88. Not Your Average Wealth Advisor with Adam Doran

Join Mike Cavaggioni with Adam Doran on the 88th episode of the Average Joe Finances Podcast to talk about wealth management. Adam is an advisor at Prevail Strategies. He shares his experience of how he became a wealth advisor.

 In this episode, you’ll learn:

• A police officer who became a wealth advisor
• How is the traditional financial planning broken today
• The tax problem nobody talks about
• What makes Adam different from the typical wealth advisor
• Recommendations for early retirement
• And much more!

About Adam Doran:
Adam Doran is a former police officer-turned wealth advisor who has been investing in real estate since 2011. He specializes in a creative capital strategy for real estate investors to build tax-free wealth alongside their growing portfolios.

As a real estate investor, Adam started with wholesaling and accumulating single-family rentals using the BRRRR method in his home market of Kansas City. He transitioned in 2019 to multifamily and now owns 52-units with his partners.

Find Adam Doran on:
LinkedIn: https://www.linkedin.com/in/adamdoran33

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Transcript

Average Joe Finances: 0:00

Hey, how's it going everybody? So today's guest is Adam Doren and he's a former police officer turned wealth advisor in Kansas city. He specializes in creative strategies for real estate investors and business owners to build tax-free wealth while they grow their business. In addition to his work as a wealth advisor, Adam has been investing in real estate since 2011. He started with wholesaling and single family rentals then transitioned in 2019 to commercial properties and now owns 52 units with his partners in Kansas city. So Adam, awesome background really love what you're doing in real estate. And as a wealth advisor, I'm really excited to talk to you today. Thanks for joining us.

Adam Doran: 0:40

Thank you, Mike, for the invite to be on today and I'm looking forward to the conversation.

Average Joe Finances: 0:43

Yeah, absolutely. Okay. So I'm going to start this off the same way I start every show and I gave like a wave top of who you are, what you're doing, where'd you come from? So if you could just elaborate a little bit more into that, share a little bit more about yourself and your story. Like what how did this all get started for you.

Adam Doran: 0:59

Yeah before I was being a wealth advisor and before I first got into real estate, I was a police officer and I did that for 16 years I got into it right at age 21, right when I was eligible to be a cop it was something I knew I wanted to do. From the time I was really young and I did really enjoy that career. The first 10 years of it, I couldn't believe I got paid to do it. I really did enjoy going to work every day. However, over those first 10 years of doing that career things of my life shifted, I got older, I got married, had a kid priorities shifted, and I got tired of living check to check. So 10 years into career, I'm trying to figure out how I can improve my financial situation and went on a journey of starting to educate myself about finances and how real wealth works and how to build sustainable wealth. Probably a similar journey to what listeners on the podcast here are going through, or just started. And basically through seminars that I went to and meetings that I attended, I came to the conclusion that there were a couple of key pieces. One was that I was going to have to learn about business and start a business because by doing that, that would qualify me for 400 plus tax breaks that you don't get. If you don't own the business. The other thing was that I realized, wealthy people, successful people, often owned real estate, and that real estate helped them to not only enjoy income from their business, but they could take the excess and put it into real estate for additional income, because we all only have 24 hours a day. We can all only work so many hours. And then the other thing was I realized that wealthy people understood finances and the financial markets. And so that was the three principles I was like, okay, gotta learn about business real estate and financial markets. And going through that journey led me to, after about another six years of being a police officer decided that I wanted to change careers. I wanted to be able to spend all of my time in that realm of finances. I found the journey fascinating, and here's what else I found traditional financial advice and traditional financial advisors by and large. What they were encouraging, did not align with what I had learned about how real wealth works. And that was a huge piece to me that was like, I need to get into this industry and share the things that I've been learning. And so that's what brought me into it.

Average Joe Finances: 3:12

it's a very similar story that, for people that get into a career field. And, maybe about halfway through or there they're doing it for a couple of years. And then they realize, Hey, how am I going to build my wealth a little bit faster? Or what's the best way to do this to where I don't have to go to work every day. And I could spend more time with my family. So it looks like one of those key drivers for you was getting some of that time back. You wanted some of that time. Freedom. speaking of time, I had to write this down when you said it and you had mentioned. We all have 24 hours in the day and we can only work for those 24 hours. And first of all, you don't want to work 24 hours in a day because that's pretty awful because then the next day starts and you've been nonstop working and you haven't slept and have no energy. And then how can you actually perform the next day? Yeah that's a very key thing. Like we all have the same amount of time. And it's a matter of what do you do with that time to better your situation? And it looks like you figured it out. Yeah. At least, what worked for you was starting a business and then getting into real estate. And, that's one of the things that I find that a lot of people that come on the show, it doesn't matter what route they decide to go. Some people don't build a business first. Some people decide they want to invest in the stock market or even to get into other things like there's alternatives like crypto now that people are doing. And then a lot of times after they start building up some wealth, They don't know where to put it. So they put it into real estate, which is a great place to store your wealth so that it's not just sitting in a savings account and collecting like no interest whatsoever. So that's really awesome. I always like bringing it back to real estate because it's one of my favorite wealth building assets out there because it's just that good. And it's just that steady because we all need a place to live. Okay. Now you were on the police force for 11 years. You said

Adam Doran: 5:00

16 years, total 16, 10, 11 year mark. That I really started exploring how to build wealth and actually got involved in real estate. And interesting, you brought that up to the order in which you do things. Everybody starts out in a different place. It seems but I started with real estate too. I actually jumped into real estate prior to really figuring out what business was I going to be in. So I, I agree that, the order, you do things in, it doesn't much matter so much as you come to the same conclusion. There's only 24 hours in a day. And you got to find a way to, to build income and build wealth.

Average Joe Finances: 5:34

Okay. So it was about 16 years. And so it was around the 10, 11 year mark when you started, to build your own business, get into real estate, right? So over that next five to six year period, you were able to get yourself to a point where you can actually step away. From your nine to five. So step away from the police force and go into what you're doing right now as a wealth advisor, for your own business and real estate full time. Five to six years, that might sound like a long time, but in the grand scheme of things, that's not a long time at all, especially to be able to walk away from a job that's paying you your full-time income. That's what you've been used to living on. And that's how you took care of yourself, your family, your own home that's what paid the bills, right? Yeah. And here you are five years later able to walk away from that because of what you've built on the side. And I think, a lot of people, especially in full-time career fields. And I know I've run into this a couple of times myself telling myself, like, how is this going to work? How am I going to find the time to do this? If you start a side gig or a side hustle now, and you start building on that, or you start investing right now, you'd be very surprised where you can be five years from now. And that's why I feel like, that, that whole thing about what you did and over that five to six year period is just absolutely amazing. And I think more people need to know, Hey you can do this. You can start something on the side and then replace your nine to five job. Okay, so now fast forward to where we are today. How long have you been investing in real estate?

Adam Doran: 7:02

10 years.

Average Joe Finances: 7:02

Okay. So 10 years now. Okay. Fantastic. And five of those years has been without working at the your original nine to five job. So that's really awesome, man. Okay. So I want to tie it into what you do now as a wealth advisor, right? One of the topics that we're going to talk about is traditional financial planning. And how that's broken. So can you tell me, like how is traditional financial planning broken today?

Adam Doran: 7:30

So what I believe is that traditional financial planning is broken for a couple of reasons. Number one, primarily it takes control away from the client. If you go into a traditional financial planning meeting, the advisor, there is positioned as the expert. They usually have, it almost sounds like an entire separate language or they speak, and there's this three meeting sequence of you meet, you get acquainted, then they collect your financial data and you meet and you go over that. And then there's a meeting where they give this presentation about here's what you're going to do based on where. And it positions them as the expert and then you're then turning over your assets for them to manage for a fee. And you're not controlling that process. And furthermore, when that money gets invested, when they manage those assets, chances are the advisor themselves. Isn't managing them. It's going to some third party out on the east coast or something, and it's going into wall street funds. There's no control. There's also no. Because usually you're encouraged to stuff your money away into these accounts where you're penalized. If you grabbed the money before you're 59 and a half, all your traditional retirement accounts, pre 59 and a half early withdrawal penalties. And then furthermore, and this is a significant one that I like to, that I like to emphasize, because I think it's right now today, we're seeing it in the headlines tax rates, I think are far more likely to be higher in the future than they are to be lower. And when you think about where we are by default accumulating all of our assets, if you're doing it the traditional way. So if you have an employer sponsored retirement program, or if you go to an advisor more than likely, you're in a 401k, an IRA, some sort of tax deferred savings account. And that seems really good today because if you make a hundred grand and you put 10 grand in that account, you're now only paying taxes on 90,000 But you've deferred the taxes and you defer the tax calculation until some point in the future and that account's getting bigger. So that problem is getting bigger. If you believe like I do that tax rates are going up in the future and you've accumulated, let's say by the time your retirement age, you've accumulated a million dollars, $2 million, $5 million in that account. The question is how much is really yours? And you don't know the answer. And the reason we don't know the answer is because how much is yours is going to be determined by what is the tax rate when you take that money out? Oh, and by the way, you and I don't control that tax rate. So it goes back to what I said about control that's, what's broken about traditional financial planning. And so what I want to do is work with clients to help them make educated decisions about where they're allocating money and where they're building assets. To insulate themselves from future tax rate hikes, because I think they're coming and we're already seeing them now. Giving yourself liquidity so that if a real estate deal comes along or any kind of opportunity comes along, starting a business, buying a business that you have liquidity, and you can access your money and not get penalized on it and be able to execute on that opportunity. And then furthermore, just being able to plan for your future with a level of confidence, because if tax rates go up by 20%, that doesn't negatively impact my future. Something along those lines. So that's really, what it's all about is giving control back to the clients that I work for by helping them position themselves. And that's all this does is this is just positioning yourself more favorably from a tax rate perspective, from a liquidity and control perspective. It's all about positioning.

Average Joe Finances: 10:49

Okay. I took notes again, when you were speaking and the big thing you're talking about here is how, going the traditional route for financial planning and just setting up your retirement for the future, that traditional route, you said it takes control away from the clients. It was in more than one way, right? Because it was pretty much the financial advisors, the one saying, okay, here's, we've got your financial information. This is how we're going to do it, to get you to where you want for your goals. So you give them your goals and then they'll help you get into the right vehicles that they believe is the right vehicles for you. To get to where you are to meet your goals. Now, the thing is, if you have certain goals that you want to be at a certain age, you don't, like you said, you don't know what that tax bracket is going to be when you hit that age. You don't know what the tax rate's going to be, and it could be almost detrimental. Cause you would think that you're going to have a certain number because you're going off of what today's tax rate would be. And it could be way higher in the future. And when you go to, pull out your retirement, when it, when you hit 59 and a half or the traditional age of 65 is what a lot of people would like to retire at that's that's not good because. You're not going to be probably where you thought you were going to be. And like you said, that control has been taken from you. So now I know another topic that we were going to discuss about today. And I don't know if this is what you were hitting on with that first question that I just asked you, but we wanted to talk about the tax problem. That nobody's really talking about.

Adam Doran: 12:20

Yeah, I think it's two-fold and I did just touch on a little bit. I think the first thing is the tax problem nobody's talking about is when we look at taxes historically, and this will be a good one for anyone who's listening. This is just a good quick history lesson. So if you would just ask anyone, pull them on the street and say, w how do you feel about taxes? Everybody always complains that they're high, but if you actually do the research, historically speaking, the highest marginal tax bracket we had, like income tax bracket we've ever had in America was in 1944 and 1945. The highest marginal tax bracket was 94%. I was stunned when I learned that, and I only learned that a few years back. And as I share that with people, they're always shocked by that because our current highest tax bracket right now is 37%. That's a big difference. And if you actually look historically through the 1970s, the highest marginal tax brackets were up in the 70% range. So historically speaking, we're at historic lows for income taxes. Now, when you look at the tax cuts and jobs act, and the fact that it's expiring here in a couple of years and the current administration, and this isn't a political statement, this is just the fact that the current administration has said that they intend to raise tax rates. We're at 37%. We've been at 94. There's a lot of spread in there. So there's a lot of opportunity for that to go up. But that being said, it hasn't changed the way financial planning is getting done. We still have claims. Maxing telling people max out, 401ks, max out your IRA. I don't know. If tax rates are going up, is that really the best play? Is there a tax-free asset where I could build money instead? So that's the first piece. The second piece is we're already starting to see tax rate hikes that aren't really announced. They're quiet. I don't know if you're familiar with the secure act. This secure act was passed back in December of I think it was December of 19. It's either December 19 or December of 20. Very recently the secure act was passed. That eliminated something called the stretch IRA. It used to be if you were a non-spouse inheritance of an IRA, so your dad passes away and leaves you his IRA. And it's got a million dollars in it. It used to be as the child of that person, you could then take, and you could spread out the required minimum distributions on that IRA over your life expectancy. So it wasn't that big a deal. If you inherited that or mom's million-dollar IRA, you could spread those minimum distributions out and it didn't really bump you up into the next tax bracket. When the secure act passed, that changed everything you're now required. If you inherit that same account, you're now required to liquidate the whole account, draw all the money out and pay all the taxes with ten years. Most people when they inherit something like that from their parents are in their fifties, probably in your peak earning years, you're probably making the most money you've ever made in your life. So imagine you're making $200,000 a year and you inherit a million dollar IRA. And now you've got to liquidate that money in the next 10 years. So if you do it evenly, that's an extra a hundred thousand a year. You just bumped yourself up a couple of tax brackets on money. You really don't need. So that was a tax rate hike. And not a lot of people know about it because it wasn't like announced as a big deal versus, if the government came out and said, Hey, we're going to raise taxes 20%. You better believe people would be talking about that. Not a lot of the conversations going on or around the secure act. So that's just one example of how there's this tax problem and it's not getting enough attention and you can test me on this. Anybody who's listening, Google on the wall street journal or USA today, or money magazine, whichever Kiplinger is whichever one you want to use. You don't see a lot of conversation about building tax-free wealth. You still see all the conversations focusing on tax deferred accounts. And I think that's a mistake.

Average Joe Finances: 15:52

Yeah that's a huge point especially when you have these I'm going to bring it to a star wars reference here, cause I'm a big star wars fan and they have this Phantom menace, right? So you have this these small things that are happening in the background and people might not look at the secure act and think anything of it, they're like, okay, just have to, withdraw this over the next 10 years. But like you said, if you think about it, if that's a million dollars in there and you're pulling it out and that's an extra a hundred grand a year now of taxable income that counts for you as the individual who is withdrawing that, yeah. That can potentially bump you up quite a few tax brackets to where now you're in that tax bracket, paying that 37% where before you were probably paying, 22%, right? That extra 15% can be huge. It can eat up quite a bit of that a hundred thousand extra that you are pulling out and can really effect, what your plans were with that income. That is definitely something that people should be mindful about. And I'm really glad that you brought that up because. Like you said, if you go and Google about tax deferred accounts right now and everything else, that's what you're going to see is articles about, Hey, now's the time to start increasing your contributions. You need to think about what, what the future is going to be like for yourself. Make sure that you have really good nest egg to sit on for when you're in your sixties, because you don't know where the world's going to be. Hey, another great argument to that is you don't know where the world's going to be when you hit your sixties and by putting all of your money into a tax deferred account that can, you can really pay for that in the future, literally and figuratively. So paying the taxes, but also paying the price because now you're not prepared to be fully retired as you expected to be. There's always unexpected expenses, especially. As we get older, you're going to start seeing, more medical expenses and things like that. And that's all stuff that should be factored in and you don't really see people talk about that too much. You just talk about, okay, what is the ideal income I need to make monthly to live off of when I'm in my sixties to not have to go to work, what are my expenses? And that's what people always focus on. And if you don't, think about some of the other things that can come up with it as in raised taxes, medical expenses, and things like that, you could really be setting yourself up for future failure and get to the point where you're living and you have no retirement cash left because, even with all the craziness that's going on right now with the pandemic and all this other stuff and different diseases and everything. Our life expectancy is still much higher than it was, even 20 years ago. And it's continuing to go up. We're fluctuating right now. It's going down and up a little bit, but generally over time, just like the stock market, it always goes up right. Our life expectancy is always going up and right now I think life expectancy is on average 77. And realistically, when you think about it, if the ideal retirement age is 65, you're looking for, you want to have enough money to last you 12 years. That doesn't seem like a long time. And it's not like, when you think about that too, do you really want to wait until 65 to retire and just have 12 years where you're not, going to work every day and having to, be able to enjoy your life. And especially at that age too like we said before, with medical expenses and things like that, how are you supposed to take those trips and vacations and be retired, and go take that trip to Europe and stuff and go do what you want to do when you have a bad back or you have a bum knee, or you can't walk because of whatever, so there's so many different things that you have to factor in there's is that really the right age for you as well? So I just wanted to touch on that a little bit. Speaking of being able to retire a little bit earlier. So I think one of the themes of this podcast as well, and one of the things that you talked about that you've done yourself is how you work yourself out of a job, right? You've worked yourself out of the police force and you did that through investing, growing a business and building a real estate portfolio Sure. You can call what you're doing right now, still a job, being a wealth advisor and everything. But at the same time, this is something you built yourself. This is something that you're doing and you enjoy. And when you're doing something that you really love doing, I always like to say this still like, can you really call that work? Cause it's something you just truly enjoy. And you're, you've got yourself set up in a pretty good spot to where, you're getting yourself. Financially free and well before your sixties and you, you get that time, freedom back, you get that, that, time back with your family and everything. And a lot of people focus on this word called fire, right? Financial independence retire early. I like that. But I like the first two letters. I don't like the last two letters really, because., I'm actually even wearing a t-shirt on here that says, it has the fire acronym on it. I have a coat on right now because it's actually very cold in Hawaii right now. So for people listening, like why is he wearing a light jacket? That's why we don't have heat in our houses. Okay. Cause we don't, it doesn't ever get this cold, but anyway so fire, with that financial independence part, that's the part I like. And that's what you've built for yourself, right? Is that financial independence? I think that's where more people need to be focused, not so much on the R word, not so much on that retire word. You want to focus on the financial independence so you can get that time back and get that time freedom. So yeah. Anyway I can go off on a tangent, which I just did as you can see. When we talk about wealth advisors, let's bring it back to you, right? There, there are plenty of them out there. So what makes you different than the typical wealth advisor that somebody would go sit down and talk about their retirement with?

Adam Doran: 21:22

Yeah. I agree with what you said about retirement. I think most of the clients I work for most of them are business owners, real estate investors. They don't intend to retire in a traditional sense. They're aiming for the same thing you just talked about which is having control and being financially independent so that work is optional and I get to choose what work I do. And I think that's a better way of, because frankly we don't want to retire if there's a lot of research out there about if you cease to be active and contribute, if you're no longer a contributor, you die a lot earlier. So we still want to contribute and we still want to do productive things. I think most of us value some type of work. It's just, we want a choice over it. And we don't want to have to get up at a certain time every day, be at a certain place at a certain time and punch a time clock. So to be able to escape that the rat race is, it always gets called. And have independence and freedom, I think is where it's at. So now I'll get to answering your question, sorry for the long-winded. What makes me different and what makes our process different at prevail, which is the firm I'm at prevail strategies in Kansas city. It feels totally different. The client experience feels totally different. We focused on the client experience, so it's not a matter of. There's this three beating sequence and we're going to be the professional. We're going to prescribe a plan. It's more of, we lead with education. Like a lot of the information I've shared today about the tax problem. Nobody's talking about, how do we get back control building tax-free assets. We lead with education and it is more a consultative process where the client says, okay, this resonates with me. Let's focus on this. And then we're going to work through that. So for example, a lot of the client conversations I'm in start with. The tax problem. Holy crap. I just realized I've built up a whole bunch in these tax deferred accounts and yeah, I want more control. I want more liquidity. I want insulation from taxes. I want to be able to take my money and leverage it into real estate and build a portfolio. Okay, then we'll run with that and we will collaboratively look at different strategies and I put together a plan based off implementing different strategies that support what you're already planning to do. We're just gonna help you do it better. By putting the right strategies in place. So I'll give you an example and I'll share just an overview of one key strategy that we often do for business owners or real estate investors to help resolve the tax issue by getting more into a tax-free bucket. They also resolved the liquidity issue by allowing us to have an account where a building that we have access to money and we don't have to worry about pre 59 and a half penalties. And we don't have to worry about any of the contribution or income limits that come with IRAs and 401ks. Cause you know, you can only put so much in those and you can only qualify for ROS if you make below a certain income level. So we can get around all of those limitations just by using a vehicle. That is more conducive to having control having liquidity. Yeah, I can use it for retirement income, but I can also tap that bucket of money today. If I want to get into a real estate deal or buy a business or build my business. So one of the strategies we use is actually using whole life insurance as an asset class. So instead of it just being an expense on your income statement and being an insurance policy where you're buying this death benefit, that you'll never use, somebody will, but it's not for you actually turning and building it as a tax-free assets. That, yeah, it has a death benefit cause it's an insurance policy, but primary is the fact that there's a cash account that I'm building and it's liquid. And it's not correlated to the markets. There's no downside risk and it has guaranteed minimum accumulation. And then there's usually a kicker in the form of a dividend every year. And that strategy goes by a lot of different names, creative capital strategy, lifestyle banking, infinite banking, cashflow banking, people have given it all sorts of names from a marketing standpoint. But the reality is all we're doing is reviewing insurance differently. We're building an asset with it. And a reason to insurance is the particular vehicle we use is because in the internal revenue code, there's actually a section devoted to life insurance, section 77 0 2. And it basically affords whole life insurance, all the same benefits that a Roth IRA gets. But without any of the limitations, That's an oversimplified way of putting it, but to avoid getting in the weeds and just overview. Cause again, this is just one strategy. We do a lot of strategies, but this is one and it's a foundational one. The reason that we do that is because not only can we build an account tax-free. But we can enjoy continued compounding growth of that capital account. Even when we deploy cash and use it in a real estate deal, use it to build a business or buy a business or whatever. What I mean by that is imagine if you could go to your local bank and they offered you a savings account, that was tax-free. Once you put the money in you don't pay taxes on it. And what if they would pay you a competitive interest? Let's just say 4%. Cause that would be a pretty competitive interest rate for a savings account right now. And let's say that if you took and you use money from that account, like there's a hundred grand in there and you take the a hundred grand out and you go use it on a real estate deal for the next five years. What if they would keep crediting you all the interest as though the money is still in the account, and then after you, and let's say you get, I don't know, 15% a year on your real estate deal. So you're making 15% a year on your real estate deal. And then 4% a year over here on your capital account. And you're making money in two places at the same time. Then when you close out the real estate deal, either with a refi or a sale of the property you take and you replenish your savings account. With your policy, it's like, you never took a use that money. So that account continued to grow and compound, there was no missed interest or dividends there. So from a growth standpoint, it makes a lot of sense as a capital strategy, a couple of other things, and then I'll let you respond because you might have a couple of follow-ups. I see you're grinning. Like you got a couple of followups. But a couple of other things about that account is in most states in the us. That life insurance policy will get similar asset protection treatment that a retirement account would get. So if a creditor sues you and wins a lawsuit or a judgment against you, they might be able to tap your savings account, your checking account, your business accounts, but they can't touch your life insurance policy. So that's very valuable. The other thing is when we get to retirement, And again, we've defined what that means different things to different people, but let's just say from age 70 to age 90, you want to have a tax-free income stream. In addition to your other buckets of money, maybe you're getting cash from your real estate. You're getting cash from a IRA that you had, or a 401k at a job you had, but this is another bucket you can use. And it's tax-free and you don't have to report the income to the IRS. What we have found Mike, by modeling out different financial scenarios for clients. We can take, and maybe that client could have safely with a traditional portfolio, could have safely taken out three to 4% of their account balance every year. When we add the life insurance as a tax-free non-reportable asset, we can actually reduce that to 7%, 8%. They can take out of their portfolio a year, so you can actually accumulate less money and still have more income later on. So those are the value points. We find business owners and real estate investors love it because we can still accomplish some of the long-term objectives of building for the future, but we've got access to money in the meanwhile. And I can't tell you how many folks I've talked to. That said I'd love to get started in real estate, but I don't have any money to do it. And I'm like how much you got in your 401k? And they're like 200 grand. I'm like if you could access that money, you could do it. So just, having a place where you can keep money and have access to it, big deal.

Average Joe Finances: 28:48

As soon as you started talking about it, I started grinning and I started writing stuff down. Cause the first thing I wrote down when you started talking about whole life insurance, I literally, I wrote that down. Using whole life insurance as an asset class and then right under that I wrote double-tap and what I mean by double-tap and that's exactly what you went into, right? How you can have money in this policy. And then borrow from it and it's still collecting the original interest on it as if you never touch that money. And then you could use the money that you borrowed from it to put a down payment on a piece of real estate or anything like that. Absolutely fantastic strategy. I've had other people on the show that have talked about that before. It's absolutely awesome. And that is definitely something that makes you different than a traditional financial advisor, especially when you're. You're gonna, you're gonna talk to more of probably the people that listen to this show, right? The people that want to invest into their future and get into real estate and different asset classes, different vehicles, that are going to get them a, into a better spot to be financially independent. One of the things you mentioned too, is this is one of the ways that you can take back control. And what are the other things that I was grinning about too, is if you see my background here, right? You could see how it says, build your wealth, control your future. That's like one of the things that we talk about on the show here. It is taking back that control to be able to control your time freedom and get your future secured to a spot where you'll have that time and money. Money is what buys time. You buy your time back and time is more important than any currency or anything like that. Cause it's that time. It's the time that we have on this planet, this earth, right? The time that we have with our families, you can't get that back. You can always go out and earn more money, but what are you doing for that you're trading time. And one of the things that we're talking about here is different ways that you don't have to necessarily trade time. Like you'll trade some time for it. But you get it to a point where it becomes more passive and you have that compound interest starts kicking in and your money starts working for you and not you working for money. And that's one of the things, when you can get to that point where it, you hit the peak and then once it hits the peak and it starts coming back down. That's where your money's working for you and you're not working for money. That's really awesome. I definitely appreciate your perspective on that and I appreciate what you do for investors and how you help them, get to that point where they can double tap into, in, into this vehicle. Okay. If there was somebody that was going to come to you today and said, Hey they're maybe in their late twenties. And been investing in my 401k with my current company and I want to do something different. I want to be able to work myself out of this nine to five job. Let's say they're in like marketing or something, and they're making about a hundred thousand a year. What would you recommend to them if they're coming to you for the first time? And they're saying, Hey, I want to get myself to the point where I can retire in the next, 15 to 20 years. And not be, in my late sixties when I want to retire, what would you recommend to somebody that's coming to you with that?

Adam Doran: 31:48

Yeah, I would say there's one of the foundational things is if you're at a job and your employer is paying you for your time. That model while it used to work long-term for folks like you could just stay. Stay at that job, stay loyal, faithful employee. And that would take care of you over the long-term. That model is gone. We live in a different economy. And so I'm not saying that quitting your job as the way to go. But what I would say is, in addition to your stable, predictable income from your job, you've got to find a way to build something on the side and it doesn't have to be a total replacement, but figuring out where your skillset is and deploying that skill. In, in, in a marketplace where you control it, where you're the boss. Because then you can grow and scale your income above and beyond what your employer truly can afford to pay you. They can only afford to pay you so much per hour. You've got to find something that doesn't limit your income. And if you can do something that's, product-based, that's even better because products are easier to scale than services. But that being said, I know that's not everybody's thing. I'm in a service business. But being able, just to find ways that you can increase your income. And the other thing is when you own a business, you can start recouping lost income because you can start taking tax deductions that you don't qualify for if you're just a W2. So when you start a business, it opens up this whole new world of tax deductions that you're not currently getting. If you're only working a job. So number one is looking at starting a business, even if it's just part-time on the side. And that's probably what it should be at. The start is part-time on the side. Number two, is that strategy I just mentioned start researching. Is there a better way or a smarter way for me to save and to build capital that life insurance strategy is very valuable, not just for real estate investors and business owners, but if you're going to be saving money someplace as a savings, It offers lot of advantages versus a traditional savings account where you give the bank your money. They don't pay you any interest and they go and they leverage it out, put this somewhere where you can leverage it. And then the third piece would be once you are expanding your income, once you have started building some capital, you should be looking at other assets that produce income, because again, real estate is another way to scale your income without working more hours. And in my case, I did it in reverse order. I got into the real estate first. Then I did the life insurance piece as a savings account. And then I started a business. In reality. If I had my druthers, I think I would have started building the savings with the life. Insurance started the business then did the real estate, but either way, whatever order you do it in. And the bottom line is those three things, right? There are core foundational to building long-term wealth. Start a business, start teaching yourself on how to save smarter Start getting educated on and building connections in the real estate world. And that's the other thing I would say on the real estate pieces. So many people are like, I want to do real estate. How do I get started? It's going to be the relationships you build and the connections you make, because more likely than not, you will not have all the necessary resources to just jump out there and do it. Unless you've got an extra 30 hours a week that you can take on a new job, because I'm going to tell you having done single family rentals, it becomes a job. So you're going to want to connect with people, have a mentor, build your network and leverage those people and their skills and their resources. And that's how you're going to get your foot in the door with real estate. It's, what's worked incredibly well for me. I'm not in a multi-family deal because I know the multifamily space I'm in it because I have a lot of friends and one of my friends happened to be a commercial broker who really knew the business and gave me an opportunity to invest. And that's usually how those types of things come along. Like you, Mike, I'm in love with real estate as an asset class. It is probably my favorite asset class. And, I think those two assets we talked about primarily right now on this interview has been, the life insurance and the real estate, what's unique about both of those assets is they come with unique tax advantages and they are not correlated to the stock market. And I'm not saying the stock market is bad. I think a lot of people have built well through the stock market, but if you're, if you've only got your money in that one place, what happens when we have a 2008, what happens to your wealth versus, you've got real estate, which is totally non-correlated. So stock market does this real estate stage. And life insurance is the same way. It's its own unique asset. It's not correlated to either of the two, the more non-correlated assets you can have, the better diversified you are.

Average Joe Finances: 36:22

I wrote down a bunch of stuff, as you were talking about this that just sticks out. There's like you said, there's three key things, and, start a business. Build capital and start buying income, producing assets, AKA real estate. And I'm really glad that you had mentioned this, right? You talked about relationship building, right? You want to get into the real estate space. You're not sure how you build relationships. You network, you meet other people that are doing. What you want to do and, so you find a local meetup of people getting together and talking about real estate. There's a lot of virtual ones now, too, that you can go to just about anywhere. Just look it up. I know like Facebook events, like if you go onto Facebook events and you type in real estate meetup, there'll be hundreds of meetups that pop up. Join one, go check it out, go meet people, talk to people. Network. I talk with real estate investors all over the United States and I live in Hawaii. And I've invested with a team out here from Hawaii. We bought 102 unit apartment out in Roanoke, Virginia. And it's just it's and it's all due to connections and networking and getting to know these people and building those relationships. That's absolutely huge. And one of the other things that I love about being in the real estate space. Is. In general, about 95% of the people that I've met are very giving and they are very like, they're giving with their knowledge, they're giving with their opportunities. If there's something coming up, they're quick to say, Hey, I remember so-and-so talking about this. Let me send, shoot them an email and see if they're interested in this deal that we have coming up. And things like that. There's so much opportunity in building relationships and in building your network so that. Absolutely huge. So yeah, definitely get, get involved in something like that. Get involved in a meetup group, go meet people. Talk about what you're passionate about and guarantee you there's somebody else out there that wants to have that same conversation with you. It's one of the reasons why I started this podcast too and one of the. I guess selfish things for me as a podcaster is, I get to build my network by meeting awesome people like you. And bringing them on as my guests, and I like to stay connected with all my guests afterwards. You're probably going to be hearing from me months from now and be like, oh man, I'm getting sick of this guy. It's I love building these relationships and it's one of the beautiful things about being in this space is the people that you meet. And I've had several people that. We're not guests on my podcast, just people from meetups that I stay connected with on the regular. And we're always throwing ideas at each other. And if there's, a good opportunity that comes up, Hey we can go in on something together. So there's, and there's always opportunities that come up guys and gals there's always something. There's, it's just a matter of being open to it and having that, that that perspective of building these relationships with everybody and building your network. It's huge. It's huge. Absolutely. I really can't talk about that enough. I have another question I want to ask you, right? Cause this is something I just started implementing into the show is so I'm curious for my guests, right? If you have a favorite business investing or real estate related book or podcast, if you do, what would that be?

Adam Doran: 39:28

Business and real estate related, man, that's really hard to narrow it down to just one favorite book or podcast.

Average Joe Finances: 39:34

I got to put you on the spot. If you could pick one, what would it be?

Adam Doran: 39:38

Yup. Yup. There's a book I like, and it's not necessarily specific to business or real estate, but I think it's so important to developing the right mindset to do either of those things. There's a book called conversations with millionaires and the author's names are Jason omen and Mike Littman, and it says, and that subtitle on the book is what millionaires do to get rich that you never learned about in school. That was one of the best reads that I think I ever. Just as somebody who is trying to change my mindset and change my paradigm other than the get up, go to work and, hang in long-term and it was so helpful to me in building the mindset that it takes to flip your paradigm, take risk and do things that are outside the outside of the norm, like building a business or building a real estate portfolio.

Average Joe Finances: 40:24

I wrote that one down for sure. I'll check it out. Conversation millionaires by Jason Oman, omen and Mike Litman. That's right. Awesome. Okay, cool. Right on. All right now. I have to ask you the most important question now. Okay. So I appreciate you answering that, but this is the most important one, especially with the type of conversation we had, this kind of turned into a tax episode, and tax advantages of real estate and life insurance, which is absolutely awesome. I really enjoyed all that. And I think it's very informational People are going to listen to the show and say, Hey, I want to know more about Adam, and what he's doing and how he learned all this stuff. Or maybe I want to go check him out and use him as a wealth advisor for myself. So where can people find more information about you? Do you have a website you could share with us social media profiles, anything like that?

Adam Doran: 41:11

Yeah, the absolute best place to find me as on LinkedIn and. I'm not the only Adam Doran on LinkedIn, but I am the only Adam Doran and in Kansas city on LinkedIn. And so very easy to find I'm with prevail strategies. So you'll see that in the title line. But that is the best way to connect with me. I'm on there every day, I meet new people on LinkedIn every day. And so that's a great way to contact me and it goes, it's the same as having my phone number, cause the messages go right to my phone

Average Joe Finances: 41:36

We're connected on LinkedIn, so I'll make sure I have a link to your LinkedIn profile in our show notes to make it easy for everybody. Hey again, Adam, this has been an absolutely awesome conversation. I really genuinely appreciate you taking the time to sit down on a Saturday and have this conversation with me.

Adam Doran: 41:54

Thank you for the invite. I've really enjoyed it. Mike enjoyed the chance to share some things and hopefully everybody that listened, found it really useful

Average Joe Finances: 42:01

right on Aloha from Hawaii.