From Income to Assets: The Framework That Builds Durable Wealth | Ep 118

James: I recently taught a finance class at our church. I just kinda went over the basics and I thought it might be good to review some of these things here, even though you're probably a high net worth. Individual. It's okay just to double check that you, you're checking all the boxes and we're even gonna dive a little bit deeper and go into places that I didn't say in the class because, well, it was semi beginner, but we're gonna do that today on the Furlo Capital Real Estate Podcast, where we dive into the intricacies of passive real estate investing and finances.

And our mission, what is it? Um, with

a mission

To equip people to invest wisely in both property and people so that together we can build wealth while improving housing. I'm James, and this is my wife Jessi.

Jessi: I'm here. Yeah. We, we like money, education, financial education. I, I think we've taught a couple of different basic classes, but, um, it's really fun right now to be doing.

Like financial education with our kids.

James: Oh

Jessi: Oh, yeah.

James: That's, uh,

Jessi: Yeah. Our son right now is learning about, uh, paying back debt. He had a, a construction problem

James: Well, he was playing in the

Jessi: Oh, yeah.

James: and broke one of our doors. And so we're like, oh man, what are you gonna do to fix that?

Jessi: Yeah. Yeah.

James: Yeah. So he's,

he's learning how to patch a door

Jessi: That's right. Repairing the door

James: And he had to spend some money that he didn't have, but um,

Jessi: He's paying it back. It's all good.

We're not charging interest, so that's okay.

James: Yeah. Yeah.

I really wanted

to,

Jessi: Um,

James: well it was funny 'cause he got his payday and he was like, do I have to pay it? And I wanted to be like. We could just charge interest and you could decide real quick if you want to pay it off. But that'd be a, that'd be a future lesson. I also, for every single tenant who moves in, I show a video or I, they have to watch a video that gives some basics of the financial stuff, which we're actually gonna go over some of that.

And, um, so, ' cause I just think it's, it's solid. Um, but yeah, I had a ton of things. I spoke for like an hour on Sunday. We're not gonna do that here. Hopefully that'll be obvious when you see the length of the podcast. But, um, but yeah, so. We usually start off with saying, Hey, you wanna have a conscious spending plan, which simply means two things spend less than you earn.

And ideally when you do spend, try to spend on things that matter to you. And we get in all sorts of ways, like, here's how you save money. But fundamentally I think it's important for us, for you to like, Hey, what are those one or two things that you love to spend money on? And that's great. And then what are those one or two things that you don't love to spend money on that just doesn't seem to bring joy into your life?

What I would try doing if that's the case, is cut those things you don't love by 50% or more if you want to, and then shift those funds towards things that you love. And, and I just think what you're gonna do is you're gonna bring your day-to-day living more into alignment with, uh, what you value

Jessi: yeah, so a, a classic example for us.

James: you love, but keep going.

Jessi: Yeah, well, well an example of this is like we don't necessarily love spending on name brand clothes. Super high end, super nice. We do love to travel though. Yeah. So I thrift a lot of our clothes. We get used or we get just lower end and it's perfectly fine and we're happy with that.

And then we have more money shifted into travel funds because we really love to do that. So yeah.

James: yeah. Now what's interesting is we actually got ourselves into trouble on that a little bit ago because we, we were going to, we were actually going to go take a trip or no, what was it? We were going to, we were gonna spend money on something. Can't remember, but it fell through for whatever reason, and my head instantly went to, oh, we can sneak in an extra trip

Jessi: this year.

James: year.

And

Jessi: And

James: Yeah,

Jessi: Yeah, I remember

James: and you were like, or we could paint the house. I was like,

oh,

I guess we could do

Jessi: yeah, I don't remember what, what the

James: What? There was something that we were.

Jessi: Right.

James: fell through

Jessi: Yeah. You were instantly like, yes. More travel

James: it was, it might have been that trip to Boston.

I think we were all gonna go as a family and, and say we switched or whatever. It doesn't matter. But I was like, definitely. 'cause that's what's important to us. And so I was like, so quickly Sweet. We'll shift it over to that thing we love and we're like, oh, hold on a second.

Jessi: Yeah. Are there other priorities?

James: Um, but yeah, no, we totally like, but yeah, that's something that we try to actively do and it's just worth looking at it. Uh, by the way, if you're not tracking your expenses, you probably should. We use quicken.com. It's relatively cheap. They don't have the most amazing analytics, but honestly, you don't need it.

Like, which is like the simple, I know.

Jessi: just gotta know where the money's

James: your income, what are your expenses, what are the ratios like? It's like super easy. You should do

it

Jessi: Well, and part of that tracking is you don't know where you can shift the funds or if you can spend more on the things you love.

Yeah. And if you are actually spending less on the things that where you want to, if you don't track and Yeah, you don't know.

James: tracking's good. Yeah. I'm not necessarily, I'm not a budget person. Um, 'cause we just, we got enough buffer in life. That is fine. But it is good to track because we do go back

Jessi: Yeah. We go back and look at categories and it's like, oh man. Yeah. Okay. We could, we could adjust that a little bit or put that one down and put more into this.

So Yeah. It's worth knowing.

James: Totally, totally. Uh, the next step that I usually tell people is, if you don't have an emergency fund, start one now. Get to at least a thousand dollars

Jessi: Mm-hmm.

James: Mm-hmm.

Depending

the house that you live in and some other stuff that may not be enough. And I actually think that, like inflation adjusted wise, probably should, I should probably start saying $1,500 to be totally honest, but.

' cause usually what I'll tell tenants is what you don't wanna have happen is have one emergency turn into two emergencies when rent comes due. And so I'm like, so I have a financial incentive for them to do this. So start doing it. And the idea is by spending less in year, you have some sort of surplus.

So it's pretty easy to do. And we'll talk more about that in a little bit. 'cause that's just the getting started piece.

piece.

The other one is pay off your debt using the old debt snowball. I'm a fan of Dave Ramsey. I've had of a lot of financial people, but he's a good one. He's way big on paying off all sorts of debt all the time, no matter what.

Anyways, he describes the debt snowball, the big thing. Here's the debate that you get into. Which one do you pay off first? Which debt? Let's say you got multiple debts.

Jessi: Uh, the one,

James: do you determine which one to pay off

Jessi: Well, I mean. I'd like to get rid of the one with the highest, highest interest, but

James: highest

interest.

'cause it's the most expensive

Jessi: Right. Okay. But I think it's a quicker win if you pay off the smallest balance. Yes. And then you put that whatever you were paying towards that, towards the next one.

James: yeah. So it's real interesting, right? 'cause mathematically, yes, you should always do the one with the highest interest. But so much about finances is less about math and more about psychology. Just like what's happening with your emotions and things like that.

So one of the, there's, I think there's two huge benefits of going after the smallest balance. First, number one, you get a quick win or you get a win quicker, I should say. And then number two, if something happens and you need to go back to paying off all the minimums, you have a higher likelihood of paying off at least one of your debts.

So your overall minimum. That you have to pay is

Jessi: is less,

James: as opposed to potentially, if you go after a big balance or a high interest that has a big balance, uh, you may not, you may still have big minimums, which could cause a problem. So it gives you more optionality down the line. I also, at one time I did a spreadsheet for us.

'cause when we graduated we had a lot of, we had like $80,000 worth of student loans and it was split between a bunch of 'em. So I actually made a spreadsheet where I could do some scenario analysis 'cause I'm a nerd and. I was like, okay, what if I can put like a little bit more towards it? Oh, by the way, in case you don't know this, the whole idea of the snowball is you do the minimums on everything except for the lowest balance.

You throw whatever extra you can at that, pay it off, and then you roll that entire thing into the next one. Then you pay that one off, and then you roll that entire thing into the next one. That's the snowball, that's the idea. And so, um, so I ran that scenario, like what are, like, I did highest interest, highest balance, lowest balance.

Lowest monthly payment. Like I tried all the different ones. Yeah. And the difference between the least efficient way of doing it and the most efficient way for us, like these were like, we're talking like, and it was just, just doing that. No extra money put in necessarily just doing the, the minimums. Uh, it was like a difference of like five months.

Yeah. On like 20 years. It was negligible, but the difference between adding like an extra a hundred dollars towards it, that was huge. That started lopping off years on it, and so I was like, oh, okay. Like, yes, it's a, it's a, it's an interesting argument, but I think it's like one of those arranging chairs on the Titanic

Jessi: of thing. Yeah. It doesn't matter.

Just choose one and go with

James: how do you just pay more towards your debt? Like, that's the question you should be asking, not what's the most optimal way to do

it. Mm.

Jessi: Mm-hmm.

Mm.

James: Once you've paid off your debt, that's when you really wanna focus on having, um, a full emergency fund. And ideally, if you've been snowballing it, it's really easy to do the emergency fund.

Uh, ideally you've got three to six months and the question is, well, is it three or is it six? Or how do you determine when?

Jessi: I mean, probably just depends on your comfort level

James: Yeah, that's part of it.

Jessi: I would rather go towards six months just 'cause it's like, I don't know. Then if an emergency happens, you, you give yourself a longer runway. But

James: at that, but that's okay. Yeah.

Jessi: yeah, I know.

James: purpose. Um, well, so part of it is, it depends, right? Like if you have a single source of income, yes. You should absolutely, absolutely be at six, maybe even nine or 12 if you have multiple sources of income, which is our situation.

Sure. I'm like, I, the risk

Jessi: Yeah. Well, and that's, that's true in my mind. I still think of like, okay, we have, we have income and expenses. I don't think about the multiple streams of income. And so

James: that's right. Think

Jessi: I should think about that. 'cause you're right, it's highly likely, highly unlikely that.

All of our streams of income would just disappear all at once. Yeah. You know, and we'd, we would shift and have a buffer. So

James: no, of course. I mean, we could, it could happen. We could have a lot of vacancies, but that would be a lot of vacancies.

Um, yeah.

Jessi: Yeah. I feel like we'd have other worries at that point. If we, if we had that many vacancies, something else would be going

James: some of the commercial tenants moving out. That would be a problem. Um, but that's also solvable. Just if you're willing to earn a little bit less per square foot, you can get it rented. Um, anyways, have an emergency fund three to six months.

The next thing that I talked about in this class was earning more income, uh, because I just think that there's, it's gonna do, and, and I went into a thing that I personally found super interesting, which is the best way to increase your income is to become more valuable. And the way you become more valuable is to increase your skills.

And there's essentially three different routes that you can go down. You can go deeper, right? You can get better at something that you're already good at. So like for me, um. Data scientist kind of guy, um, when I was working. And so I could go deeper in like, okay, how do I get better at doing the actual data science, doing the visualization, telling the narratives, like, you know, that kind of stuff like.

The data science piece, then there's, you can leverage, which is adding an orthogonal skill to what it is. So something that's related. So the classic you've seen is like an engineer gets their MBA because now they've got the math and the business organization piece to it. Classic. Um, there's a lot of people who, uh, like with data science, it might be project

Jessi: might mm-hmm.

James: Is is one. 'cause you're like, yeah, I am. These are essentially projects. Let me figure out how to do them. In a more efficient way, that kind of thing. Or you take a writing class to get better at,

Jessi: communicating, yeah.

communic. Yeah.

James: piece of it, you know, potentially. Um, but then the third one is optionality, which is building a wire wild card skill, something that.

Jessi: unrelated,

James: totally

unrelated and there isn't necessarily an obvious, oh, this is going to lead to that. And um, and I just think that's where it's really interesting 'cause it's honestly like income grows the most when you have an intersection of interesting skills. And, um, and so the question is like, like how do you find those?

And ideally ones that are valuable to the market at large. And so like it could be, I don't know, I'm just to throw something totally random out there as a data scientist learning how to weld.

Mm-hmm. Right. Or learning

potentially like how to do 3D CAD for 3D printing, that's unrelated. But yet there could potentially be something there in the future where you go, oh, this opens up an opportunity for me somehow.

I don't know. And so, um, I just think that's, uh, that's just good. And even, even as an investor. High net worth person. I think those are good skills to learn and to, and just keep that in mind of like, yeah, how do I become more valuable?

Jessi: What are some of the ways that you would recommend like, growing those skills? It's like, are are you talking about like going back to college, taking a college

James: oh my gosh, no,

Jessi: Reading books like,

James: Um,

yeah, primary ways, uh, reading books I think are huge. Um, I actually think like books are one of the best investments in the world. Like it's kind of crazy, right? You have someone who either through the school of hard knocks doing a lot of research or whatever,

Jessi: they're a genius

James: Um,

do a lot of experience.

Sure. They have taken the time to distill what they've learned in an organized way that in a couple hours you can read. For the cost of a meal. Like it's, it's unreal how good of a deal books are. And so I like read, I don't know, 10 to 12 nonfiction self-improvement types of books a year. I'm reading one about customer service and how to do that better and um, yeah, I think it's great.

So I highly recommend just regularly reading, learning, you know, whatever it is for your ministry stuff where you're like, yeah, I could,

Jessi: yeah. I listen to, I listen to podcasts and I do a, um, a leadership training course. I guess.

James: I think podcasts are okay. Uh, if you are new to a subject, I think is very helpful. Yeah. If, um, you know, if you, if you know more about it, I don't, I I think it's like they're just too,

Jessi: surfacey or something

James: Yeah. I mean, like, even this, right here we are, we're talking about personal finance.

If you're someone who like, oh yeah, I already know a lot. I'm like, all right, we're going like pretty surface level relatively. My hope is that we're throwing in little, like you're like, oh, that's interesting. I never thought about that. So I'm trying to not just do the surface level thing, but I think that happens a lot in podcasts or they get repetitive, I think could also be an issue.

So they're good. It's a good

Jessi: about like go getting like a CER certification or something like you were saying, like a welding certificate or a drone license or something like online classes.

James: classes totally makes sense. I think getting a certificate or some sort of licensing could make sense, especially in the going depth and leverage piece, wild card that may not make as much sense to do unless you love it, you're having fun.

Like, I was like, yeah, well that was a leverage thing. I was like, I got my drone pilot license. But that was a

Jessi: Mm.

James: Um,

kind of, it was wild card leverage. Um, I had a very clear like, oh, here's how I can use it in my business. So I guess it would be leverage. Uh, yeah, I think, um,

Jessi: it is that this, yeah, whatever. It's obvious this particular

point

To me is super intriguing and, and interesting because I think a lot of times people go towards the defense and it's like, oh, we just gotta cut expenses and we gotta like, that's how we gotta manage things.

That's how we're gonna have more. And it's like, no, there's two sides. You know, you can increase income or, and decrease expenses. But the increase in the income, that's could be very interesting.

James: Well, in theory it's limitless, right? Like you can only cut your expenses so far. Sure. But like

Jessi: You could always improve

James: to billions if you hit it right at the very least. Hundreds of thousands, millions, that kind of thing.

Yeah, no, totally. I think that's where like, I think it's worth spending a lot of time on

Jessi: So I should develop my wild card skill of untangling knots and then monetize. Monetize

James: Yeah. Yeah.

Yeah. Uh,

Yeah, speaking of the monetization piece, I went into the class, I talked about how to be a better employee, just to earn more there. So real quickly, I talked about you become a top performer, but do it selectively. So the question is like, what keeps your boss up at night?

What's important to them? And they just focus on those things and man, just let everything else go. It's okay. It really is. Um, the other one is you wanna solve problems before you're asked. I had a boss where he came to me and he was like, you just wanna come bearing gifts. Like go find problems, solve them, and then come to me and go, Hey, guess what?

I solved this problem for you. He's like, or at the very least, do the, the Dan Martel 1, 3 1 thing where like, Hey, I found this one problem. Here's my three potential solutions. Here's my recommendation, shall I go for it? And um, and yeah, I think, you know, bosses love that kind of thing. I also wanna make your work visible, which kills me because I just want my work to stand for itself.

But you can't. You gotta talk about it. You gotta tell other people. In a work environment, the easiest way to do that is to send like an end of the week summary. Hey, here's what I did to move the ball forward. Here's how I added value. You know, here's whatever, blah, blah,

Jessi: Mm-hmm.

Mm-hmm.

James: Um, I think it's great. So, alright.

Side thing. Super interesting. So Jack Dorsey is the CEO of block, which is a, they are in charge of Square and other financial stuff. Um, he actually just announced he's laying off like 40% of his people. But what's fascinating, one of the things that he's had them been, that he's had his employees doing for a while now is he has every single one of them send him a summary of what they accomplished for the week.

We're talking like, he had like 10,000 people, another down on six, but. What he is doing is he is using AI to then gather all that and summarize it. So instead of it being your employee, telling your boss, telling your director, telling your VP and making it to him, he's getting, now granted, he's getting the, the positive side of it all.

'cause then what's an employee gonna really say? But he's getting this feedback almost in real time from the entire company. And then he can kind of dive in as needed. Super interesting use of ai. But, um, anyways, whole point. Tell your boss what it is that you're doing and, um, if you can somehow tie your work to revenue or savings, that's a great thing to do.

Uh, when I was at hp, I volunteered for a project that was launching a new product and, um, it was. It was super fun. Uh, here's a classic one. You expand your scope before you ask for pay. So see a problem, start doing it, take care of it, prove that you're actually pretty good at it. And then, um, and then you can have that conversation like, Hey, I'm already doing this.

Let's talk about, uh, you know, making it work. And then you can negotiate like a pro. And the way that pros negotiate is a, they look at market data. Are you actually underpaid? They then bring proof that you're doing a good job, which those weekly updates

Jessi: Or solving problems. Super. Yep.

James: Yep. And then you actually come at it collaboratively.

You know, you don't just be like, yeah, you owe me this,

Jessi: I deserve more

James: Not that like, Hey, how do we make this work? Like, that's kind of the trick. Um, if, if you're looking to do some sort of side gig type of thingy, uh, I think there's a, a ton of frameworks, um, to go after.

after.

Jessi: where my YouTube channel fits in

James: Yeah.

Jessi: side gig,

James: Side gig. Um, so essentially you wanna find something like, what are you passionate about, good at? Um, and then like, what's valuable to other people. It's essentially that, uh, some great books that, um, highly recommend is, uh, so good. They can't ignore you by Count Newport if you're in the employee world

world

and then a Million Dollar Weekend by Noah Kagan is great at helping you come up with ideas and then a hundred million dollar offers.

By Alex or Moey is good at like, all right, you got an idea. Here's how you craft it in such a way that, um, people find it valuable. Or as he says, um, how to make offers so good. People feel stupid saying no, which I think is good. Uh, yeah, we then talked about, uh, giving in the class and, um, I just think giving's important.

It shapes your heart. I think it's good, and especially as high net worth individuals, I think we have that responsibility to, to give back and to do it sooner rather than later. I think a lot of times we fall into the trap of, well, I'm just gonna earn a ton now, maximize the returns. And then once I've made a lot, I'll give a lot.

And don't get me wrong, like legacy giving. It's great. If you're able to do it, highly

Jessi: able to

James: a conversation you and I should have at some point.

But,

Uh, but I think there's something to be said about giving today as well and just kind of being able to let go of those funds and be like, yeah, I don't have to hold onto this tightly.

I think it's just, it's just good for you, um, to do that. Um, one of the things that we do is we actually have a seed account for giving. Um, so that when an opportunity, when an opportunity comes along,

Jessi: we can say yes. Yeah.

James: we can just go, yeah, sure. We just look at the account. How much do we got? Yeah, go for it.

Which is nice. Yeah, we gotta talk about a giving goal. What do you think should be our, our giving dream? Like as a family? What's your initial thought

Jessi: Like annually or total or time, whatever? I don't know.

James: No. Yeah, like what's your I've already, come on, I've already asked you this, like

Jessi: oh, you, well, you gave me a, you gave me your number,

James: What was my number? I had

Jessi: you wanna give away a million

James: Oh, that's not my number. That was someone else. That

Jessi: Oh, it was someone else's? Yeah. Oh. I don't, I don't know. Like, I don't know. I don't think in terms of like, I,

um,

a dollar amount or like money.

I, yeah. I'm like, I think of it more as like I would wanna

James: you wanna do? Create

Jessi: like something. That Like a trust or like a scholarship? A scholarship or something that like, yeah, that the Furlos like loved this particular thing. I, I don't know what that education or books or what, I don't know. Something that's like, yeah.

James: we created a

Jessi: or given a library, yes. Yeah. Something. I don't know.

James: exist. All

right, cool.

Jessi: Just, I don't know.

James: Something to think about

Jessi: it is something to think about. I do like, I do like, I mean I have a soft spot for kids and education and so I'm like something within that. Benefits. Kids ongoing or, I don't know. I like food too. So feeding hungry people.

James: There's, there's that. Hmm. Hungry puppies.

Jessi: Oh, hungry puppies.

James: Yeah,

Jessi: More puppies.

James: All right. We'll have to, I have to think about that. Um, we could help out the homeless somehow. That's real estate related. I don't know. I haven't really thought about

it.

which we should. That's on our list.

Uh, but the next step that we talked about was investing your income. Uh, into assets. Mm-hmm. And, uh, this was kind of, this is an interesting part of, of the class because oftentimes the, the advice is, hey, invest 15% or more if you can afford it. Uh, put it into your employer, 401k up to the matching amount.

Then head over to the Roth ira, maybe set up a Vanguard account, total market index, go for it, max that out. And then if you still have money left over, you can either go back to the 401k or set up another account or whatever, like those kind of things.

Jessi: Sure.

James: Which is interesting, and that's what I usually recommend to people, even though we did not do that path at all,

Um,

which I'm just

Jessi: ah.

James: man, it just feels weird to talk about it.

I was like, yeah, no, I, I mean, I actually did, I did do the

do the oh one K

employer thing. I did do that, but instead of the Roth IRA, we just put it in a real estate and instead went, we'll just take the cash

Jessi: Mm-hmm. We

James: we reinvested

that into more properties. And then eventually I had enough of those where I was like, all right, cool.

Like I can stop

working.

Jessi: Yeah.

James: And the cool part about real estate was I wasn't just getting that classic seven to 10% return because we were actively involved in the investments, we were able to get significantly higher, which meant we didn't have to invest as much, or I mean, or we just, it just grew faster.

Yeah. Uh, which was rather nice. And so, but it was just kinda, it's always weird in that part of the classroom, like, so here's the recommendation, not what I did, but here's the same thing, which I get it right. Most people, they've got a life. They've got other things that are important to 'em that are not gonna spend the time, like learning about real estate or whatever, starting up a business and getting after it.

And so, um, so it makes sense to, to do the passive thing. Um, but I definitely was like, no man, I do the real estate

Jessi: Well, and there are, there are certain options to invest more passively in real estate than we did.

James: Yes.

Jessi: So that's true. I, you know, I think doing your due diligence on finding a sponsor or

uh,

fully understanding, like, is this, well, it makes sense because it's like, is this.

The best use of my funds to just put it in a Roth IRA or to put it in, you know, a Vanguard account or would I get a better return if I invested in something else with someone else. So just looking at all the options I think is a good idea.

James: Yeah. No, I, I think you're right. I think it's good. Uh, so we talked about that. Um, I talked about an interesting aspect. I thought that was worth bringing

up

Was it was, it was cool math. I don't actually remember where I read this, but, uh, they were comparing

like.

uh, retiring when you're 65 versus retiring when you're 75

Jessi: Yeah. I

James: those 10 extra years.

And, and I did a. A shocker. I whipped up a whole spreadsheet. 'cause I was like, how

Jessi: does this

James: work? So I did the whole 4% rule and went, oh, look at that. It does come out to like $2 million if you wanna retire when you got 80 grand. Awesome. And then I, and then I started doing the comparisons of 65 versus 75.

So, so here's the, here's the crazy math that happens.

Jessi: Mm.

James: So, uh, if you are retiring 75 versus 65, there's 10 years there. Do two things. Number one, that's 10 less years that you need to spend in retirement,

Jessi: Mm-hmm.

James: and it's also 10 more years that not only do you get to save for retirement, but your existing funds get to compound.

Jessi: Mm-hmm.

James: Right.

Which I get it. In theory, you don't spend all your money day one.

Jessi: Yeah.

James: Yeah.

you retire, so it still does some compounding afterwards. Sure. But you know, you get the, you get my point, and it's shocking how much those 10 years make a difference, because it essentially means that you can save half as much to retire with the same

amount.

Jessi: Oh.

James: yeah.

Jessi: I don't think I fully understood that the first time you explained it to me. Yeah.

James: yeah.

Jessi: Okay.

James: Because of that compounding piece. Wow. To it. Yeah.

Jessi: Huh. So if you're able, I mean, there's

a.

quite a few people who aren't able to

James: on the job type, right? If you're doing construction, yeah. Yeah. You should name for 65. But you know, if you're a lawyer or a business person, a manager type of thing, a real estate investor, like there's like, it's pretty reasonable to say,

Jessi: Kidman director.

James: Kidman Director.

Yeah. It's reasonable to say like, yeah, we'll go until we're 75 or 70. Right. I think the math for 70 was, it's like a third plus.

Jessi: Huh?

James: Or 25% less, some, somewhere

in there.

Jessi: Yeah.

James: Um, yeah, I mean it's, and, and, and the whole point is just something to think about that I was, that I was trying to make is you don't necessarily want to go all in for some future retirement date.

Instead, you may think about saying, Hey, maybe I'll still lock in my lifestyle for what it

Jessi: Mm-hmm.

James: And I'm gonna commit to working a little bit longer so that I can enjoy things today.

Jessi: Mm-hmm.

James: And um, and yeah, it does, it does give you an opportunity to give more, which I think is good as we talked about. But the other piece, which I thought was fascinating, it was just talking about kids and, and this idea of if you're working really hard to save up so that you go, so once I retire, then I can hang out with my kids and stuff like that.

Like you got, well, there's two problems with that. Number one. They'll probably be working hard based on what you modeled for them. So they're not actually gonna have time to hang out and B, they may not wanna hang out with you 'cause you weren't fun when they were younger. And so you kinda wanna establish that pretty early on.

I'm like, oh no. Yeah, hanging out with my

Jessi: Be willing to, to work more years and spend more time with, with your family now in your working

James: Yeah. Yeah. So that was just so that I just kind of threw out, which again was kind of weird 'cause that wasn't, I mean. It wasn't really what we did, but I don't know. We were on a different trajectory altogether. Um, but anyways, that was an interesting thing. Uh, we then talked about protecting your future, talked about insurance, and the main thrust here was on for your liability insurance stuff.

Just like review it once a year. It's good to do. Um, we change ours. Uh, I don't know.

we,

seems like, it's like every five to seven years I think and just 'cause. Usually we make a new relationship and something better comes along. One of 'em, I didn't have a choice they get was like, I'm getting out of this.

You gotta choose someone new. I'm like, no.

Jessi: Okay.

James: no.

Um, but uh, but it happens. Uh, life insurance, it's important. Um, I would avoid whole life insurance and instead go for term life insurance. You just gotta remember right. Term life insurance, right? It's for a fixed amount, for a fixed amount of time, for a fixed payout.

And if you skip one month of pain. It's gone. So it's like, it's a, but you know it and it's super nice. And the question is, how much should you get? And it's whatever the final expenses will be. Um, plus whatever debts you have, plus still paying for college if you want to, and then your income times 10. And that's kind of what you should have for, uh, life insurance.

And then I think actually more important for high net worth individuals is getting a, a will and trust. Set up and a super fun story. I really like this. It was, um, CV Miller, uh, Charles Vance Miller, I think was what his name was. Um, super cool guy. He was a Canadian. He died in 1929 and in his will, he gave a part of his fortune to whoever it was who had the most kids in the next 10 years.

And, uh, it was crazy. And so there was the baby race that went on and ultimately there were four women who each got $110,000 for their nine kids,

Jessi: each.

James: dude just pumping out the babies.

Jessi: That's cool.

James: That's, that's

just insane, man. Which I was trying to do the math. I was like, man, what's 110,000 equivalent for in like 19?

I guess that'd be 1939, right? Like that's a pretty, like, it's not quite a million dollars, but mostly like, did you got nine kids? Like that is, that's a lot of kiddos. Yeah.

Jessi: yeah.

James: Um, but yeah, so the point of me sharing that was a, you could put whatever you want in a will, which is kind of cool, but it's really important to just get a will and trust set up.

That's also especially important if you have kids who are under 18 like we do.

Jessi: because.

James: Because, um, it helps say where they're gonna go and there's professionals. Go talk to 'em. Don't use chat GBT for that one.

Jessi: word.

James: Um,

Jessi: Yeah, go talk to a professional though. We can, but I wouldn't. They have, they have tools that help you to think through all of it, so Yeah,

James: exactly.

Exactly. Then the last thing we talked about was automation and um, 'cause at the end of the day, we're cognitive misers, which is a really fancy way of saying we're lazy. Uh, we don't want to have to remember to do all this stuff. And so as much as you can automate things, that's what you wanna do. And like I said, we use quicken.com for tracking our expenses.

Uh, we use capital one.com for our savings account, so it's really cool. You can set up 25 sub savings accounts, just kind of throw money in there every

Jessi: you can do. Yeah. Auto

James: For whatever. It's like we have stuff for our emergency fund and for travel

Jessi: car maintenance.

James: for home, whatever. Um, apparently betterment is also an option.

They give you 20 subs savings accounts. Their interest is a little bit more, I was looking this up, so Capital One, as of today, these things change all the time. They were at 3.3%. Betterment was at 3.9%.

Jessi: Hmm.

Hmm.

James: Whatever, it's slightly

Jessi: yeah.

James: Um, I also, I have an account with open bank.

Jessi: Hmm.

James: Um,

when we get investor funds, oftentimes we get a lot of money up front, but we don't necessarily need it all day one.

And so we throw it into open bank and that one's at 4.09%. I don't need how much of subs savings accounts. I just needed one

Jessi: Yeah.

James: one. And so I was like, well, what's the best interest rate? Um, so yeah, so we try to earn our 4% just, you know, it's like, uh, we're building a house and we got all the funds up front, but the contractor needed them in different tranches.

And so we're like, well, yeah, we're gonna earn our 4% on our. I don't know, whenever we were sitting on that first

Jessi: and that's just like a savings account.

James: $60,000.

Yeah, it's just a high yield savings account and which I'm like, yeah, beat some money, whatever. Um, so yeah. Uh, and then, uh, vanguard.com is what I recommend if you're gonna get into the old stock market investing.

'cause it's a non-profit, so it's just like 82% cheaper than everything else. Which is really nice. And when you do that, just set up automatic transfers, man. Like, don't,

Jessi: don't have to think about it. Yeah.

James: Um, if there's books that you'd like to read, 'cause again, best investment ever, highly recommend it. I had a bunch that, um, that I recommended.

Uh, the first one is I Will Teach You To Be Rich by REIT Setti. Uh, crazy title, but great book. Just highly actionable, really good. It's designed for the 20 somethings and 30 year olds just getting started.

Jessi: mm-hmm.

James: Um, but still really good.

He's got one money for couples, which I actually think it was good for us. It led to a lot of really good conversations that we had.

'cause it just gets into the, Hey, how do you, um, you know, you, you just spend money differently. Right. And how do you have those conversations? Yeah.

Jessi: How do you align on

James: Every year we have a conversation about Christmas gifts every year and what that is, so anyways, helps with that. Uh, one of them that I really loved was The Millionaire Next Door by, what was it?

Stanley something by Thomas

Jessi: Mm,

James: Um, really good. Just, I don't know, just gotta be thinking about wealth a little bit differently

Jessi: It's more about mindset. Yeah. How you view wealth.

James: So good. Um, simple Money. Rich Life was a good one. He's a Christian author

Jessi: I don't know if I've read that one.

James: Um,

no, I don't think so. He's the guy who set the, the giving goal

of

a

Jessi: maybe I should read that one.

James: was good. Uh, Dave Ramsey classic Total Money Makeover. Um, psychology of Money is

Jessi: Mm-hmm. Really

James: good and um, which again, it's less about the. The mechanics and the dollars a cents, but more just like your mindset. Mm-hmm. Psychology, something might say. Uh, but yeah. Anyways, that was, uh, that was what we talked about in the class and just, um, interesting.

Obviously went over it pretty quickly here, but I think it's good just to have that reminder of like, oh, yeah, yeah, yeah. I do need to set those up and I do need to get those things and I just make sure your financial house is in order. It's good. Um, because we do wanna be good stewards of the resources that we're given, and so doing these things help you do

that.

Jessi: Yeah.

yeah,

James: There you go. Worth

Jessi: it's worth it.

James: it. And if you're looking for additional ways to invest your precious resources, um, we'd love to help you do that. And so you can learn more about us at Furlo.com where we've got our investing thesis, our heart behind it, and different ways that you can get involved, which is investing in syndications, investing in debt, or if you already own the asset, hiring us as a property manager.

So lots of ways that we can help you on the real estate front. So with that, thanks for listening. Have a great day.

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