August 4, 2022

What to Do to Increase Your Education Around Money - Billy Keels

In today’s solo show, Billy will explain how you can learn more about money, some lesser known strategies for making money work for you, and how to ensure consistent returns and stop paying so much tax.
Billy Keels
CEO and Founder FGCP

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Going Long Podcast Episode 235: What to Do to Increase Your Education Around Money

In today’s solo show you’ll learn the following from Billy himself:

  • [00:20 - 02:55] Show introduction with comments from Billy.
  • [02:55 - 12:23] How you can learn about how money really works. and the lesser known ways you can make it can work for you yourself.
  • [12:23 - 13:14] Action you can take to ensure consistent returns and stop paying so much tax so that you can keep more of what you have worked hard to earn.
  • [13:14 - 13:55] Billy wraps up the show.


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Episode Transcript

SUMMARY KEYWORDS

investing, returns, income,understanding, yield, continue, conversation, education, paid, talk, taxadvisor, real estate, irs, type, exclamation, topics, tax, money, gaining,faster

SPEAKERS

Billy Keels

 

Billy Keels  00:00

Today's conversation issponsored by first generation Capital Partners. If you're an accreditedinvestor and you want to know about how we're helping other accreditedinvestors keep more of their income, go to first gen cpe.com forward slashgoing long.

 

00:12

You're listening to the goinglong podcast with Billy keels, the number one podcast for long distance realassets investing.

 

Billy Keels  00:22

Welcome back to the goinglong podcast, we're back once again, to continue to help to educate you so thatyou feel much more comfortable as well as confident investing beyond yourbackyard. Yep, I'm your host, Billy keels. And guess what we're back together.Once again, for another one of the solo episodes, I'm really enjoying these, Iwant to know, are you enjoying these, I really hope that you are because thisis this is a lot of fun. So now I'm understanding why you asked for these typesof conversations to happen. And so today, it's going to be another briefconversation another brief, I guess, I keep saying conversation, but amonologue, listen, it's taking me a little bit of time to not have somebody onthe other side of the microphone. So it's, this is this is very, very positive.And so I'm trusting that you're getting a lot out of this as well. So today,we're gonna get into one of the topics that was pretty close to my heart. Andit has a lot to do with the education around money and the money system andthings like that, what we're taught, we're more importantly, not taught. Butbefore we even get to that, I want to continue to recognize our awesome,awesome, honest, written reviews, as well as ratings and the individuals thathave written them. And once again, if you want to have your honest review, readin front of people in front of 30 different countries, 10s of 1000s ofdownloads. And this is the place to do that. And also, I read every one ofthese that I mentioned to you before I read every one of them, because we wantto make sure that you're giving, we are giving you exactly what it is that youneed. So this becomes your go to podcast. So once again, today's conversationis it says great show, and this is from Maryann exclamation point, exclamationpoint, I really enjoy your show. After listening to a few episodes, I wastotally hooked. It has great direction, it deals with very instructive andinteresting topics. I really love this programme, exclamation point. So thankyou very much, Marianne, exclamation point, exclamation point, we reallyappreciate you investing the time and making sure that you're providing us withyour feedback, we want to continue to make sure that we're delivering value foreverybody. And so Marian, exclamation point, exclamation point, it's greatlyappreciated. And we're going to continue to do and make this this veryinstructive, as well as an interesting topics that are going to help you verysimilar to the topics that we are talking about today or the topic that that Iwant to address with you today. And that is the whole question of increasingyour education around money. And I know that we've talked about a couple ofthings before and helping you get clear on the destination and choosing theright vehicle and, and also being able to understand when is the right time tostart to invest. And so that was where episodes to 29 to 31 and 233. And, andnow it's really about increasing your understanding around money. And so I havethis feeling, what's not even a feeling it's just the reality. In academia, Ilearned little to nothing about money and the management of money as it relatesto real life topics. I do have two degrees, I went to great university MiamiUniversity in Oxford, Ohio. So it has nothing to do with that. But academianever really taught me about money and how to make money multiply, and how tomake money work best for me. And because I was in a family where we didn'treally talk about money a lot, because money was not a really positive subjectto talk about. A lot of this I've learned because I've continued to I was verymoney driven. The beginning, that is not a major motivation. For me at thispoint, I understand that you need to have money in order to do the things thatwe're talking about. But that is not that were all end all it is really aboutthe experiences that you're able to create, through having income and havingcurrency, having money depending on how you look at it. But the fact of thematter is, is academia teaches you little to nothing about money. And becauseof that, what it does is it can get you ready to go and doing things. Butyou're if you're not really allocating your financial resources in the mostappropriate way, you can be spinning in circles for quite a while, you may feellike you're moving forward, because you're beating inflation, or you are doingwhat you need to do. But when you find out that you could have actuallyaccelerated and gotten to your goal much faster. That's when we go back to theconcepts of having the opportunity cost that you're actually missing. And so Ithink that there's probably no what better way to explain that kind of problemthan sharing my own story with you. Because this is one of the things thatyou're going to see that when you don't have the baseline education, you'redoing the things that maybe you're watching other people do, but if you're notreally getting educated, you're not really understanding your specific context,your idea, the way that you grew up and The comfort that you have with the differentvehicles, especially when you're clear on the destination that you want to getto, that can hold you back. And what do I mean by that? So, because I grew upthe way that I grew up, and I got to a point where I was able to save money, soI was saving money, and then I was able to invest money. But I was investing inthe things that I learned in my job, the person came in and said, Hey, Dustin,do you want to sign up for this 401 K plan. And then when you max that out,then you want to sign up for an IRA and you had friends and family. And that'swhat they talked about. And so that's what I did. I didn't give it a lot ofthought. I just knew that I was quote, unquote, investing. And so as I wasinvesting, I was really kind of like buy low sell high mentality, because thethought of just investing, I was just trying to figure out, okay, well, what'sthe like, what's the highest return, I didn't give any thought to what thehighest return was or what the risk adjusted return was, because those were conceptsthat I was not familiar with. So what I spent my time doing, as I was workingin my day job, and I became a very high paid professional, I was chasing theyields, meaning the returns on the money. And you can look at it at a number ofdifferent ways, whether it's cash on cash, or its internal rate of return ornet present value, we're not going to get into that specific, specificspecificity, say that three times fast on this in this conversation, but theidea was, I was chasing the type of yields that were in the stock market that Ihad absolutely no control over. And they just told me what fluctuate somewherebetween, you know, 4%, and 8%, or whatever, once I made the shift from gettingaway from paper assets, still in the portfolio, but a much lower component ofthe portfolio started investing, as most of you know, in real estate doing thatlong distance living in Barcelona investing through companies in the UnitedStates. And so I was also chasing the similar type of yield. As I was doingthat, I was gaining experience. But then I realized I could invest with otherpeople. And when I started investing with other people, I went to the samementality that I had before because I didn't, I had, I started gettingeducation and practical experience, but not really expanding the networkgaining new access to education. And so I continued to chase yield that was,you know, somewhere between five and 8%, because that seemed better thananywhere else that I could get. And I continued to do that for quite a while investing,actively investing passively. Now, on the active side, the yield was higherthan that, but I was doing a lot more work. When I was investing with otherpeople, you know, the yield was anywhere between 5% or 8%, at the time, and Iwas told that I was going to, I was going to get strong tax benefits. So what Iunderstood that to mean is I was going to be paying less in tax, my educationwas soon to come. Because after a number of years of investing passively, andactively in real estate, I kept hearing that real estate was going to drive mytaxes down. But the problem was, I was still getting the return. And they werereally efficient in real estate and I was paying little to no tax on thosereturns. The challenge was I continue to pay 40 plus percent in income tax. Andso I didn't understand that, because I kept hearing that real estate was goingto drive my taxes down. Well, you have to be educated and ask the rightquestions. Because if you are someone who is a high paid professional, you area high paid professional, your spouse is a high paid professional, it's highlyunlikely that you investing in just a real estate deal is going to drive yourtaxes down, it is going to be very tax efficient for you in terms of thereturns, but the when you still get your tax bill and it's 40 50%. Don't beshocked. And by the way, I am not a tax advisor. I'm not giving anybody any taxadvice. I'm just sharing my own story because this is what happened to me. Ikept listening, I kept hearing I kept reading the blogs, I kept reading thecopywriting that was in my LinkedIn file that you know, real estate was taxefficient, it's going to drive your taxes down. But that was not happening forme. It wasn't until I got really educated. And I started finding out that hey,listen, there are different types of income. And understanding those differenttypes of income, ie passive income like that is not meaning that does not meanthat you don't work for your money. That is an IRS definition of the type ofincome that is generated from types of investments such as royalties, rentalreal estate, which is what most people talk about. But that is a specific typeof income. If you are working in your job a W two and you are earning incomethat way that is very typically an active type of income or some would sayordinary income or earned income like your W two income. And these are two verytypes of income that unless you have a very specific IRS designation, these twodo not mix. And so I got really frustrated because I had these things calledpassive losses. And these passive losses kept building up building up buildingup, but it didn't drive my tax bill down. And so it led me to go figure outwhat was the way that I can actually consistently create returns becauseinvestments are about create Getting returns risk adjusted returns, and alsobeing able to help me pay less income tax. And so once I realized that I couldcontinue to keep things in the stock market very little, I could also invest inother real assets that were generating IRS defined passive income, I could alsocreate consistent returns, and be able to help on my active income or ordinaryincome, and be able to create those consistent returns at the same time, beingable to lower my tax bill, because when you can go from paying 40% 40 pluspercent in this example, to half of that, well imagine that income that you cankeep, and you're able to then invest in other streams of passive income, i.e.,because it's a lower taxed income. So these are some of the things when I talkabout education that this was an education that happened to me, I spent a lotmore time investing in passive streams of income in real estate very much. ButI did that for a decade. And so if I would have understood these differentgoals, or these different benefits from investing in different types of assets,I would have been able to cut that timeframe down from 10 years, to maybe fiveyears, that would have given me even more options and been able to do morethings, but I wasn't exposed it to these types of investment opportunities. Oneof the reasons that I talked to you about that today is because I want you toget to your goals much faster than it took me it took me almost a decade, if itcan take you half that time, that would be fantastic. If it takes you half thattime, but you continue to want to go into your day job because that's whatbrings you the most joy. Fantastic, I believe you're going to be a betteremployee, I believe you're going to be able to add more value to the company,because you're going in and you're doing the things that you enjoy doing,knowing that your life, your financial life, and the real life outside of thejob is already taken care of. So like I said, I wanted you to be exposed tothis do my own story, especially for those of you that are high wage earners.Understanding that if you hear that, that real estate drives your tax billdown, you may want to ask more questions. How does that do that specifically,because to my knowledge, there's only one IRS designation that would allow youto do that. And if you are a busy professional, you or your spouse combined,it's very, very difficult. I don't want to say impossible, but very difficultto do that. Once again, I'm not a tax advisor or anything like that. I've justlearned some stuff and I'm sharing my own example. So if you happen to be avery busy professional and you are interested in being able to createconsistent returns, and also stop paying 40 plus percent in taxes, there's avery tactical action that you can take in find out more starts with education,go to first gen cp.com forward slash going long. There's we've had a guide thatwe talked about exactly what's happening, and just start the education processget get more informed. Learn from my example. Hopefully this helped you tounderstand combining these different vehicles will allow you to collapsetimeframes and be able to get to your destination much faster. But this alsostarts around the education around money and the different ways that you cangenerate money and how you can also by keeping it or creating a much moresecure runway for yourself and your family. And once again, if you're that highpaid professional, you're that accredited investor. Just go to first ncp.comforward slash going long. And listen while you are reading that guide orlistening to the conversation again, rewinding it, sharing it with your friendsand family. I'll be here preparing the next conversation. So until then go outand make it a great day. Thank you very much. Press Did you enjoy today'sconversation and once again, today's conversation was sponsored by firstgeneration Capital Partners. If you're an accredited investor want to find outmore about how we're helping accredited investors to gain their personalfreedom even faster. Go to firstgencp.com forward slash going long.

Billy Keels
Founder & CEO of FGCP
Billy is on a mission to share a roadmap and opportunities with other extremely busy, high-paid professionals on how to find financial freedom through investments. Listen in to learn how!
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