Partner With The Government To Pay Zero Taxes - Robert Kiyosaki, Tom Wheelwright, and Ken McElroy

[Music] this is the rich dad radio show the good news and bad news about money here's robert kiyosaki hello hello hello rich dad radio show the good news and bad news about taxes and because this is a four-part series on taxes if you love paying taxes you don't have to watch any of them but if you want to know how the rich make more money and pay less taxes this is your four-part series so one part is about taxes and corporations with tom we all write and garrett sutton this series is going to be on taxes and real estate it's really about debt and taxes the reason kim and i love debt is it's tax free money i just somehow just tickles me to think about that all day long and the other one was paper assets with john mcgregor andy tanner and kim and i and tom and then another one will be on taxes and commodities gold silver and bitcoin so i always remind people of this one of the classics of all times in my world was president trump during the 2016 camp uh debate between hillary and donald hillary thought she got him she she says and you don't pay any taxes and but donald just simply says that means i'm smart and now that pissed off most people but that's their problem because he is smart when it comes to taxi he may not be smart at diplomacy see hillary and obama and uh biden they earned their money differently you know it's from the swamp and trump earns most of his money as an entrepreneur and a real estate guy so those are the differences any comments kim yeah well i i like these series and um because we as you just mentioned there's the four asset classes there's business real estate paper assets stocks bonds mutual funds and commodities gold silver bitcoin oil gas things like that and we always say that you know you got to find the asset that fits you fits you best so we always recommend go look at all the different asset classes see what one fits you best and then the next sub the next piece of it is taxes because everything is taxed differently depending on how you buy real estate can be taxed different ways depending how you buy and when you sell same as paper assets same as commodities so this is a great series and we've got two great experts and you'll know now why they are our rich dad advisors because they do advise us and they advise us well and uh they take us they take us far in the you're gonna hold up your quadrant they're gonna they take us far in the b quadrant as well as the i investor quadrant b is for big business i is for investor and that's where we all like to play and the reason you know trump can make so much money and not pay taxes legally and we do the same thing is because we're functionally business owners we're entrepreneurs big business we have brands trump is a brand rich does a brand and i is we do most of our money in real estate and then we save goals silver bitcoin and other commodities why why i say i want to say this because jim records brought it up the other day he says the most misused word is diversify you know when a financial planner tells you to diversify they really are saying diversify so you'll say well i'm diversified i have oil i have gold i have real estate but they're all in paper assets and there's a difference between paper assets and real real gold real silver real real estate and real businesses so a stock is not a real business it's a share of a business it's a derivative of a business so when these f and financial planners tell you you diversified they're lying to you just because you have a paper asset and one of them doesn't mean you're diversified and that's what richards was saying he said and especially given in these times and where we're going in the future he said the best assets to be in today this was according to rickerts jim rickards was real estate gold silver he doesn't like bitcoin anyway uh we've had tom introduced kenny introduce yourself please to the gang here and you know kenny's our go-to guy because without him we wouldn't have made so much money so it's a combination of tom and kenny you can't do this on humility's i can't so kenny give us an introduction about yourself and how you make us millions and millions and millions and millions in real estate using debt sure uh thanks robert well as you guys might know i i wrote the books or the rich dad series the uh abcs of real estate investing and and the advanced guide and the property management book and and um you know but primarily what i do is invest in real estate so we have multi-family we have self-storage we have office we do land development and that's what i do full-time my partner ross and i we have 250 employees we're in multiple states uh primarily texas arizona uh heavily there and we're building we're buying all the time in fact we were talking about two deals right before we jumped on the show here today so um uh you know about 500 units uh that we're about ready to put into escrow so uh i use debt as you know robert and kim you i think uh why wouldn't you use other people's money that's basically what it is it's borrowing money from a bank uh you know people people put their deposits in the bank and then they give them to me to invest in property and so that's that's uh it's the greatest thing ever and then we only have to come up with the down payments and and um so we use uh debt and then uh you know tom works his miracles on the on the depreciation side and the bonus depreciation and all the other advantages that we get on the tax side so we make millions and millions of dollars every year and we pay very little taxes and sometimes uh none and yeah and to your point robert about you can't do this on your own when we met kenny um we were doing it on our own and we got i was basically handling all the properties and we didn't have a lot at that time we had two apartments three apartment buildings and some single families and um i couldn't handle anymore because i took up all my time and so when we met kenny i'm like oh yeah can you manage my properties and he said no he said i cannot i said we only work with like 120 units or more and that's when the team came together because as i was doing it on my own i could only go this far and i know a lot of people that are in real estate that can't go farther because their time is all they've got so you've got to bring a team on so we had kenny and then we brought on tom and it's the team that lets us grow yeah this is a very important point most real estate investors are here you know they have a duplex or a four-plex and then property management gets them yes and so what tom what kenny said to you nearly broke our heart and he said he said kim was so proud i have a 30 unit apartment huh it's too small so not that you can't do the same tax laws but kenny can't manage you manage it because in real estate unlike stocks see the reason stocks are good our paper is good there's no management but real estate is management and kenny comes from the management style so when kim and i met him 20 years ago he was like god sent to us this is this guy can manage property and unless you've been in real estate you don't know that is the magilla if you can manage real estate you got it right kenny yeah in fact even when somebody's giving you money it doesn't matter who that's the number one question they ask who's your team how are you gonna management who's gonna manage it who are they what's their experience and so it's it's the most important thing because giving somebody handing somebody money is not that hard but then having that money produce is hard yes so kenny how how did you get started i mean you started as a management guy right yeah i did i started you know i was in college you know trying to uh you know not rack up a lot of student debt even though i had some and i was managing a property and i was getting paid a whopping 600 a month and i was and i got a free one bedroom and um i was managing an apartment building in downtown seattle and i liked it i actually really liked the business and i felt like it was really horribly managed when i moved in and and i was like well if i just get people in here that can pay rent and i can clean this place up it'll be a lot less work for me and uh i did that and then the owner came over about three months later and he's like hey thanks for cleaning this place up and you know in comes up place looks great and i was like i need to be on that side of the desk somehow so i that's when i started to had my mind shift is like okay how do i how do i buy these and then apply these same management principles and so i've been you know as you know i've been in the management business we still have a management company uh i really really really love the business yeah so the you have a book called the abcs of managing property yep abc's a property management i sure do that is the most important book if you plan on being in real estate if you don't like managing property people and toilets stay in the stock market right kenny yeah yeah it's it's it's a day-to-day i mean right now we're dealing with hundreds of leaks uh froze the frozen pipes and resident issues in texas as an example we've got two semi loads of food and water uh out of arizona this week and um you know so every week there's something trust me we've had tornadoes we've got hurricanes we've had hail storms we had fires we've had you know all kinds of things that's part of the business uh you know and uh but there is a lot more fun to it than that actually you know when you take somebody's money and you invest it it's fun i think because now there's a way okay how do we create how do we make this money uh make more money and you know how to keep these places full run them well and there's a lot to uh management and there's a lot of details as you know we have we have uh uh a company of people that yeah we have a company full of people that that are specialists in lots of areas so like uh you know when guys like dave ramsey say live debt free what goes through your head well i think that um it's the dumbest advice ever actually i really do like it you know i i just makes no sense to me i i don't know i i mean people are people are getting debt right now for two and a half percent 2.3 2.4 percent that's going to be less than inflation so if you could lock that if you can borrow at that rate why wouldn't you it's free money it's literally free money uh and i i think dave ramsey has a different audience i think the debt that he's talking about getting out of his bad debt is yours no no no no no no no no dave rams is a friend i've had dinner with him several times i meet with him his advice is good for our stock people yes if you're going to go into real estate debt is your best asset and the reason that ken and ios talk about this this is a financial statement okay so you have income expense asset liability for the people on the b and the i side the biggest liability is cash yes am i correct tom absolutely yes it doesn't produce it it doesn't produce anything no printing they're printing it they're printing it since 1971 they've been printing it so what happens is when kim and i make money income comes in here and we have cash we've got to move it into debt right we're converting cash into debt as fast as we can but the key is kenny's now is uh property management and then investor management and market management so that's why anybody saving cash today and living debt free it's good advice if you want to be poor correct now but don't switch into real estate unless you're willing to understand what kenny knows about real estate so that's why his three books give us your three bucks again kenny the abc is a real estate investing the abc's of property management and then we have an advanced guide to real estate investing and that's what you need to understand because when you say move your money into debt if you don't know what you're doing and you're buying a property and you have no education you have no experience you don't know what you're doing that that's going to be bad debt and i remember i remember you have a dad kim her dad was hardcore stock guy you know he was hardcore buy hold and pray in the stock market and that worked for him but i told him we're buying real estate he says i refused to fix toilets also that was that was my that was my plan i was going to have dad was going to be a business partner my dad was going to be my business partner on this property and i called him up i said what do you think about buying this little single family house well i don't want to fix property and i don't want tenants calling me at this time of day and i don't want to fix leaky roofs and i'm like i don't i don't think i want to do this like this i said i don't think you do either thank you very much so just remember paper assets are for some people commodities stock i mean gold silver oil for some people businesses are for some people and real estate is the best because right now the problem with kim and i our income is going up and if kenny doesn't find us a property pretty soon we're going to pay taxes so tom would you explain that psychology because this is on the be in the eye side and because tom when we talk about taxes tom always says can you find another property can you find another property can you get more debt yeah right so so you have to start with the premise of course as we've said on the other um episodes that the tax law is a series of incentives to do what the government wants done and one of the things the government wants done is they want housing built okay and they want commercial property built so what they do is they say well we'll give you a tax benefit so that you're willing to go and risk your money put in the effort and the time to go get and and actually and to borrow money as well because the government of course wants you to borrow money because that increases the amount of cash in the economy and so it's all good for the economy so what happens is the the the benefit that they give is what's called the primary benefits what's called depreciation and depreciation is magic okay because while you're while your property is going up in value and you're increasing your rents you're actually getting a deduction for more than what you paid because you get a deduction not only for the amount of money you put in but you get a deduction for the amount of money the bank put in so so the debt is important you know from a return standpoint but it's also important from a tax standpoint so critical that you understand debt if you're going to get into real estate and get the tax savings that you guys talk about so let me let me show you a picture okay so let's say kim and i have a million dollars coming in from our businesses it's a liability to us because they're printing more money today so i want to take this million dollars over here i want to give it to kenny he's going to amp it up to 10 million and exactly as you said because the government wants you to borrow money because the dollar became debt in 1971 when nixon took the dollar off the gold standard they dropped the interest rates because they want you to borrow money if they don't want you to borrow money they'll raise interest rates it's very that simple so let's say it goes to 1 million here to 10 million here what that does is reduce taxes here is that correct tom right because that that one million dollars is not just a liability because they're printing it but it's a liability because there's four hundred thousand dollars of taxes associated with that million dollars of income and and really the one of the best ways to get rid of that four hundred thousand dollar tax liability is to take that money and convert it into real estate because then the government gives you this big deduction for your money for the bank's money and it offsets that million dollars of taxable income your taxes go away so that's why you know kenny hears a panic in our voices all the time kenny have you found another property yet because if he doesn't find any property tom is going to make me pay taxes is that correct tom the irs is going to make you pay i'm going to file the taxes and just to be clear really clear here and also to be clear this formula is not just a u.s formula this formula is worldwide correct it is the us right now has the best tax laws in the world when it comes to real estate there's no question but every country allows depreciation on investment real estate final words can we about one minute so what do you have to say because this is why we're always calling you we have too much cash you've got to provide this for us so we can go into debt here and we can reduce taxes does that fit your psychology your your belief system oh yeah i mean tom always says it perfectly in my opinion he says if you want to see what the irs wants just look at their codes and what the irs wants us to do is invest in housing period and that's why that's why we get that's why we get the benefits from it so so we invest that money we get the the debt from the bank and which is we're beating inflation and then with depreciation and other things we're actually able to take that money out tax-free so we're getting income so we're investing our money we're getting our income tax-free and if it's a value-add deal which you guys have been involved in a lot of with with us you know then you actually get your money back and then we have of course what we call infinite return which is you've now gotten your money back and and you paid no tax and that's a cash out refi so you're paying you know payday tax on that and you still get income so you so you give me money i give it back and you pay tax legally um uh you know over that depreciation amount only so let me explain what i just said so this 10 million dollar property do that's throwing income here cash flow let's say it goes up to 20 million what what kenny's talking about is we borrow out the gain and that comes to us tax-free but that's now tax free money so we go from 10 million to 20 million due to inflation everybody want to call it well i i call that forced equity so i i buy a property at 10 million with the idea of bringing it to 20. before i put the value add yes i already know how i'm going to do it it's not just market driven you know we're actually doing things to make it worth 20. yeah so when when kenny pitches the deal to us we already know i'm going to put a million here it's going to go to 10 is going to go to 20. we're already getting income from the property when the property goes to 20 we borrow out the 10 tax-free is that correct tim well that's right and then you borrow out the 10 but then you reinvest that 10 into new property because you've got to constantly be investing in real estate that's why i'm always after you guys look you're making money we need to constantly be reinvesting that money into real estate and and that's really how this system works now real estate let me say one last thing on on the importance of real estate from a tax standpoint it is one of the few places where you can actually reduce your taxes today and to never pay taxes in the future now you've got to have the right financial education you've got to have the right tax advice but you can literally eliminate your taxes from your business today and to never pay tax on the income from the real estate in the future even when you sell the real estate i mean it's it's unbelievable the tax benefits in real estate yeah and that's why donald trump that's why hillary is going after donald trump he said well you don't pay taxes and he says that means i'm smart but they don't teach you this in school but they'll tell you put your money in a 401k which to me is a loser's game but it's better than nothing and don't do this at home if you don't know anything about real estate because property management is the hardest part of this game so when we come back we'll be going more into why real estate is in my opinion the best income especially if you don't want to pay taxes we'll be right back welcome back robert secretary bishop ready to show the good news and bad news about taxes and why the rich don't pay any taxes legally and why the small the employee and the small business owner pays the most taxes and as we know president biden is going to raise taxes he says we're not going to tax the we're going to tax the rich well they don't tax the rich they tax the poor and middle class and that's the tragedy of this whole thing plus they're going to print money which causes inflation which is a tax and then they're going to raise a minimum wage of 15 15 which is another tax and so that's why if you really don't want to pay taxes and make a lot of money that's why this four part series at the rich dad radio program is about how the rich make more money and pay less taxes legally it's the people who are on the e and the s side are the ones who cheat any comments kim well yes and as i've said before you know taxes are so misunderstood and everybody thinks taxes are evil um but as as ken and as tom were saying that taxes are an incentive for doing what the government doesn't want to do so they're giving us tax breaks to do what the government doesn't want to do create create housing create office buildings things like that and borrow money and borrow money so um this is i think this series is very very important because the more you understand about taxes the more sophisticated and better decisions you're going to make as you go into world of investing and for those of you listening on the radio you can't see this that's why we have cash flow clubs at the cash flow game because you can't learn this stuff by thinking about it anyway the beauty of a cash flow game is you have to do it be and do it and if you don't want to do it then buy a 401k and pray i mean that's really where it's about so our guests today are again our tax advisor tom real wright and our real estate partner ken mcelroy uh because we make ken has made us wealthier over and over and over again in 2008 when the market crashed we all thought we would die that went to heaven because the real estate prices dropped but so did interest rates and so as soon as the market market real estate dropped and interest rates dropped kenny says i'm going to borrow 300 million and when kenny builds into his business plan that he's going to take that three whatever the heck can he's going to make the property more valuable and we're going to borrow out the equity we don't have to flip the property so we borrow out the equity again we don't pay any taxes any comments on that tom well yeah for sure i mean first of all the reason you don't pay tax when you borrow money is because you that money is still owed to somebody and so it's not income to you you you're going to have to pay back but the great thing about real estate of course is that your tenants are going to pay that back all along the way the government's going to give you this incentive called depreciation and allow you to use that depreciation to offset that income coming from the tenants that's paying down or amortizing your debt so it's kind of the perfect storm in a good way let me add one more quick thing about about about what biden wants to do by the way he wants to when he says tax rich he's talking about the high earning employees that's who he's going after the high earning employees and small businesses it's the e and the s that's who he's going after he is not going after the bee in the eye and especially the eye the eye is never going to change because that's where the government gets most of its work done and while it might shift from oil and gas to solar it's still the same thing it's an incentive to do what the government wants done that's right in the inside investor that i quadrant and that's where you get zero tax and it's all based on debt and taxes so when somebody says live debt free i check out because you're going to pay a lot of taxes if you don't have any debt yeah another the reason is is 1971 when nixon took the dollar off the gold standard the dollar became debt and the only way money is created is when you borrow money that's why they want you to have credit cards and all this because if you stop borrowing the whole economy seizes up comments on that kenny [Music] yeah well i think the other thing that a lot of people miss is that when we look at real estate we look at real estate from a long-term cash flow standpoint we're not trying to time things obviously we don't want to buy at the top just like anybody doesn't want to buy at the top but if it cash flows even today as hot as the market is at the cash flows we actually buy it so if that's why i'm still buying you know if the numbers make sense and so we're we've always been cash flow driven and we've always been you know how do we use the real estate to pay less tax legally and that is the rules of the game and when hillary said that that what what i thought about immediately was you know she made her look stupid because she doesn't know the rules of the game that's what she said you know she was she's ignorant around that it's well trump calls a crooked hillary and there's a reason for that name there's rules around all this stuff guys this is not i mean this is stuff that you can learn anybody can learn this stuff and we're all playing by the same rules she just didn't understand them yeah but you and robert you said something earlier um about when the market crashed you know in 2008 when the market crashed we did very very well so one of the keys to financial education is we know and kenny and and tom and andy tanner with paper assets cash flowing paper assets when the market goes down we do really really well for the average guy girl out there when the market crashes they crash too they're 401k crashes their retirement plan crashes they don't know how to make money when the markets crash so that's the really the key importance i think for financial education because there is going to be a crash and are you prepared and can you take advantage of it and the tax law wants you to borrow money and i think that i think it's funny when somebody asked me that they can't kenny says what's your net worth i said oh about a negative billion yeah they don't realize that debt is money right it became money in 1971. and the more money i borrow it's tax-free money is that correct tom that's exactly right tax-free the government wants you to borrow money because if we don't borrow money the whole freaking economy grinds to a halt am i correct on that one it's just like said kim you know the the tax law is incentive to do what the government wants done well one of the things the government wants done is they want that money borrowed from the banks to flow through the economy and so that not being taxed on debt is an incentive to borrow and we can't ignore that that's what it is it's an absolute tax incentive to go borrow money and there's one more advantage i want to talk about kenny and this is the brilliance of his his financial plan is this so kim and i make money here in the income column in the income column and then that means we pay more taxes so we get this cash here we move it to kenny and let's say we go from 1 million to 10 million his business plan is going to take that property up to 20 million and then we're going to borrow out the 10 million so it's 10 million tax free so the thing i want to talk about is kenny when you know that property we saw i think it was in texas it was 400 units vacancy was 900 and the place was empty the the prior tenant was a real thief probably was a democrat and went in there and stole all the copper wire and all the you know just tore everything apart this place was a mess there was nobody living there then they weren't collecting red and there was a fire and there was a fire and i walked in there and kenny and i look at this thing and there's a toilet the toilet had been taken out and the guy was sitting in front on the toilet in front of the fireplace and i go i'm walking out of here and kenny can he goes oh this is wonderful this is wonderful remember that one of course i i i have a lot of stories like that you know if the property was incredibly well located as you know it was very very poorly run and very poorly managed to the point that the bank actually took it back it was owned by bank of america that's what's happening next if you know kim kind of touched on this banks actually get in trouble when they get their loads back that's not a good thing that's called toxic debt and it it affects the the bank a lot from a share of a price from from you know being able to lend more money and all it's not a good thing so it was owned by the bank because of the prior owner and the prior management he tried to do his own management in-house and ran the thing into the ground the bank took it back this is a very common story the reason we bought it the bones were good i always like to say the bones are good and the location was amazing of course being right next to usaa insurance in san antonio which is a massive employer i think last i checked there was like 15 000 people that worked there so you know so for me it's you know you know uh it's just uh fixing it fixing it back up and getting it and you know what happens is the whole neighborhood loves you you know because the people living there and all the things that are going on the city council the mayor they all know what's happening at these places and and so when you go in and buy something and and and infuse new life into it and fix it up and get better people in there and and the thing starts coming along and running the way it's supposed to run the whole community embraces you and we took that property if you remember we bought it for i bought the note for 20 million from from the bank of america i put seven and a half into it when we were done two years later it was worth 42 million and we we put debt on it we paid everybody back their initial investment and we've owned that thing cash free you know you know we have no we have no investment in that deal we still own it today it kicks off a million dollars a year of cash flow okay so not only can you know kim and i donated part of the million here yes i call them the seven million in from the from the li because cash is a liability to us because they're printing it so it goes in here you put it into 20 million dollars you ramp it up to 40. and meanwhile we're getting cash flow and tom why are we paying no taxes on all this well because first of all you're paying no tax on the debt because you're going to pay that back second of all you're not paying tax on the income for your business because the depreciation from the real estate is offsetting that income so so here's the thing is the income from rich dad right you understand that the reason we're b's and i's is that by investing in real estate in the b we make the money into b and we invest with kenny in the eye and that offsets our taxes in the b am i correct tom that's correct now one thing that you mention all the time is in the i quadrant that's not just any investor that's the inside investor and that's very important in the u.s especially if you're a casual investor you don't get the same benefits you must be a professional investor and an inside investor and then not only do you get you know all the better interest rates you get the better deals you know you get things before they come on market etc but you also get better tax results um because kim is an inside investor she's professional she's a she's a professional in real estate she spends a lot of time at real estate and that's what allows her to get these tax benefits that they the average casual investor is never going to get because they don't understand how the law works so so this is where kenny kicks in so we saw this piece of crap property i was ready to run when i saw that i still had that toilet in front of the fireplace is burned in my mind and i realized the guy who owned it before weighed it his business plan was to just strip it is that correct he collected all the rents and stripped it that was his business plan so kenneth goes in there with his team and i didn't believe kenny i saw his team i forgot your guy this guy he looked at it he was just as excited as kenny because he knew he could fix it is that correct yeah he was an expert he was an ex-marine like you he just he was mission driven he knew exactly what we needed to do again robert once you start to do this whether it's one unit in this particular case it was for 400 that we needed to fix it was a 680 unit property uh you know it's just a it's just math now literally as some units are a thousand bucks some user units are ten thousand dollars you have to figure all that out before you buy it that was a big number that's why we raised all that extra money and and the bank wants that the community wants that everybody wants that everybody wants somebody it's no different than if it's a house in the exact same condition but it's also part of your formula kenny and you touched on it earlier your your formula is you number one you like properties with problems but number two is you look for a property where there's jobs and that does that fit that court that core formula to a t right it's easy to buy something that's fully you know 100 occupied you're not going to get you're not going to move the needle a lot there i'd rather personally buy something that's 100 vacant and then figure out how to occupy it and that's management and then that also if you you know if the building is vacant it's worth a lot less than if it's full and that's how you double your value the worth of your property so keeping the math simple so kim and i have a million on to us the cash is a liability that coming from rich dad we move it in to the 20 million in the asset column we turn it into debt we took cash convert to debt kenny improves the property to do 40 million so meanwhile we're making all this cash flow from the original 20 million dollars debt but let's say he raises it to 20 40 that 20 million comes out as debt why is that tax free tom because you have to pay it back so the government says it's not your money it's the bank's money you're using their money but you have to pay it back so you're not taxed on but here's what's even better not only are you not taxed on the debt you get to deduct the interest so if you put your own money in you don't get to deduct the the cost of putting that your own money in but if you borrow the bank's money you get to deduct the cost of putting their money in that's and by the way that's something that's true all over the world um all over the world you get to deduct interest expense um but you don't get to deduct your the the amount of money you put in as capital so kenny um that's called an him because you know when i when when i met kenny for the first time uses 20 something years ago everybody was flipping property remember that of course yep they're doing it again right now tom what happens when you flip you have you have the worst kind of income what i call earned income which is like ordinary income with the additional tax of social security on top of the ordinary income so you're at the super highest rate that 60 bracket that you talk about in the s quadrant that's for flippers and let me ask you one more thing tom because here's one other huge tax benefit that i like okay let's say you have a property and you're going to put down 20 of the 100 cost you put down the 20 in cash but you still get a hundred percent of the tax benefits correct that is correct so you leverage your tax benefits in other words you get five times the tax benefits than if you just put down the then if you paid cash for it in the tax law which is potomac book tax-free wealth there's appreciation depreciation and amortization right so by doing this formally appreciation is tax free correct depreciation is income tax benefit tax benefit and amortization is the bank that's their money back that's tax free money too well that's tax-free because the depreciation covers that it would be otherwise taxable but because you've got depreciation it offsets that amortization don't do this on your own no i mean kenny definitely could not fix that toilet i know that for for certain but the guy he brought in he was all excited about it because i saw this toilet as a horrible thing sitting in front of the fireplace with all the copper wire ripped out of the drywall i was ready to run as like 80 vacant it was a nightmare but to kenny on the finance side it was an opportunity because he knew his business plans to take it from 25 to about 45 million and going back to where we first started talking about when we met and kenny said i can't manage your 60 units 70 units because it's too small is because he had this whole team that he has on his side that that would be too small for his team to manage and it wouldn't bring him any financial benefit as well yeah so that's the importance of a team it doesn't mean don't start small no start small start small yeah but the benefit is you always have dreams of going too big on this side here right can i make because you started as a property manager in college absolutely i started well actually my first investment was a two bedroom two bath i used my own money and and now um you know the deals that we're doing uh obviously require like 20 million dollars down and uh you know i use other people's money so you you go from you know using your own to learning how to use other people's and that's actually the way the system is set up capitalism yeah it's literally set up even even people people put their money in insurance policies and pension plans and 401ks and all that kind of stuff there are people managing that money and when you get your statement somebody is putting it somewhere to make it you know make that money money so you know and and so you just want to be on that side of it you know we you know we we borrowed from insurance companies we've bought from pension uh groups we've you know we've borrowed from banks involved from life life companies you know people when when all the stockpile of money people are investing or saving it it needs to go to you so there's a velocity of money that has to happen somehow and and uh and so they look for people like like our company and my final comment is if you're starting small and you're just starting don't use other people's money until you know what the hell you're doing yeah that's a big responsibility that's a big responsibility learn on your own money for a little bit that's what kenny did that's what we did and then once you've got the experience you got the knowledge then you can take it to the next level and please get you know if you figure out if you want to go to the next level start small get tom's book and get kenny's three books because it's a very sophisticated game is what capitalist capitalists do it's what donald trump does and hillary doesn't so those are the differences there so anyway i want to thank the two of you thanks for making this the thing that's really funny is kenny keeps giving back our money and our problem is we have to give it back to him he just keeps it he pretty much just keeps it [Laughter] comes up all the time all the time in and out so kenneth says i have 10 million for you so where are we gonna put it yeah you know because if i take that money it becomes tax i've got to move it back into debt i got to move it back into and then ken is going to have a business plan that's going to take the 10 million let's say it turned into 20 million final words tom uh so this is great um thanks for doing this four part series uh seriously uh taxes is this is a a complex game so don't think it's that simple i would echo your point kim start with your own money start with your small deals but remember that as you get more experience and more education you're going to need up your team as well i mean you guys i mean let's let's face it you haven't always had me and kenny on your team so you had up your game too and as you upped your game you had to had to increase the level of your team members and that's critical because not everybody um you know you can pay a lot of tax and still own real estate if you don't have the right team members correct great point final words kenny and thanks for your time today because you guys you guys you're putting another big deal together and people put together because i don't know i don't want to pay my taxes uh well first of all i i want everybody to know that we all kind of started without knowledge all of us uh you know even on this on this call here in this zoo and i didn't know how to do any of this stuff in the beginning and and i just learned and i said well if if that person can do it you know how how how did they do it and and i was surrounded by family members and friends that didn't they just said you can't do that you know there's no way to do that um and uh i learned how to do that and now they're like how did he do that you know and so the the point is uh you have to uh you have to surround yourself with people that know how to do it ask a lot of questions that's definitely achievable yeah i think the best tip that you made was when you did a good job managing that guy's property but the check went from you to him it did it went the wrong way talk about a wake-up call yeah i know i i increased the value of his real estate a lot uh which was my job by the way i'm glad i did it and i'm proud that i did it he was happy i was happy but you know he got the benefit yeah and the tax breaks so anyway thank you guys and we're right back thank you kenny welcome back robert kiyosaki radio show the good news and bad news about money a reminder this is a four-part series on taxes if you like paying taxes and you like hillary clinton don't listen to this four-part series but if you want to be like donald trump and make millions of dollars and pay no taxes this is your series so this four-part series it's about corporations and llcs and that how the rich use corporations to minimize taxes and asset protection this one was debt and taxes while the government wants you to get into debt and so anybody says live debt free that's another point of view we don't do that then we have andy tanner and john mcgregor with with tom on paper assets and the last one will be on gold silver and bitcoin or commodities and oil that's a whole nother different subject any comments kim yes this was great this was a great show really appreciate it i always appreciate talking to tom and to kenny because i always learn something because kenny's always working on something and tom's always learning more about what is happening in the tax laws um but i think kenny said it really really well he said all of us when we started in real estate we didn't know anything we knew very little you had your rich dad's knowledge but then you had to put it into practice um so what a lot of what we were talking about today was some advanced things in terms of infinite returns and raising money just want to say if you're just starting start small use your own money learn get the experience get the knowledge i learned because when the one thing i learned the most on was this one property we bought in scottsdale arizona it was 18 units and i inherited the property managers and they were brilliant and they lived on the property and they taught me property management had i not had that that property then i would not have learned anything so understand what level you're at and uh get kenny's book actually all his books the rich dad um hang on oh abc's of real estate the abc's of real estate the abcs of property management and the advanced guide to real estate investing and tom real wright's book is tax-free wealth so i would highly highly highly recommend reading those how big was your first meal two bedroom one bath how much forty five thousand dollars u.s how much did you make 25 dollars a month that's how i started but the formula same formula it's the same formula as a two bedroom one bath as and then the same formulas kenny's talking about 400 units same formula and what i do is when i came back from vietnam i wanted my rich dad to teach me he says that's not his job he says you gotta go learn so i took real estate classes and my first class was on infinite returns so my first property was in maui on the on the island of maui and it was a one bedroom one bath condo was eighteen thousand dollars down and my job was to buy it with no money so i put it on my credit card i borrowed eighteen hundred dollars i put it i put that was eighteen thousand i put ten percent down and i made twenty five bucks a month but i understood infinite returns so at the age of 25 i knew i never needed money again now that kind of messed me up because once you get a taste of not needing money kind of goes to your head but we all go through that's all part of the learning process so again it was a one bedroom one bath house eighteen thousand dollars i broke up my mastercard to put eighteen hundred dollars on it and i was making twenty five dollars purely on debt because debt is government government wants you to borrow because in 1971 the u.s dollar became debt any commissioner sarah i'm just glad that you guys mentioned both of your first deals because as we were going through the show i'm like well yeah he has a million dollars or you know but you proved that it's the same formula you can start small get your feet wet and then as your deals grow your team grows i mean it's so i'm glad we're ending the show on that on that point because it really anybody can do it with the right financial education you just have to start somewhere yeah it's just it's like anything else you're going to learn you're going to start you're going to start at the bottom and you're going to learn you're going to take the next step you're going to take the next step you're going to take the next step that's just how we learn that's how we're designed to learn yeah i think a lot of we're going to make mistakes too just know you're gonna make mistakes i don't wanna make mistake you're gonna make mistakes i think that's a a lot of the comments that we hear though is oh well i don't have 10 million dollars to start you know investing in robert started with 1800 i started with 5 000. and that's the point is is just start somewhere start small um like you said you have to start somewhere start at the beginning right and all four ask classes you have business real estate paper and you have commodities it's up to you whatever works best for you i just like using debt i love debt but that's why kim and i have so much money to save and goals over bitcoin because we don't need cash once you know how to use debt it's one of the most important things but don't do this on your own start small i take classes we're constantly studying kenny teaches all the time on youtube and things like this so does tom and you can always learn so anyway thank you for listening to the rich dad radio show and that's why you know i just love debt and not paying taxes thank you listen to the rich dad show thank you

Channel: The Rich Dad Channel

Views: 913,447

Keywords: TheRichDadChannel, robert, kiyosaki, rich dad poor dad, business ideas, make money, how to get rich, network marketing, how to make money, how to invest, passive income, cashflow game, Ken McElroy, Tom wheelwright, Real estate and taxes, robert kiyosaki real estate, how to not pay taxes, tom wheelwright tax free wealth, real estate, real estate investing, tax loopholes for real estate, real estate entrepreneur, tax loopholes the rich use to pay zero taxes

Id: hdJyXd51PEI

Length: 48min 40sec (2920 seconds)

Published: Wed Mar 24 2021