I, you know, I got a job with, you know, a premier and investment bank on Wall streets, you know, and then when I started with working with them, I said, you know, man, I’ve you know, I’ve made it, I’m here, I’m 22 years old, making some good money.
Craig Feldmeier (04:05):
And then what did I do, which, you know, most first year analyst do, or most first year employees? You open up a 401k because that’s what you’re supposed to do. Right?
Chris Miles (04:15):
Right.
Craig Feldmeier (04:16):
So I remember, you know, the first month of work kind of opening the 401k and then the first, you know, the first big shock for me was, Oh, wow! I can’t even really pick what I can invest in. You know, I’ve got 10 different mutual funds and target date funds, where I can put my money. Doesn’t really know too much about the target date fund at the time. This is, you know, 2008, 2009. So I said, okay, you know, I’ll put in a certain percentage of my salary into this target date fund and just kind of let it ride. So, you know, over the years my job at that investment bank was working with ultra high net worth clients.
Craig Feldmeier (04:53):
So that typically means in the industry a $5 million liquid net worth. And so people who have significant amounts of wealth.
Chris Miles (05:01):
Yeah.
Craig Feldmeier (05:02):
And what really kind of the first light bulb moment I had, a couple of years into the job and I was really starting to dig into how our client’s portfolios are designed. And I came to realize that, you know, people with that $5 million net worth, they were only able to generate cash flow on those assets about 10 to $15,000 a month pre-tax. Now it’s a pretty good, I would take 10 to 15 grand a month. Don’t get me wrong, but it dawned on me. And I said, you know, I am nowhere near having a $5 million investment portfolio. And on top of that, will I ever have a $5 million investment portfolio? I don’t know, you know, so then I started tracking my 401k, seeing, you know, how that wasn’t growing nearly as much.
Craig Feldmeier (05:49):
As I thought it would be a start, you know, looking into more of, you know, the expenses of these mutual funds. I mean, even with the company match, wasn’t growing, you know, nearly as much as I thought, and I really kind of had, you know, a stressful moment thinking, you know, what am I going to do? I’m doing everything right. I did everything, you know, society told me to do, you know, maybe I’ll reach that magic $1 million number, you know, 30 or 40 years from when I started working, I took it a step further. And I said, okay, see you even get to the million dollar number. You know, the financial pundits say, you know, when you’ve accumulated assets, what can you withdraw? You know, 4%, even 4% now is I think a little generous. I think most of usual advisors are saying, you know, kind of the two to 3% range, you know, just for the purpose of this conversation, let’s say 4%.
Craig Feldmeier (06:37):
I said, if I have a million dollar net worth or a million dollars in my retirement account, and I’m withdrawing 4% a year, I’m only making or only taking $40,000 a year pre-tax so you still have to pay taxes on that money because the 401k taxes are deferred until you make your withdrawals.
Chris Miles (06:55):
Yeah.
Craig Feldmeier (06:56):
So that was a very jarring kind of light bulb moment that happened to me. And I said, wow! Even working all these years, working super hard, you know, I’m only able to take out $40,000 a year. You know, that’s just for me to live at that point. You know, I want to be able to help my family be able to put my kids through college, you know, how am I gonna do this? And so I really kind of went down the path of trying to educate myself. I said, you know, I know there are people who do not struggle in their retirement years.
Craig Feldmeier (07:23):
So let me try to do as much research as I can, really kind of find some mentors that are out there and see people that I kind of want to emulate my life after, I let me do what they’re doing. And through those kinds of thoughts and conversations that led me to, you know, introducing myself to you and similar people who think like us. So that’s kind of led me to to where I’m at right now. And I’ve had a huge shift in mentality in terms of I’d say the main shift is really going from being an asset gatherer, accumulating a pile of assets, which really is kind of the scarcity mindset that, you know, I know you’ve referred to in the past, it’s kind of humiliating a bunch of assets and then doing everything you can to making sure that, you know, your assets don’t go down and just kind of, you know, a few percent off the top every year to live on, as opposed to having a really shift to more of an abundant mindset.
Craig Feldmeier (08:24):
And that really has to do with buying, investing in cash flow producing assets, because if you can start building cash flow now, you know, 500 a month, a thousand a month, 2000 a month, you know, over time that can really accumulate to 10, 15, $20,000 a month given, you know, individual circumstances given how much runway you have. But it’s really become a very big passion of mine. And, you know, I’m gonna, you know, try to follow in your footsteps and really try to help people escape the rat race. You’re really helped that financial underdog get to financial freedom, take control of their finances and really kind of take control of their life.
Chris Miles (09:04):
Yeah. And the cool thing is, you know, you’re talking about doing this stuff all without having to build up five or $10 million. Right?
Craig Feldmeier (09:10):
Exactly. You really can get started. I mean, you can get started really with any amounts. I would say, you know, if you’re looking to invest in real estate and single family homes, multi-family properties, which is, I know a big part of my investment portfolio, I’d say at a minimum you need 15 to 20,000 to get started.
Chris Miles (09:31):
Yeah.
Craig Feldmeier (09:31):
In a good credit score. And, you know, really, you can kind of take it from there just to kind of get your passive cash flow rolling.
Chris Miles (09:38):
That’s right. Absolutely. Yeah. One thing we always thought about it’s like, you know, you even have a hundred thousand bucks, you know, and the a hundred thousand can easily turn it to at least 10,000 a year, which for some people I think that wait, that doesn’t seem like it’s possible. It’s like, actually we’re being conservative. We’re trying to go on the low end. So you don’t, we don’t over promise anything, you know? Cause it depends on where you decide to invest, but it’s not that difficult is it?
Craig Feldmeier (10:01):
It’s really not. And especially too, if anyone’s listening to this in 2020, you know, you still have a few months left to qualify for those Cares Act distributions, which I have taken advantage of myself. So just as a kind of a recap, you know, that’s allowing people to withdraw to a hundred thousand dollars from their retirement accounts. You don’t have to pay the 10% penalty and you can defer taxes on those investments over three years as opposed to paying taxes the whole lump sum next year. So a very powerful thing to do just to kind of get the ball rolling. And it was a very, you know, it was really tough. I’m not gonna lie when, you know, I stopped contributing to my 401k a couple of years ago. You know, when I took out that first, you know, lump sum of cash, from my retirement assets, you know, as I said, Oh my gosh! Am I doing the right thing?
Craig Feldmeier (10:53):
Is this a huge mistake? I’ll tell you what, it all disappeared. As soon as I got that first rental check, kind of hitting my account. I said, wow! You know, this is real. And a lot of people say real estate is risky. You know, I’ve done a lot of work getting myself up to speed and kind of becoming, you know, an experts and the real estate space, at least in terms of the single family home, the multi-family home, you know, there are, you don’t have to go out driving through your neighborhood right away and finding, you know, some duplex that you need to spend a bunch of money renovating, trying to find tenants yourself. You know, there are easier ways to go about investing in real estate. I know we’ve talked extensively about getting started with turnkey properties, which I think is a great first step for people.
Craig Feldmeier (11:45):
Basically, you know, you have these companies that really go into neighborhoods that they’re experts in, they purchase properties that you buy. And all you have to do is really kind of send in your down payment check. You talk to a property manager and you really just kind of collect that cash flow every month. And I think conservatively right now, kind of given where rates are. I mean, this is the best time to invest in real estate rates are so low, probably the lowest we’ll ever see in our lifetimes. You know, you can get 10, 12, 14%, I think cash on cash return in a very conservative investment.
Chris Miles (12:24):
Yeah, I totally agree. And that doesn’t even sound conservative to most people, they hear those numbers that’s high risk creates high returns. Right?
Craig Feldmeier (12:32):
Right,. Exactly.
Chris Miles (12:34):
It’s kind of flipping on its head.
Craig Feldmeier (12:36):
And I mean, the way, you know, different people have different ways. They think about how they want to invest their money. For me personally, my wife and I, you know, we came to the agreement that we wanted to cover our fixed expenses with passive cash flow. So passive cash flow is you don’t really have to do too much in order to get your money every month. And then, you know, once we have our fixed expenses covered, maybe we can take some more risks and look at some more active cash flow measures, really try to kind of follow our passions, do something where you can maybe make a little bit more return. But I think just, you know, just the freedom that being able to cover your fixed expenses through passive cash low, it provides you with just such certainty in life that you can really, you know, if you love your job, that’s great. You know, maybe you get a new boss that comes in. Maybe they want you to move to another city. It really gives you kind of the power to control your life in the way you want. And just, you know, educating people that you don’t have to be a slave to the corporate world. You don’t have to be a slave to a financial advisor or to these mutual funds, you know, is very empowering. And I think, you know, people can just start learning that way of thinking. It can really change someone’s life.
Chris Miles (13:52):
Yeah. I agree. So from your experience, you just left the corporate world, right? Like you’re now out of that, you’ve the shackles have been released from wall street, you know, invest how you want, you know, for those that are also in the corporate world right now, and they’re trying to do what you’re doing, right? They’re trying to get to that step where they’re able to free themselves from that. What are some recommendations you would give?
Craig Feldmeier (14:13):
I would say the best thing to do is just to start small and don’t take any drastic moves right now. I would say number one, the thing that every investor has to do, and this is no matter kind of what type of investor you are. If you like stocks, if you like bonds, if you real estate. You have to get your personal financial statements in order. That’s number one, it’s really important to be organized. So what that means is you have to come up with your own personal balance sheet, come up with a list of what all your assets are and what all your liabilities are. I remember when my wife and I did this for the first time, she was shocked at how many assets we accumulated. Cause we never had really looked at them all together on paper between our, kind of our 401k accounts between our primary residence, between some other money we had.
Craig Feldmeier (15:05):
And she said, wow! I didn’t realize we had so much, but it doesn’t seem like it because none of our assets were producing any cash flow for us, which I think is a problem. You know, there’s so many people have. So first getting a sense of, you know, what are your assets? What are your liabilities? What are some high, if you’ve got some high interest credit card debt, how do you pay that off quickly? And then you also want to get a sense of what your income and expenses are. So in the business world, we call that a profit and loss statement. On a personal side, I would say, you know, list out what your income is, list out what your expenses are. And that’ll give you a really good sense of areas you can cut back on and it will give you a good sense of how much money you have every month to start, you know, your investment portfolio.
Craig Feldmeier (15:51):
And then I’d say once you kind of get a better understanding of how your, you know, your financial statements are set up, then you say, okay, what are my goals? What do I want to accomplish? Do you want to, you know, get out of the rat race in 10 years in 15 years in 20 years, you know, do you want to help your kids pay for college? You know, you had to really think about what those financial milestones are. And then it’s much easier to design a plan in order to produce cash flow to reach those goals. So maybe you could say, you know, if I can get 5,000 a month, 10,000 a month, that would really help me solve my financial goals, my financial problems, then you and I can come in and say, okay, this is what you need to do. This is how long you know, we think it’s going to take, and that gives you a sense of kind of how to structure your working life.
Craig Feldmeier (16:41):
How aggressive do you need to be to save? Are there any sacrifices you need to make? You know, right now my wife and I are debating, do we still need two cars? Now that we’re both, kind of working from home, you know, that could be a huge expense that somebody could get rid of that maybe seem, could be jarring at first, but you know, maybe once it’s gone, it’s like, ah! We didn’t, we don’t need two cars anymore. Just kind of getting a sense of what your goals are, how your assets can produce cash flow for you, I think is kind of just the best way to really get started.
Chris Miles (17:15):
Amen to that. That’s great. I love it, man. So last question for you, Craig, right?
Craig Feldmeier (17:19):
Yeah.
Chris Miles (17:20):
Why? Like, why you care so much about teaching and doing this? Cause you could just keep focusing on your portfolio and doing your thing just like I could do, right? Why are you doing this? Why are you wanting to teach people this stuff?
Craig Feldmeier (17:33):
You know, such a good question, Chris. You the, 2020 has been such a rough year in so many different ways, but a lot of people, myself included and you know, my wife and I, you know, kind of midway through the summer when COVID is really kind of, when it, when we realized it was going to be more of a long-term reality than, you know, than a short-term reality, we said, you know, what do we really want our life to look like? We never really sat down and kind of have that conversation. And I was pretty miserable in my current job. And you know, I said, I really, you know, what is it I really want to do? What really kind of lights my internal fire? And I told my wife, I said, I really want to help people that are really struggling and are really frustrated with their financial situation.
Craig Feldmeier (18:22):
I want to help them, you know, take control of their life, you know, help them build the steps to financial freedom. That really gives me a lot of fulfillment. And I think that’s kind of, you know, the light bulb moment I had when I said, you know, this is important. This is kind of what my mission is. This is the problem that I want to help people solve for.
Chris Miles (18:42):
Yeah.
Craig Feldmeier (18:42):
How am I going to do that? And so that’s kind of, you know, what led me to, you know, conversations with you going through your financial training course and you know, that’s just, that’s kind of what gets me out of bed every day. That’s kind of, you know, that connection with clients trying to help them, you know, just plan their financial future, in the Anti-Financial Advisor way is, you know, really kind of what my passion is and something I’m really looking forward to exploring.
Chris Miles (19:09):
I love it, man. Well, Craig, I gotta tell you, I’m excited to have you as part of the team, like, and
Craig Feldmeier (19:13):
Yeah. This is great, Chris. It’s going to be fun.
Chris Miles (19:16):
It’s going to be a fun ride that’s for sure. And so and then everybody else too, and I know a lot of people can relate to where you’re coming from and where you’ve been and where you’re, well, they hope to relate to where you now are. So I’m definitely excited to have you a part of the team, man, and everybody else, like if you’re saying, Hey, I think I need to do that same thing. Like, I feel discontented just like Craig was saying, like, I’m not feeling like, you know, I’m feeling frustrated my financial situation. I feel like I should be better off than I am right now. Or I feel like there’s pipe potential here. We don’t know how to tap into it or what to do with this money. We have, you know, shoot us an email, go to WWW.MONEYRIPPLES.COM Send us a contact email and just say, Hey! What do we do?
Chris Miles (19:51):
Like, you know, is this something that’s a good fit? Because you know, whether it’s me or Craig or it doesn’t matter, like the truth is we are here to serve you. We’re definitely been here to serve ourselves plenty. Now it’s time for us to give back and that’s what we’re here to do guys. So, you know, reach out to us, shoot us. You know, shoot us an email through the web page there. And Hey! Let’s see if we can serve you. Anyways, Craig, thank you so much for joining us today. It’s been such a valuable amount of information experience that you have here.
Craig Feldmeier (20:18):
Yeah. Thanks for having me, Chris. I appreciate it.
Chris Miles (20:20):
You bet, everybody else. I hope we make it a wonderful and prosperous week! Week that leads to a prosperous life that you don’t just stop by listening, but you become a doer as well. Everybody, you make it a great day! We’ll see you later.
