157. Sprinting in a Wealth Marathon with Brighton Gbarazia

Hey, welcome back to the Average Joe Finances podcast. I'm your host, Mike Cavaggioni, and today's guest is Brighton Gbarazia. So Brighton, super excited to have you on the show. Thanks for joining me.

Thanks, Mike. Thanks for having me on. Excited to be on.

Yeah, absolutely. Hey I know we were talking a little bit off camera, but I want to talk a little bit more about who you are, what you're doing. Give the audience a good understanding. Who is Brighton Gbarazia?

Sure. So I'm Brighton Gbarazia. I'm a financial coach also founder of Wealth Marathon and a licensed a mortgage broker out in Canada. So I'm based out in Vancouver. So that's what I've been doing last couple of years. Prior to that, I worked basically for all the top banks in Canada doing underwriting. So whether it's auto owner writing, mortgage underwriting, Pretty much any kind of underwriting you can think of I've pretty much touched it at the bank world. So I bring all those knowledge together and then I help my clients in terms of financial coaching, probably looking to do real estate. I help out with the financing side of it cause I'm a licensed mortgage broker. But yeah, my next little project here is being focused on building, wealth marathon. So that's what I do most of my time now. And also doing my normal real estate deals that I do on the site as well.

That's awesome. Like what a great background. And I don't think, when we were talking off camera, you mentioned that you were a financial coach as well, so that's awesome cause I'm also a financial coach. So maybe we could talk more Yeah. Share some ideas about that after this, but No, that, that's awesome. Absolutely. And it's cool because like you're a financial coach, but then you're also a, licensed mortgage broker. And I'm a financial coach, but I'm also a licensed real estate agent out here in Hawaii. So it's like we're both on two different sides of the real estate spectrum. So I'm curious though, like when you were, like, when you're coaching your clients and stuff, Do you focus more on the real estate side? cause when I talk to them about, once they get themselves to a good place and they're ready to start doing something with their money, I always say real estate should be a very big consideration for building your wealth depending on what you wanna do is that kind of the same route that you go? or anything else?

Yeah, I think it's the same too for me, Mike. I think what I usually do is it depends how people get in touch with me first. So some people may just get in touch with me on the coaching side, and then naturally they find out I'm also licensed mortgage broker. And then real estate always comes up. And as like real estate is such a big part of everyone's finance because it makes up a huge percentage of people's net worth. So real estate at some point will come up in any kind of financial discussion you're talking about. But yeah, it depends what child, they're first come in contact with me. If I have a client that came to me just from the strip real estate side, we start there and then we see if they want to broaden their financial, picture a little bit more and then we go into the coaching side. So yeah, it depends how they come into me and I cannot stay with that lane, and then we broaden the lane depending if they wanna go further with that. So I let my clients decide, but it's always nice for them to know that I am licensed. Sometimes they forget that I'm licensed because I usually do have my financial coach first, because to me I promote that more often because really I want people to be financially secure. And to me that doesn't mean necessarily mean you have to be in real estate. So I'm really more about, how do you get life. You want that financial independence journey you're on and whether that real estate is a part of that or it's a stock investment, I'm really indifferent to that. So I usually start off there, but at the same time, if we start talking, they find out, oh, you're actually licensed. I'm like, yes, I am licensed too. I can do these deals for you if you need that. And I usually gives them comfort cause then they're dealing with someone they know and trust and then it's just getting the deal done for them around that side.

Yeah that's awesome. Now, so one of the things I wanted to talk to you about specifically so if you come to that empass and they're like, okay, I want to invest in real estate, that's where I wanna put my money to work for me. I know the real estate market in Canada is very similar to the real estate market in the US right? We have a lot of similar programs. So the way that people invest is very close to the same, right? Yeah. So one of the questions I wanted to ask you, when you have somebody coming up to you and they decide, okay, I want to buy my first property, I wanna buy my first home, how do you make that? Like, how do you make that purchase the right way.

Great question, mike. cause you know you probably . We get that question quite often I think. Okay. So you have to understand I'm sub 35, so the demographic that I deal with is a little bit different than if I have a client who's more seasoned. That's completely different conversation. So for my demographic, I think what I really try to, and it sounds weird, but I really try to make them. It's really okay to take this process slow. What I try to do with my clients is just tell them to slow down this process. Because when you're buying a home, and if you've done it for your first time, it's such an emotional rollercoaster because you can be buying a home for all sorts of reasons that you're not emotionally aware of, and then that can go into the finance decision, right? You could be buying a home for me, I said in my book when I was buying my first home, I'm an immigrant from Nigeria. I wanted to be that first family, that person in the family that bought the home. My parents had been renting the whole time in Canada, and I didn't like the way people looked at us when we said we were renting, and that was a huge emotional trigger for me to want to buy that home. So in my case, initially I was using it as a way to show my success and all these other things that had nothing to do with the home really. So when it comes to people with Sub 35, I really try to slow down the process because they're trying to get a home to show themselves that they're successful, like the rest of their peers. And what I try to do is just, let's slow this down. This is an investment. There's lots of, transaction happen. This is a long-term purchase that could have impact fee for 25 plus years, right? So let's take our time with it and let's first understand. What it is that we are buying? Where are the expenses related to us? How does this asset work? And how do you do it properly? And then what I usually do with all my clients is I try to retire them and say, this is just a lifestyle purchase. I'm of the belief that if you buy a principal resident, by that I mean you are gonna live in there with your family. The best way to be successful at that is really to ignore all the noise about your assets gonna go up and blah, blah, blah, blah. Because the mindset to buying an investment property and a principal resident to raise your family are completely different, right? One is about numbers and how do I get the best return? And the other one is really about creating this experience that you're gonna have these memories that you want to build up in that home. And that means sometimes it's not about the investment return that you care about. But it's also about those memories that are just as equally as important as the return. So that's what I try to do with all my clients, is slow down the process and let them know that it's a lifestyle purchase. And what we want to do is figure out what's the right mortgage, what's the right home that can get us? The lifestyle that we love living, because if we can do that, we wouldn't care if the properties are going up and down because we can actually live the lifestyle. We want to live on a dayday basis, and that's really all that matters. So that's what I try to do, is just slow down the process for them, let them know it's a lifestyle purchase, and then we try to understand, educate them about all the expenses to come home ownership, and then usually, my clients appreciate that because they realize they don't have to rush into this. This isn't a thing. I have to go buy home right now. And they take the time to figure out what is a lifestyle and then find the right mortgage at a right home that can fit that lifestyle for them.

Yeah, so Brighton, I absolutely love your answer to that because you know it's, it shows how genuine you are, right? And how caring you are with your clients, that you tell them, Hey, slowdown, let's take a deep breath.

Yeah.

And really take a step back and take a look at what we're getting ourselves into here. Especially if you're a first time home buyer, you've never owned a home before. Maybe your parents have, maybe they haven't, but you don't have that experience. You might know other ho people that own homes, but you've never owned one yourself. So you've never gone through that process. And to say that emotions are involved is an understatement, right? Because yeah, you might have that underlying emotional connection that's happening when you're making this purchase, but there is so much more than that, like you said, you might not even realize cause when you're gonna spend that much money on something, trust me, the emotions are gonna get triggered. You're gonna feel that. Oh yeah. And and you might not realize just how tied this transaction is to your emotions. I think a lot of people don't realize and it took me a long time to realize too, that every purchase I've ever. Whether it was something small, big an investment, anything, there was always some type of emotion tied to that. And anytime I spent my money. And it was about changing that mindset of how I felt about my money, how I treated my money, and just changing my relationship with my money is when I realized, okay, it's okay to let go of certain things. But that took time. Yeah. That wasn't just Overnight thing and I'm ready to go. Oh yeah I've completely detached myself emotionally from all of this, right? It's impossible. I even say that from my primary residence that I live in out here in Hawaii too, right? It's oh yeah I've detached myself emotionally. I could sell this tomorrow and I'd be fine. That's not really the case. My wife and my kids are here, that we built a life here to just pack up and go like that. That's a huge emotional decision, right? Although it's one that I'm trying to convince my wife to make so we can just pack everything up and go buy a sailboat and sail around the world, but, I digress but seriously.

Good luck with that.

That's one of the things. Yeah. But that's one of those things where you don't realize that those little things in the back of your head that might be getting triggered when you start making those decisions, and then you start, talking yourself out of things because you're like, did I do the right thing? Did I make the right decision? Is this the right path for me and my family to follow? . So the fact that you target that when you're working with clients is huge, right? Because it shows how much you care like I said before, right? Yeah. So I know that they're getting a good experience when they come to you, that they feel more comfortable when they make that decision. So as they're going through the process they've slowed down and they're like, okay we've found the property we want we wanna make this happen. . I'm not sure what the, cause I haven't followed it, like what the interest rates and stuff look like in Canada right now, but I know in the US they're rising, right?

Yes.

Yeah, but they're, I mean they're what they were at I think when I bought my first home cause when I bought my first property I think I got like a 6.4% interest rate or something on it.

Wow.

My current property, I my primary residence right now, I have a 2.25, which is beautiful. People right now are like, okay, they're scared because the interest rates right now, if you are working with somebody and that becomes a factor, like they're starting to back off because they're like, I don't know, because the interest rates, like how does that impact somebody that wants to purchase home?

Yeah, and I think Mike, you probably know this, it depends the segment, if you're a first time home, buyer's definitely impacting them way more because obviously, their ability, their capacity is reduced significantly. Like in Canada, even though rates are rising and prices have slowed down, Average home price is still far exceeding most people's first time home buyers income level, right? So even if rates are high and yes, people are not like crazy bidding on houses and all that, like during covid time it's still really expensive to get a home or to get into a home to start off with it. And honest truth is, For most young buyers, I'm no, just so you know, most they're having to get help from family and friends. That's just the reality of it, because to save up the amount of money that you need for the minimum down payment, 5% of a million dollars is a lot of money to save up, particularly when you're just maybe starting your career. Even if you're just eating noodles, it's still a lot of money to save up. So typically what I find is friends and families have to get involved, and that's just the reality of it. And I try to coach them and say, some people really, they really want to try to do on their own. And I say, you know what? It's okay if you need to get friends and family involved in this transaction because the reality is maybe it's just not working out. So that's one way to do it. The other way, people are being creative. Maybe I would say younger people are being smarter, they pay more attention to cash flow. So maybe they're due to have a property, it's just not a principal. It's a rental property and they rent, I have a friend who lives in Vancouver, but they own the property in another part of Vancouver, which is low mainland. And actually because they bought early on that property now is generating enough cash for the office of their rental cost in Vancouver because they would like to live in Vancouver, and that's the life that they wanna live. , and that's ways that I think younger people are doing it. So you have to be a little more creative. You have to look at how the landscape is and then be creative in terms of thinking about what is it that I'm trying to achieve long term, and then find different ways to go about it. But if you're just laser focused on just the way that maybe your parents did it, , but the situation environment today is completely different from where your parents are going. You're gonna find it very frustrating with any kind of realtor or mortgage broker because you're never gonna be able to get in. So you have to be creative to get to the same destination that you're trying to get to. It doesn't mean that you can't achieve that, but it does mean it makes like a different vehicle to get to that spot. And that's what I like to do with people who were at that point where they're trying to get in, but they're like, oh, you can't and Mike, you know this, the other thing too, that it's important for clients in this market, I try to tell them is the best time to really buy a property is when these prices are going high, because people who are still selling at these points, they want to get out. Either they have some kind of motivation. That's what you always wanna find, right? You want to find that seller that has a motivated reason to get rid of that property because it means you're gonna be able to negotiate with them, right? So in the rising interest rate environment, you have individuals who, they're selling late now because they saw all their friends and families sell earlier on. They're still stuck to that price point, but then they have to re. And what will be left eventually with people who are actually have a need to leave that property. So it can be a great time to buy now if you can get into it, because you're probably gonna be buying from people who have an extra motivation to get rid of that property, as opposed to when rates are really low, everyone's selling and buying, now you're committing people like, oh, just send on silent. Everyone can afford it. Everyone can qualify. No problem. So it's a great time. I'm working with a client right now and that's what we're doing. I'm just I told them. Know, just relax. We'll take our time. Maybe Christmas time will come and we'll see some really people who are really desperate, they need to get off their property and that might be a good time for you to go acquire property because has their home off for sale in December. They got to leave, right? No one wants to sell in December, right? . So it's one of those things, finding different ways to get to the same solution and just being patient with it, right?

Yeah, Brighton. That's a great point. And it makes me think about, some of the conversations I've had with my clients as a real estate agent out here as well is, Yes the home prices are at a point where they've peaked, right? And now with the rise in interest rates, they've, we're starting to see like smaller price drops. Nothing crazy out here, but they're either staying flat or there's minor price drops, right? And with the higher interest rates, it does make it a little more difficult, right? Because you cannot purchase as much home as you could a year ago when the interest rates were much lower. But what I'm telling the clients that I work with is Hey, like right now, Your competition is gone. Like where, a couple months ago you'd be bidding on this house and crossing your fingers and hoping that you put the right amount on there over asking price to get it. Where now you can probably go in and offer asking price or maybe even a little under asking price and get this property that you want. And then guess what? When interest rates, resolve and they start going back down. Yeah, go refinance it six months to a year from now.

Exactly.

And lower your mortgage payment. But guess what? You won because you got that property that you wanted and you didn't have to compete for it. So right now it's exactly, it's a good time to be a buyer. It is a really good time because you have that opportunity now. You have a little more leverage than you did before. Previously when it was just a seller's market. it was like throwing a rock and hoping that it hits something and you're like please.

Exactly.

I had a client that, we put in nine offers and when they were going to put in their 10th one, they said, you know what, we just, we can't do this anymore. It's too emotionally draining. And I'm talking about they were offering 50, 60, 70,000 over asking and still not getting it. Stuff like that is, is painful. But now is that time, you don't have to worry necessarily worry about that. And you can focus on finding that property that you really want. The one that hits the market and you're like, okay, this is it. And you don't really have that competition anymore. I think that's huge. I wanna circle back to something else that you mentioned about your friends in Vancouver. And how they bought that one property outside of Vancouver.

Yeah.

They got it at a price point where it now it, cash flows and offsets their rent for them to live in Vancouver. And it makes me think about a conversation I had with someone a couple months ago, and actually the podcast episode just aired not too long ago, but we were talking about how, he in particular, and I've heard other people say this too own where you rent, right? So rent out the properties that you own, but then live.

Yeah.

And then rent where you live. So what are your thoughts on that? If you were to just buy, like investment properties in different areas? And then you wanna rent in a specific location because that's where you want to be. And it would be cheaper to rent there than buy I, an example being Vancouver, I'm pretty sure it's very expensive to purchase real estate there. But renting would is more is doable, right? So what are your thoughts on that? What do you think about your friends that did that? Is that something that you would recommend to other people? Hey, use this to offset and live where you wanna live and enjoy.

Yeah. I think, yeah, that's a conversation that happens more because I think, again, demographic, depending where you are at, right? Like in Vancouver it's stupidly expensive. And I said a million, that's not the price month of Vancouver, right? That's like a box you're getting for a million. So if you're talking like a detached home, like most of us, like sub 30, no, that's way out in the picture. You're not. So I think the whole idea for me in that concept, whatever makes sense, it depends on the client. You have to first agree with me on the basis of why I would make that recommendation, which is I don't view a principal resident as an investment property. Like I don't view that as an asset because I'm using cash flow as my definition of it, right? Because if I have a cash flow property, someone's paying me cash for the offset the cost of that property. And then if I'm lucky and I've paid all the expense and I have a little bit of cash for leftover, which then I can do whatever I want with it. But in a principal resident, it's the opposite, right? You're not the one receiving the cash flow. The lender receives the cash flow, which is why I said earlier, you need to think of it as a lifestyle purchase. So if it's a lifestyle you're after, then it makes sense for you to think about, okay, where do I wanna live? If you can find someone saying Vancouver, where you're like, okay. I don't really want to buy a principal resident because I'm after a particular lifestyle and the area I wanna live doesn't make sense for me to buy a principal resident because then I'm really not buying investment property, but I can buy an investment property, which then I can participate in the growth of real estate over time. And over time I can actually have that cashflow to help me lift the lifestyle, the place that I want to live in. And that's very, but you have to be very disciplined with that, right? It's not a thing that you just pick up and say, I'm gonna do overnight. And that's why most of the clients that I would bring up that to, they already think in that manner. I just help educate and say, okay your thought process makes sense. I wouldn't be necessarily suggesting that just to anyone, because that strategy really requires someone to be disciplined. That friend I mention has owned that property for 10. This is not just a one thing, oh, 10 years. And that person's individually strong in the lifestyle they wanna live, right? Not all clients like that. They may say it's a good thing, it makes sense. We talk about emotional. They may agree with me, they may be nodding with me, but when it comes time to implementing the strategy, they're waiver on it, right? Maybe now they move back into the property, right? Because they're going why would I be paying rent to someone else? And all these different things, right? And. The reason why that makes sense and why that conversations happened more often, particularly under 35 years, is because at this price point, it starts to become even more obvious that it is not a cashflow investment. Like they're giving up so much of their income daily to put a roof over their head, and they start to question, what is the quality of that lifestyle I'm having? What is the point of giving so much of my income on a day-to-day basis to someone else? when I'm gonna be doing this for the next 25 years, like I don't wanna live that lifestyle. And when they realize that, I think that's where the renting thing starts to play a bigger role. And because in Vancouver, I don't know how it is in Hawaii, but in Vancouver, just the fundamentals of supply for us, like there's just not enough homes, which means these prices are gonna stay elevated. For as long as you can. And which means that if you've gone in early, like I was fortunate to get in early, you're gonna benefit for the short to long term. But if you're trying to start the game right now, it's really difficult. And people ask me all the times, would I do buy my own home again? I said, no, I wouldn't because it's way too much cash flow access, right? The home I'm in right now, I wouldn't buy at the price when it's currently for the market. What I would do though is what I said earlier, which is I probably buy it, but it'd probably be an investment property, which means the whole house would be rented. My family and I would probably live in somewhere else, and then my hope would be in 10 years, we've paid it down enough that it makes sense for my lifestyle to move into that home or we just keep it going forever. And then that could be our retirement plan down the road. So again, it's about thinking differently based on the environment you're in and not just doing the same thing that you are accustomed to when the environment and situation around here is completely changed, but you're still doing the same habits and wondering like, why can't I buy a home? Because it's completely out to your reach. You have to think about. differently, right? So that's what I mean by that. But I agree with you, Mike. I think those conversations I'm hearing are way more than I used to. But I think it's helping in my market because the prices are so high. But if you take another market like Calgary, which is just a neighboring province, to me, more people still own there because home ownership is still way affordable over there. So it depends what market you're in. But if you're in a high price market, I think that strategy makes more sense. But if you're in Alberta, which is next door to British Columbia, It's still really affordable to buy a home. You can buy a nice reasonable home for like 300,000 Alberta. So like it's still the rent versus ownership. Ownership makes more sense in that market than say, Vancouver, where it's completely skewed the other way. Where it's just way too expensive, too much cash flow outflow going out every month, that it doesn't make sense necessarily to own, even if there may be a long-term benefit, just day-to-day people can't sustain that lifestyle for like 10, 15, 25 years cause it sucks so much income out of their life.

Yeah, Brighton you hit a lot of key things there. And one of the things I want to talk about is, the inventory of the market right now. When you were describing how the prices there are staying steady because there is a low inventory right of properties that are available. And it's the same thing out here in Hawaii, and that's actually always been a problem in Hawaii, is the actual inventory. It's always been very tough. And then of course with the pandemic it made it even crazier. And the thing is like that and that's I think that's what people don't realize. They're like why aren't the prices like dropping more? cause you'll see like a property that's listed, at 1,000,100 thousand and then they'll drop it 50,000. Oh, how come they haven't dropped it more? Yeah. 50 thousand's a lot for for the reason why they dropped it. The values of these properties are not going down because there's no other properties really being built. We have some that are being built, but not much. There's only so much land that we have out here before, before you can't build anything any anymore anyway. But the same thing though with some of the shortages and the supply chain and things like that, it's caused a lot of these home developers to not be able to finish projects on time. Or increased costs that they have to deal with. So now the properties that they're building that you thought you were getting at a certain price point now have to go up in price. So there's a lot of factors that come into that. But the inventory piece I think is huge so I'm glad that you mentioned that. And it's a thing that it needs to be in the back of people's heads when they start looking to go purchase a property. Just understanding how the market itself works, and that's why it's important that you have a really good team, right? You have a really good real estate agent that knows the market you're working in. You have a really good, lender that understands, what your capabilities are right to make sure that you're pre-approved for the loan that you need to have and to make sure you're not gonna over-leverage yourself. Because that's one of those things you don't wanna see people doing is where they take out a loan too big and they think, okay, I got this. I'm pre-approved and I'm gonna go buy this home. And then they buy the home and they're like, cool, I could afford this mortgage. And they're like, oh wait, property taxes. Oh, wait in, homeowner's insurance? Yeah. Oh. We have an assessment that came up for whatever, or, oh, wait here's a homeowner's association fee. I got a pay that I didn't know about. So it's very important to have all this information upfront before you make that huge emotional decision. Yeah that's huge, man. So actually speaking of that, because I just outlined a couple of mistakes, but what are some common mistakes that you've seen people make when buying a home?

Yeah, oh man. Maybe we'll have to do another podcast. Your mic just cover this. We can share with each other and never seen. I think the biggest, the overarching thing is just we're not really clear about what we want initially. Like when you started this journey, we're just not clear. Even I, it took me a while and I said in my book, the reason I was successful. At my initial first purchase was because I worked at the bank, so I would meet these clients that own property or investment property, and I would literally just work my conversation to buying a home into it. And they kept giving me advice. And what I found was people who did the home successfully, they kept stressing the mortgage debt. Like they just kept stressing it over and over to me. The investors, my clients that were investor, they kept stressing cash flow, right? Just focus on cash flow. So when I went my first purchase, like I said, I was an emotional wreck. I didn't know that I was using my home as a way to show that I was successful. Like I really didn't think of that. I was just like, oh, I've got a good career. The next step is to buy a home. That's what I was thinking myself. But realistically, what I was doing is I was using my home as this guys for success. I wanted people to just see the home and then automatically attached that I'm successful because I have this home. So it took me a while to know that I think. like you and I will know. The typical thing for first time home buyers, like they don't like the things you point at, they don't know there's other expense, like property tax, like insurance, like water utility. They will typically come from a place, maybe they're paying rent, so they will go rent to mortgage and they think that's it. And I go, no. Yeah, rent to mortgage is not really an apples to apples comparison. What you have to do is if you're paying a certain amount of rent, you have to figure out what the total home ownership cost is to own a home, and then compare that. So the rent payment would be comparing to the mortgage, the property taxes, the insurance the person has to pay, and all the other expense that are required for that individual to pay, to continue to live in that home. And then you factor that into your actual rent payment, cause that'll give you a proper assessment on it. So I think the biggest thing is, like you said, most of us are emotionally driven by something else. We think we just wanna buy the home. But really there's something else happening. We're not willing to be honest about that until someone points it out to us. Oh, we take a deep dive into ourselves. And then the second thing there's comment I wanna tell you is just first time home buyers, they just don't know all the expenses associated with they're really not aware of house breakdown. And that's your cost. The bank doesn't come to fix that. Like a new gutter needs to be replaced. That's your cost. No one is coming to fix that. Or the maintenance are just involved in keeping a home going. People are not really aware of that. Or if they are, they really don't appreciate how cost that can be, especially if you get into a home where you just got in. You don't have a lot of free cash flow. So you get into the home, you're excited, and then two months later, something's wrong with the gutter and that's $1,200 you have to pay. And you're like, I don't have $1,200. So guess where it goes? Credit card. And then the cycle kind of starts. And then I think the final thing for my existing homeowners that have home. The biggest thing they do is they constantly refinance their home. And I am not a fan of constant refinance, particularly if it's a principle resident. I view refinancing, like when you own a business and you have retained earnings at the end. Like you shouldn't just get your retain earnings to go spend on vacation, whatever that retainer is in there to try to help the business be more successful, right? So when you take the money out to the company, you should be on things that can actually improve the business. And to me, I use that analogy of my clients and say, your equity you build up is like your retained earning. Why would you take that back out to go give back to the lender to charge her a higher interest? You just worked all this time paying down the mortgage to bring through a certain level and now you're gonna give it back to lend to make more money off you. And the worst part with my existing clients is most of that refinancing is done for credit card consolidation. So now they're taking good debt that they had and they're bringing in to pay off bad debt. And they continue to do that because they have a cashflow deficit, right? And that's something that I really try to tap with. You shouldn't just refinance. And I think Mike, we have all these new products, right? Equity line credits. So easy to tap into that equity nowadays that I try to tell my clients, if you have a home and you've done a really good job, when you're paying that down, that is your payday. That is your retained earning. If you're gonna take that equity. Do it on things that is gonna produce more cash for you. Try not to just do it to go get a new vehicle. Like I know you need a new vehicle, but that's a depreciating asset, and now you've just taken good debt and made even worse debt, right? That you've paid down on. So those are big things I know went in circle, but if you're starting out, I would say, most people, they're buying a home for other reasons other than just buying a home. But they tell themselves they keep buying a home for that. No, there's an emotional thing why you're buying a home, so figure that out. And then the second thing is most part, just not aware with the full cost of a home. They don't appreciate that, hey, this home takes a lot of energy and effort to maintain. And then for once they get the home and they've been working on it for five, 10 years, they start to frequently refinance every time their property goes up. And they don't understand that they're taking their retained earnings and giving it right back to the bank. To charge a more interest on it. So those the three things I would say that most people misstep in terms of the home ownership.

Yeah. That's a lot to unpack there. , and, including what I had mentioned earlier, you added so much onto that too. Like, when you think about the different expenses that can come up with home ownership, you have a plumbing issue, you have an electrical issue something happens and you have to replace your roof. That stuff's not cheap. And it's not something that is really on the top of your mind when you're signing that document to own that home. You're like, , great. I own this property. This is how much it's gonna cost me every month, and this and that, or whatever. But then if you add up all those other expenses that are gonna pop up and add that to your monthly payment. Now, what do you think about it? So those are things that you really need to consider. And then, yeah, for the people going out and refine, I guess maybe doing like a cash out refinance and things like that. Not realizing how much more you're adding or paying back to the bank by doing that. I do like other products, like you had mentioned lines of credit, right? So home equity line of credit. I actually took one out to my principal residents to buy more real estate. And I bought more cash flowing assets, and I take the cash flow from those assets and I pay it back into the heloc. So I think.

Absolutely.

Stuff like that is great. So knowing what those products are and how to properly utilize them, To purchase more cash flowing assets can really help you in the long run, start really accelerating and building your wealth. So I think that's I think that's huge. Brighton absolutely awesome, man. I wanna transition this now into something that I call the final round where I'm gonna ask you the same four questions that I ask everybody that comes on this show. So if you're ready to go we'll get that party started.

Let's get into it.

All right, let's do it. All right, Brighton. The first question I'm gonna ask you and these are all like hard-hitting questions and they all tie into each other, but what's the biggest mistake you've ever made with your finances?

Yeah, biggest mistake is when I got my first real job running for a cellphone company. I decided to buy a brand new vehicle as opposed to listen to my dad to buy, keep my used vehicle, and just keep maintaining it. Again, I shall impress my dad. So I bought the new vehicle $350 a month, and it was a balloon payment, which meant that at the end of five years, the interest shocked 3% to 11%. So yeah, I have that vehicle still to remind me what poor financial decisions look like. So that would be my biggest mistake that I still drive that vehicle. I'm not kidding. I still have it as a Kia Forte 2010. And that's where I drive to remind myself that we all make mistakes. But that's my biggest financial mistake early on.

Wow. appreciate that transparency. And I just got to ask, cause you said, your dad told you to keep your used car and then you bought the new car to impress your dad. So what did he say when you when you did that? What do you do with knucklehead?

Yeah, he was just I did that he was fighting with me the whole day, like saying, why are you buying this vehicle? You don't need it. But like that, what that was very good is like when he said his piece, he lets you experience the failure cause he always thought you learn more. And he was right. He went with me to a dealership and he said, it's a nice car. He was very supportive, but he made his point like, you don't need to do this. This is a wasteful purchase that you're doing right now. But I was young, just I thought, I deserved a new car. I didn't want to be driving an old beat up car anymore.

No that's fair.

I got a new car.

But that's awesome.

I learned now what he meant as just, Hey, I get it now. It's a depreciation asset. I'm spending this money. I should put that into savings. And don't get me started, Mike, on the compounding effect on that payment that I'm thinking about every day. I don't think about it really. I don't think about it.

All right. I'm not gonna try to give you any flashbacks or bring that up anymore, alright. Hey Brighton, so what is something that you've learned that you wish you knew when you first started?

Focus on cashflow generation as opposed to acquiring assets. That I wish someone had really hammered that into my head because what I'm doing now in my life and everything I look to purchase, you mentioned investment, profit is just cash flow. The more cashflow you can get right and keep your expenses low, the better quality of life you can have. But early on I was focused on asset accumulate. I wanted assets, I didn't care if they had cash flow or not. I just want people to be like, oh, you got a new car? Oh, you got a house. But I wasn't paying attention to cash flow, so now I understand how significant the cash flow is, and I wish I had learned that early on because some of the investment decisions I would've done would've been different. I would've been where I am probably sooner if I understood the cashflow principle.

That is a fantastic answer. And again, thank you again for that transparency because cash flow, as I say, cash is king, right? Cash flow is king.

Yeah.

If you can build up your cash flow to the point where, You have enough where it covers your expenses. You have now become financially independent. And I think that's huge. As a matter of fact this past weekend, I played the cash flow game for kids with my kids, and they absolutely loved it. And they were asking so many questions about Hey, why is it that now I have to make this, these extra payments because I got this, credit card payment, that now I have this new monthly debt that I have to pay. And my youngest she was asking so many questions about this stuff and I was like, oh, this is really good. It's getting, the juices flowing and getting them thinking about it. That's awesome. And then awesome, yeah. realized, like there was some of the stuff that they bought, they would buy securities and they're like, oh, you know it, that's only getting me a small amount per month. But then when I bought this business or when I bought this piece of real estate, it was making me more cash flow than the investment, the securities that I bought. So she's okay. She's maybe that's what I wanna focus on, if I land on a asset card and it comes up with another securities, if it's not enough money, I don't want it, I'm gonna push that business or I'm gonna push for that real estate. And I was like, oh, okay. That's good. So I was like, yeah this game's that's out pretty good, man. , okay. Cool. That's awesome. I don't want to take this over, so I'm gonna go into the next question.

And it's all good man.

Do you have any tips or tricks that you would recommend to someone that is just getting started out today?

Ooh, that's a tough one. But I think it goes back to my early answer, which is just focus on the lifestyle, really try to create a sustainable lifestyle. What I mean is like you can have a lifestyle that's just like you can live on consistently as minimal as possible. And then what I do is make sure you have cherries on tops here and there, but you don't wanna cherish your whole life. You need a sustainable lifestyle, but still find ways. If you like to travel, make sure maybe your budget's a little more skewed more than other people, tourists, traveling, but make sure everything else is consistent. So for me now, it's just, try to create a sustainable lifestyle, because if you can do that, you can keep increasing your cash flow, but your expenses won't necessarily increase. And that's the trick in this finance game is how do I increase my income? but keep my expenses at bare minimum, right? That still functions for my day-to-day life, my family's life. So I think that's the tip I would say is, if you can do that, you're probably gonna be successful long term.

All right. I love that. I love that. All right. And the final question Brighton, do you have, and besides your own do you have a favorite business investing or real estate related book or podcast or both?

Average Joe is pretty good too. Yeah, no, I would say about that one a book. I'm a huge fan of Ray Dalio. So Principal is one I read recently. It's a really good book. I just like how we like a life and wealth together. I think if you try to disconnect those two things. Even if you have financial success, you're gonna be miserable. So I like how he ma matches wealth and life in general. So that's a good one. Won of the earliest book. That really I was like that's that's exactly, it was Tony Robbins, the first book he wrote, the big giant, like 800 page one. Off the top of my head, I can, I think it's mastered the game or something like that. It's call. But that book was really great. I'm gonna get one more investment book that I like, which is the original Jack Bolos book on that passive investing. Can't remember the exact title, but it's the little small book. I think it's called Little Book on Investing. But that was just like, to me when I read that, it was just, I was at the bank and I remember we always had these debate between active versus versus passive. And when I read his book, I just was like. Yeah, I knew it didn't make sense for this to be happening. So that book's always in my shelf and it's one of my favorite books to give first time investors to just say, Hey, at the end of the day, cost matters a great deal. All things being equal, focus on the cost. For podcasts, other than that Freakonomics is one I enjoy thoroughly. I think he does a really good job just exploring all kinds of finance and stuff like that. So those would be my tips. Things that I'm interested in. I read and listen too.

All right. Awesome. I appreciate that. I appreciate your recommendations there. And I wrote down a couple of them there, especially principals. got to add that to my list. But yeah that's awesome man. And I appreciate just everything about this episode, the transparency and just how open you were with everything. But I do have one more question for you cause that's it for the final round. But the last question here is the most important question of all because the people that have been listening to this episode are like, I really like what Brighton's talking about. I really want to know more about him and what he's doing. And I know we, we didn't really talk about it during the interview, but I know you have a website that you can share with us. So if you could please share with us what is your website? Do you have any social medias that anybody can follow you on and hear more information about you or from you.

Yeah, sure. So the best way to get in contact would be go to a website, which is www.wealthmarathon.com. That's the best place to start, cause there you got all the details from there. I'm active on LinkedIn, we got lots of exciting stuff happening next year with the company. So go on the website. You can always sign up a newsletter, keep updated on all the information that's gonna be coming through. If you want to read a little bit more about me or some of my concepts, you can always pick up my book. Master Your Mortgage. It's on Amazon what the banks wouldn't tell you about buying the right home. So you can read a little bit of that to find a little bit more about me. But again, go to the website cause that's where you got all the details.

All right. Awesome. Hey, man I really appreciate that. I'll make it simple for everybody and we will have those links in the show notes so you can copy and paste or click away.

Awesome.

Just don't do it while you're driving. Brighton, this has been Yes, absolutely fantastic, man. This was a really good interview and I really appreciate your energy. I appreciate your transparency, like I said before, and just all the information that you shared with us. Man, this was really good stuff.

Hey man, like I'm appreciated. You had me on Mike. It was awesome. And again, hopefully that was valuable to all the audience that's listening here.

Yeah, thanks so much. And speaking of my listeners I want to thank you all so much for joining me in our special guest Brighton Gbarazia, on the average Joe Finances Podcast. Make sure you go leave us a five star review and tell us what you liked about today's episode with Brighton. Aloha from Hawaiian. Have a great rest of your day.