Mark Willis (02:42):
And so, anyway, I got into my adult life with six figures of student loan debt, no real plan to pay it off, and living in a world where jobs weren’t really abundant. So, there you go. Have a nice life, right? Right out of college. So, as we got more focused on our own finances, I realized how crucial it was to get a strategy in place that would be a solve function for my financial life. I didn’t want a bunch of volatility or things that would not be in my control, so I looked for strategies and concepts and tools that helped me reach my financial objectives without taking a bunch of unnecessary risks. And, as I started to be my own boss and start my own business, boy, you take plenty of necessary risks as a business owner, so didn’t need to add a lot of unnecessary risk to that formula of life as it’s been these last 10, 11 years.

Mark Willis (03:32):
It’s been a real gift and a real treasure to work with clients over Zoom, over the phone, meeting with folks as a Certified Financial Planner now, and helping incorporate multiple different creative… I call them not your average financial strategies and it’s been a real pleasure to work with folks from all across the country.

Robert Leonard (03:51):
In my experience, I’ve seen that a lot of financial planners and financial advisors don’t typically incorporate or recommend real estate to their clients. And, I think the answer for that and the reason for that is pretty obvious, and that’s because they don’t typically make any money when they do that. They don’t make any commissions, whereas with other financial products, mutual funds, insurance products, they can make a commission. So, I think the incentive structure there is pretty clear as to why certain advice is given. You’re an outlier in this space because you’re a financial planner that does promote real estate to your clients. You work with real estate. You talk about real estate.

Robert Leonard (04:27):
First, as someone who is in this space, true or false that not many financial advisors and planners recommend real estate to their clients? And, second, how did you become an outlier and begin recommending real estate to your clients?

Mark Willis (04:41):
First, true. You’re right. Most financial planners know what they know. They stay in their lane. And so, you’re right. I think anecdotally, there’s a lot of financial products that they are sort of weaned on. I call them amateur retail investment products. And, if you want to buy retail, you’re going to pay retail price for retail investment products. What are those? That’s every target-date fund in your 401(k) you have at work, by default. What are retail investment products? Your brokerage account, your meme stocks. These sorts of things are like pigs being led to the slaughter for… In terms of your growth potential and the fees that are associated with those retail investment products.

Mark Willis (05:23):
So, I think the first answer is true. Yes. Most financial planners would love to sell you retail, but you can move up the food chain and start buying wholesale or even buying direct if you can. You know, there are some direct purchases and one of those direct buying purchases is real estate. It’s just like clothing. It’s just like anything else. You could pay the retail price at the mall. Remember those? Or, you could go up the food chain and go to Costco, whatever, or wholesale, right? Get your groceries wholesale. Or, you can go directly to your farmer or, in the case of clothing, you can actually source your clothes, whatever, directly. But there’s additional risk. So, there’s always more risk when you cut out the middle man.

Mark Willis (06:04):
But I think your impulse is correct, Robert. In the event of a direct real estate investment, the investor carries more risk. Typically, it’s harder to diversify when you’re buying a whole duplex or a multifamily unit. But you get to cut out a lot of fees, and fees, according to the Department of Labor, can gobble up a third of your life savings over your retirement. A third, if the fee is just 1% assets under management. So, it’s a big deal to think carefully about who’s getting paid on your money and will they be able to retire before you can.

Robert Leonard (06:39):
On your website, it says, “Real estate can be a core component of your financial plan. Properly managing real estate, buying and selling, and proactive use of your equity is a specialty we build into our conversation with clients.” I want to break down a few different pieces of that statement. When you say properly manage real estate, what do you mean by that? How do we properly manage our real estate portfolios?

Mark Willis (07:05):
You hear the words property management and that’s different than what I’m saying there. What I’m saying in my concept to properly manage the real estate, you’re looking at it with the right lens. I was talking to someone earlier last week over Zoom. He was actually working on his tile and grout while we were talking, on one of his 10 rental properties. And, Robert, he had paid off these 10 properties. The debt was all gone and he was cash flowing, after property taxes, about 200 grand a year off these 10 properties. And, he was feeling pretty good. And, I think that’s an amazing accomplishment. Right? To have six figures, mid-six figures of passive income. That’s pretty cool. As passive as… You know, still on your hands and knees doing tile and grout. I don’t know if you count that as passive or not, but he liked doing it.

Mark Willis (07:51):
We got into the conversation and everything in his financial life was his real estate. He had exactly nothing else. No cash, no stocks, bonds, mutual funds, which I was okay with. No other passive income streams, like annuities. In fact, he was so in on real estate, which again, I appreciated. But his concern was, “Mark, all of my money is locked up in the drywalls of these properties and I’m in a state where they are essentially putting a moratorium on rent and evictions. I can’t get my money out of these houses and I can’t get money out of my renters.” And, we got down to it and Robert, we, I guess, agreed at the end that he didn’t really have the tangible asset he thought he had with real estate.

Mark Willis (08:39):
There is nothing liquid about real estate. There’s nothing guaranteed about real estate. All we have is the contract that that real estate is built upon. So, all we have is the faith and trust of the contract between you and the deed you have on the property or the lease that you have with the tenant. Everything else above and beyond that contract, that written word… If you don’t have that, all we have with real estate is squatters’ rights.

Mark Willis (09:06):
So, properly conceived, real estate can be an incredible contract with your financial future, to have that stream of income, to have that 200,000 of passive income like he had and has is an incredible thing. But it’s always important to properly understand that real estate is nothing more than a contract. And, I’m a big believer in contract law. I think if we don’t have the contract, Robert, we don’t have anything. Nothing else in civilization matters if you don’t have a contract of trust with the people you’re working with. If you have a mutual fund, you don’t have a contract. You just have a bucket of cash that goes up and down and looks good one month and looks terrible the next month. But when you’ve got a contract with a real estate property and you’ve got a couple of insurance contracts that couple alongside it, all of a sudden, you’ve got, like, nitro and glycerin working together for your favor. It’s like dynamite.

Robert Leonard (10:03):
The other piece of that statement that I mentioned that I want to break down was proactively using our equity. What do you mean by proactively and how do we actually do that?

Mark Willis (10:13):
Well, again, I think there’s kind of two sides of the fence you can fall off here. One side of the fence is to never touch that equity. This guy had 10 properties, several million dollars, all locked up in the drywall. And, he thought that was a good thing. Hey, I paid off my mortgage. That’s great. But what if we could think more creatively and more proactively, build a plan around our equity, just like we would any other asset? Again, if he was, for some reason, unable to meet his financial commitments one year… Let’s say the tenants stopped paying rent for, say, eight months during a pandemic, let’s say, Robert. What could he do? He couldn’t necessarily get a loan from a bank if the renter wasn’t paying him an income. What banker is going to loan you money if you’re not going to receive money income to be able to pay back that banker? Okay? So, it all depends. You’re still under the thumb of the generous banker, even if you’ve paid off your rental properties, even if you’ve paid off your home.

Mark Willis (11:11):
So, in my book, that’s not a smart use of equity. Dead equity, as they call it. So, one side of the fence is to say I’ll never use my equity. I’ll just let it live and die inside my rentals or my real estate. The other problem, the other side of the fence, is using your house and your property as like a piggy bank or a roulette table, whatever. You don’t want to just be ripping cash out of your house for no reason or to buy the flat-screen TV.

Mark Willis (11:34):
Okay. So, with those two things out of the way, what’s a proper use of equity? Well, what if you could harvest the equity out of these properties every five, seven years? We’re in historically low-interest rates. We can use this highly appreciated real estate market we’re all living in right now and harvest the equity and put it somewhere where it’s liquid, predictable, and guaranteed to grow for you for the rest of your life. Once again, these dual relationships between the insurance contract and the mortgage or the home equity or the real estate equity couples really nicely together. Again, nitro and glycerin. Cheese and wine. Thelma and Louise. Batman and Robin. They go really well together.

Mark Willis (12:15):
So, in the event that you harvested out some equity, we go into this and I can get into some numbers if you’d like. But you can harvest out, say, you know, 50, 70% of your equity, let’s say, every seven years. Had a lady who did this. She harvested some equity out of one property, a condo she had, used that equity, put it into a life insurance contract called a bank on yourself type life insurance contract. And then, she used that liquid bucket of money now to go buy a second real estate property. Now, her year-over-year appreciation… She still has the condo. She still has the new house. She’s got two rental incomes. She’s got two appreciations on Zillow or whatever. But now she has a new asset, too. She went from one asset, the condo, to a condo plus an apartment building plus a whole life insurance policy, all of which is growing. She’s got two rental income streams coming off these two properties. And, the interest rate on the mortgage is incredibly low. So, that’s just one creative way.

Robert Leonard (13:18):
One of the pieces I want to talk about next is… It’s complex and it’s super individualized and it’s going to vary, but a big piece of financial planning is tax strategy. How does real estate play into someone’s tax strategy?

Mark Willis (13:33):
Man. Well, go back to the pyramids, because that’s how old real estate is in the universe, right? The financial universe. And, go back to Egypt and that’s about when taxes started, too, Robert. So, it’s interesting. There’s a connection there. So, there’s a really, really longstanding tradition for governments to subsidize what they want us to do through tax breaks, and that’s a good thing. It’s an incentive. Essentially outsource. The government doesn’t necessarily want to be in the housing industry. They don’t want to give us all housing, necessarily. I don’t want to live in government housing. So, I’m happy to see that they incentivize us private owners to go out and build, create, maintain, improve upon, real estate in this country. It’s one of the great things.

Mark Willis (14:22):
But again, it’s a tax break and whether you’re looking at cost segregation strategies, whether you’re looking at some of the carried over interest deferral through a 1031 exchange, whether you’re looking at some of the ways we can do [to] step up and base this upon death, there are some incredible advantages of real estate if you’ve got a good accountant who’s thinking about these topics.

Mark Willis (14:43):
Now, as a CFP, one of my, I guess, key elements or perspectives, really… I don’t want us to just think about how we’re going to lower our taxes, but I also want to think about how we’re going to pay for the taxes we might still owe. So, I was just working with a gentleman out in Georgia and he has a significant income through real estate. He also owns several businesses. He came to me saying, “Mark, I’ve got some great passive income deductions off my real estate but I’ve still got about $100,000 I got to pay the Internal Revenue Service.” Or, Robert, if you like, I like to put the word “the” and “IRS” together. What does that spell? Like, it’s the word theirs. Spell the word theirs. Because it’s all theirs.

Mark Willis (15:26):
So, he was concerned about this six-figure bill to the IRS. So, we had to decide. All right. He had already worked with his accountant to lower that tax bill down as hard as he could, legally. And now, he’s got a big fat check. What’s he going to do? He has a choice. He can either withdraw it from a bank account and it stops the growth on that money. Once he withdraws money out of a savings account, it’s gone. But also gone is the powerful use of compound interest on that 100 grand. If he had not had the tax bill and he had just left that money in there to accumulate and grow, Robert, what would $100,000 grow to over his lifetime? And, it’s even worse than that because what’s funny… The IRS tends to want to be paid every single year. So, what’s $100,000 compounding? Multiply that 100,000 every year for the rest of this guy’s life. It could be millions, tens of millions of dollars, that he will lose out on. The wealth won’t be there if he just simply writes the check and writes the check to the IRS. Gone.

Mark Willis (16:25):
What’s his other option? Well, he could stay liquid. He could keep money in the savings account and go into debt, get a line of credit, get a HELOC or whatever and pay his tax bill. Well, who’s going to win there? Well, the IRS wins because they get their 100 grand and the bank wins because they get the interest off of his line of credit.

Mark Willis (16:42):
So, what’s his option? We all have to pay taxes, all of us. Unless you guys have figured something out that I haven’t found out. Even if you’re not a big tax bill guy like this guy was, all year long, how many sales taxes are you paying? How many property tax bills are you paying on all your real estate? How many dollars are you paying on your payroll tax? Et cetera, et cetera, et cetera. So, bottom line is what’s the right way to pay the bill that we still owe? And, one of the most interesting strategies that I’ve come across, Robert, is using one of these whole life policies. It doesn’t reduce my taxes. That’s what real estate is for. But what it can do is the bill that is still owed can now be paid without sacrificing your compound growth, which is the most important. Biggest financial tool in the universe is uninterrupted compound growth.

Robert Leonard (17:29):
Most people listening to this show are quite a ways away from retirement. Not everyone, but a lot of people listening. And, are even at the beginning stages of their real estate journey. What should they be doing today to prepare for retirement in the future, even though it might seem like it’s a long time away?

Mark Willis (17:48):
Well, the first thing is you’re listening to this podcast and so, well done deciding that you’re going to spend your time not just listening to music, whatever, but you’re putting your mind to good use. You’re turning your car into this wonderful library. You’re doing your dishes or walking your dog, listening to incredible content Robert puts out.

Mark Willis (18:05):
I would say first thing is get that mindset where you’re going to be a transformer over your life and not just a consumer. So, you could easily consume this episode and move right on to the next one in your playlist. Or, you could decide… Pull the car over, whatever, and decide here’s the moment I’m going to put an action step on my to-do list to whatever it is. Reach out to Robert. Give him a call. Reach out to me. Give me a call. Contact your financial planner and give them a call. Whatever your choice of action is. But you’ve made a choice to transform, not just to consume. So, that’s maybe the first thing you might choose to do.

Mark Willis (18:39):
The next thing I would suggest… Again, I’m not… I don’t know everybody listening, so I don’t know everyone’s particular financial situation, but I have noticed anecdotally with a thousand plus people we’ve interviewed and are working with us now across the country… Oh my goodness. There is a big shortage of liquidity in most people’s financial life, especially when you get started. And, people wonder why they climb up the stair ladder, they put a little money in their savings account, and then, boom. The emergency. Or, boom. They got to buy a car. Or, boom. They got to buy another car. So, the problem I notice most people have is that they simply are living on very little margin but they could be doing so much better with a big pool of liquid contingency cash.

Mark Willis (19:26):
I’m not just talking about emergencies, Robert. I’m saying like what about your contingency fund for an opportunity? If you’re sitting on the big pile of money like Buffett might be or most other large investors might be, you can be ready to take advantage of the opportunity, but it’s only if you’ve got ready to go capital that isn’t dependent on a generous banker. There’s an old Mark Twain quote. He says, “A banker is a fellow who will lend you his umbrella when the sun is shining but wants it back as soon as it starts to rain.” That is the case with most of our lines of credit at these banks. Now, what if you had all the money in the world in the moment, the very moment, when banks stop lending again?

Mark Willis (20:04):
Again, I’ve been through enough of these crashes and crises now to know that markets aren’t done with us yet. The roller coaster hasn’t stopped. And, certainly, we could do a little better if we had a big pool of money ready to buy that real estate deal down the street or pick up that next opportunity if we were sitting on a little more cash. So, that’s the first piece of advice.

Mark Willis (20:27):
I’ll say this last piece and then I’ll hush. The first and most important thing you’d want to do before embarking on a financial journey, whether you buy real estate or not, is to just simply have a little thought time. It’s so rare for us to think these days. There’s an old quote. 10% of people truly think, Robert. Another 10% of us think that we think. And then, the other 80% of us would rather die than think. And, it goes back to that old adage. For most financial planners, they just want to hear their clients tell them to do it for them. “Hey, Mr. Financial Planner. Here’s all my money. Just do it for me. I don’t ever want to think about this. Just… I’ll see you in 40 years when I’m ready to retire.” That is the wrong way to go. In fact, “do it for me” could be the foremost dangerous words in your financial vocabulary because that’s where we get the Bernie Madoffs of the world, right?

Mark Willis (21:18):
So, you got to take some control, some responsibility. You don’t have to necessarily be an investor pro, but you need to know. You need to understand the function and the characteristics of where your money is going. So, what does that mean? Well, maybe it just means half an hour, sit down with a journal and decide, hey, if I could wave a magic wand if I could just become Pope of money for the day, what sort of characteristics or attributes would I want my money to have? If I could just create my brand new, never before seen financial product or instrument, what sort of things would I want it to have?

Mark Willis (21:53):
In fact, my wife and I did this a long time ago and we said to ourselves, “All right. If we had to have our own shot at being Fed Reserve Chairman, whatever, for the day, and we could just snap our fingers and make a brand new financial product, what are some of the things we’d want our money to have?”. And, we thought about it. We said we want it to be tax-free. We want it to be without penalties, get access to the money. We wanted some sort of predictable guaranteed competitive rate of return that beats inflation. We wanted it to be accessible, like, liquid and accessible. We also knew with real estate we needed to be private, keep it off the books of any courts if anybody decides to sue our property, whatever. So, we just kind of made our own little list. And then, when we’re approached with a great syndication deal or, hey, here’s the snazzy new solo 401(k), we knew, hey, this won’t fit our matrix. This won’t fit our best options.

Robert Leonard (22:45):
What if someone wants to retire early? Maybe they don’t want to wait until they’re 65 to retire or maybe they want to retire at 35 or 45. Or, maybe it’s not a specific year or age. It’s just five years from now I want to retire or 10 years from now. What can people do from a financial planning perspective that would help them achieve the goal of early retirement?

Mark Willis (23:07):
You got to watch out for fire extinguishers. That’s the first thing. If you love fire, financial independence, retire early. If you’re looking at five years or less, got to watch out for fire extinguishers. Major fire extinguishers are market volatility. If you’re five years before you retired… I don’t care if you’re 25 years old or 65 years old. If you’re within five years of retiring, the market has a great way of just deciding they’re going to take that money from you.

Mark Willis (23:32):
I had the clients at the old CPA firm I worked for. I heard the CPA give them the dreaded phone call where she said, “Hey, I’m sorry Mr. Client. You’re 62 years old. You’re about to retire. But I just lost you a third of your life savings. You can’t retire like you thought you could.” So, the biggest thing is just to watch out for fire extinguishers. Other extinguishers might be fees, future tax increases. If you think you can make it on 50 grand a year today but then they raise the taxes on your 401(k) double, whoops. Might have to go back to work for that. What about inflation? Okay. That’s another fire extinguisher. Watch out for these fire extinguishers. Those are some of the key pieces.

Mark Willis (24:13):
One last thing I’ll just mention quickly is what does retirement mean for you? And again, get a very clear picture of what you think you mean when you say retirement because maybe it’s different than what your spouse wants, so get a very clear picture on what the word retirement means. And, even if you’re single, maybe give it a try for a while. Maybe go for three months to Costa Rica if that’s where you want to live and see if you like it. Nothing worse than retiring early, giving the F you email to the boss, and then moving to the beach and then getting sunburned for two days and hating your life and then begging him for a job back. So, give it a try first before you decide to totally jump ship.

Mark Willis (24:54):
So, decide exactly what retirement means. That’s the first. And then, the second is watch out for all those fire extinguishers I mentioned.

Robert Leonard (25:01):
From all the people that you’ve worked with over the years, before they started working with you, what is the worst mistake you’ve seen people making financially?

Mark Willis (25:10):
Well, again, I have to go back to… They get so enamored with the golf clubs that they forget to improve their golf swing. It’s a choice most people don’t realize they have. They can either get a golf club or they can improve their swing. And, Robert, I don’t know about you, but if I could either have Phil Mickelson’s golf clubs or his swing, I would choose his swing over the clubs, and I think a lot of people get wrong this idea that if they just had the best real estate deal, if they could just find that perfect rental property or multifamily or if they could just be like the Joneses down the street or if they could find that sexy new index fund that’s paying them 15% guaranteed by God every single year, then they finally would make it. And, unfortunately, they’re going to be disappointed. I mean, I’d say that that’s one of the biggest mistakes I see a lot of people make.

Mark Willis (26:03):
Finally, I’ll say one last thing. They attach themselves to a money guru. And, you know what I’m talking about, right? A money guru is somebody who comes down from the mountain and makes it clear that they know the secrets, that they’ve got their crystal ball. They’ve got the Wizard of Oz in their pocket. But honestly, Robert, the problem is they don’t know. They don’t know the future. I don’t know the future and you don’t know the future. None of us have that crystal ball. And yet, there are enough radio hosts, there are enough people with big $30,000 a year seminars, that are getting rich off your back. So, be careful with money gurus.

Mark Willis (26:41):
In fact, I jokingly call myself your last money guru. Here’s why. I try my best. When I’m meeting with clients, I go through a training process. I actually give them pop quizzes because I want them to know and I want them to tell me that they know where their money is going. I don’t make it tough. I don’t ask them to bring a calculator. I’m just saying, “Hey, let’s have a discussion where you tell me why you’re doing what you’re doing.” And, that changes the dynamic. Takes me out of the role of having to convince somebody that investing is good for them or real estate is good for them or whole life insurance is good for them. And, instead of that, I’m now listening to them tell me why they have chosen to pursue a particular pathway, why they’re standing there in the green and they’re not going to grab their sand wedge or their driver. They know the swing and the clubs are the afterthought.

Mark Willis (27:33):
So, why do people mess up their financial life? It really comes down to the issue of the money gurus, where they let you down in the wrong way. I would say I try to be the last money guru where I let you down in the right way and I say, “Hey. You know what? You have what it takes. You don’t need another guy, another savvy money guru. But you know what you know and the future now is in your hands.” Which, to me, is a very empowering way to deal with and work with clients.

Robert Leonard (28:01):
When you start working with a new client, what is the very first thing you look at in their current financial life? What is the first thing you check to see if they’re doing it right, and, if they’re not, you start there?

Mark Willis (28:12):
That’s a really insightful question. I don’t know. I’d be curious what you would do. If you were a financial planner, as you work with people, what you look for. I guess to me the consumer mindset and the transformer mindset… I oftentimes will ask them, “What was money like for you when you were growing up?”. I’ll ask them, “What did your parents teach you about money?”. I sometimes will ask them, “What sort of future would you consider a success? Well, let’s say we set up this financial plan right now in 2021. Let’s say it’s 2026. How will you know it’s working?”.

Mark Willis (28:50):
These are some of the questions I would ask. But I’d be curious what you would look for, Robert. I’ll put it back on you in this case if that’s all right.

Robert Leonard (28:56):
I’m not a financial planner, but the things that I would look at are just to make sure that people fully understand everything that they have going on in their financial life. Do you understand everything you own, whether it be cash, bank accounts? Do you know where all your money even is? Did you have a bank account that you forgot about when you switched banks? What are your investments in? Do you even know what your 401(k) is invested in? Do you know what your IRAs are in? Do you know what insurance products you have?

Robert Leonard (29:21):
And then, on the other side of the balance sheet, I would look at, do you know what debts you have? Do you know what your interest rates are? All of these types of things just… Are you fully aware of what your financial picture currently is? Because I don’t believe anybody can get anywhere if they don’t know where they currently are.

Mark Willis (29:36):
I totally agree. It’s the old GPS. You got to know you are here. You got to know where the button is before you know where you’re going to go. And, yeah. We go through a one on one advisory consultation where we go into that. Hey, what is the account statement look like through your mutual funds through work? What is the interest rate on your credit cards? Et cetera. But I also ask them what’s important about having this account to you, because I could ask them to just send me a spreadsheet of their stuff and then I could just spit back to them a number of recommendations and that’d be fine, I guess. But there’s a reason why I have a one-on-one Zoom call or phone call with folks and that is I need to hear their language. I need to hear how they feel about where the markets are, about where taxes are headed.

Mark Willis (30:22):
Give you a case in point. Certain person. They have all their money in qualified plans. Okay? I’m working with them right now. That means it’s all going to get taxed in the future. Now, they’ve got a good healthy sum. Seven figures in these various accounts. So, they’re going to have at least a decent required minimum distribution off this money, meaning they’re going to be forced to take money out. They’re going to be forced to pay taxes on this for the rest of their life. They don’t need the money, okay? They’ve got some other real estate. They’ve got a pension. They’ve got Social Security. All their income is done. They’re set. But they got this massive problem coming at them called a required minimum distribution, coming out of their 401(k)s and IRAs. Most people don’t even realize those exist.

Mark Willis (31:04):
So, I asked him. I said, “How do you feel about these numbers? You’ve won. You won the game. You got seven figures in qualified plans. You got your pension. You got your other stuff. You’ve won.” And, he said, “Mark, I’m scared to death because I don’t want the IRS to be the biggest beneficiary of all my life’s hard work.” And, we did the math and he’s right. He’s got a couple of kids, three kids, and he’s going to leave more money to the IRS than he’ll leave to each of his individual children if you did the math on that.

Mark Willis (31:34):
So, his problem was not on that spreadsheet. His problem was in his heart. He’s got to figure out a great way. And, we figured out, by the way. Side note. There’s an incredible strategy. We were able to help him avoid all that and to leave all of his kids’ income tax [inaudible 00:31:50] inheritances. But, you know, it came down to the discussion. Do you, the listener… Do you believe that taxes are going to go down or up in the future? I’m not talking about this year’s tax results, not this year’s Congress vote. I’m talking about the next 30 years of your life. Is taxes a downward trend or an upward trend over your lifetime? Because if you believe taxes are going to go up over your lifetime and yet you’re putting all this money into tax-deferred plans like 401(k)s and IRAs, goodness. That’s a moment of, hopefully, self-reflection. Why are you doing that? What’s important about putting away tax-deferred money if you believe taxes are going to go higher in the future? It doesn’t make mathematical sense.

Mark Willis (32:33):
So, these were some of the conversations we would have with clients.

Robert Leonard (32:36):
Whether it’s about life in general or it’s financial-related, what’s a piece of advice you’ve received that has really had an impact on you and you continue to use it and think of it to this day?

Mark Willis (32:48):
Boy. You know, I’ve got a little list of principles for my life that I’ve got ready to go in case I don’t make it home one afternoon. I’ll give to my daughter and my wife, a little list of principles. But one of those principles that seems to immediately… Here, I’ll give two and I’ll keep it brief, I promise. One is truth reflects nature. So, that means look to nature if you want to know what’s really going on. Nature seems to have a really interesting way of surviving against the two fundamental laws of the financial universe and the world’s universe, which are the law of gravity and the law of entropy. Gravity pulls you down. Markets certainly do. And, entropy tears you apart. And, that’s certainly the case with our finances as well.

Mark Willis (33:28):
So, if you want the truth, look to nature. How does nature fight back against these fundamental laws of gravity and entropy? DNA. Life fights back against entropy and gravity through a contract with their future. That is what DNA is. DNA is a script for your future and that’s something that you can incorporate into your financial life, too.

Mark Willis (33:50):
So, one of the things I really, I guess, fundamentally believe, is that the contract with your future, your own purpose toward your future, is something that is not only like a mindset, like knowing for sure, hey, you know, wealth is coming my way. Write that somewhere where you can see it every day. But then, you also got to have financial products and strategies like real estate and life insurance that are literally a contract with your future. Both of those assets are. So, that’s why I’m so keen on life insurance. That’s why I’m so keen on real estate and why I’m not so keen on putting the vast majority of our money into things that are not contracts, things that are simply paper wealth or paper losses.

Mark Willis (34:30):
So, that’s my first piece, that nature reflects reality. The second, very quickly, is… I guess there’s a statement I heard somebody else say, and I forget who said it. But they said all conflict is the result of unmet or unexpressed expectations. All conflict is the result of unmet or unexpressed expectations. I feel like that would be a great thing to keep in mind next time you’re having a rift with your significant other, okay? Or, you’re thinking about your own disappointment with the market this afternoon or your real [inaudible 00:35:04] fell through. You know, just keep in mind that all conflict is the result of unmet or unexpressed expectations. So, even internal conflict. Maybe you can resolve some of that through some journaling, figuring out what you truly want. Unexpressed expectations.

Mark Willis (35:18):
So, that’s my two little bits of info.

Robert Leonard (35:21):
I really like that last one. The second one… Expectations are huge for me. It’s something that I focus a lot on. I often believe that the outcome isn’t necessarily good or bad, but it’s really your expectations of what that outcome was going to be, and I think that that’s often more important than the actual outcome itself. So, I’m big on setting expectations in all aspects of life.

Robert Leonard (35:44):
Mark, thanks for joining me on the show. For those listening that are interested in connecting with you after this episode, where is the best place for them to go?

Mark Willis (35:52):
You know, guys, if you want to hear more about any of our strategies, things that we’ve done in the past with other clients, you can go to Not Your Average Financial Podcast anywhere you’re listening to this show. It should be on that player as well. If you want to reach out to me and say hello, we can do a 15-minute phone call, get to know you a little bit, answer some of your questions you might have. You can go to bit.ly/boyrealestate. That’s Bank On Yourself Real Estate. So, again, that link it bit.ly, B-I-T dot L-Y, forward slash B-O-Y real estate. And, we can chat.

Robert Leonard (36:26):
Awesome. Thanks for those links, Mark. I’ll be sure to put those in the show notes below for anyone that’s interested. Thanks for joining me.

Mark Willis (36:33):
Thank you.

Robert Leonard (36:34):
All right, guys. That’s all I had for this week’s episode of Real Estate Investing. I’ll see you again next week.

Outro (01:04:44):
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