Welcome to the Fearless Innovator Podcast, my name is Mechiel Kopaska and I am your host.
While I was out traveling around in my RV this summer, I stopped off at local Financial Independence Retire Early Meetup group in Des Moines IA. I went because I love learning new ideas and I thought perhaps I could learn something new outside of Florida and what others are doing. I quickly learned that I could add value to the content for their meeting and I asked the leader if he wouldn’t mind me speaking at his next event. I felt I had relevant content considering I had just written a book on Why my J.O.B. Quit Me, jumpstart Your Firing. I decided to share with you the content for my speaking engagement.
Let’s define Financial Independence – This does not mean that you have millions of dollars in the bank. This is a mindset change. It also means that MONEY is not your focus. Financial independence to me means I have the time to do what I want when I want. And you are sitting here looking at me and calling me crazy….why? Because you’re focused on the money… and I’m not….let that sink in.
Here are the real facts:
2000 – Started investing in real estate
2017 – Quit my J.O.B
2020 – hit financial freedom
*It took me 17 years to get out of the rat race and another 3 years to get out of the rat race. My goal is to inspire you to get out of the rat race much quicker than I did!
Robert Kiyosaki defines J.O.B as Just Over Broke! – Did you know 97% of Americans are stuck in the Rat Race? To understand more about the Rat Race – Please read Robert Kiyosaki’s book Rich Dad Poor dad. I read this book in 2000 and it completely started to change my mindset.
Let’s say you’re an employee making
Gross Salary $100,000
Net Salary $ 50,000 – left for mortgage, car payment and all expenses. (student loan debt, credit card debt, child care, etc) . Did you know that you work from January to May just to pay for the $50k in taxes and you take home the rest from June to December?
Roughly $4,000 a month – That $4000 just became your targeted get out of jail free card – is your Goal is to replace the $4000 a month.
How do I make $4000 a month without a J.O.B?
Buy 4 single family homes where the rent is at least $1,000 a month.
1). Your rental income becomes Passive Income – which is taxed at a lower rate and only on the income earned that year. You’re taxed on 12,000 income minus all your expenses.
2). This opens you up for Tax write-offs and deductions you do not get as an employee, lowering your taxable income. This trip to Iowa for me is a write-off. Why? Because I am conducting business and looking for real estate to buy.
3). Your tax liability becomes less, and the tax rate is much lower than what you pay as an employee.
4). Your rental house is now an asset not a liability because this debt is considered good debt because you have a tenant paying for house as it appreciates in value and the debit is getting paid down.
Tax Rates:
Investors earn income through Passive Income and Capital Gains– Passive income requires minimal labor to earn and maintain.
Capital Gains are earned when you sell a property. There are 2 types: Short and Long term
Capital Gains currently is 15% to 20% on assets held 1 year or more.
Single Employee making $100,000 ordinary income is 24% – Taken from the IRS website.
Married filing jointly $100,000 is 22%
How many of you FEAR quitting or losing your J.O.B.?
I’m sure you think about this in the back of your mind every day. I know, because I used to do it, but then I realized why am I fearing losing my JOB when I have skills that I can take anywhere? I also realized that my JOB was the one imposing the fear upon me, I just accepted it! You know the review process you go through and the potential you have at “getting a raise” – that’s your JOB dangling a carrot over your head. OH, bad review = no raise. Once I figured that out, it was clear in my mind that I wanted out!
How many fear losing your identity? Here are 2 examples – You go to school to become an airline pilot – When you take off your pilot hat – you’re just like everyone else. If you can’t pilot a plane, who are you?
I was a Project Manager in IT – that’s all I knew. Who was I when I took off that hat? I couldn’t write code or develop a mobile app – I was just a girl. What do you do? You change your identity!
What strategy did I use to get out of the rat race?
1). Over time I built up my real estate inventory to 8 units. 7 rental homes and 1 short term rental in Gatlinburg.
2). I started working part time so I could focus on my real estate business. I was changing my identity
3). When I quit my J.O.B. – I immediately sat down for weeks and cut all my expenses in half
4). I quit buying Doo Dads, sold things I didn’t need and paid off everything I owned except mortgage debt which Robert calls GOOD debt and the debt on my primary residence – which is a Liability not an asset like your bank will tell you.
5). I took a Robert Kiyosaki class for 6 months and worked directly with a mentor. Once the class was over, I went on the hunt to buy more properties with the knowledge I had just learned. I applied that knowledge and bought my first flip and an 8-unit apartment complex.
In summary:
- I determined the amount of money I needed to live on
- Purchased passive income producing real estate to match the amount of money I needed to live on
- Started to gradually change my identity from Project Manager to Real Estate Investor
- Reduced my hours from full time to part time
- Quit buying doodads – no more bad debt.
- Sold things I didn’t need
- Quit my JOB
- Took an online course
- Surrounded myself with mentors and people way smarter than I am.
- Today, I continue to buy real estate
Robert Kiyosaki quote – It’s not how much money you make, but how much money you keep and how hard it works for you & how many generations you keep it.
Thank you for listening, I hope you were inspired, entertained or you learned something new!
While I’m on my 3 month adventure in my RV my real estate business is on auto pilot and I’m producing income If you want to know how, reach me at www.fearlessinnovator.com or you can now listen to me on the Fearless Innovator Podcast. I can be found on Apple Podcast, Spotify and YouTube!
Catch me later…
