Speaker 1: Welcome the Money in Wealth with John Hobryant, a production
Speaker 1: of the Black Effect Podcast Network and iHeartRadio. Yo Yo Yo.
Speaker 1: This is John ho Bryant, and this is money and wealth.
Speaker 1: We're talking about a topic that so many people are,
Speaker 1: of course interested in. So let's get it out the way.
Speaker 1: How to become a millionaire? Now? Only in the dictionary
Speaker 1: let me just start here for anybody who thinks that
Speaker 1: this is like putting something in a toaster. Only in
Speaker 1: the dictionary does the word success come before the word work.
Speaker 1: Because it's alphabetical, so nothing good comes easy. And whenever
Speaker 1: you make emotional decision, it's going to be a bad one,
Speaker 1: and we're going to get into that with this trending
Speaker 1: topic around money. But I am I'm making this promise
Speaker 1: to you in this hour, Within this hour, I am
Speaker 1: going to break down for you and I want you
Speaker 1: to go get my book. Financial Literacy for All, is
Speaker 1: number one in business finance in the country on Amazon.
Speaker 1: Financial Literacy for All as part of the Operation Hope
Speaker 1: and Financial Literacy for All movement, and it's been out
Speaker 1: for three months and it appears a lot of people
Speaker 1: of color. I'm very proud everybody's buying it, but a
Speaker 1: lot of people of color in particular are buying it
Speaker 1: because it demystifies money. And I want you to see
Speaker 1: it marked up. I want you to see underline. I
Speaker 1: want you to send me notes with dog ears. I
Speaker 1: want you to talk about this at the dinner table. Okay,
Speaker 1: But I'm going to deal with something I don't specific
Speaker 1: explicitly deal with directly in the books. I'm trying to
Speaker 1: give you the foundation and the guidepost for just managing
Speaker 1: your life. Right. So I'm going to break down if
Speaker 1: you want. If your goal is to become a millionaire,
Speaker 1: I'm going to break down in this hour. Get all
Speaker 1: your friends together, share this with others. I'm going to
Speaker 1: make this simple of how you become a millionaire and
Speaker 1: is little as five years. You can also do it
Speaker 1: in forty five years and take very little risk on
Speaker 1: your way to do it. But before we do that,
Speaker 1: I'm gonna share a disturbing trending topic and it is
Speaker 1: his brother. This I'm gonna call it brother because I
Speaker 1: don't claim this dude. This is young black man who
Speaker 1: gets entitled about his girlfriend's not even his wife, his
Speaker 1: girlfriend's money. And I'm always advocating buying a home. I
Speaker 1: say this is the way, a way to build generational wealth.
Speaker 1: This is the wrong way to do it. I'm gonna
Speaker 1: let you listen to this because I want you to
Speaker 1: hear the emotions and how frustrated this young lady is,
Speaker 1: and she has to rewrite my opinion to be frustrated.
Speaker 1: You want me to understand a lot of what you're hearing.
Speaker 1: I'm gonna try to translate it for you, but I
Speaker 1: think you'll get the message from the emotionalism here, and
Speaker 1: then I will further break it down after it finishes.
Speaker 1: We bought the house tripping. So he is walking her
Speaker 1: in this house, and he says that she's tripping. She's upset.
Speaker 1: Why would you do this with our money? She says,
Speaker 1: getting it's fine, man, So the boyfriend asked the guy
Speaker 1: to explain it to her. When he's been explained it,
Speaker 1: he tells the dude he's not in part of this conversation.
Speaker 1: Seventy percent her money. By the way, we had a relationship.
Speaker 1: I told you get out to change just my Josney right,
Speaker 1: just we bought the house. This is alarming, is distressing,
Speaker 1: it's hurtful. Cover the furnace up with a curtain. So
Speaker 1: she says, I need my money back to the realtor.
Speaker 1: The realtor begins to explain that you're under contract, and
Speaker 1: this is I guess the way it's structured. They can't
Speaker 1: get the money back. The deal is about to close,
Speaker 1: and I don't know how they did that, because either
Speaker 1: he forged her signature of the boyfriend or he'd put
Speaker 1: it in his own name, which is worse because seventy
Speaker 1: five percent of the money is her money. But right
Speaker 1: when she says I need to get my money back,
Speaker 1: the boyfriend tells the girl girlfriend, not all the dudes
Speaker 1: not in this conversation, leave him out of this. But
Speaker 1: then when he wants to calm the girlfriend down, as
Speaker 1: if she's some toy, again, it's seventy five percent of
Speaker 1: her money here be clear, twenty five percent of his money. Maximum.
Speaker 1: When he wants to calm her down from her emotionalism
Speaker 1: over a decision that he made about the single most
Speaker 1: important decision on investments that you can make as a family,
Speaker 1: which is where you're going to live your own home,
Speaker 1: he then invites the same guy he just seldom said
Speaker 1: to be quiet. He's not part of this. He doesn't
Speaker 1: invites that guy to shut his girlfriend down. It's toying
Speaker 1: with her. She's clearly about to go left. And while
Speaker 1: I don't encourage emotionalism and I don't encourage anger, I
Speaker 1: do understand what she's going through. She trusts at him.
Speaker 1: She says, we're not even married yet. Yes, I trusted
Speaker 1: you to make this decision, but you should have checked
Speaker 1: with me before you made a final decision. That didn't
Speaker 1: mean to just go out and buy whatever you like.
Speaker 1: I don't even like this how, she says. Clearly, she's
Speaker 1: you know, a man may make the house a woman
Speaker 1: turns into a home. Anybody common sense knows that. So
Speaker 1: it's arrogant, it's narcissistic, it's it's it's presumption, it's entitlement.
Speaker 1: It's it's disgusting what this dude did. And hopefully they're
Speaker 1: able to resell this, this house and get the money out.
Speaker 1: This relationship, I can tell you right now, is not
Speaker 1: gonna last my opinion. Now, unless they just love drama
Speaker 1: and this is just part of what they go through
Speaker 1: and for some reason they're just hooked on pain, then
Speaker 1: I don't know. Maybe it will last, but in anything
Speaker 1: that I call common sense, don't hunt. This is not
Speaker 1: going to sustain itself. And I feel sorry for her,
Speaker 1: and brother man needs to learn some lessons about human decency, respect,
Speaker 1: decision making in life. What do you think? What's your opinion?
Speaker 1: Did he have a right to do this? It was
Speaker 1: twenty five percent of his money seventy five percent of
Speaker 1: her money. Did he have a right to do this
Speaker 1: when she said, you're basically sure, baby, go find us
Speaker 1: a house or should he have checked with her before
Speaker 1: he made a decision for her? Okay, this is John
Speaker 1: O'Brien and this is money and wealth talking today about
Speaker 1: becoming a millionaire. Now you've heard me say over and
Speaker 1: over again, real estate is the biggest business in the world.
Speaker 1: It's the biggest business in the entire world, biggest industry.
Speaker 1: Be very specific, in the entire world. Anybody who's a
Speaker 1: millionaire was a man dollar net worth or more. The
Speaker 1: likelihood is ninety percent plus that if they're a sustainable millionaire,
Speaker 1: meaning somebody who's not just as a contract earning of
Speaker 1: million dollars an income. By the way, income is different
Speaker 1: from net worth. If they have a net worth of
Speaker 1: a million dollars or more, and it is sustainable, meaning
Speaker 1: it's not here today, gone tomorrow. There's a ninety percent
Speaker 1: chance there's some real estate in that portfolio. Every millionaire
Speaker 1: just knows that this is, you know, a basic part
Speaker 1: of your building block. So the easiest way you build
Speaker 1: wealth in America is home ownership. But forty one to
Speaker 1: forty four percent of African Americans, as an example, own
Speaker 1: a home compared to seventy five percent of our mainstream
Speaker 1: counterparts who own a home. The tax system in America,
Speaker 1: And no, this is not jeez, this is John's strategy.
Speaker 1: How do I become a millionaire? No, I'm just giving.
Speaker 1: I'm laying the foundation here. I'm I actually walk you
Speaker 1: through how you can do this. I think with minimal
Speaker 1: risk and maximum upside, both a short term strategy and
Speaker 1: a long term strategy. But I want to lay the
Speaker 1: frown foundation in the building blocks because we all start
Speaker 1: in our knowledge of financial literacy, which I believe is
Speaker 1: the civil rights issue of this generation. And why I
Speaker 1: book wrote the book Financial Literacy for All, and why
Speaker 1: I found it the largest financial coaching organization financial literacy
Speaker 1: coaching organization in America, Operation Hope, And why I helped
Speaker 1: to create federal note that helped it we created federal policy. Sorry,
Speaker 1: we didn't create it. The president, President George W. Bush
Speaker 1: and President Barack Obama executed federal policy at the federal
Speaker 1: levels for the first time in this country on financial
Speaker 1: literacy as a direct result of our recommendation when I
Speaker 1: was a presidential advisor. So I know lot about this
Speaker 1: topic of financial literacy, and I know that some of
Speaker 1: us is what we don't know, that we don't know
Speaker 1: what we think we know. So I try to lay
Speaker 1: out the basics. Why do I say home ownership is
Speaker 1: the easiest way to build wealth in America? Well, Number one,
Speaker 1: the entire tax system is designed to encourage home ownership
Speaker 1: and even a mortgage. So if you look at the
Speaker 1: tax policy, if you rent an apartment, and as I've
Speaker 1: said before, you could rent in places that you can't afford,
Speaker 1: around people who don't want you with money, you don't
Speaker 1: have to impress people you don't know and to have
Speaker 1: conversations in the hall that don't matter. And you don't
Speaker 1: own a thing, or you can buy something that you own.
Speaker 1: And if you rent, by the way, you're opening up
Speaker 1: that window and you're throwing money out that window, and
Speaker 1: you have no claim to it. I have said before
Speaker 1: on Roland Martin Show, and I believe I said it
Speaker 1: on Charlemagne's program that I created from twenty seventeen to
Speaker 1: twenty twenty one the largest minority owner of single family
Speaker 1: rental homes in America. I sold the company Christmas Eve,
Speaker 1: twenty twenty one. I'm still a passive shareholder, but I
Speaker 1: don't have any material involving any decision making anymore. But
Speaker 1: we built a portfolio of seven hundred homes, and we
Speaker 1: gave them a lot of incentives for going from rent
Speaker 1: to own and paying rent on time, and using minority
Speaker 1: vendors and all that stuff, raising their credit score, all
Speaker 1: these programs. But I encourage people not to rent for
Speaker 1: me for life, like you know rent and whenever you
Speaker 1: can move up to home ownership, there are no incentives
Speaker 1: for renting. If you have a mortgage, you can write
Speaker 1: twenty about any paying mortgage once a year. I would
Speaker 1: encourage you, by the way, to pay a mortgage every
Speaker 1: two weeks. Doesn't cost you anymore. I'll get in that
Speaker 1: minute in a minute. But if you pay your mortgage
Speaker 1: once a month, like most people do in this country,
Speaker 1: two Thursday, mortgage is going to be mortgage interests, So
Speaker 1: twenty years approximately, that thirty year mortgage, depending on how
Speaker 1: your mortgage is structured, is probably mortgage. Interesting. Now here's
Speaker 1: a good news. You can write that off your taxes
Speaker 1: most of the time. So you now get the benefit
Speaker 1: of the money you're paying on the mortgage you have
Speaker 1: in the house, get that back in a tax refund,
Speaker 1: whole or part. At the end of the year. You
Speaker 1: get a benefit of the depreciation of the house. Okay,
Speaker 1: you get a benefit of the appreciation of the house
Speaker 1: the value increase, and you get to write off the
Speaker 1: mortgages most payments against the house against your income. It's
Speaker 1: a great deal. The tax system is designed to support
Speaker 1: home ownership, and once you're in that house, there are
Speaker 1: things that you can also write off that you spend
Speaker 1: on the house. But that's a whole nother conversation. So
Speaker 1: the tax policy isn't designed to encourage people to own
Speaker 1: a home. Brothers going to say to me at a
Speaker 1: session of your I was I think it was Roland
Speaker 1: Martin again. My brother responded, you know online, Oh you know,
Speaker 1: why should I Why should I buy a home? John
Speaker 1: Brian talk I want to buying a home. I don't
Speaker 1: own the home. The government owns a home. No, he said, sorry,
Speaker 1: the bank owns a home. I don't own the home.
Speaker 1: The Morris Company owns a home. My reaction if you
Speaker 1: don't pay, if you don't pay that mortgage, yes, the
Speaker 1: bank's going to own the home. Let me tell you something.
Speaker 1: If I loan you some money to buy a house
Speaker 1: and you don't pay, I'm going to own your home.
Speaker 1: Real talk. You stop being my cousin Pookie. Then you
Speaker 1: start being my uncle jojo U. Stop being my buddy
Speaker 1: and my friend, and you start being my borrower. My
Speaker 1: business contract. Uh, I want to say client, my business
Speaker 1: contract recipient. H and soon the foreclosure notice recipient, because
Speaker 1: I'm going to forkloths on you. Business is not personal.
Speaker 1: That's another podcast I would do at another day. Business
Speaker 1: is business, and we need to see it that way. Now,
Speaker 1: if you pay that mortgage payment, you do own the home,
Speaker 1: and you own all the interests tied to that you own.
Speaker 1: As I said, you get the benefit of the appreciation
Speaker 1: the value of the house after you bought it. You
Speaker 1: get the benefit of depreciation, which is a tax strategy,
Speaker 1: a tax reality really, and you get the benefit of
Speaker 1: writing off mortgage payments which are tax deductible against your income. Now,
Speaker 1: see a tax policy, see a taxman or tax woman
Speaker 1: on this. Don't take my specific example. I'm just giving
Speaker 1: you broad descriptions here, by the way, just to get
Speaker 1: into depreciation specifically. It's really gives you some value on
Speaker 1: the wear and tear and the aging of your of
Speaker 1: your house over time. It's typically tied to rental on
Speaker 1: investment properties, by the way, which I'm going to get
Speaker 1: into on how you build a net worth, but I
Speaker 1: wanted to at least cover all these different definitions so
Speaker 1: that you're really clear on it. There's a depreciation calculation again,
Speaker 1: talk to your tax pro on this. There's a depreciation
Speaker 1: depreciation formula. Talk to your tax pro on this. So
Speaker 1: when you're buying a house for yourself, you just really
Speaker 1: you want to obsess on the appreciation, obsess on the
Speaker 1: mortgage write offs. Okay, so now let's get into the
Speaker 1: meat of the matter. Now that we've made a case
Speaker 1: for your own individual homeownership for wealth creation, now let's
Speaker 1: get into what I promised you building a million dollar
Speaker 1: portfolio being being having a net worth of one million
Speaker 1: dollars or more. Now, let me be very clear, making
Speaker 1: a million dollars income is different than a million dollar
Speaker 1: net worth. You can actually a million dollar income and
Speaker 1: have a zero net worth. You make money during the day.
Speaker 1: Thank you Tony Wrestler, my billionaire brother for giving me
Speaker 1: in my business partner, and my friend for giving me
Speaker 1: this very specific distinction during the time I was building
Speaker 1: a company with him. Help me to focus on the
Speaker 1: right thing. You make money during the day. You build
Speaker 1: wealth in your sleep. That's what I call making money
Speaker 1: during the day, making a living. Most people are obsessed
Speaker 1: with making a living, but they're not making necessarily a life.
Speaker 1: You build wealth in your sleep, stocks, bonds, investments, homeownership,
Speaker 1: small business ownership. I believe education qualifies for that. You
Speaker 1: build wealth in your sleep. It's compounding mechanism. Now, let's
Speaker 1: now deal with how if you want to build wealth
Speaker 1: a million dollar net worth minimum in five years. You're
Speaker 1: in a rush, you're in a hurry to do this. Well, No,
Speaker 1: let me deal with the easiest one first. Let me
Speaker 1: deal with if you don't mind waiting, and you are focused,
Speaker 1: you're on mission in your life, and you don't mind
Speaker 1: starting this adventure this process. Your generation is going to
Speaker 1: live longer because there's the health care and wellness mostly
Speaker 1: wellness strategies. Now you're eating better, hopefully you're eating eating
Speaker 1: fruits and vegetables and a balanced diet, and you're taking
Speaker 1: nutrients and you're exercising. You're going to live a longer life.
Speaker 1: You're going to live hopefully close to one hundred years
Speaker 1: old years of age, at least to ninety, at least
Speaker 1: to eighty. Right, So, if you're living in a seven
Speaker 1: undredredit score neighborhood, by the way, you lived at least
Speaker 1: eighty one years old. You lived in a five eighty
Speaker 1: credit score neighborhood, five fifty credit cocre neighborhood. If you
Speaker 1: look at the Hope credit score index, you live to
Speaker 1: sixty one years old. I'll do a separate podcast just
Speaker 1: on that. Yes, fifteen minutes apart you live, it's a
Speaker 1: twenty year delta on life. You live twenty years longer
Speaker 1: in a higher credit score neighborhood. It's mindset mentality surviving
Speaker 1: versus a thriving and winning mentality is where you know.
Speaker 1: It's a belief system. It's your emotional spiritual health basically
Speaker 1: that is materializing in access, opportunity, belief, confidence, so on,
Speaker 1: and so forth, the execution of your aspirations makes you
Speaker 1: happier and less stressed out, and you're making better decisions
Speaker 1: and you live longer. I'll get into that also in
Speaker 1: a separate podcast. So, now you don't mind starting at
Speaker 1: twenty or twenty two years of age, you're working somewhere,
Speaker 1: you don't mind starting your journey. Now you've gone through college.
Speaker 1: You know you've got some job or you're in college,
Speaker 1: you've got some job that pays you, I don't know,
Speaker 1: thirty thousand dollars a more year, okay, And you're going
Speaker 1: to live on a budget, and you're going to in
Speaker 1: this example, you're willing to put aside three thousand dollars
Speaker 1: a year. Okay, this is the easy way over forty
Speaker 1: seven years, forty five, forty seven years to make it
Speaker 1: be worth a million dollars. You're going to take three
Speaker 1: thousand dollars and you're going to put it in a
Speaker 1: wroth ira. Now it doesn't have to be a roth ira.
Speaker 1: It can be certain I'm trying to be careful not
Speaker 1: to make certain stock recommendations here. It can be in
Speaker 1: a certain type of investment account for publicly traded stocks.
Speaker 1: It can be in an index fund. It can be
Speaker 1: in a blue chip like a high quality stock portfolio.
Speaker 1: You can deal with if you want to. If you
Speaker 1: want to be culturally and enrich, you can deal with
Speaker 1: a company like Aerial Capital Management, which is a black
Speaker 1: owned mutual fund. My friend John Rodgers and Melody Hobson
Speaker 1: found it in and run it. But do business with
Speaker 1: whoever you like, whoever ye're comfortable with. But you can,
Speaker 1: you know, let's just let's just make this simple and say,
Speaker 1: through your four oh one K program at your employer,
Speaker 1: you pick a basket or an index fund or whatever. Again,
Speaker 1: I'm trying not to be specific here or in this
Speaker 1: case again a wroth. I are a account and you're
Speaker 1: going to set aside three thousand dollars a year. Now.
Speaker 1: The key here is that it going to throw off
Speaker 1: on average, give or take. Some years will be higher,
Speaker 1: some years will be lower, but on average you'll probably
Speaker 1: throw off about seven percent return. Okay, you're not going
Speaker 1: to touch it. It's very important here. Put it in,
Speaker 1: set it aside, and forget about it. Now. It's your money.
Speaker 1: It's not going anywhere. It's not running off to China
Speaker 1: or Russia around the world without your permission. Nobody's going
Speaker 1: to steal it from you. If you ever get into
Speaker 1: a desperate situation, I encourage you not to think about
Speaker 1: it in this way, because you will go grab it
Speaker 1: at some point. Something you will find to rationalizes is
Speaker 1: to tell rational lies. You oil frill, find some reason
Speaker 1: to go to go punch a hole in this account
Speaker 1: and grab it. But I'm suggesting that you've invested and
Speaker 1: forget it, set it aside, and forget it. You didn't
Speaker 1: make thirty thousand dollars, you made twenty seven thousand dollars. Right,
Speaker 1: You didn't make thirty five thousand dollars. You made thirty
Speaker 1: two thousand dollars before Texas. You didn't make fifty thousand dollars.
Speaker 1: You made forty seven thousand dollars. Okay, Now and budget
Speaker 1: around it. Put that three thousand dollars size is going
Speaker 1: to get you an average return. Again, some years will
Speaker 1: be hired, some years will be lower of about seven percent. Now,
Speaker 1: if you do that and do nothing else, you can
Speaker 1: still live your life, go on vacations, enjoy yourself, and
Speaker 1: as you over years, you're gonna make more and more money.
Speaker 1: So this will become less and less painful. Because in
Speaker 1: your earlier years you're probably making less money, particularly when
Speaker 1: you start this when you're in college. Right, it'll be
Speaker 1: a point you go get to a point where you
Speaker 1: go forget about it. But if you do three thousand
Speaker 1: dollars a year for forty seven years and follow the
Speaker 1: calculations forty five to forty seven years, you'll be worth
Speaker 1: about one million dollars. Do nothing else. Okay, you do
Speaker 1: that for sixty years, you'll be worth about two point
Speaker 1: five million dollars. And if you really want to be
Speaker 1: a baller, and you start earlier, or maybe as a couple,
Speaker 1: will you double down and don't get married and don't
Speaker 1: get divorced? Okay, because you can break this. You can
Speaker 1: cut this in this number in half and just do
Speaker 1: it fifty to fifty. You do it for sixty five
Speaker 1: years at three thousand dollars a year, you'd be worth
Speaker 1: three and a half million dollars. But let's go back
Speaker 1: to the million dollar number, because that's something most people
Speaker 1: can see line of sight to. You know, it's forty
Speaker 1: five to forty seven years, again depending on how the
Speaker 1: markets do. But you know, let's say in five years
Speaker 1: the markets don't do that great they do good and
Speaker 1: they do bad. But over the long arc of time,
Speaker 1: if you keep it in there, keep it the money
Speaker 1: in the market for twenty years. There's never been a
Speaker 1: twenty year period of time in the US where the
Speaker 1: markets didn't on balance go up. I'm talking about the
Speaker 1: stock market in this example. I'm not even gone in
Speaker 1: real estate yet, right, so buy, So invest it and
Speaker 1: forget about it. There's three things that have not gone
Speaker 1: down in the history of the United States of America
Speaker 1: stock market value, real estate values, and the GDP gross
Speaker 1: domestic product the income of the nation. That doesn't that
Speaker 1: They're not going to be dips. You go up, it dips, right,
Speaker 1: but it always corrects above the line. It has always
Speaker 1: corrected above the line. So invest it and forget it.
Speaker 1: And that's the easiest way, and that is the least
Speaker 1: volatile way, is the least risky way. Now you say,
Speaker 1: I don't have forty five years. I'm not that patient.
Speaker 1: I don't want to get married and rely on on
Speaker 1: splitting this responsibility with my mate. I don't want to wait,
Speaker 1: you know, forty five to sixty years, right, I want
Speaker 1: it now. Okay, here you go, here's something. Now I
Speaker 1: write all this down. I want you to get, when
Speaker 1: you're twenty years old, a term life insurance policy. I
Speaker 1: want you to get a policy for one hundred thousand dollars.
Speaker 1: It'll cost you if you're in great health, you know,
Speaker 1: it may cost you as little as ten bucks a month.
Speaker 1: And the older you get, by the way, the more
Speaker 1: expensive the policy. But if you're twenty three, thirty years
Speaker 1: of age, thirty five years of age, and you're good,
Speaker 1: good health, this should not be expensive at all. If
Speaker 1: you can't get a million dollar policy, can't It will
Speaker 1: cost you less than one hundred dollars a month if
Speaker 1: you're in good health, fifty bucks a month. I've seen it,
Speaker 1: all right. That's not the key to the policy, the
Speaker 1: strategy either. But if God forbid, you dropped dead before
Speaker 1: you and you've had children before you enter the heart
Speaker 1: of the plan. I'm telling you about the minute you
Speaker 1: get this policy and you pay your premiums and you're
Speaker 1: having children, you're starting a family, you drop dead. I
Speaker 1: don't know how long you only live, but I dang
Speaker 1: sure not. We all will die, all right. It's not
Speaker 1: a mystery. You drop dead. And now there's two things
Speaker 1: going to happen. One you don't have to your family
Speaker 1: is have to do a embarrassing go fund me campaign
Speaker 1: to bury you. Right, that's just crazy to me. All
Speaker 1: these celebrities doing go fund me campaigns to have themselves buried.
Speaker 1: Its nuts. You know, you're making all this money and
Speaker 1: two your descendants, your children, your wife or your husband
Speaker 1: will be a millionaire in the example of a million
Speaker 1: dollar policy or at least one hundred thousand there. But
Speaker 1: they'll have money to buy a house, start a business,
Speaker 1: go to college, reset their life, etc. Don't you want
Speaker 1: that for them. That's not the strategy either of how
Speaker 1: to become a millionaire. This is bonus stuff. I want
Speaker 1: you to go. I want you to fill out one
Speaker 1: page will so that you can direct your affairs. You know,
Speaker 1: you may have a PlayStation, but you want to make
Speaker 1: sure that PlayStation's going to whomever you wanted to go to.
Speaker 1: You know, I mean Prince is upset in death. I'm
Speaker 1: sure that he built this whole thing and like the
Speaker 1: money had no control over his affairs because these thoughts
Speaker 1: was gonna live forever or whatever, didn't get around to it,
Speaker 1: didn't have a will, So he built a great estate,
Speaker 1: great net worth, and then it went to people he
Speaker 1: barely as I could tell, barely knew who happened to
Speaker 1: be related to him, who are now paid, and I'm
Speaker 1: sure doing things that he would not want done. Your
Speaker 1: will is your direction post life on this earth, of
Speaker 1: how you want your affairs to be out. I want
Speaker 1: you to get a one page will. I want you
Speaker 1: to execute it. I want you to finish it right.
Speaker 1: I want you to file it right. I want you
Speaker 1: to have a insurance policy. I mean a life insurant policy.
Speaker 1: A term life policy is easiest and cheapest. Whole life
Speaker 1: is better. But that's again, I'm not giving you investment advice.
Speaker 1: I'm telling you how the minimum you should have. Right.
Speaker 1: I want you to buy a home. Now, we're getting
Speaker 1: into it, right. I want you to buy the worst
Speaker 1: house and the best block. Okay, no mini mansions right,
Speaker 1: no balling, no profiling, all right. I want you to
Speaker 1: buy the worst house on the best block, in a
Speaker 1: working class, a workforce neighborhood, near jobs, transportation, economic activity,
Speaker 1: and commerce. Now, most inner cities in America are centrally
Speaker 1: located real estate. They used to be the center of
Speaker 1: whatever area that was until minorities moved in and other
Speaker 1: folks moved out and try to create suburbs, and now
Speaker 1: traffic so bad that the folks who moved in the
Speaker 1: suburbs trying to come back and reclaim the inner cities.
Speaker 1: You know, in the inner city in France is called Paris.
Speaker 1: An inner city in the UK is called London. An
Speaker 1: inner city in Turkey is Istanbul. Like inner city is
Speaker 1: are prime real estate. Inner city in Greater New York
Speaker 1: is called Manhattan. Right, So only in America that we
Speaker 1: run out of our own communities because of you know, reasons.
Speaker 1: I'm not going to get into and left poor people there.
Speaker 1: But that real estate now is centrally located invaluable, and
Speaker 1: I want you to own some of it now. And
Speaker 1: a great example of this is Anacostia. If anybody knows Washington,
Speaker 1: d c. Area, you know that for years and years
Speaker 1: and years Anacostia was basically abandoned, and Frederick Douglas used
Speaker 1: to live there. It used to be a very prosperous area,
Speaker 1: but in the Industrial Revolution it was thought to the
Speaker 1: worst place to live was on a hill next to
Speaker 1: the water because during the Industrial Revolution the factories polluted
Speaker 1: the air and polluted the water through dumping so you
Speaker 1: didn't want to be anywhere near the water or a
Speaker 1: hell with your home. But we now live in a
Speaker 1: clean economy, don't we. Hello, we've gone from the industrial
Speaker 1: age to the technology age, to the information age. We're
Speaker 1: about to go into the AI age, all right, artificial intelligence,
Speaker 1: and I'll do a whole podcast on that. Don't worry.
Speaker 1: I'm working with my friend Sam Autman on the AI
Speaker 1: Ethics Council that's coming up. But in that clean economy,
Speaker 1: where's now the best land next to the water on
Speaker 1: the hill? Go check out Anacostia. See what's happened. Poor
Speaker 1: people were giving them a little voucher or you know,
Speaker 1: encouragement here a couple thousand dollars or whatever. Move them out,
Speaker 1: and now anacosiaus that real estate is invaluable. Same thing
Speaker 1: happened in Harlem. You could give that property away thirty
Speaker 1: years ago, give it away thirty forty years ago, tear
Speaker 1: down you know today is seven figures in Harlem. You
Speaker 1: can't you know? And I mean top seven figures, maybe
Speaker 1: eight figures. And as soon as Bill Clinton moved into Harlem,
Speaker 1: President Bill Clinton, you should have known and signaled that
Speaker 1: things were changing on Harlem, is Upper Manhattan, even Detroit
Speaker 1: with they're giving away homes for a dollar a decade ago.
Speaker 1: Those homes now many neighborhoods and the hopes many neighborhoods
Speaker 1: in Detroit are now valuable, right, and you can still
Speaker 1: buy homes in certain neighborhoods. And you know Baltimore has
Speaker 1: an oversupply. I'm not telling you to go buy in Baltimore,
Speaker 1: so don't be blaming me for your decisions. I'm just
Speaker 1: saying that these are you should do your own research.
Speaker 1: But you want to buy in a neighborhood you're comfortable,
Speaker 1: that you understand, but you need to buy modestly in
Speaker 1: areas that fit the criteria that I outlined for you,
Speaker 1: where there's robust engagement and economic energy vibrancy. And if
Speaker 1: you see hospitals and universities and retail and restaurants and
Speaker 1: transportation and ports and office buildings or whatever it is
Speaker 1: your definition of economic activity and vitality, that might be
Speaker 1: a signal. If you can find a house that is
Speaker 1: modest on a decent block, then think about buying it
Speaker 1: rehabbing it. Can get a rehabilitation loan from a lender
Speaker 1: if you need to a construction loan. You can use
Speaker 1: minority vendors from the neighborhood to help you do that work.
Speaker 1: Make sure they're certified. By the way, don't go hire
Speaker 1: cousin Jojo who has no skills. They will go. They
Speaker 1: will take all the money with good intentions and then
Speaker 1: say they're sorry. As you got to pay that bill,
Speaker 1: you have to say, yeah, you are sorry, you are sorry, right,
Speaker 1: but they were not gonna give you none of that
Speaker 1: money back because they broke. If you want to, you
Speaker 1: heard me say, if you hang around nine broke people,
Speaker 1: you'll be the tenth. So get certified vendors to do
Speaker 1: that work and hold them accountable every week. You want
Speaker 1: to progress, report, don't let don't let time go by anyway,
Speaker 1: buy it, rehabit, live in it. I want you to
Speaker 1: buy something modest now, no mansions. I'm not talking about
Speaker 1: millions of dollars a half million dollars. I'm talking and
Speaker 1: you may have to You may not be able to
Speaker 1: do this in the city you're living in. You may
Speaker 1: have to go where the puck is going, meaning you
Speaker 1: want to go where the market is going, where withere,
Speaker 1: someplace is still growing. If you see on the front
Speaker 1: page of your newspaper in your town, the real estate
Speaker 1: values are at an all time high and people are
Speaker 1: getting becoming millionaires and billionaires. Well, that deal is probably done.
Speaker 1: That that money has been made Manhattan. The money has
Speaker 1: been made. You can get a nice lifestyle, but you're
Speaker 1: not getting rich or building wealth overnight in Manhattan on
Speaker 1: real estate. That's not going to happen traditionally. And if
Speaker 1: you want to go restructure some office buildings, which is
Speaker 1: a whole other conversation, that's a different thing that takes
Speaker 1: deep pockets and a lot of courage. I'm talking about,
Speaker 1: you know, I'm talking about a second tier city. You know,
Speaker 1: you know, Atlanta used to be considered a second tier city.
Speaker 1: But there's there's suburbs outside of Atlanta. This is you know,
Speaker 1: you know, there's seven counties that surround it Greater Atlanta.
Speaker 1: Go to one of those counties. Go to some place
Speaker 1: that's twenty thirty minutes outside of Atlanta, proper, Go go
Speaker 1: drive the neighborhoods and find a home with it in
Speaker 1: a nice neighborhood with a tree in the roof, right, right,
Speaker 1: but buy something, or go to Columbus, Georgia, or go
Speaker 1: go to, you know, go someplace out right outside of Nashville,
Speaker 1: or go someplace, you know, Memphis, wherever it. I'm not
Speaker 1: telling you where to go. I'm telling you what. I'm
Speaker 1: telling you what you need to look for, right, And
Speaker 1: it's not just in the Southeast. These are just examples
Speaker 1: I can give you because I'm taking I live in Atlanta, Georgia,
Speaker 1: so it's just something around the top of my mind.
Speaker 1: I grew up in Los Angeles, and you know, you
Speaker 1: can go to you know, places outside of La Lynnwood
Speaker 1: and you know whatever, you know, Long Beach, whatever floats
Speaker 1: your boat. Long Beach probably actually not a second considered
Speaker 1: a second tier city anymore. It was when I was
Speaker 1: growing up. But you got the message right, and my
Speaker 1: mother bought in Rialto, Rialto. That property went up too.
Speaker 1: That's an hour outside of Los Angeles. So I want
Speaker 1: you to buy it, rehabit and live in it. Okay,
Speaker 1: after a couple of years, I want you to get
Speaker 1: that home reappraised, right and hopefully it's gone up a
Speaker 1: little bit in value. I want you to pull out
Speaker 1: and gets you Your credit score has to be you know, decent,
Speaker 1: Hopefully it's seven hundred operation hope can help you get
Speaker 1: there if you're not there already. Right, And because once
Speaker 1: you get a seven hundred plus credit score, you're no
Speaker 1: longer black or white or Latino or whatever you want
Speaker 1: to color. You know you think it is an issue
Speaker 1: black or Latino or brown or whatever or a woman, right,
Speaker 1: you're just green in the computer at midnight just says
Speaker 1: yes when you putting that application in if you have
Speaker 1: a very high credit score, because it's just analyzing, you know,
Speaker 1: your risk factors is not looking at what color you are,
Speaker 1: whether you're male or female. Okay, So you're gonna take
Speaker 1: a home equity loan, home equity line of credit out right,
Speaker 1: which by the way, in most cases you can also
Speaker 1: get a tax deduction on if you check with your
Speaker 1: tax pro You're gonna use part of the loan, the
Speaker 1: home equity loan. And I don't want you to sell
Speaker 1: that first house. You just want to extract a little
Speaker 1: bit of equity. Don't over leverage yourself, all right, a
Speaker 1: little bit equity. You're gonna buy another home, hopefully more
Speaker 1: modest than the home you're in. Hood adjacent okay, a
Speaker 1: working class neighborhood, workforce housing preferably. Right, You're gonna buy
Speaker 1: that house. You're gonna rehabit with hopefully again minority and
Speaker 1: women owned vendors in that neighborhood, plumbing, heating, lighting, landscaping,
Speaker 1: and roofing that like I did with Promise Homes Company
Speaker 1: when I built it, when I built up the company,
Speaker 1: when I owned it, And then you're gonna rent that house.
Speaker 1: Now you may say, well, John, I don't have you
Speaker 1: know whatever, I don't have the total down the down
Speaker 1: payment for the new house, or I can't apply enough
Speaker 1: money out of my home on a home equity line
Speaker 1: of credit. Okay, you've got somebody in your family that
Speaker 1: makes less than sixty thousand dollars a year. Okay, you're
Speaker 1: going to form a limited liability corporation in LC. I
Speaker 1: did a whole podcast on different types of corporate structures.
Speaker 1: Go back and listen to that podcast on which structure
Speaker 1: to choose from. And this example, it's an ALC. You've
Speaker 1: got somebody in your family who makes less than sixty
Speaker 1: five thousand dollars a year. I forget the exact cutoff
Speaker 1: or earned income task credit, but I know sixty thousand
Speaker 1: dollars is an easy number. And they live maybe in
Speaker 1: the neighborhood or the area that you're going to buy
Speaker 1: this house. Maybe you live in La they live in
Speaker 1: pick the state, Alabama, wherever it is right and wherever
Speaker 1: you're looking at doing this, and you trust them, you
Speaker 1: have a good relationship. They're a hardworking person, right, no
Speaker 1: emotions here, and they have three children. They make Ashley
Speaker 1: as a teacher in that community. They make forty thousand
Speaker 1: dollars thirty eight thousand dollars a year. There aren't. They
Speaker 1: have a right to the Earned Income Task Credit. It's
Speaker 1: a bonus for working. They're gonna get, in this example,
Speaker 1: six thousand dollars cash. You can do this any time
Speaker 1: of year. Amend your taxes, okay, operation can help you
Speaker 1: with that as well. If you've never filed for eiitc
Speaker 1: hold on now, it's retroactive for three years. That's right.
Speaker 1: You get three years worth of the Earned income tax credit.
Speaker 1: That could be as much as close to twenty thousand dollars. Now,
Speaker 1: if you're buying one hundred thousand dollars house as a
Speaker 1: rehab project, by the way, you can buy it for
Speaker 1: sixty thousand dollars because it's got a tree in the roof. Right,
Speaker 1: it's not livable. You get a construction loan for you know,
Speaker 1: a total, a construction purchase and construction loan for a
Speaker 1: total of let's say eighty five thousand dollars or ninety
Speaker 1: thousand dollars. And so that's the lender saying, I'm gonna,
Speaker 1: you know, we believe the house is worth one hundred
Speaker 1: and twenty five thousand dollars or one hundred and thirty
Speaker 1: hundred and fifty thousan dollars whatever, We're gonna give you
Speaker 1: a construction loan for up to seventy seventy five percent
Speaker 1: of that number. Okay, a purchase number, A purchase and
Speaker 1: can we can and construction loan. They're going to purchase
Speaker 1: the house and give you a construction loan so that
Speaker 1: you can rehab that house. Now, if you're confused about
Speaker 1: confused about any of this, just simply go to my
Speaker 1: Hope Financial Coaches. Sign up, by the way to the
Speaker 1: one million Black Business Program or partnership with Shopify and
Speaker 1: truest Banks and Bank of America, Wells farg and all
Speaker 1: these other partners that donate expertise and provide access to
Speaker 1: capital to business owners in that program, including black banks.
Speaker 1: By the way. So if you get confused, go get
Speaker 1: an appointment with Operation Hope. But I'm walking you through this.
Speaker 1: So you're gonna get the earning task credit. You're buying
Speaker 1: this house for a modest amount of money. You're getting
Speaker 1: a construction and rehab loan, a construction loan or construction
Speaker 1: or a purchase in construction slash rehab loan orright so
Speaker 1: rehab loan. It's a purchase loan and you can rehabit
Speaker 1: with your own money. The money from the earn income
Speaker 1: Task credit and your line of credit that I gets
Speaker 1: told you to take out on you homelexicuity, a line
Speaker 1: of credit or yes, a purchase a construction and rehab loan. Okay,
Speaker 1: that allows you to do all that. You may not
Speaker 1: need any additional capital. Maybe you need to put a
Speaker 1: modest down payment, okay, but I've just given you two
Speaker 1: ways to do a down payment, either through the home
Speaker 1: equity line of credit. Do not over leverage yourself. I
Speaker 1: would not suggest you go over seventy percent loan the
Speaker 1: value of your primary residence. You don't want to stress
Speaker 1: yourself out, and make sure you can afford the payment
Speaker 1: for the first trustee and the home equity line of credit.
Speaker 1: You don't by the way, you don't have to move
Speaker 1: money out of the line of credit. When you get it,
Speaker 1: they approve you for it. You can let it sit
Speaker 1: there and do nothing, okay, and then you get the
Speaker 1: earned tax credit. In partnership with a member of your family.
Speaker 1: In this example, they contribute the money, you contribute the
Speaker 1: good credit, et cetera, et cetera, the purchase ability, and
Speaker 1: you guys share in the upside of this property. Now
Speaker 1: that's up to you how you negotiate who owns what
Speaker 1: in that LLC. I want you to wait another So
Speaker 1: in this example, you've waited. The first deal was you
Speaker 1: bought the house your primary resid you had two years.
Speaker 1: Now you're waiting. Now you've you've finished through construction of
Speaker 1: the rehabit this purchase home. You've rented it out, Okay,
Speaker 1: and maybe you've got a Section eight certificate from the city,
Speaker 1: or maybe you know you've gotten some other tax benefit
Speaker 1: from the city because they were so happy you rehab
Speaker 1: this property. Looking at every city, state, and federal program
Speaker 1: available when you're doing stuff like this, the third thing
Speaker 1: you're gonna do is you're gonna take now equity from
Speaker 1: this second home all right, or the or the lone
Speaker 1: of credit from your first home okay, or savings you
Speaker 1: for that aside, and you're going to buy a third
Speaker 1: rental property the same platform, same area, so that you
Speaker 1: can do maintenance on all those homes. Right. I'm ideally
Speaker 1: you want to buy all these three homes in the
Speaker 1: same city. But you can do this where the two
Speaker 1: rental homes or another city loan as there's somebody you
Speaker 1: trust taking care of it, or you can get there
Speaker 1: on a regular basis. I would suggest someplace you can
Speaker 1: drive to if it's just you doing this. You don't
Speaker 1: want to have something out of state you got to
Speaker 1: fly to. You will always over calculate how often you're
Speaker 1: going to go there, Like buying a time share, I
Speaker 1: will go together all the time. You ain't been there
Speaker 1: in years, and you upset and it ain't. That's the
Speaker 1: one thing that's a one kind of real estate investment
Speaker 1: I do not like is a time share. The only
Speaker 1: time I lost any money was when I bought a
Speaker 1: time share and I broke my own rule. I made
Speaker 1: an emotional decision, but I was trying to impress a
Speaker 1: gentleman who I won't mention. But he was the president
Speaker 1: of a prominent nonprofit when I was coming up in
Speaker 1: south central LA. I loved this man, and he knew
Speaker 1: I loved him and admired him, and so he used
Speaker 1: my emotions to get a bonus for himself and got
Speaker 1: me to buy this time share that he owned as well,
Speaker 1: and he had a referral fee for me doing it.
Speaker 1: And I've owned that thing for thirty years and it
Speaker 1: has lost money. I mean, it is horrible. I got
Speaker 1: his horror. I gotta pay maintenance fees. And you can
Speaker 1: tell him emotionally distraught about this. I'm I'm still I'm
Speaker 1: talking about it. Not even that's not even the subject
Speaker 1: of this program. I I did a whole segment, by
Speaker 1: the way, just on on time share, so you can
Speaker 1: go and check that out. So that's the only kind
Speaker 1: of real estate I don't love. I don't. I don't
Speaker 1: think that's a that's a good deal, do you that?
Speaker 1: For lifestyle and not for investment. It's like, you know,
Speaker 1: certain kind of bioin not bitcoin, but some kind of cryptocurrency.
Speaker 1: Bitcoin actually it seems to have stabilized, but some of
Speaker 1: these cryptocurrencies, it's just speculation, and that's what timesharees are
Speaker 1: it's just speculation, so and it's cool if you can
Speaker 1: afford to do it, but just don't do you, just
Speaker 1: don't use your rent money. So in this example, I
Speaker 1: told you get a will, I told you get an insurance,
Speaker 1: a life insurance policy. I've told you to get your
Speaker 1: earn income tax credit if you qualify for it, or
Speaker 1: find out somebody in your family who qualifies for it,
Speaker 1: who may become your investment partner. I've encouraged you to
Speaker 1: use an LLC structure for the investment properties. I've encourage
Speaker 1: you to buy a home for yourself. I've encouraged you
Speaker 1: after a couple of years, be patient, get a line
Speaker 1: of credit against that home. Do not take that line
Speaker 1: of credit and go on vacation. Do not go buy it.
Speaker 1: Do not go shopping at the department store, do not
Speaker 1: go Craig Cray because you have a line of credit.
Speaker 1: And don't sell that house. Because you sell the house,
Speaker 1: you're going to get a capital gains tax hit. And
Speaker 1: there's another thing you can do when you sell a
Speaker 1: piece of property, which I'll get to in a minute,
Speaker 1: to avoid a capital gains tax hit. But if you
Speaker 1: take a loan against the house. It's not taxable. In fact,
Speaker 1: it may be tax deductible. There's a lot of covering
Speaker 1: in this podcast, so you may have to listen to
Speaker 1: it over and over again. So I want you to
Speaker 1: buy the house, a modest home that you can afford,
Speaker 1: right in a neighborhood that is a good street, decent,
Speaker 1: and near where you can go to work. But may
Speaker 1: not be all the floss in that you want to do.
Speaker 1: That's fine, floss later, all right, buy it, live in it.
Speaker 1: The worst house on the best block because of the
Speaker 1: other homes of that block. Are gonna pull your values up.
Speaker 1: And the neighbor's gonna be happy you bought this house
Speaker 1: and you rehabbed it. It was an eyesore. They were
Speaker 1: so happy you bought this out. They may bring you
Speaker 1: a pie. You're gonna own that home for a couple
Speaker 1: of years. Then you canna use equity and or the
Speaker 1: other strategies I mentioned you, and you're gonna buy a
Speaker 1: second home, and then you're gonna buy a third home.
Speaker 1: No many mansions, nothing fancy, right, workforce housing. You do
Speaker 1: that three times. You do the other things I mentioned
Speaker 1: to you. You have a million dollar net worth in
Speaker 1: five years now, that's the way you do it in
Speaker 1: five years. That's one strategy. Another strategy is to start
Speaker 1: a business. Now you can take some money you've been investing,
Speaker 1: and I'm not gonna tell you where to get this
Speaker 1: money from. I want you to put By the way,
Speaker 1: four oh one K programs are easy free money. If
Speaker 1: your employer has a four oh wing K program, you
Speaker 1: need to be in it yesterday. That's free money. They're
Speaker 1: putting a dollar in for every dollar you put in,
Speaker 1: it's your money for life. Do not pass go without
Speaker 1: putting money into a four to one K plan. But
Speaker 1: you're gonna find and there are ways you can use.
Speaker 1: You can use that money to help you with a
Speaker 1: down payment. It's another topic for another day. I'm gonna
Speaker 1: deal with that with a fan question. By the way,
Speaker 1: so you can start a business. You can start a
Speaker 1: franchise business with money you set aside right or an
Speaker 1: investment group you put together through an ALLC however you
Speaker 1: want to do it. And in this example, I would
Speaker 1: not encourage you to do something that's never been done before.
Speaker 1: I want you to do something that has been done before.
Speaker 1: It's an existing business plan. So an entrepreneur is different
Speaker 1: than a business person. An entrepreneur is doing something that
Speaker 1: has never been done before. It's from a whole cloth,
Speaker 1: creating value out of nothing. That's me, I'm crazy. An
Speaker 1: entrepreneur works eighteen hours day to key from getting a job.
Speaker 1: We're nuts. But that's the highest risk in the highest reward.
Speaker 1: A business person woman or a businessman is using an
Speaker 1: existing business plan, a franchise. You know that they need
Speaker 1: a local restaurant or a drive through restaurant, or a
Speaker 1: little food store, or a gas station, or a beauty
Speaker 1: salon or a nail salon. Nel salons tend to be
Speaker 1: lower cost, consistent businesses that are needed in a neighborhood.
Speaker 1: Every neighborhood needs twenty different businesses. Figure out what those
Speaker 1: twenty businesses are. See if there's a franchise model for
Speaker 1: it that has a brand name attached to an existing,
Speaker 1: proven business plan. And typically if you you know, do
Speaker 1: it right, You work hard, you don't pull money out.
Speaker 1: You know as you're starting the business, don't go still
Speaker 1: getting don't go listen lease in Mercedes. You know with
Speaker 1: money you don't have trying to floss again. Flossing is
Speaker 1: the death nail of building wealth right, keep that money
Speaker 1: in the business and within five years, if that business
Speaker 1: succeeds right, and if it's a franchise, there's a high
Speaker 1: probability it will approven. Franchise for a basic need in
Speaker 1: the neighborhood. Once again, you'll be worth a million dollars
Speaker 1: in five years. About five years, I'm going to give
Speaker 1: you an example of businesses to start if you keep
Speaker 1: listening to this podcast and tell all your friends and subscribe.
Speaker 1: By the way, I'm going to break down different businesses
Speaker 1: in coming weeks that you can start, and I'm gonna
Speaker 1: break down how those businesses work, how they what are
Speaker 1: the risks, what's the profitability, how you structure them, which
Speaker 1: what businesses in your neighborhood are doing well that you're
Speaker 1: driving by every day. You know, when I was coming
Speaker 1: up and I got my financial literacy course when I
Speaker 1: was nine years old, I saw a muffler shop at
Speaker 1: the first time. I saw the nail salon as a
Speaker 1: business for the first time. And in all these places
Speaker 1: I've been walking by all day. Now I understood they're businesses,
Speaker 1: you know, I mean real talk. The drug dealer neighborhood's
Speaker 1: a business person. It's not an ethical business or when
Speaker 1: it's sustainable, and it's not good capitalism because good capitalism
Speaker 1: where I benefit, you benefit more, and bad capitalism is
Speaker 1: where I benefit you pay a price for it. But
Speaker 1: everything around you is a business model. That's what I'm
Speaker 1: trying to get you to understand. So I just gave
Speaker 1: you three strategies to become a millionaire. Right. We did
Speaker 1: this in less than an hour. I gave you a
Speaker 1: slow bake, easy methodical. Put it on remote control. You're
Speaker 1: not hurting anything because it's your money, is not going anywhere,
Speaker 1: You're not losing it. Way to build them at least
Speaker 1: a million dollar net well worth in cash. Better than cash,
Speaker 1: marketable securities is in stocks. And by the way, here's
Speaker 1: something no one tells you. If ever you get in
Speaker 1: trouble and you've got a stock portfolio that you've built up,
Speaker 1: you can get a margin account alone from you to you.
Speaker 1: Did you know that for as much as seventy percent?
Speaker 1: Don't leverage this up. Please don't go saying John Bryan
Speaker 1: told me, actually, get a seventy percent loan against my
Speaker 1: own account. I don't want you get any loan against
Speaker 1: your account. I'm just saying I don't want you to
Speaker 1: be afraid of becoming an investor because you know your
Speaker 1: money's not in your hands. You can't always locked up.
Speaker 1: I can't, no, no, if you have marketable securities, high
Speaker 1: quality assets that your own. By the way, when you
Speaker 1: buy one stock of anything, you have the right to
Speaker 1: all the financials of that company. You want to buy
Speaker 1: one share of Walmart. I think it is a great company.
Speaker 1: By the way, my friend Doug mc millan, CE of Walmart,
Speaker 1: is co chair of Financial Literacy for All with me
Speaker 1: and his coach and has done the force for my book,
Speaker 1: Financial Literacy for All. And he's a great guy, great friend.
Speaker 1: But whether there's Tarja, Target or McDonald's, McDonald's, or whatever
Speaker 1: it is you love, you know, whatever business, Nike, whatever
Speaker 1: thing you love. Once you invest, you know, into one
Speaker 1: share of stock, you have a right of the same
Speaker 1: rights as Warren Buffett. You have the same rights. It's
Speaker 1: whatever investor you've heard about who is legendary. You get
Speaker 1: to look at all of their financials, all of their
Speaker 1: financial reports, all their strategies. You get to go to
Speaker 1: those shareholder meeting. I think you should give your kid
Speaker 1: a stockport, a stock certificate framed. They don't do stock
Speaker 1: certificates so much these days because it's all digital, But
Speaker 1: you can still order one, and I'll maybe put a
Speaker 1: link in the video version of this podcast. I'll put
Speaker 1: a link where you can get a company that I
Speaker 1: that I know here in Atlanta does stock certificates. You
Speaker 1: can frame and for your kid's birthday or graduation, whatever
Speaker 1: and put it on their wall so they can see it,
Speaker 1: and they can they have a right to now, it's
Speaker 1: just like any you know, like the biggest shareholders. They
Speaker 1: have a right to go to the shareholder meeting and
Speaker 1: vote and all that stuff. But you can now take
Speaker 1: a loan against your own asset if you get into trouble.
Speaker 1: So I just tried to square out and zero out
Speaker 1: all of the risk, all of the downside, all of
Speaker 1: the naysayers. Right, And what are black people in brown
Speaker 1: people not doing. We're not investing in the stock market.
Speaker 1: Last time I checked, eighteen percent of us were invested
Speaker 1: in stock market. That number might have changed, but it
Speaker 1: was a low number. We're not investing in home ownership.
Speaker 1: Only forty one forty four percent of us own a home.
Speaker 1: I've just told you it's the easiest way to build wealth.
Speaker 1: We're not owning businesses in a way that compound and
Speaker 1: build well. Ninety six percent of our businesses are sole
Speaker 1: proprietorships no, which basically makes it them a self employment project.
Speaker 1: It means you have a contract basically, and you're just
Speaker 1: doing work on your own schedule versus working for somebody
Speaker 1: else on their schedule. You think it's a business as
Speaker 1: a hobby horse, Okay, it's a hobby, and it isn't.
Speaker 1: That contract is over the money, we'll run out. And
Speaker 1: that's why we're training you at Operation Hope in our
Speaker 1: Small Business and Entrepreneurship program, or really tuning you up
Speaker 1: through our one million Black Business program. We serve everybody,
Speaker 1: by the way, but we hyper focus on the group
Speaker 1: that we think have been left behind, like groups like
Speaker 1: black businesses and Latino owned businesses. But if you poor,
Speaker 1: white walk in the door, by the way, or middle
Speaker 1: class or whatever will help you too. Right. So the
Speaker 1: point I was making is that most strategies we're not
Speaker 1: like we failed at them, We just never did them, right.
Speaker 1: I just gave you two examples, stock market and real estate.
Speaker 1: And I've already told you that over in the long
Speaker 1: arc of history, these things have never gone down they've
Speaker 1: only over time gone up. Now somebody, somebody's going to
Speaker 1: again say, John, what do you mean there was a
Speaker 1: there was a crash market crash two thousand and nine. Yes,
Speaker 1: stocks will go up, they will crash, real estates will
Speaker 1: they will crashed. Be a recession, they will recess. Right,
Speaker 1: they will dip and they will correct above the line. Hello, Now,
Speaker 1: let me go back to something that I said I
Speaker 1: would explain to you, which is a tax exchange. So
Speaker 1: I bought a piece of property in Los Angeles for
Speaker 1: a couple hundred thousand dollars. It was a townhouse. When
Speaker 1: I bought it, I was very proud of it. I
Speaker 1: lived in it. It went down in value while I
Speaker 1: lived in it. I was encouraged by my broke friends
Speaker 1: to sell it. Now they broke again. Watch what you
Speaker 1: pay attention to for advice. Right, my broke friends didn't
Speaker 1: even own a townhouse. They were written talking about you
Speaker 1: need to sell that. Just look, look, leave your bad
Speaker 1: advice in your bad in your well intentioned bad mouth,
Speaker 1: like in your head. Keep just say hello to me.
Speaker 1: That's That's all I want to hear. Is you know
Speaker 1: he's an old Southern saying no matter how much I
Speaker 1: love you, my son or my daughter. If I don't
Speaker 1: have wisdom, I can only give you my own ignorance.
Speaker 1: So out of love, we passed down bad habits and
Speaker 1: bad advice from generation to generation. Is what we don't know.
Speaker 1: That we don't know. This killing is what we think
Speaker 1: we know. We never got the memo. That's my third
Speaker 1: or fourth book. The thing is my third book that
Speaker 1: we never got the memos. Well, we don't know that
Speaker 1: we don't know, so stop listening people who have give
Speaker 1: you bad advice on no experience. Right, So that my
Speaker 1: friends quotation Marks told me to sell my house. Luckily
Speaker 1: didn't pay attention to on the condo. I moved out
Speaker 1: and rented it out to you know, a tenant, and
Speaker 1: they were slow paying, but they paid, and I had
Speaker 1: to pay the property taxes every year, but it was
Speaker 1: mostly covered by the renter. And I forgot about it.
Speaker 1: I said it and released it, just like I told
Speaker 1: you to buy it, put money aside, set and release.
Speaker 1: I just forgot about it. And because I just figured,
Speaker 1: you know, can't be you know, over time it will
Speaker 1: at least be worth what I paid for it. So
Speaker 1: a few years past and I moved to Atlanta, and
Speaker 1: I'm trying to buy a piece of property that's, you know,
Speaker 1: about seven hundred and fifty thousand dollars. And I call
Speaker 1: my friend, a broker in Los Angeles happened to be
Speaker 1: a person of color, Mister low is his name, And
Speaker 1: I said, can you check on this property from me?
Speaker 1: And he said sure. I said, well, what do you
Speaker 1: think I can get for it? He said, well, because
Speaker 1: I had a couple of properties I was selling this one,
Speaker 1: you can probably ge seven hundred fifty thousand dollars for
Speaker 1: I said, what did you say? What did you say?
Speaker 1: Seven hundred and fifty thousand dollars. I bought it for
Speaker 1: two hundred thousand change. It had gone down one hundred
Speaker 1: thousand change. My so called friends told me to sell it. Hello,
Speaker 1: five years six years later, is worth seven hundred and
Speaker 1: fifty thousand dollars. It's worth even more now I sold it.
Speaker 1: You have a year to do a tax free exchange,
Speaker 1: which means you pay no taxes. And I found the
Speaker 1: property that I wanted to buy, and I purchased the
Speaker 1: property that I wanted to buy with the proceeds of
Speaker 1: the property I just sold, and I paid no taxes.
Speaker 1: So there you go, and you want to check with
Speaker 1: your tax man and all this stuff. You know, don't
Speaker 1: listen to me and say John Bryant told me to
Speaker 1: do this. I'm just giving you, you know, examples of
Speaker 1: what you can do, but you need to check with
Speaker 1: your tax pro and or my hope, financial coaches for
Speaker 1: exactly what you should do or how to do it.
Speaker 1: It's go by the way. It's called a ten thirty
Speaker 1: one tax free exchange in the Revenue the Internal Revenue Code.
Speaker 1: But again, tech, check with your tax pro and see
Speaker 1: how it relates to you. Okay, let's get to the
Speaker 1: fan question. I just made you a millionaire. Well you did,
Speaker 1: because you're going to work hard at it. But you
Speaker 1: know now, there's no reason why you're not going to
Speaker 1: be better off after you do this when you than before.
Speaker 1: I mean, it's like somebody said, why should I try God? Well,
Speaker 1: because God cannot possibly screw up and mismanage your life
Speaker 1: worse than you have. So give them a try. Let's
Speaker 1: see how that works out. And given it, it says universe,
Speaker 1: in my opinion, you'll probably be Okay. I can't guarantee
Speaker 1: you that being positive is going to make you a success.
Speaker 1: But I absolutely guarantee you the being negative will ultimately
Speaker 1: make you fail. I want you to be positive. I
Speaker 1: want you to employ common sense. Literally every group of
Speaker 1: people in this country, two hundred plus ethnic groups have
Speaker 1: succeeded using free enterprise capitalism and a market economy and
Speaker 1: the things that I've told you. The only three groups
Speaker 1: that have been left behind African Americans, not all Africans,
Speaker 1: African Americans. I'm gonna deal with Africans versus Africans or
Speaker 1: blacks versus blacks. Is that a thing? And that's not
Speaker 1: a negative situation. I mean, blacks are blacks? Is that
Speaker 1: a thing? I'm gonna deal with that in a second
Speaker 1: part a separate podcast, because it is a thing. But
Speaker 1: African Americans, not African Africans or African Caribbeans. African Americans
Speaker 1: who had a special treatment negative in this country, and
Speaker 1: who's really there? Our self esteeming, our brains were messed with,
Speaker 1: Our minds and mindsets were messed with right and Native
Speaker 1: American Indians okay, they didn't have a good run. And
Speaker 1: poor whites, yes, poor whites are those three groups that
Speaker 1: did not use free enterprise capitalism in a market economy
Speaker 1: to succeed. Two of those groups actually use a government,
Speaker 1: and in government will help you cover your downside. And
Speaker 1: we need good government. We need civil rights, but you
Speaker 1: also need civil rights. We need not just red rooms
Speaker 1: stopping bad things like this police discrimination and bias and
Speaker 1: all the negative stuff. We need some green rooms. Access
Speaker 1: to capital, access to internships, extra apprenticeship, access to apprenticeships,
Speaker 1: access to credit, access to financing, access to you know,
Speaker 1: opportunity and aspiration. Can I get an amen? This is
Speaker 1: the church that what's happening now? And what have you
Speaker 1: done for me lately? All right? So fan question? Can
Speaker 1: I use my IRA? Let me see who this fan
Speaker 1: questions for, give her some credit or him some credit?
Speaker 1: It's at This is on Instagram at Willy eight seven
Speaker 1: six at d A w I L l I eight
Speaker 1: seven six. That's on Instagram. So thanks for the question.
Speaker 1: Can I use my IRA to purchase my first home?
Speaker 1: The short answer is yes, you can use your IRA
Speaker 1: and they will again check with the tax person, but
Speaker 1: they will allow you. Irs will allow you to withdraw
Speaker 1: up to ten thousand dollars from a traditional roth ir
Speaker 1: without an early withdrawal penalty. If you want to buy
Speaker 1: a home as a down payment. By the way, if
Speaker 1: you come from you need to use the funds within
Speaker 1: one hundred and twenty days to if you're going to
Speaker 1: use the funds to buy a home and limit I
Speaker 1: think it's ten thousand dollars begin check with your tax
Speaker 1: pro and or check with Operation Hope. But by the way,
Speaker 1: you check with Operation Hope, and if you are from
Speaker 1: an underserved population, you could qualify for a ten thousand
Speaker 1: dollars In addition to everything I just mentioned, you might
Speaker 1: qualify for a ten thousand dollars grant you don't pay
Speaker 1: it back, a down payment assistance grant to buy your
Speaker 1: first home. It is so much stuff going on out here.
Speaker 1: And what Operation Hope does is serves as a nonprofit
Speaker 1: investment banker to sort of concierge your financial empowerment experience.
Speaker 1: Whether you want to be a small business owner, you
Speaker 1: want to be an entrepreneur, you want to be a homeowner,
Speaker 1: you want to be an informed asumer, you want to
Speaker 1: get your credit score straight, you want to become an investor,
Speaker 1: you want to become a you know, a titan, a balla,
Speaker 1: a balla adjacent. You want to become a billionaire or
Speaker 1: a thousandaire, right, I just want to buy some are
Speaker 1: you know we're going to help you get set yourself free.
Speaker 1: In order to do that, you need self determination. You
Speaker 1: need to self determine yourself and you're not going to
Speaker 1: do that in the current market economy unless you understand
Speaker 1: how the economy works. You're not dumb and you're not stupid.
Speaker 1: You are brilliant. Because you've been doing so much but
Speaker 1: so little for so long. You can almost do anything
Speaker 1: with nothing. It's what you don't know that you don't
Speaker 1: know that is killing you. But you think you know.
Speaker 1: It's time to give you the enlightenment and the tools
Speaker 1: that you need to set yourself free. Go buy Financial
Speaker 1: Literacy for all the book. I want it dog eared,
Speaker 1: I want it underlined. I want you to have it
Speaker 1: on the bus stop, on the car pool and when
Speaker 1: you're driving. I want you to I want you to
Speaker 1: have a reas to the family meeting, have dinner once
Speaker 1: a week or what a concept dinner with your family,
Speaker 1: talk about money. Don't come on by themselves talking. When
Speaker 1: you go to bed tonight, that's that's you know, that's
Speaker 1: a pillow you purchased right, whether you're renting it or
Speaker 1: where you're buying it, whether you own it, you know,
Speaker 1: it's always always kills me. People talking I don't like capitalism,
Speaker 1: as their commenting on the phone, they bought with capitalism
Speaker 1: from a capitalist. They bought it from Apple or Samsung
Speaker 1: or whoever. They bought this phone from a capitalist institution
Speaker 1: with the money they made, the capital they made using
Speaker 1: their human capital exchange for their talents and skills. They
Speaker 1: got a paycheck. That's an exchange of human capital for compensation.
Speaker 1: I cover that in a podcast too, the six versions
Speaker 1: of capitalism from lowest risk to highest. Go back and
Speaker 1: read I'm sorry, listen or watch that. So yeah, look,
Speaker 1: we're you're in the system, whether you like it or not.
Speaker 1: You might as well master it. That's what I'm talking about.
Speaker 1: Master it. This is John O'Briant. I'm out. Money and
Speaker 1: Wealth with John O'Brien is a production of the Black
Speaker 1: Effect Podcast Network. For more podcasts from the Black Effect
Speaker 1: Podcast Network, visit the iHeartRadio app, Apple Podcasts, or wherever
Speaker 1: you listen to your favorite shows.