117. Grow Your Wealth Safely with Mark Willis

Hey, how's it going everybody. Welcome back to the Average Joe Finances Podcast. I'm your host, Mike Cavaggioni and today's guest is Mark Willis. So mark, super excited to have you on the show with me today. Thanks for joining us.

Oh, Mike. Glad to be on man. Thanks for having me.

Yeah, absolutely. Hey I would like to start this the way I start every podcast interview, and we wanna know a little bit more about you. So if you could share your story, like how did you get started? Especially as a CFP and what you're doing right now. I know you're the author of a best-selling book and you run a financial firm in Chicago. So if you could just share with us how this all started for you.

I very quickly discovered that I'm not your average financial planner. And that's literally the name of our podcast, Not Your Average Financial Podcast. So when I saw your show, I was like, man, we gotta get to know each other. We've had quite the run. I never grew up with money. In fact, I have a first memory of money. I somehow scratched together 50 bucks as a little kid, and it was in a paper bag in my sock drawer basically. And my mom was doing the right thing, trying to get me exposed to the whole financial world. So she took me by the hand, took me to the bank to open a checking account. And I was gonna figure this whole checking account bank world out. And I had to bring my little paper bag of money with me. That was my life savings, everything I had ever put together, rub two pennies together, whatever, and walked into the bank. And the job, my job was to hand over everything I had ever earned. All the blood, sweat, and tears of a little five year old with a lemonade stand and vacuum in the back, the carpet and whatever to get all that money scratched together. Now I'm supposed to give it to a total stranger and I'm supposed to trust that he's gonna walk away with that money and do something good. I didn't feel good about that. And fast forward to the future, I didn't know a lot about banking, but my instinct was right on. Banks are not exactly people that should be trusted with our life savings and our hard work. So fast forward a few more years, I'm now in a dark hotel room and I'm signing my life away as I'm getting ready to go to college. And as I went through my college degrees, my wife and I graduated from three private school degrees between us and we had six figures of student loan debt, 120 grand graduating in 2008 with no job prospects and not really any marketable degrees between us. So talk about a great start to life. Then we get really saddled with the great recession. And I'm like, man, this is gonna be a fun ride. We were doing a lot of rice and beans and rice and all that fun stuff for a while and had to find a better way to earn some income and become better than debt free. And right around that time, I started working for a CPA firm, got really interested in my own personal financial journey. Mike, there's something about, having to come up with a big chunk of money every month that gets you focused on your finances, right? When you gotta come up and pay the pipe or in this case, Sallie Mae, every single month it gets you really focused on, this money thing. So I can credit my student loans with that anyway and the rest is history. I ended up starting a financial firm. We've now working with clients all across the country, over a thousand clients all over the country and really the world. So it's been a lot of fun and that's what brings us to our conversation today.

That is quite the background and quite a start, one of the first things you mentioned is how you and your wife started off life with 120K in student loan debt. So that is definitely not a head start, I would say. And you got yourself to the point where you realize you're paying this large chunk of money every month. And that's one of the things that opened your eyes, but I, honestly, I think, your eyes were open from a very young age, from that first trip you took to the bank with your mom, right? When you realize you're handing over all of your money that you made, all this money that you worked hard for, giving it to this person and hoping and trusting that they will do something good with your money and have it do something where it can maybe work a little bit for you. We all know in reality, that's not what really happens, putting your money in the bank. It just, it sits there and stagnates and inflation just eats it away. Looking at that from a very young age, you already had a really good questioning attitude when it came to your money and what was going on there. So I just wanted to touch on that a little bit. That's pretty awesome. Now, fast forward to where you are today, you're paying all this money in student loans and it opened up your eyes that you want to, you wanna get more involved in financial literacy and you wanna learn more. So how did that kind of work for you? So you went to school, you became a certified financial planner and then you started off at a firm, and how did you build up to where you are today?

It was in those first days that I almost got out of the whole gig because it felt like being dropped into the front lines of a war. Mike, it's a great question in fact, when I first got into the business of finance, I almost got right back out again because it was like the aftermath of 2008 when I was getting into finance and I worked for a CPA at the time, and it really did feel like I was getting dropped into the front lines of a war because I would overhear her. She was a great nationally recognized CPA, did a lot of great work for her clients. Tax prep was mostly what I was helping her with. But she was having those calls, those conversations with clients saying, I'm sorry, Mr. Client, you're 63 years old, but I just lost you a third of your life savings. I just lost you half your life savings. That conversation was one I knew I never wanted to have ever with a client to ruin their life like that. Felt like a crime. And I knew it was the markets and I knew it was stuff outside of our control. But like you just said with banks, you have to hope you have to trust. These are good words when it comes to your religion, it's not so good when it comes to your finances and your money. Okay. So hope and trust have no place in a financial plan. Think about that for a minute. How can we call it a plan? If we also are using words like hope and trust. Okay. That's not a plan. That's a hope and trust strategy. Okay. So I knew I had to make a choice. I was either gonna get out of the business or I had to find strategies that didn't rely on hope and trust. As you obviously can tell, I didn't get out of the business. I dove deeper into it. I was determined both for my own sake, my own personal financial life and that of my potential clients. I wanted to find strategies that had some contractual and predictable wealth generating gains that we could lean on and income that we could count on. We ended up coining phrases and strategies like the income maximization strategy, because we knew that income was the key to really everything when it came to not just your current life, but also your future retirement. And even now to this day with, within the last 90 to 120 days or so, clients are coming to me saying, Mark, we can't buy as much groceries as we used to. Hey Mark, the price of lumber has gone up last year. Hey Mark, the price of everything has gone up this year. So income is really back to basics, right? Income is King, Cash Flow is King. Cash is not king, cash flow is king. So how can we increase our income, reduce our expenses and maximize our income over the course of many years, regardless of what's happening in the markets or banks decide they wanna do with our cash.

I absolutely love that answer, Mark, especially the way you ended it there too with it's not Cash's King. That is a term that you hear often and that's not really the right way to look at it, but when you say cash flow is king, that's huge. Cuz the cash flow is what's gonna actually keep you safer. Having that passive income or money that's coming in that you can then utilize. And, as you were going through, I was writing some things down because inflation is real. And a lot of people, wanna just put that on the back burner or not really think about it until they go to the grocery store and spend a hundred dollars to get a half a bag of groceries where that used to get you a full bag, and they're scratching their head and wondering why how did this happen? When did we get here? And it's slowly been creeping and creeping year after year. And if you're not doing anything to hedge against that, you're putting yourself in a very bad spot, because if your income, like you said, if your income's not changing, if your income's not increasing, you are losing money every single year. Now, I'd like to talk about one of the things that you mentioned, it was called the income maximization strategy. I think that is a topic that my listeners would probably really be interested in because I think even, I would love to maximize my income. What are ways to do that? Mark, if you could share with us, what is the income maximization strategy?

Imagine if you could always have income, even if you ran out of money. Let that sink in for a minute. How could we possibly continue to get uninterrupted income, mailbox money, even if we ran out of cash, we'd never run out of income. And what if there was guarantees baked into that built around that protecting you from never being without? I think most traditional average financial plans are designed for helping us climb up the mountain. So I want us to picture Mount Everest for a minute or any mountain in Hawaii, I've been to Hawaii the big island and the incredible mountain climbing that gets to be done there and the trails I get to go on there, it's just breathtaking. And my wife and I, we actually fell in love in Japan and we fell in love, going up the Mount Fuji and going up Mount Fuji was an incredibly like breathtaking experience, literally, it took my breath because it was a big exercise to get up the mountain. But I'll tell you, Mike, it was death defying coming down. I really felt like on several occasions that I was going to die coming down that mountain. And then in fact, 90% of deaths on Mount Everest are descending down the mountain. All right. So the first people to probably summit Mount Everest were in the 1920s, somewhere around 1923. There was a crew of people that went up the mountain, but we never heard from them again. They were last seen at the highest base camp and everyone thinks they probably made it to the top, but they never came back down. So we don't know. The first people to successfully summit and return back down to base camp. I believe it was in the 1940s. You'll have to correct me that, and I'm someone online's gonna find this, but it was almost 20 years later after the original pair that might have made it to the top. What does this have to do with finance? The game of finance for most investment advisors, most average financial planners is to help you climb up that mountain to get you assets under their management. That's literally what they call it. Your assets under their management, and they'll happily charge you a fee to help you climb up the mountain. Okay? So the larger your 401k gets the larger their fee gets. And by the way, come down if there's an earthquake on the mountain going up, they still get paid a fee. Even if you're losing, like we have this year 15, 20, or more percent. So they're the ones with the guarantee. You're the ones with the volatility. But nevertheless, we're climbing up that mountain and the game plan, the goal is get to the highest point, right? Plant your flag on the summit. That's the goal, right? That's what everyone says, but no, that's not the goal. The real goal in my opinion, as a certified financial planner, is to get back down the mountain safely and plant your flag back down at base camp. And nobody's talking about that, man. No one has a game plan for people's retirement spending. We have a accumulation plan, but no, one's got a distribution plan. And what's the point of accumulating a 10 million bucks in a 401k, if we have no real safety plan for getting out of that, like getting down the mountain. So the income maximization strategy is a response to what I saw was a big gap in the plan for people's retirement income needs. So that's it, on a high level what's the problem, so you asked what is the income maximization strategy and I'll Blab on for a few more minutes and then I'll hush and get your feedback, man. But all so now here we are, we're at the top of the mountain, whatever happened to get you to that point, you've been maxing out or you've been contributing to your 401k, you've got an IRA or a Roth IRA or whatever, and let's say you've got, I'll just pick a easy number. Let's say you've got a million bucks in your retirement accounts. You're 65 years old at that point, you're ready to punch out for the last time at the day job, what is the right amount of money? According to best research that you can spend out of that million bucks, do you feel wealthy? You got a seven figure you're in the two comic club, you got seven figures, right? A million bucks. What is the safe amount of money that you can take out of that 401k this year and never run out of money as long as you live. Anyone answer that question.

You always hear people say 4%, right? Everybody's a safe number.

Yep. And that has a a longstanding there's a tradition around 4%, but the best research that was done in the nineties back when interest rates were a lot higher bond rates were a lot higher. And it's a tradition that's held on, it's one of those sacred cows in finance that they have to be tipped over. I spent some time in Texas, we did some sacred cow tipping. Let's just say that alright. So best research today and a way to go man, for coming up with 4%. But the best research, according to Wade Pfau who's a PhD in retirement research, the best research from David Blanchett, who is one of the head of retirement researchers at Morningstar. Some of the best minds and finance are now telling us 2.8% is the right number to pull. Now, is that a big deal? 4%, 2.8. Doesn't sound like a big deal, but if you had a million bucks to your name and it's time to retire, you have a wonderful life at 28,000 bucks a year. And that'd be before taxes, by the way. So after taxes, we're looking at maybe 20, what do you want? 22,000 bucks, right there, is that the millionaire lifestyle we've come to expect? Can we even live on 20 grand?

I wouldn't think that, if you're classifying yourself as a millionaire, living off of $22,000 a year is probably not what you had in mind when it came to your retirement.

Right, yes. Yeah. I'm with you on that. It's shockingly inefficient to spend your stock market portfolio, even if it's conservatively invest. In fact, it's worse if it's conservatively invested, cuz now we can't rely on equities to help give you that yield as you go into retirement. So we're looking at somewhere around two and a half to 3% of your money can be spent down. And even then you have a one in 10 shot of running out of money, one in 10. You cannot undo your retirement. It's not like you can go back and fix it, if you mess it up, so I jokingly ask clients, I'll say, Hey, if there was a one in 10 that your airplane you're boarding right now was gonna crash. If it was a one in 10 pilot gets on the air on the megaphone, Hey, just wanna let you know we've got a 90% success rate landing, these planes but one in 10 crashes and burns. Would you stay on that airplane or would you get off immediately? Of course I'd be off outside.

I don't think that's a flight I would be comfortable getting on.

Yeah. This is why so many people go on Medicaid in retirement homes and long-term care, cuz they've blown through their savings and now they have this mega problem in retirement in their final years. It's why so many people rely on their kids, it's why so many people have social security as their primary or only income. It's a shame, it's too bad. These are the golden years of your life, right? And you're that dependent on a, on things that you can't control. So anyway, the income maximization strategy uses contractual wealth rather than stock market profits and losses. It uses the contract. It uses a contract to build an income that you cannot outlive. It uses a contract to pay you an income that has the potential to give you increasing income. Throughout retirement. So rather than your 22 grand whatever of income, you might start at 50 grand or 60 grand, and then they pay you an increase off of that. So your 50 grand becomes 52 grand becomes 56 grand becomes $60,000 every year as you go throughout retirement, it keeps up with inflation. So you can keep getting that full bag of groceries into your retirement years. You can keep playing with the grandkids and taking 'em to, to the Disney world destinations and so forth that to me sounds like a better pathway down mount retirement, where we're not having to worry about running outta cash.

Okay. So you say it's called a contractual wealth, right? So you're doing it based off a contract. What kind of contract are you talking about?

Contracts in principle are the basis for civilization, right? I'm gonna start at 30,000 feet and we'll come right down to runway levels.

Start at the peak of the mountain.

There you go, man. Yeah. So at the highest level, without a contract, we're toast as a civilization, think about it. I was talking to a guy who's a client of mine. He's got 10 rental properties, he was working on his tile and grout while I was talking to him about his financial life. All of his wealth was in these 10 properties. He had paid him off, no mortgage making good income off of it. And I asked him, I said first of all, congratulations making it to this point. What is it about the real estate that makes it, secure for you? We said, Hey, there's no value guarantee. House prices can go up and down. What is it that truly makes real estate real? What is it? And we had to think about it for a while, but it's the contract. It's the contract. If you don't have a contract with the property that you own, all you have is squatter, right? Anybody with the bigger shotgun can come and take that property from you and the renter in that property that he had has a contract with him. He's the landlord there. He has a contract with that land, with that tenant to get a check every month, right? Without the contract, all we have is squatters rights and the same is true with other contractual financial tools. Now, there are no contracts with stocks, bonds, mutual funds, index funds ,hedge funds. The list goes on and on, right? That's mainly paper profits going up and down your personal home. There's no contract, except maybe you might say the deed on your property, but it's not I don't know if it's different in Hawaii, but there's no ATM on my house. So I'm not being paid to live in this house. But you want contractual wealth that pays you an income that's written right in the black and white word. That's committed to you, right? That's contractual, guaranteed income. Annuities are another form of guaranteed income. And in fact, I'll tell you a quick story. I was at a museum here in Chicago, it's called the ancient Oriental Institute. And I was walking down the halls of this museum. , I'm a nerd for like ancient, like archeology stuff, like mummies and tablets of stone and uniform tablets. I'm big into that sort of thing. So I was there geeking out and along the wall was this big parchment paper. It was about 20 feet long. And it had this old cool, like ancient script written on it. Egyptian style, Sumerian script and underneath it, I think it, it was 324 BC. And it said annuity contract from 2300 years ago, Mike. And that just melted my brain to think that was somebody got paid a guaranteed income for the rest of his or her life. It's probably a soldier, Alexander The Great's army. And he was probably just getting his pension, right? So annuities, pensions, they've been around for thousands of years. And I cannot believe that they're not more regularly used today as a certified financial planner it seems like it's in the best interest of at least some of your income to get a contractual portion of your income, that's guaranteed to come to you no matter what's happening, your stock portfolio or real estate portfolio. I was talking to the same guy that I mentioned earlier. And we talked about how annuities are like a renter that always pays on time. And that to me sounds like at least a little bit of relief. So anyway, part of the income maximization strategy, it's not the whole thing, but part of it is incorporating annuities, modern ones, not the old fashioned ones, cuz there's some old school annuities that I wouldn't recommend, but and we can get into that if you want to Mike. Modernized annuities that give you flexible income with increasing income. If possible, that help you offset the deal of inflation, but that never run out of income, even if you run out of money.

Yeah. That's a great point and I never even thought to think about annuities that way, my in-laws have an annuity that they're, that they have right now, which is working out pretty good for them. My retirement pension from the Navy is an annuity. That's that's pretty interesting cuz you know what? You hear a lot of people say, oh don't get into annuities, don't do it. You can spend your money elsewhere and do other things. but those same people and I'm probably one of them too, because I talk about this all the time is, saying to invest your money in real estate instead. But again, going back to what you're saying, markets it's contractual, like what you said, right? So it's, you're doing the same thing, but this time you're putting a little more effort into it because you are, you're having this contract with your tenant to get paid every month where with the annuity, it's just guaranteed. You do the contract one time. You don't have to sit here and renew a lease or anything like that. So that's pretty interesting and I never looked at it that way. Thank you for opening my eyes to looking at it like that. Very interesting. Okay. Somebody let's say, cuz you said you don't have to put all of your retirement into that, you said you could put some, so would you recommend to somebody that they diversify and say, Hey, put some here into annuity, take the rest, keep it in the stock market or maybe purchase some real estate or different things like that, what would you say would be like your traditional route for somebody that you are advising with where they're gonna go? Let's say let's use that magic number of a million dollars again. Would you tell somebody take that full million and put it into an annuity? Or how would you have them like split it up?

It depends on everyone's goals. That's the default CFP answer. It's like an adult diaper, it depends. Let's get a little better than that, but that's the real answer. It would come down to us having a one-on-one discussion over, over zoom or over the phone to get to know you and your risk tolerance and goals there. But let's say a portion of that money went to an annuity and we let it sit and grow for a while. Let's say that you had some other money that you wanted to just sitting in cash savings or whatever, and you put that into another weird, old, strange financial strategy known as bank on yourself. Bank on yourself is a using another form of a contract, a life insurance contract in this case. And that money goes into a liquid bucket of money now. All right. Again, I gotta just back up for a minute. Life insurance can be term insurance that we rent for a while, or it can be whole life insurance that we own for life. And if you own your policy, your life insurance policy, it has a contractual cash value a wealth account it's called a cash value and it's money that you can access on this side of heaven on this side of the grass, that you can use for anything you want, including purchasing real estate. And if it's designed for cash value, instead of insurance, death benefit and commissions, if we designed it heavily toward the cash value side of that contract, you can have significant cash in the first month or month of this policy. Like I had a guy just dump in several hundred thousand dollars into one of these policies last week. He's a great guy. And he's borrowing it out next week to do a closing on a real estate deal. Now that's cool. So the policy is liquid and available. Why wouldn't he just pick cash for that? Some people might ask. When you put money into life insurance, if it's designed the bank on yourself, way in it, and 99% of life insurance, it's not designed this particular way, but if we design it correctly it just works. So you put the money into this policy, you borrow it out. When you do that borrowing, the policy will continue to grow as if there was no loan. And so if I had $200,000 of cash value in my life insurance policy designed this bank on yourself way, and I borrow out, let's say 150 grand to do a down payment on a whatever, on a property. Then my policy that year will still pay me on all 200,000 bucks even the 150 that I had borrowed out. And I've got the real estate deal with all the tax advantages and cash flow that comes from the real estate. And I might still have my annuity providing me a guaranteed income. So even if my apartment building fails or all, or the government, puts another restriction on landlords collecting rent again, yikes, then I've got, still got the contract for my annuity to diversify my income streams and I've got the policy, the life insurance policy still growing, even as if I'd never borrowed the money for the real estate at all. And some people might get hung up in the word borrow. Yes, you can borrow from these policies, but you are in essence, your own source of financing. So you get to decide how, when you repay that loan. So Mike, if let's say the renters, stop paying your rent, you can skip payments on the policy loan. It's a loan to yourself. It's how I ended up paying off all my student loans by the way, I used the policy to wipe out all my student loan debt. And as I paid it all off, the power was, I got the asset was continuing to grow for my retirement. So this gives us some liquidity and again, the cash value grows on a guaranteed basis. So between the contract of the life insurance and its ability to be used for all the other stuff in life, real estate deals, crypto, buying land in Mexico for the next factory that's gonna get built or whatever you wanna build or do with your life, send your kid to college., The cash value in the life insurance is there for all of your liquid needs today. The Annuity is there as a stream of guaranteed protected income for the future. And there's one more piece. And so I'm gonna make your make you wait for the last piece of this income maximization strategy, but I better hush here first. Any feedback or thoughts on the step two with using the bank on yourself type policies?

No. Yeah, I absolutely love that. I've heard about this a lot, the infinite banking strategies, another name for it. Yeah I have I have two permanent life insurance policies, myself, one on me and one of my wife and we've, that's like one of our little safety nets that we always know we can borrow from that if we need to and that's pretty neat. Cause I also do velocity banking with a HELOC on my primary home. So I've been using that to, to invest in more real estate and also pay down debt while I'm like chunking it down. It's very interesting and, It's just, it just goes to show the creativity someone can have when it comes to building up a retirement portfolio or just how they wanna invest in different assets. There's so many different ways and so many different strategies that somebody can utilize with this being one of them. And I know a lot of people that do the infinite banking strategy or banking on yourself. They, it's, you get to double. It's a beautiful thing because you're still getting that the interest from the from the life insurance the cash value of the life insurance that you have, right at the same rate as if you didn't borrow that money. And at the same time, if you borrow that money to buy a cash flowing asset, you now have two ways that you're bringing money in based off of that. So that's a, it's a pretty amazing strategy for sure.

Yeah. And I know a lot of people have recently, not so much this year with all the interest rates going up, but it gets really fun. So all of a sudden you can take, for example let's say that you have a a nice property and you do a cash out refinance and you get 250,000 bucks that you need to do something with. You can choose what you wanna do with it. I have several clients where they will alternate what they purchase. So they'll get that refi every couple of years as long as interest rates remain modest and the cash flow makes sense, you can dump one cash out refi. Maybe it goes into a policy. So now you have your apartment still doing its thing, and you have your policy, your life insurance now, and now you can borrow against the life insurance and buy a second apartment building. All right. So that's one idea then let's say a couple years later, four or five years later, you do another cash out refi on both apartment buildings. And this time you buy an annuity. Now, why would you do. Again, it's cash flow. Cash flow is king. You buy that annuity and it's just there to lock in some of the income and again, double dip, as you said. Lock in your future income someday when you sell those rental properties, you still probably want to get the, what, if you could sell the apartment building, get rid of the trash, the termites, the taxes the headaches, but you got to keep the rental income. What if you could do that? That's what we're talking about here, where every couple of years you do a cash out refi, or you sell your property while these prices are still high, you sell property and you put that money into an annuity. That's one idea for how you could maximize your income. And I'll even say this as another kind of creative idea. In recently I just did one of these where I borrowed from my life insurance to buy an annuity. So why would I do that? It sounds I borrowed from my life insurance to buy an annuity. This is so different than your average financial plan. Don't touch life insurance, don't touch annuities. I just did both and I'm super pumped about it. I pumped money into a policy borrowed against it, bought an annuity. Again, the policy is still growing as if I had not touched the money. So I get that uninterrupted compound growth. The problem, traditional ways to buy things is every time I buy a car or real estate deal, I'm spending money out of my savings account and it's no longer earning interest for me after I make the purchase. But with the policy, I don't have that problem. I have uninterrupted compound growth. So I did, I borrowed from the policy and I bought this annuity. So what did I do? I have this now protected, guaranteed income for my future. And I've got the policy still growing today. As I want to I've paid off the loan to the policy. So it's liquid and accessible and ready for me to go buy another rental property or another annuity, or, send my daughter to college or fix up the kitchen. It's the operating fund for my life, but I'm buying my rental. I'm buying my retirement income in chunks now and it gives me that assurance that I'm doing the most with the dollars I have. We all have only a finite amount of money. And we're talking about big numbers today. We could be talking, take some zeros off or add some zeros on, but the strategies of thinking outside the box is what makes us, not so average. Your show's called your average show, but I think you're not so average in my opinion.

No I appreciate that. And I was just gonna say too, like the stuff you're describing is not so average. And that's why, you have your podcast called the, Not Your Average Financial Podcast. So I absolutely love that when we started talking and I saw, I was reading up on your background and everything and saw about your podcast and I'm like, oh this is like the perfect guy to bring on this show to talk about this stuff. So it's really cool. Mark, so I know you have a hard stop coming up, I have a hard stop coming up, I just wanted to point out that these are some phenomenal, like strategies that people can look at for their future. You don't have to do all of 'em or, but there's some ways that you can look at this and take some information from this interview and move forward in something in life and try to set something for the future. Right? And this isn't something that, you have to wait a very long time for, if you get one of these life insurance policies and you front load it a lot, you can start borrowing from it, like right away. Like you said the client that you helped that, that did exactly that. So that's definitely a great way to look at, especially for the real estate investors out there, that when you get these times where you sell some of your assets or you do cash out refinance, and you get these large chunks of money, instead of just taking that cash and dumping it into another property, why not front load a life insurance policy then borrow from it, then dump it into that property. So you can get that double dip excitement there. So really awesome stuff, mark. I really appreciate that. So I'd like to go into something right now that I call the final round. I'm gonna ask you four questions that, that are hard hitting, but wanna see where you're at with this stuff.

Let's do it.

All right. So you've been doing this for a little while, Mark. My first question is, with everything that you've done over the years, especially, from building up where you were from $120,000 in debt to where you are today, what would you say is the biggest mistake you've ever made?

Paying my debt off with cash. No doubt. And trying to chase down that debt snowball, it was the biggest mistake of my life because it was the most important dollars. The most valuable dollars are the ones that are in your pocket right now. The money that's like in your hands right now is the most valuable you'll ever have again, because that's the money that will have the most opportunity to grow. And I was just throwing it at debt, giving it to some other banker. I was handing that paper bag of money to Sallie Mae every month, just like I did when I was five years old. So the biggest mistake was thinking that I could just spend my way outta debt. I want to not just be debt free. I want to be better than debt free and that's where using the policy to pay off my debt gave me an asset that was growing for me, not just, becoming in debt free.

That's wow. That's fantastic. And that's a really good way to look at it. Definitely appreciate that answer. Okay. Next question is what is something that you've learned that you wish you knew when you first started?

Again the trouble of there's so many men, but there's so many psychological things that so many psychological manners that we all take with us into this world called money. I'll just use one or two. We've talked about opportunity cost. That's the idea where, when you say yes to this ice cream cone, you have to say no to the $32 that three bucks might have grown to over your life. Okay. So that's the first one is opportunity cost. I didn't know about that early on. The second is familiarity bias. I'll just mention two here today. Familiarity bias. We typically are told to get a 401k and we're all just assuming that's what everyone's always done. Mike, do you realize that the 401k is so young? It's not even old enough to retire yet? It got started in 1981. 1981! That's younger than star wars. So find out the truth about money. Don't just look into, what's familiar to you and whole life insurance has been around hundreds of years. Annuities, as I mentioned, have been around 2300 years. Real estate is as old as the pyramids. And one last thing, I guess I'll mention is something called the Lindy effect, which as long as something's been around, it's more likely it's gonna exist for a long period of time. It's why the Bible is gonna outlast this year's New York times best seller. It's why I think the chair will outlast the iPhone. The longer something's been in existence, the longer it's likely gonna be in existence. So it's my bet that real estate, whole life insurance and annuities will beat out the stock market. And we'll be here for thousands more years. Okay. So that's the Lindy Effect and watch out for familiarity bias and watch out for opportunity.

Wow, that's a great answer, mark. Definitely appreciate that. And that's a great point too. When you think about like how long something's been around, how long, especially when you're looking at like financial products. And, talking about how the 401k's only been around since 1981 that's really something to think about. That's yeah, like you said, it's not even old enough to retire.

It's a mind number, right?

Yeah, absolutely. Okay, fantastic. So here's the next question. So do you have any tips or tricks that you would recommend to someone that is just getting started today? I have a feeling, I know what this answer's gonna be, but Mark, please.

Can you give context getting started in?

So just so let's say it's somebody that. Like you, they just finished up school, right? They've got their student loan debt and they're starting their adulthood today. What would you recommend to them?

Get above water financially, make more money than you spend, watch out for Parkinson's law, which says expenses will rise to meet your income. Or as I like to say a luxury, once you enjoy it becomes a necessity. Watch out for that. Step one is just get above water financially. Step two is pack away tons of cash and invest in yourself. You are your greatest asset so the more you can invest in yourself, your knowledge, your insights, your connections with people. And then when you do make some more money, pack it away and something that's contractually guaranteed. Not just hope and pray strategy.

Fantastic. Love that, Mark. Okay. The final question I have for you and so this is gonna be besides your own question. Okay. So besides your own, do you have a favorite business investing or real estate related book or podcast or both?

I'm really a big fan right now of Keith Cunningham's book The Road Less Stupid, great book about how to not pay the dumb tax. And we all have paid dumb tax in our life, but we can get into a lower tax bracket with the dumb tax and this that's my goal.

Fantastic. And I wrote that one down, cause I've not read that and I'm gonna add that to my list. Awesome. Now that was the final round, but I do have one more question for you, Mark. And this is probably the most important question for this entire interview because for the people that have been listening and they're saying, wow, I really what Mark's talking about. I wanna know more about him. Or, some of these different strategies that he's talking about, I'd love to have a one on one with him or something. So where can people find more information about you? Do you have a website, social media, anything you'd like to share with us? And please tell us about your podcast as well.

Oh, sure. Yeah. If you guys like your, if you like Average Joe Finances that Mike talks about here on this show, you'd love Not Your Average Financial Podcast , anywhere you listen to this show. If you wanna reach out to me and you're ready to build some contractual wealth without all the stock market, tomfoolery. If you wanna be able to use the bank on yourself strategy with your real estate, or you wanna lock in some guaranteed income for the rest of your life, let's chat go to kickstartwithmark.com it's probably the best website to go to kickstartwithmark.com.

Fantastic. Hey, we'll make sure we have that down in the show notes to make it easier for everybody. So kickstartwithmark.com. Go check it out. Check out what Mark's doing. Go take a look go listen to his podcast. He's got some great content he's putting out there. I think he's on what episode? 247 right now. So it's...

I'm just trying to keep up with you, man.

I'm not even there. I'm nowhere near that, man. Doing great work and definitely appreciate it. So Mark, I am super, just humbled and excited that I got to have this conversation with you today. Thank you so much for joining us and sharing your story and what you're doing.

Hey Mike, thanks so much. And everybody Mike is blowing it up on the interwebs. He's doing a great job. Give him a five star review. He works hard on this show. So go give him a five star review.

You know what I really appreciate that. Thank you so much. And Aloha from Hawaii.