CAIR 74: Invest Like The Wealthy To Change Your Life

In this episode, I have the opportunity to talk with a self made entrepreneur who's followed the footsteps of her amazing dad, and in the journey has discovered what the tips are that the wealthy use to invest to change your life.

Grant
Hey, everybody, welcome to another episode of Financial investing radio. So I have been trying to track down this person multiple times and admitted it was my fault. I could not get my calendar right to meet with Stephanie Walter. So glad to have her here with me today. I'm fascinated with her background, what she's done in terms of growing wealth. But before I go any further, Stephanie, welcome.

Stephanie
Thank you so much for having me. I appreciate it. 

Grant
Yes, this is fun to have you here. Your journey is a fascinating one to me, because it's this journey as I reviewed it, of gathering some financial capabilities, but then not resting on that, but rather using it to leverage for future wealth. So I don't want to give that away because I want I want our listeners to hear this cool journey that you've gone on. But let's rewind. Okay, let's uh, we won't go back to where you were raised as a kid. But let's go back to you get out of school, and you're thinking I'm gonna go do some work. And that led you down a certain path? Would you talk about that? Yeah, I did what like most people do, I got it. I just got a regular job with a corporation.

Stephanie
I had some interest in insurance. So I became a claims adjuster. And, and I sort of moved up the ranks pretty pretty quickly to where I was working kind of as a liaison between the attorneys in that represented the insurance companies and, and the insurance company. So that was, that was really interesting, but just, you know, working in a corporate setting, I remember that, you know, my pivotal point was I was getting a 2% Raise after my superiors had said, what a fantastic job I was. You're welcome all 2% Did you get to keep all that 2%? Or did you know you got to keep? 

Grant
That's impressive. Yeah.

Stephanie
And I went home to my Dad, I just bought a house and was like, Dad, I just, you know, look at how much gets taken out. But with taxes, it was a big learning experience. I mean, well, as you know, I did put, you know, seven years into it, but just realize that, you know, if I'm making these 2% races for the rest of my life, you know, what is that going to look like? And my dad was an entrepreneur, actually, he's a second generation entrepreneur. And he's like, Well, you know, what you're gonna get if you stay in this, but if you go out on your own, you know, really what you build will be up to you. And it's your choice to do what you want to do. And I gave my my two week notice probably the next day, did you really? Oh, wow. That's okay. Wow, a woman a decision and action. That's awesome.

Grant
So, all right, so you gave you gave the two week notice you left, and then you didn't go to the pool? That's for sure. What did you go though?

Stephanie
Well, I have a I have a lot of relatives and insurance. And that's kind of how I started in doing in claims to begin with. And so I just knew, you know, the company I was really familiar with, went and signed up with them, took all the classes to become an agent and and just, you know, started started working, you know, right off the bat, state and insurance agent for about 16 years. 

See, I started that I'm trying to think of like timeframes, I think it was 2004. And then right around that same time, I kind of decided, you know, with the when the bottom fell out to buy some real estate, single family homes, right in an area in Denver, I'm a native, as I mentioned, where I felt like if there would be growth, from Denver that, you know, over time, these would probably be good, good investments to have. And that was in the Sloan's Lake area if people are familiar. And so I became, you know, a untrained landlord, as well as a business owner at the same time, all in one shot. So quick question. So when you did this transition out of the corporate world, into the entrepreneur going to do myself.

Grant
How many entrepreneur books did you read before you got started?

Stephanie
You know, I? I didn't read that many. 

Grant
Yeah, that's like I could tell you just jumped in and went after it. Right? You got going on.

Stephanie
I think also my my step up in that area was I'd see my dad growing up who had never, who had always had businesses and so to I never saw him work a nine to five job, you know, have a two week vacation or anything like that. So I had a very good example of what an entrepreneur looks like. And so that's probably why I didn't need to read books. I have since read a lot of books. 

Grant
But yeah, yeah. But you had a role model, you had a mentor to follow after. Alright, so you go through this journey, you run your real, or excuse me, your insurance agency for 16 years. What happened?

Stephanie
I mean, as time went on, there was you know, also some distaff dissatisfaction. Because you, you know, you really like your clients, and they're doing business because of you. But then there's this big, you know, corporation behind you, mine was Farmers Insurance, who, you know, ultimately makes the decisions based on, you know, the claims and the the rate changes and things like that. So that became kind of frustrating. But then also, you know, again, my dad was, you know, pretty. He passed away, actually, shortly after I started my agency, but I'm sorry, yeah, thank you. But I had, I remembered a lot of things as time went on. I was like, Oh, I remember when Dad said that. And one of the things he always said was, don't put all your eggs in one basket. And that was for me, that meant just, you know, don't continue, farmers was very big on, take a loan out, to keep running your visit business, make it bigger, make it better, all these things, where I just sort of directed my money in my growth into real estate, because I felt like it wasn't so attached to to the business. And I loved real estate. I didn't know much about it. I certainly wasn't very educated about it.

Oh, I think it was 2016 I had gotten an invitation to a boot camp and about buying apartments, which I had always been curious about, oh, cool. Went into there. And that's where I first heard the term syndication. And I was I was just blown away, I'd never heard that I loved the idea of a group of people buying something that no one could do on their own. And I from that point on, I was all in there. I did about three years thing me maybe it was only No, I think it was only two years of education, which, you know, was an investment, but you come out of that bait being able to be very knowledgeable about commercial real estate, which is very different than residential real estate residential. 

Grant
So if I hear you, right, I think you said that this transition to real estate, it was a diversification strategy for you following your dad's counsel, right not to have all your eggs in one basket. You still had the insurance company at least for a while, right? And then then you started investing in the real estate, is that right? 

Stephanie
Yeah. i And well, I had all I had invested, you know, in the single family homes and they're, you know, through the last crash and then wanted to do the apartments and then in 2016, that really was probably, I mean, I kept running my agency obviously, until actually last year when I Um, my investing had my income from investing had exceeded my, my business income. So I was able to retire, or in my case, just do do a different career for a while.

Grant
I love that when I saw that in your profile, I thought that was the ultimate, which was to sort of break away. It's that, hey, I'm no longer just going to be a business sort of operator, right? I'm actually going to step aside and let let your income or your assets generate that income for you, right. It's the money's working for you. And I saw that in your notes too, which was a, you said some interesting about the way the wealthy do it, which is the wealthy have their money working for them? Was that always at the forefront of your mind? Or did you sort of discover that along the way? 

Stephanie
No, that's a that's a big, I think it was big, the aha moment for me. And how I describe it is that I believe most people, and I was one of those most people believed in an accumulation model of money, which meant for most people is I'm going to accumulate the money in my 401k. I never really, you know, went down that path from owning my own business, I wanted to accumulate my money in real estate. But yet my idea was the same, which is I'm going to buy this property and manage it for 30 years until the loan is paid off. And then I will live off of the rents or whatever at that time. But when I started raising money for the syndications, I started becoming friends and, you know, meeting really, very interesting, you know, wealthy people, and just notice that they were doing stuff differently than than I was, I couldn't quite put my finger on it. But after a while of working with them, I realized that they look at their money as a good word is utilization. They're always using their money. They're using their money to give them cash flow. And there was kind of the light bulb that came on for me. Later on. You know, I started doing syndications in 2018, and I think it was the end of 2019 that I started to sell my properties one by one, and invest them in syndications. Because I realized I had these this great big chunk just sitting in and it's really not doing much as far as you know, cash flow, helping me out at all. Whereas, you know, if I just shifted my focus and where I put my money, the returns as far as cash flow, were really significant. Yeah, Major. 

Grant
Have you ever played that game called cashflow there? I've heard about the Robert Kiyosaki Robert Kiyosaki game. Yeah, I've never played it, you shouldn't play I have a feeling you do really well with it. 

Stephanie
Yeah. 

Grant
Excellent with cash flow is king, as you're as you're pointing out, and the ability to get that cash flow lined up and consistently look at money as a tool to deliver the cash flow is critical. So that 401k experience, I've had that same journey where I was putting money I was putting money in in a 401k. And then the first time the market in my career, you know, did this massive dive down, right, and I'm sitting there thinking, I know that there's someone on Wall Street's buying puts against my investment making a ton of money while I'm losing a ton, wait, who came up with this strategy, right? You know, also you could keep your you know, 2% Raise, it is it is a disservice to the working class for sure. So, did you did you ever get involved in the 401k strategy? Or, or did you ultimately just leave it wouldn't? What happened there? 

Stephanie
Eight, actually, I have my series six, when to be a n 63. So for the audience, that just means that I was registered to sell products, you know, mutual funds and things like that to my database of clients. I never really like to that I never really, I felt the variability and that the training that I was given never seemed to give me a lot of anxiety. And so I never really did much with that. And inevitably let those those licenses go. But though the 401k Actually, I'm in the process of writing a book and there's going to be there's one chapter that's dedicated to the 401k, which I do a great deal, you know of research on and you you pit. You know some really good points on on that. And but it's just letting people question it because there are so many things about the 401 K that are, you know, you're giving you're giving your money to someone else to watch. And they're not doing it for free. And financial institutions want to hold on to your money for as long as they can and give it back, as you know, little as they can. And so you're you're using your money to subsidize things that you probably don't even know your money's doing. And I know, these are hard things to come to in this day and age when it's just like, can I just give my money to this person and have him manage it? Or have the 401k make those decisions? Why do I have to be involved with everything, it really is a significant amount of money that you pay to these financial institutions. And you can do much better on your own. But I won't go into that. That's a whole nother discussion. 

Grant
That but that's your journey, though. I think your journey is you figured out Wait a minute, I can do something differently with this. And you took control of it right? You did the education you put in the work, you discovered cash flows. The secret to this, let my money work on just building even small incremental cash flow growth and how critical that is in the strategy.

Stephanie
One other point just quickly is I was watching something on TV last night, and there was several commercials that came on. And they were women. They were geared to women and there they were talking about, you know, women and finances are bad with finances. And the whole message in this commercial was save your money for retirement or whatever. And I was like, I want to just get out the message that it's not saving your money. It's investing your money and learn how to be a good investor, because those are the things that are going to allow you to retire early or retire in not a poverty situation. But in you know, invest and learn how to invest because it isn't as hard as people think it is, you know? 

Grant
Yeah, absolutely. I love that and are good. I understand. You're right. Did you say the messaging in that TV ad was that women are bad with finances? Is that what you say? 

Stephanie
Yeah, I think well, they were trying to you know, women were kind of trying to empower themselves by saying, I'm not bad with finances, even though you know, I've been told that women are bad with finances, but it seemed like the solution for them in that commercial was save. Save your money. You say? Like, no, no, no. Yeah. Yeah. Ah, good. Good. Debt should produce cashflow. Right. That's, that's actually that's actually the message right there. One of the things I noticed as I was looking at your background, and the things you've done, as you had made a comment if I if I've got this right.

Grant
Money myths, you talked about money myths, and I think you just touched on one of those. What other money myths? Have you learned that we hold on to that? Are these incorrect notions that actually hurt us financially? What have you found? 

Stephanie
There's one very significant one, which is people will say, well, the wealthy people, you know, I've talked to people and they'll be like, Oh, but the reason the people you work with have so much money is because they're willing to take these crazy risks with their money, and stuff like that high risks. That's that's why they got where they are, they are and I say actually, nothing could be further from the truth. The majority of wealthy people invest in extremely conservative things. They, the other myth is, you know, put put your money into the stock market. Many people can't tell you in their mutual funds, what they're invested in, what even one company is that they're invested in, let alone who's who are the team members on that, you know, on board or who's the CEO of the company, they can't tell you anything. Whereas wealthy people they tend to invest if they do invest in businesses, they invest directly in a business, either for themselves or they understand the dynamics of the business and the business plan and they invest that way. If they invest in real estate, they largely do the syndications and they get to know the team that's running, running the syndication. They know what kind of experience they have, what kind of past returns they've done. They do their homework in that sense. But then once they've invested in the team, they tend to invest again and again. And these are very conservative things that they're investing in things that are tangible in value. That's another. That's right. Three things I'm hitting is wealthy people tend to invest in things that have tangible value, which means, you know, an apartment complex Well, let's say, for some reason, it's terribly mismanaged and it goes out of nobody wants to be in it anymore. Well, you still have the building and the land in which you can sell. So there's, there's tangible value there.

Grant
Okay, so the tangible piece, that's interesting, too, especially in today's world, where digital assets are becoming more and more of a thing, right. In fact, I saw recently, someone talking about digital real estate on one of the online ads, you know, doesn't feel tangible, right. Are all the NFT stuff going on? Right are the crypto so many intangibles today as well? It Do you have any position or thoughts when they do that? 

Stephanie
I don't because I guess I always take the line if I if I don't understand it, or if it's not something that I want, you know, I guess it comes down to really understanding it. I've had a lot of people explain it to me, but I still don't, you know, the ups and downs, you know, lately, it's been a pretty big crash, you know, people are saying that's a good thing. Okay, I still don't really understand it. And I know that they're planning on, you know, digitizing, then that's, that's probably, you know, not too far away in real estate, you know, 10, I would hope it's going to be 1015 years in the future. I don't know what that looks like. But that's definitely something in the future. I don't think that is wrong. And when I say that the wealthy people invest in, they probably do have some investments in cryptocurrency, but that's probably less than 5% of their portfolio.

Great majority of what they're invested in, probably 30% Every year.

If you go on to the name of this group is called Tiger 21. And it's, it's for wealthy, wealthy people, I think they have to show a net worth of at least five or $10 million to get in the group. But every year, by agreeing to be in this group, they agreed to release as a group, kind of a asset allocation of all of their investments, and every year, there doesn't change that much. And over 30% is in real estate. 

Grant
Really. Okay. All right. That's interesting. That's fascinating. One of the things that I noticed as I looked at it now Now the name your company, you're gonna have to help me because is it Erbe Wealth? This Erbe? 

Stephanie
Well, Erbe Wealth, okay, everybody. Well, thank you Erbe Wealth. 

Grant
Well, so I'm on your site, I was on your site. And I was checking out. This is really cool. erbewealth.com. And I went to the about page and told my listeners, you should check this out. Stephanie's got this thing called the 15% Plus community. Can you talk about that? 

Stephanie
Yeah, well, I mean, my partner and I started working together in 2018. And we both realized, as many successful pairings go is that he had some skills in in this in the certain areas, and I had skills in certain areas. And together, we have really done very well together, and we just closed on our 12th deal about two weeks ago. And every single deal that we put together has returned over 15%. But truthfully, every every one that we've done up to this point has returned over 20%. So the person designing my website said, I don't know you might want to just put that down to 15%. But every deal that we have done has had an annualized rate of return of over 20%. So if you're we, our goal is when we hold the money for three to four years, then we'll double your investment in that time. And we have we've done that successfully, and we have a system and we're will we're continuing with it. 

Grant
That's amazing and that's that's leveraging the syndicated real estate strategy. 

Stephanie
Yep, that's we buy apartment complexes and a very specific market in the country, we have a very specific buying strategy that allows us to get in and make money when we purchase it, purchase the property. And then we just find areas where there's there's been a lot of growth, and there's been a lot of rent growth and population growth. And I think if anyone's been listening to the news is we know that there's a housing shortage. So we buy in areas where, you know, there's a great deal of population growth and not enough housing, 

Grant
What is your what is your perfect client look like? What's their profile? Like?

Stephanie
I mean, I would like it to be more broad than than it is, it's usually, you know, well, to invest in our deals, you need to be accredited, which, you know, that means you need to have a net worth of a million, or you have a $200,000 salary.

And so I love working with business owners, that's kind of my thought to I tend to attract a lot our business owners, because, well, one is, they're so busy trying to make their business work, and I'm talking more like smaller business owners, you know, and, you know, trying to manage their company, which they're very passionate about, but business owners tend to not really plan that well for their retirement, because they're just, you know, they're thinking all about this. Yeah. Run on the business constantly, right? Yep. Right. So those are, you know, those are the people I love to work with, just to you know, get them some cash flow, that that is nice, but as well as just having, you know, great returns that they don't have to manage, you know, at all. 

Grant
So, okay, very good. While you've been very generous with your time, can you give our listeners a place to go to to learn more about you? Yeah, to your website? 

Stephanie
Yep. That's my website, which is erbewealth.com.

There's, I have I think, right now, it's not a lot, but it's about 15 articles that I've written, that just I try to really educate the newer investor that isn't familiar with this type of investing. And then there's a track record of of all of our Not, not cherry cherry pick deals closer, every single deal that we've done together, up until this point, and then you can join, you know, the list the email list to get notifications, I like to really educate my investors, as well as then they get the first, you know, chance of getting the new investment when it comes out. But air Bay, actually is the German word for legacy. And my dad was a second generation, my grandfather came over on the boat right from Germany. And he became an entrepreneur after he paid his dues and did everything he needed to do to become a citizen. And then my dad, you know, followed in his footsteps and was an entrepreneur. 

Grant
So I was gonna ask you about the backstory on that name. I was trying to figure out Erbe. What is that? Yes, that's awesome. I appreciate that. 

Stephanie
Yeah, not to my dad, who never you know, saw any of this, but definitely, it's because of him that this has happened. I can tell you have an awesome dad. Really cool. 

Grant
That's awesome. Stephanie, any final comments that you want to share?

Stephanie
No, no, but I'd say you know, just just check on my website. I'm trying to, like I said, working on a book and that that'll be my next. I'm hoping to have it done by the end of summer. So when when it's available, it will be available on my website as well. 

Grant
That's awesome. Stephanie, thank you so much for taking the time with us today, everyone. 
Thanks for listening to another episode of Financial Investing Radio. And until next time, check out erbewealth.com.