Episode 160: Creating Long-Lasting Cashflow & Wealth Because Of Profit First With Chris Miles
The Profit First REI Podcast
March 2, 2023
David Richter
Summary:
The ultimate goal of investing is to generate long-term wealth, not just earn more. You want to make money work for you and not the other way around. It takes effort and stability, but with guidance and an effective system, you will be more equipped to reach your financial goals.
Our guest today is someone who dedicates himself to helping others achieve being wealthy. Chris Miles is a cash flow expert, investor, and the founder of Money Ripples, with a mission to teach other entrepreneurs to create quick cash flow.
His career is a testament to tenacity, grown into success after suffering from the crash in 2008. So tune in for education and inspiration as Chris shares his story, work, and why you should implement the Profit First method into your life!
Key Takeaways:
[00:52] Introducing Chris Miles and His Background
[02:41] On the Profit First Message
[05:11] Experiencing the Real Estate Crash and What Happened After
[10:18] Before and After Implemented Profit First into His Business
[16:08] On Profit First Allowing Chris to Reinvest in His Business
[18:17] On Profit First’s Effect on Chris’s Mindset
[22:22] Passive Real Estate Investing
[26:36] Advice for People Who Want to Implement Profit First
[28:16] Connect with Chris
Quotes:
[03:38] “[Profit First] really took hold of me…I talked about cash flow all the time [you’d] think I would [already be following] it.”
[11:16] “I think too many entrepreneurs get into a hustle habit. Or they get stuck in hustle mode, even though they don’t have to be, they start getting caught up working harder—not even smarter or working right.”
[27:40] “Just [having separate buckets for different expenses and profit] alone, that kind of discipline, it actually just eye-openingning.”
[25:10] “When [you have] profit, don’t spend it unless you know that money you want to spend will give you more money.”
Connect with Chris:
Podcast: https://podcasts.apple.com/us/podcast/money-ripples-podcast/id895555599
Website: https://moneyripples.com/
Tired of living deal to deal?
If you are a real estate investor or business owner who is tired of living deal to deal, and want to double your profits, head over here to book your no-obligation discovery call with me. Either myself or someone from my team will hop on a short call with you to get clear on your business goals, remove any obstacles holding you back, and map out a game plan to help you finally start keeping more of the money you work so hard to make. – David
Transcription:
Chris Miles:
<affirmative>, a business owner’s mindset is one of the biggest things you gotta protect and foster. Uh, even just as important as if you’re try to protect both an entity trying to protect in the sense of, you know, having insurances or liability protection or lawyers and attorneys and good CPAs and all that kinda stuff to protect the business. But ultimately, the way, best way to protect your business is protect this your mindset, right? Yeah. How do you stay an abundant state of mind so you don’t make bad decisions?
Outro:
If you’re a real estate investor who’s sick and tired of living deal to deal, then welcome home. Hear from everyday real estate investors just like you, and discover how they’ve completely transformed their business by taking a profit First approach. This is the profit first for REI Podcast, podcast where we believe revenue is vanity. Profit is sanity. It’s time to start making profit a habit in your business. So here’s your host, David Richter.
David Richter:
Chris Miles is a good dude. This guy is a passive investor, passive real estate investor, but he also helps people find and free up cash in their business and does a lot of other great things. He talks about how he lost a ton when upside down, like being from a millionaire to an upside down millionaire during the last crash, 2008, nine, how that helped him get lean in the coming years. And then how Profit First also revolutionized his business once he heard about in 2015, even though he had become lean, mean, and a better steward of his finances up until then, he said Prophet first put a system in place and just how talking through that, if that doesn’t give you hope, I don’t know what will, but I just, I know that this episode can really help you. He’s got a great mind, super smart, and also just knows how to put it on the bottom shelf for people like me. So hopefully you enjoy this podcast. Thank you very much for listening. Hey, Chris Miles is here with me. We are on The Prophet First. I podcast. Chris, thank you so much for taking the time to be on this show today,
Chris Miles:
Man, I’m so honored to be here. I’ve, I love everything you’re about and everything you teach with Prophet First, so I’m excited to have a chat today.
David Richter:
Well, and Chris comes from a unique perspective. He’s a passive investor, but he is also very good with the money as well too because he helps a lot of people with building and creating wealth, like generational wealth and just, and he does a great job, like a great job with people. But then he’s not the typical financial advisor, you know, type person. He just, he loves real estate, he loves, you know, the infinite banking. He loves lots of different things that traditional financial advisors wouldn’t, so I’m sure we’ll get into that. But he is also a big fan of Profit First. He’s implemented in his business. We’re gonna talk about that today. But I guess let’s start there then Chris, so we can, uh, get through that and then we can see what else on the other side. But what got you excited about the Profit First message when you first heard about it?
Chris Miles:
Uh, cuz I
David Richter:
Okay. <laugh>,
Chris Miles:
If I would be perfectly blunt, right? Yeah. I mean, I remember I first heard about it in, I think it was 2015 is when I started
David Richter:
Yeah.
Chris Miles:
Like really starting to absorb it and, and take the concept in. And cuz I was guilty, I was the entrepreneur that was paying himself last.
David Richter:
Right.
Chris Miles:
It was always quote unquote reinvesting in my business, which really means I had no profit. Um, I mean, I took money home, but there were some months that were really lean months. I wouldn’t take much home. There would be contractors or people like that would take home more than me, you know? And, and that was a tough thing. I mean, I was always a fan of paying yourself first. I believe as a C E O you should be
David Richter:
yeah
Chris Miles:
The best paid employee of your business. You know? So, uh, so be able to hear that concept in reversing the roles of, hey, you build it around trying to create an income for yourself and then you f factor in the expenses of the business. And I’ve always kind of been lean and mean anyways.
David Richter:
Yeah.
Chris Miles:
But, um, that was something that really took hold me really reversed that psychology on myself to kind of call me out, so to speak and say, Hey, you better focus more on profit. Which of course I talk about cash flow all the time. You’d think
David Richter:
Yeah,
Chris Miles:
I would follow it. Right,
David Richter:
Right. Exactly. <laugh>, a lot of people hear this in the real estate space and now I cash flow, I get that. But then they’re like, whoa, this is totally different than just a rental property giving me $300 a month. You know, or whatever it might be.
Chris Miles:
Yeah.
David Richter:
So talk about where you were at that time. Where were you in your business journey? What were you doing at that time? Like when you first heard that message?
Chris Miles:
Yeah, I was, I had just launched Money Ripples in 2012.
David Richter:
Okay.
Chris Miles:
So I was a few years in, it was starting to grow, you know, I was proud of the growth we were making. We were increasing revenue every year.
David Richter:
Yeah.
Chris Miles:
But my profits really weren’t, you know.
David Richter:
Okay.
Chris Miles:
And that was frustrating. Right. And it was inconsistent revenue. So it’d be like big month, low month.
David Richter:
Yep.
Chris Miles:
Big month, low month. Right. It was like that. Um, and I kinda had the belief I went through the last recession. I got my butt kicked during that time.
David Richter:
Okay.
Chris Miles:
So I learned how to get lean and mean during
David Richter:
yeah
Chris Miles:
Those tough times, you know, so that I can, you know, get more money reinvested. But it really wasn’t getting traction. Uh, funny enough, it was actually another, uh, MCEITS book that actually helped me really get it in 2016. But, um, for me it was, it was really that rough go, it was just like that feaster famine
David Richter:
Right type of place. Plus I was actually about to go through a divorce too.
Chris Miles:
Oh wow.
David Richter:
So emotionally I was up and down and my revenue, my income was doing the same thing.
Sounds like the message came at a pretty good time then. Sounds like there was a lot of different things going on in your life. Before we go down that road, I want to ask about how did, if you don’t mind, how did you get your butt kicked in the last recession? Was a real estate or was it a different business or was it something, you know, like how did you learn those lessons to be lean and mean, you know, company?
Chris Miles:
He was both, actually, it was real estate and a new business. I had launched in 2007.
David Richter:
Okay.
Chris Miles:
Um, I actually launched a partner, um, I dunno if you’ve heard of a guy named Garrett Gunderson. He wrote
David Richter:
yep
Chris Miles:
A book called Killing Secret Cows. Uh, we launched the predecessor of Wealth Factory together and uh, it was Ray at the wrong time cause all of our market were real estate investors, but there were more active flippers, you know, people like that,
David Richter:
hmm-hmm
Chris Miles:
That were flipping and
David Richter:
Okay.
Chris Miles:
It’s a little bit of wholesaling too. I even did a little dabble of that of, or more like unpaid wholesaling is what I did for friends and family
David Richter:
<laugh>. Okay.
Chris Miles:
But, uh, but yeah, during that time everything dried up, credit lines dried up and especially you’re really relying upon appreciation versus, you know, actually cash flow.
David Richter:
Right.
Chris Miles:
Which is what I preach now. Right. Um, during that time, like I went from millionaire to upside down Millionaire, you know,
David Richter:
Okay
Chris Miles:
And, uh, and we launched that new business together and our market, I mean, obviously our business was failing. People were quitting or dropping out left and right.
David Richter:
Yeah
Chris Miles:
Um, it was a rough go. It lasted for nearly two years from about, you know, for me about summer or fall of 2007 all the way through to about summer of 2009 before we started to pull out of that, that tailspin really
David Richter:
Then, so that I guess would be, uh, some pretty big lesson there of
Chris Miles:
mm-hmm. <affirmative>
David Richter:
Being lean and mean. So, do you mind me asking then, from 2009 before you started Money Ripples, were you still in that business with him? Or like, did you do something else at that point? Or like what happened before you start, you went off on your own?
Chris Miles:
Yeah, we were definitely in business together for about six. Yeah, I guess it was six years,
David Richter:
Yeah
Chris Miles:
Um, that we were doing that business. It had nearly gone bankrupt. The only thing keeping it going was just, uh, we’re just barely making ends. You know, we weren’t even making ends meet. I mean
David Richter:
Okay.
Chris Miles:
I was personally not taking home money from that business hardly at all. Like, by the time I paid my expenses in the business, I was left with very little. So I had a few little side hustles I was doing, I was doing like some of the infinite banking stuff on the side as well.
David Richter:
Okay.
Chris Miles:
But what was amazing is that I created kind of a new aspect of the business I was able to apply to his business. And then that eventually became part of Money Ripples too. Uh, which was more about really finding and freeing up cash. Because up to that point in 2007, we were teaching people how to get outta the rat race.
David Richter:
Okay.
Chris Miles:
Because we had all done it. But when I found myself back in the rat race, I’m just the worst BSer in the world. I cannot teach something I don’t do.
David Richter:
Right.
Chris Miles:
You know, and so I ended up, uh, like I, people would come, you know, I’d talk to some people, you know, about becoming clients. They’d say, Chris, I would love to pay you right now, but this recession’s been hard on me. I can’t even find the money. And in the back of my mind, I wouldn’t say it verbally, but in the back of my mind, I’d say, I guarantee your situation’s not as bad as mine. I’m about a million dollars in debt now. Um, 16,000 the whole each month between my personal and my business.
David Richter:
Right.
Chris Miles:
Like, that’s why I was negative, you know, showing a loss in my numbers.
David Richter:
Yeah
Chris Miles:
Right? And so I was like, Ugh, I can guarantee I could find the money. So I would tell him, I said, listen, if I could find the money for you, would you pay me? Well of course. That, yeah, that’s sounds like a fair deal. Great. And then I finally like creative ways to help them find money. Whether it’s, it’s, you know, just tracking money in general, which is a basic necessity if you’re gonna go do anything like Profit first. Right. I mean even just that or creative ways to pay off debt. Cause I was having to do the same thing is
David Richter:
yeah
Chris Miles:
How do I pay off debt when I have basically no savings left, no credit left to do anything to refinance, how do I do it? You know? Um, so I was starting to teach ’em those kind of things and on average what happens, we were able to apply that in the business and over a couple years we had like 600 people go through the process.
David Richter:
Oh wow.
Chris Miles:
And they freed up on average like $34,000 a year.
David Richter:
Wow.
Chris Miles:
You know, sometimes it was in taxes, sometimes
David Richter:
Yeah
Chris Miles:
It was paying off debt or just, you know, tracking money, um, saving money on insurance costs, you know, if they’re overpaying on certain things or whatever it might be. Right.
David Richter:
Yeah.
Chris Miles:
We’re just finding money wherever we could, um, where they didn’t realize it was there. And that became, you know, that whole business. I kinda left it with them. My old process took it with me and Money Ripples in 2012 when I decided to launch my own business. Um, and then implemented also the whole passive income investing aspect to it as well, which kind of sets us apart that way. We’re kinda like anti financianal advisors.
David Richter:
Right,
Chris Miles:
Right Teach people not to put money in the markets. We’re more like, Hey, let’s do passive investing things like, you know, long-term rentals or syndications or oil and gas or land or whatever it might be. Mostly real estate based type of investments, um, that allow you to generate passive income without you having to work for it.
David Richter:
Okay. Well that’s awesome because sounds like you took a bowl of crud and turned it into that ray of sunshine there to help other people and that was so I love what you said too. You were an ingenuitive at that time too. Like, look at this. Like, if I can free up the money for you, can you pay me? You know, like I will do this.
Chris Miles:
Yeah
David Richter:
And it sounded like that became almost a linchpin for what you do, cuz that’s, you’re finding and freeing up cash. I mean, who doesn’t need that? Cuz like you said, most people don’t even track it. Once you track things, it usually goes up, so
Chris Miles:
mm-hmm. <affirmative>
David Richter:
And it sounds like you got a nice little turnaround there to be able to say, this is what I can help people with. So then do you mind me asking then from 2012 then 2015 you hear Profit first. How did that factor into your business? What did your business look like before you implemented Profit First? Because it sounds like you had the fine and free up cash. So how did it change once you learned of that message and that concept and system?
Chris Miles:
Yeah. You know, like I mentioned, I was already pretty lean and mean. Right?
David Richter:
Yeah.
Chris Miles:
Because exactly I had that PTSDs from the recession. You know,
David Richter:
Right
Chris Miles:
It affects you, it sticks with you.
David Richter:
Yeah.
Chris Miles:
Um, that’s what why I have a lot more faith and confidence going to this next recession because, you know, I know that I know how to get lean and mean. I know how to adjust and move quickly, you know,
David Richter:
yeah
Chris Miles:
If I have to. Um, but, uh, but yeah, like in 2015 though, like when I start first ran into profit first, even though I was lean and mean, the problem was I was still trying to, you know, use things as excuse of, well I just have to do this, right?
David Richter:
Mm-hmm.
Chris Miles:
I had
David Richter:
Okay,
Chris Miles:
A lack of money freedom. And I especially had a lack of time freedom cuz I was just in the constant hustle mode.I even got in a, I call it a hustle habit. I think too many entrepreneurs get into a hustle habit,
David Richter:
<laugh>
Chris Miles:
Or they get stuck in hustle mode even though they don’t have to be, they start getting caught of working harder, not even smarter or working right.
David Richter:
Yeah
Chris Miles:
They just work, work, work, work. You know? And then they have guys like Grant Cardone. They give ’em the excuse, keep doing it more Right. Or
David Richter:
Right.
Chris Miles:
You know, they hear, you know, little sound bites. They’re like, that’s it.
David Richter:
Yeah.
Chris Miles:
I’m gonna wake up at 4:00 AM I’m gonna crush it. I’m gonna beast mode. And you’re like, dude, you’re being an idiot. Like
David Richter:
Right.
Chris Miles:
You’re just bashing your head against the wall is what you’re doing. Um, and that was kind of me, right? Like, you know, for example, um, I mentioned the other Mike Mceits book that kind of woke me up in 2016
David Richter:
yeah
Chris Miles:
As well was was, uh, actually I found out it was a predecessor to, it was The Pumpkin Plan.
David Richter:
Yeah.
Chris Miles:
Right. And the pumpkin Plan. Like, it kind of created that imagery for me about that, you know, that one prize-winning pumpkin that eventually cut off all the smaller pumpkins until you’re just feeding that vines feeding the one giant prize-winning pumpkin. And when I started to not just analyze my numbers because I couldn’t cut back much more, right?
David Richter:
Right.
Chris Miles:
I was already cutting back to the point I was sacrificing revenue and profit as well. Um, but when I started to look at what was really worth my time and energy, and I included some money too, some of my profit was going towards it. Like for example, networking groups.
David Richter:
Yeah
Chris Miles:
I mean, I would spend easily 10 hours a week going to local, you know, networking groups around the state of Utah, you know, trying to go and present stuff. But when I really looked at it, it’s like, well, is this productive?
David Richter:
Right?
Chris Miles:
And I would look at it, I wasn’t making much revenue from that, but I was sure spending a lot of money. But most importantly I spending more time
David Richter:
mm-hmm. <affirmative>
Chris Miles:
And energy into those areas versus areas that actually were producing results. And so what I did, I started shifting over, I said, well, what’s like the parades principle? That 80 20 principle, right?
David Richter:
Yeah.
Chris Miles:
The 20% that gives you 80% of your money. I wanted to go to level deeper. I said, what’s my 80% or really what’s my 20% of my 20%? Which is really your top 4% that generates 96% of your results. And for me, I realized it was my podcast. You know,
David Richter:
hmm
Chris Miles:
I had, I’ve had my podcast now my eighth season with, now it’s the Money Ripples podcast. It was at that time the Chris Miles money show. I was really creative.
David Richter:
Yes. <laugh>.
Chris Miles:
Um, but I was doing the podcast and I was even on interviews like this and I realized most people were coming to us from the podcast more so than they ever were. For me going to networking events, even for me life speaking on stages, I mean, that was a lot of energy and time and money. And sometimes I never really produced many results. And I’m not saying that’s not gonna be the case for everybody. Right. And I’ve spoken on stages since and done well, but I realized that for me, I could actually parret down and get my business ultra-simple to the point where I didn’t even need a VA anymore. Like my VA was like, I’m down to four hours of work a week. It’s not even, I, Chris, I’m just gonna go start my business now <laugh> because it’s not even worth working for you anymore.
David Richter:
right
Chris Miles:
And now she actually has a business still to this day that she’s got going. But, um, but yeah, I was able to parret down, like I didn’t need all the labor that I needed. And so my expenses actually did drop
David Richter:
Yeah.
Chris Miles:
A little bit even though I was pretty pared down at that point. But as a result, my income, my revenue increased dramatically. So what it looked like is my profits overall, even though I doubled my revenue the next year by pairing it down my profits, uh, what would be octupled. Right?
David Richter:
Wow, yeah.
Chris Miles:
Big time. Eight x,
David Richter:
<laugh>
Chris Miles:
You know, not quite 10 x, sorry Grant, but I did eight x my profits because I was able to pair it down and then focus on the most money producing activities that generated the best results and even better clients.
David Richter:
Awesome. So then it sounds like because 2015 was when private first came out and I know pumpkin pan plan was like right before that as well too.
Chris Miles:
Yeah.
David Richter:
So then you’ve been running on this for a while. How has you seen it affect your business over time and how has it maybe evolved or have you kept it super simple and now it’s just like, hey, now I know revenue’s coming in, profit’s going out. Like can you give us the journey from then until now?
Chris Miles:
Yeah, it’s definitely matured a lot more
David Richter:
okay
Chris Miles:
Just because now my team, I have a team now, I’ve grown it. Um, we’re in a much more scale mode with our business and
David Richter:
yeah.
Chris Miles:
And so now, um, it’s still the same concept. I still build my lifestyle. Like I make sure I still have a good lifestyle with what I have. And not to mention on top of what I have coming from the business, I also have passive streams of income coming from my real estate to where I don’t even need the money for my business. Right?
David Richter:
Nice.
Chris Miles:
So I still pay myself the salary that I gotta pay myself so that the IRS thinks I look awesome as well as the lenders if they wanna,
David Richter:
<laugh>right
Chris Miles:
Lend me money. Um, but you know, it’s a lot of it’s just profit, you know, on thrown on top of the wages that I pay.
David Richter:
Yeah.
Chris Miles:
But, um, but the nice thing is that now I have that covered and I got this nice stable income. I actually have a salary for the first time, you know, over the last several years
David Richter:
Yeah.
Chris Miles:
That I never had before, before was just well account, you know, cpa, figure it out, whatever you can, whatever I have just, you know, reduce it. And based on all these dividends, I didn’t even pay myself a wage figure it out to state a wage essentially. Right?
David Richter:
Yeah.
Chris Miles:
Now it’s like I’m paying a stable, steady wage every month. That’s great for home. Um, but at the same time now I also got more profits that I’m now actually I’m reinvesting in the business to really scale and increase our growth. And kinda like the true rein investing.
David Richter:
It’s the true reinvesting like you’re taking,
Chris Miles:
It’s the true reinvest. Yeah.
David Richter:
Right. The where you’re smart about it, you still have profits, but now you can take a portion of that and say, do I want another person to grow the team or do I just wanna be profitable? So it’s
Chris Miles:
exactly
David Richter:
<laugh>, Right. Because I love what you said, it’s like reinvesting to most people is just covering up that they’re just spending it all, you know
Chris Miles:
mm-hmm. <affirmative>
David Richter:
And it’s just going back to everything, you know, burn all the money that’s coming in. So I love that matured. You grew the team, you know, I love going <laugh> how you’re now taking the profits and actually reinvesting, you know, if you want to grow. Um,
Chris Miles:
yeah.
David Richter:
Which is a much different position than just living on the edge all the time. So, well
Chris Miles:
You definitely, yeah. That’s, I think that’s the key is that a business owner’s mindset is one of the biggest things you gotta protect and foster. Uh, even just as important as if you’re try to protect both an entity trying to protect in the sense of, you know, having insurances or liability protection or lawyers and attorneys and good CPAs and all that kinda stuff to protect the business. But ultimately the way, best way to protect your business is protect this your mindset, right?
David Richter:
Yeah. Yep. Sure.
Chris Miles:
How do you stay in an abundant state of mind so you don’t make bad decisions? Because if I learned anything from the last recession, at first I was like, oh, I’ll solve and work my way out of this. But then when all of a sudden every door started closing on me, I went into panic mode.
David Richter:
hmm
Chris Miles:
I was not making wise decisions. Like I was staying in that desperate place longer because I couldn’t have a clear head
David Richter:
yeah
Chris Miles:
Or I wasn’t keeping a clear head long enough. Right. Um, so if you can keep a clear head as a business owner and at the same time now you’re trying to look growing and scaling or whatever you’re trying to do with your business or even just try to stay, you know, in a good place where you just have good stable profits coming in and you just want to not grow it, just keep it stable, great. Stabilize it and you know, enjoy it.
David Richter:
Yeah.
Chris Miles:
I think that’s the biggest thing is just really protect your mindset.
David Richter:
That’s awesome. So I guess that is one question cuz it sounded like a lot of stuff was happening around that time. You know, that when you started implementing, you said going through some major life things, some major
Chris Miles:
Yeah.
David Richter:
You know, work things as well too. Did it help to stabilize that mindset during that time? Was it more, at least you don’t have to worry about the money <laugh>, you know, at that point or like, I don’t know, what, what were you feeling at that point once you started implementing it?
Chris Miles:
Yeah, it was fascinating cuz when I was going through my divorce,
David Richter:
yeah
Chris Miles:
Like I actually like emotionally was crushed. So financially I was crushed more by the last recession. Right?
David Richter:
Yeah.
Chris Miles:
That hurt.
David Richter:
Right.
Chris Miles:
But if someone had asked me what was worse going through the divorce or going through the recession, even though the divorce was a quicker situation, it was emotionally worse. You know?
David Richter:
Okay.
Chris Miles:
Um, to the point where I could barely function.
David Richter:
Yeah.
Chris Miles:
And that was kind of the divinity behind it because it, that’s what got me to really implement this stuff like the pumpkin plan,
David Richter:
Sure.
Chris Miles:
And really pare down because I could only, I even though I had all the time in the world at that point, I was working 50, 60 hours up until the divorce.
David Richter:
Okay.
Chris Miles:
During the, after the, or during the divorce process and everything else, I could barely function. So I was like five, 10 hours a week.
David Richter:
Okay.
Chris Miles:
So I had to figure out what was my most productive use of my time during that time. Right?
David Richter:
Yeah.
Chris Miles:
So it was kind of an accidental or was it accidental? Maybe it was divinely
David Richter:
right
Chris Miles:
Appointed to work that way, but, um, but it did help in that sense where I was able to get out of it. Cuz again, my income was just tanking.
David Richter:
Sure
Chris Miles:
My ex thought I was hiding money. I’m like, I guarantee I’m broke. I’m going to the goodwill store to buy silverware right now. You know, I’m shopping at Walmart for everything, you know.
David Richter:
Right.
Chris Miles:
I even had somebody loan me money during that period of time, like just for like a month just to get me through
David Richter:
mm-hmm. <affirmative>
Chris Miles:
And uh, it was a rough go. Um, but once I was, but the thing is I did learn from the last recession, like those emotional things. Right?
David Richter:
Yeah.
Chris Miles:
How to like really control that mindset, how to focus on the little bit of good, even if there’s everything else looks negative around you. Um, I learned how to do that. So when I started to do that focus on relationships too. Um, that’s one thing I didn’t do in the last recession as I started, I tried to live a life of quiet desperation. I didn’t want to talk to people about my problems. I didn’t want people to feel like I was desperate or my ego was getting in the way. I don’t want people to think less of me. And so I would stay quiet, but during the time of my divorce I said, okay, I know that relationships are everything. Like I should have been open, I should have been talking about some of these problems. Not just like people not to the whole world.
David Richter:
Right, Yeah.
Chris Miles:
But just like people and ask for help, you know? And so I was trying to, you know, get, you know, good relationships going, even business relationships as well as personal ones helped me through those times. And uh, and it was a matter of months getting through that versus two years with the last recession. Right?
David Richter:
Right.
Chris Miles:
Um, for me it was on a matter of months, and the next thing I know my business came back stronger than ever. It felt like an eternity when you’re going through it. Cuz crap always does when you’re, when it’s hitting the fan. But, oh
David Richter:
yeah.
Chris Miles:
You know, when it came out on the other end, like maybe six months later, um, it was way better. Uh, and everything is just rebuilt stronger again from that point forward.
David Richter:
Yeah, no, that’s, you’ve hit on a lot of good points there. <laugh> like number one that I heard was one of the biggest, well you no, you said the biggest struggle in your life that you’ve had up to this point. You saw where, you know, the silver lining even out of that, you know, like what, what came out of that that was good. So I thought that was really good cuz no matter what it is divorce or bankruptcy or like just some of the big wild swings like that, it’s like what can we take from that? Then you’d said, you know, not talking about your problems during the like the first recession. Uh, that’s such a good point that there’s people out there that want your help, you know, that or want to help you. You know, it’s like those people that really, you know, want you to rely on them and want to be able to be that arm for you, you know, and help you up when you fall down. So if you’re listening to this right now and you’re in that position, you know, there’s people out there that care about you. That’s an extreme form of trust too. I think we both realize that now. It’s not just that, oh, what are they gonna think about? Like Chris was saying, it’s more of you trust them to, with your deepest, darkest things that hey, I’m going through a difficult time. So I thought that was a another really great point here. Uh, so there’s been a lot of good stuff on this podcast. So Chris, I really appreciate sharing a lot of this with our listeners. I only have a few last questions here. I wanted make sure number one the real estate investing, you specifically like to invest in the passive side. So did you, did that ever flip? Like were you ever in the active wholesale fix and flip and you went to passive or you were like, Nope, it’s the passive game for me, I just love cash flow. Like did you ever have that mindset shift from active to passive or was it always passive?
Chris Miles:
It’s fascinating cuz in 2006 I was actually able to get outta the rat race and be more of a passive investor.
David Richter:
Okay.
Chris Miles:
You know, focusing on getting the cash flow right.
David Richter:
Yeah.
Chris Miles:
Because that was the thing that really opened my eyes. I actually quit being a financial advisor in 2006 because I realized financial advisors nor any of their clients were financially free.
David Richter:
Right.
Chris Miles:
They were all broke.
David Richter:
Yeah.
Chris Miles:
The only financial advisors, the only thing that gets them financially free is really the commissions they earn.
David Richter:
Right.
Chris Miles:
From keeping assets under management, but not actually from the investments they’ve been recommending to,
David Richter:
Right.
Chris Miles:
So that’s why I had to quit. I was like, this is crap I can’t teach anymore. But I found that real estate investors, there were people that were legitimately financially free investing in real estate. So I went down that path instead. And, um, and so it was interesting the very simple, the small and simple principles that you talk about. Right. Which is, you know, having enough passive income to replace and pay off your expenses.
David Richter:
Yeah.
Chris Miles:
I got there in 2006. Nice. Then 2007 I went to launch that business with Garrett and um, and part of the thing they didn’t like is I had multiple streams of income coming in. Ironically.
David Richter:
Yeah.
Chris Miles:
Since that’s what we’re preaching. And so they said, no, we want you to focus wholeheartedly here. So I started cutting off the streams of income and I got greedy. I got really, I was 28 years old, 29 years old. I was kind of young and dumb. Right. And I say young and dumb even though that’s not that young, but you know, when you’re in your twenties and I know you’ve seen it, and especially in the real estate space.
David Richter:
Yeah.
Chris Miles:
You make a little bit of money, it goes to your head.
David Richter:
Right.
Chris Miles:
You think you’re amazing.
David Richter:
Yes.
Chris Miles:
When really it was a market swing that helped you out a little bit more. Yeah. And so I started doing more with flipping.
David Richter:
Right.
Chris Miles:
I was like, oh, well who cares if it’s negative cash flow as a property because there’s equity in it so I can always sell it or flip it and make profit off of that. You know? And besides making a $50,000 or more on a flip is way sexier than $300 a door.
David Richter:
Right.
Chris Miles:
Come on. You know? And uh, and that was my, I mean, between that and a new business where I wasn’t tracking my money, I actually stopped tracking my money when, when money was coming in so abundantly like air.
David Richter:
Mm-hmm.
Chris Miles:
You just, you forget about it, you know?
David Richter:
Right.
Chris Miles:
And so I got lazy on the very principles that actually got me out of the rat race I stopped doing in 2007.
David Richter:
Yeah.
Chris Miles:
And uh, and that’s what really kicked my butt.
David Richter:
Okay.
Chris Miles:
And so the next go around like in 2000, uh, really like by the time I felt safe to do real estate investing again cuz I was really burned hard by it. Um, and I didn’t even file for bankruptcy. So that was the harder part. I had to dig outta that hole paying off that debt. Right. Um, the harder part was trying to go back to it. And so when I went back, I went back to more like turnkey rentals at first just starting out with something that was like, I’m not managing the property cuz I suck as a property manager. Um, I’m just seriously putting money in a property that I know ahead of time how much money I’m gonna make, right?
David Richter:
Yeah.
Chris Miles:
I can’t guarantee anything, but at least with a turnkey rental, I know the numbers up upfront. I know what I’m gonna make. Um, you know, and it’s easy, you know, it’s kind of, you know, I can’t screw it up too badly if I have the
David Richter:
right
Chris Miles:
Company to work with. So I started doing that and uh, and after some time then I started to gain more and more experience. I realized I’d like the passive route
David Richter:
yeah
Chris Miles:
And so nothing against me, an active investor, but I realized that there’s kind of its own rat race when you’re
David Richter:
Yeah.
Chris Miles:
Trying to do wholesaling and flipping. You really have a business, you’re not financially free. And many of our friends, our mutual friends that we have in groups, they usually admit that to me. They say, you know what, I want passive income because I have, I hate having to keep hustling. Especially when they get to their forties,
David Richter:
right
Chris Miles:
They start realizing, I’m getting too old for this crap.
David Richter:
Wait, I see,
Chris Miles:
I need to like, actually, I don’t care how many millions I make, how do I actually have enough passive income that my family’s protected? So even if this business blows up, I’m okay.
David Richter:
Yeah.
Chris Miles:
And that’s exactly, that’s kinda what I purport for a lot of people to do today.
David Richter:
Yeah. No, I love that cuz that’s like the long term mindset. That’s a wealth mindset versus rich, right? It’s like,
Chris Miles:
Yes,
David Richter:
Okay, we’re building wealth, we’re not just building income. So
Chris Miles:
mm-hmm. <affirmative>,
David Richter:
Because I both are very important, but <laugh> like you said, people get to a certain age and they’re like, okay, this, you know, get me off the merry-go-round here. So, okay. I absolutely love that. So the one final question and then we’ll go into the actual last question here, but I just wondered if for people implementing Profit first, what would you, especially for real estate investors, what advice would you give to them if they were looking to implement Profit First in their business?
Chris Miles:
Well, first to start somewhere, um,
David Richter:
<laugh>
Chris Miles:
Whatever’s easier for you.
David Richter:
Yeah.
Chris Miles:
Um, I really enjoyed the whole Buckets conversation. Like, for whatever reason I didn’t pick that up in the Profit First book.
David Richter:
Yeah.
Chris Miles:
But I remember when we had Mike Mceits at one of our mastermind groups speaking and he mentioned about the different savings buckets to have, you know,
David Richter:
yeah
Chris Miles:
Even a spending bucket, right? I was like,
David Richter:
yeah,
Chris Miles:
Well duh, this is just budgeting in business. Like I get that concept, but it was just done in a way that thought, you know what I need to do that I need to actually like disperse X amount of dollars to each bucket or whatever, you know, and you don’t have to have it in separate accounts. You can keep it easy, but, you know, I kind of have a certain bucket, you know, where I move my certain operating expenses into. I have my profit bucket that gets away from my account. So it’s a separate from that. Um, and just doing that alone, that kind of discipline, uh, it actually just was eye-opening. So
David Richter:
Yeah.
Chris Miles:
Um, if you’re already kind of looking into it or you’re already starting to implement something, like really have a separate account to put profit in. I don’t care if it’s 1% of your, of your revenue or you know, money goes in, great. That’s profit. You know, even it means you have a 1% profit margin cuz you’ve got the money away from you.
David Richter:
Right.
Chris Miles:
You know, got it outta the business so you don’t reinvest it.
David Richter:
Right
Chris Miles:
Everything, you know, that you have, it’s a great habit to start.
David Richter:
Awesome. There you go. Start where you can and then just start wherever you are. You know, like even if it’s 1% and the concept of the bucket. So that’s good advice. Then final question here. You provide a ton of value, talk about Money Ripples, talk about how people can get ahold of you. You’ve got your podcast. Like what’s, what’s something that if they wanted to g give value back, you know, how could they get ahold of you?
Chris Miles:
Yeah, I’d love to have you guys follow our podcast. The Money Ripples podcast. You can follow on iTunes, YouTube, you know, we have our own YouTube channel, the Money Ripples channel. Um, yeah, great podcast there. Uh, we even talk about things on our website, moneyripples.com. We even have like different sections, even like infinite banking, you mentioned that. Like how does that work with real estate investing? I teach a lot of that concept as well as actually a way you could use as part of your profit bucket, right? Like where can you use it and maybe even start to generate more wealth with creating passive income in other places or just using your business where you can get your money to pay you three times.
David Richter:
Yeah, there you go. We’ll get that moneyripples.com sounds like you could get the podcast, you could go to his website, you can follow him in on his YouTube channel. He’s got a lot of great information. He is a content producer, so he puts out there and helps, tries to help as much as possible. So that’s awesome. I wanted to just say too, if you’re listening right now and you felt like Chris at any point, like 2007 89 or the ninth of the 12 and you were like, Hey, where’s all the money going? You know, I’ve, or you had good principles and you stopped. Or if you’re like, Hey, I’ve never even touched the money. You know, like even if didn’t even identify with that. If you need that help with the cash flow, go to simplecfo.com. We can make sure that we help implement Profit First, get you the right buckets and the bank accounts like Chris was talking about. If you need that help, we’re there. If you don’t need it, we can pinion to someone honestly good. Like Chris or other people in this space as well too, depending on what you’re needing, if you’re needing to find and free up the cash. I love that statement that he said, but that’s where if you need that help, we can usually point it to someone really good like Chris and other people as well too. That’s simplecfo.com remember to make profit A habit in your business. Chris, thank you so much for being a guest today. It was awesome.
Chris Miles:
Such an honor. Thank you.
Outro:
This episode of The Prophet First for REI podcast is over, but there are plenty more where that came from. Are you ready to learn how David and his team can help implement the Profit First system in your business? Schedule a discovery call at simplecfo.com right now. We’ll see you next time on the Profit First for REI podcast with David Richter.
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