How Real Estate Investors Use Tax Laws to Build Wealth

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 market's crash. So that's really the key importance, I think, for financial education, because there is going to be a crash. And are you preparing? Can you take advantage of it? This is the Rich Dad Radio Show, the good news and bad news about money. Here's Robert Kiyosaki. Hello. Rich Dad Radio Show, the good news and bad news about taxes. Any comments, Kim? Yeah. Well, I like these series and because we, as you just mentioned, there's the four asset classes. There's business, real estate, paper asset, stocks funds, 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 the next sub, the next piece of it is taxes, because everything is tax differently, depending on how you buy real estate can be tax different ways, depending how you buy and when you sell, same as paper assets, same as commodities. We've got two great experts and you'll know now why they are Rich Dad advisors, because they do advise us and they advise us well. And they take us, they take us far in the, you're going to hold up your quadrant, 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. Branchpreneurs, big business, branch and I is, we do most of our money in real estate. And then we save goals, silver, Bitcoin and other commodities. One wise thing I want to say this, because Jim Records brought it up the other day, this is the most misused word is diversify. You know, when a financial planner tells you diversify, they really are saying de-wersify. 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 diversify, they're lying to you. That's because you have a paper asset and one of them doesn't mean you diversified. And that's what Records 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 records, Jim Records, was real estate, gold, silver. He doesn't like Bitcoin. I like Bitcoin. Anyone who has that, we've had Tom introduce, Kenny introduce the self place of the gang here in, you know, Kenny is 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, well, he'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. Thanks Robert. Well, as you guys might know, I wrote the books or the Rich Dad series, the ABCs are real estate investing in the advanced guide and the property management book. 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. As you know, Robert and Kim, I think why wouldn't you use other people's money? That's basically what it is. It's borrowing money from a bank, you know, people put their deposits in the bank and then they give them to me to invest in property. So that's a, it's the greatest thing ever and then we only have to come up with the down payments and so we use debt and then, you know, Tom works as miracles 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 none. Yeah, and to your point, Robert, about you can't do this on your own when we met Kenny, we were doing it on our own and we had got, I was basically handling all the properties and we didn't have a lot at that time. We had two apartment, three apartment buildings and some single families and 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 it cannot, 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 let's us grow. Yeah, this is a very important point. There's most real estate investors right here, you know, they have a duplex or a fourplex and then property management gets them. And so what Tom, what Kenny said to get nearly broke her heart, Kenny said, Kenny said, Kenny said, Kim was so proud. I have a 30 unit apartment, Kenny said, he's too small. Not that you can't do the same tax laws, but Kenny can't manage you and manage it because in real estate, unlike stocks, see, the reason stocks are good or papers 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 magella. 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 going to manage it? Who are they? What's their experience? And so it's the most important thing, because giving somebody, handing somebody money is not that hard, but then having that money produces hard. Yes. Kenny, 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, 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 got a free one bedroom. And I was managing the 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 I was like, well, if I just get people in here that can pay rad and I can clean this place up, it'll be a lot less work for me. And 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, income's up, place looks great. And I was like, I need to be on that side of the desk somehow. So 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 as you know, I've been in the management business. We still have a management company. I really, really, really love the business and but there is a lot more fun to it than that actually. But 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, make more money? And the reason that Ken and I was talking about this, this is a financial statement, okay. So you have income expense, asset liability for the people on the B on the I side. The biggest liability is cash. Yes. Am I correct, Tom? Absolutely. It doesn't produce, 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. We're converting cash into debt as fast as we can. But the key is Kenny's not is 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 books again, Kenny. The ABC is a real estate investing, the ABC is a property management and then we have an advanced guy 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 debt'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 by hold and pray in the stock market. And that worked for him, but I told him we're buying a real estate and he says, I refuse to fix toilets. 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, 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. 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, goals over 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 B and the I 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 you have to start with the premise, of course, as we've said on the other episodes that the tax laws are 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 actually into 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 that the benefit that they give is what's called the primary benefits, what's called depreciation. And depreciation is magic, okay? Because 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 the debt is important 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 be sure in a picture, okay? So let's say, Ken 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 and 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 1 million dollars is not just a liability because they're printing it, but it's a liability because there's 400,000 dollars of taxes associated with that million dollars of income. And really, one of the best ways to get rid of that $400,000 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 tax blame come, your taxes go away. So that's why Kenny, here's a panic in our voices all the time, Kenny, Kenny, have you fun another property yet? Because if he doesn't find any property, Tom's going to make me pay taxes, is that correct Tom? >> The IRS is going to make you pay all the taxes. >> And just to make clear here, and also to be clear, this formula is not just a US 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. >> 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. Is that fit your psychology, 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 we get the benefits from it. So we invest that money, we get 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-ad deal, which you guys have been involved in a lot of with us, 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 you pay no tax, and that's a cash-out refund, so you don't pay any tax on that, and you still get income, so you give me money, I give it back, and you pay tax legally over that depreciation amount only. So let me explain what it just says, so this $10 million property is throwing income here. Cash flow. Let's say it goes up to 20 million, 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 some $10 million to $20 million, due to inflation, I already want to call it. Well, I call that force equity, so I buy a property of $10 million with the idea of bringing it to $20, before I buy it. That's the value-ad, yes. I already know how I'm going to do it, it's not just market-driven, we're actually doing things to make it worth $20. Yeah, so when Kenny pitches the deal to us, we already know we're going to put a million here, it's going to go to $10, it's 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, Tom? 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 that's really how this system works. Now, real estate, let me say one last thing 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 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 never pay tax on the income from the real estate in the future, even when you sell the real estate. I mean, it's unbelievable, the tax benefits in real estate. 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, what we're 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 Kierstack. The rich are ready to share their good news and bad news about taxes, and why they're rich, don't pay any taxes legally, and why the small, the employee and the small business owner pays the most taxes. Any comments, Kim? Well, yes. And as I've said before, you know, taxes are so misunderstood. And everybody thinks taxes are evil, but as as Ken and as Tom were saying that taxes aren't 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. And for those of you listening who can't see this, that's why we have cash flow clubs of the cash flow game, because you can't learn the 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 going to our tax advisor, Tom real right and our real estate partner Ken Malkeroy, because we may, Ken has made us wealthier over and over and over again in 2008 when the market crashed. We all thought we were dying and 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, Ken 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 hot cat, 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 and it comes 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. So 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. 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 get a lot of taxes if you don't have any debt. Yeah. And 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 what I want you to have credit cards and all. this because if you stop borrowing, the whole economy seizes up comments on that Kenny. 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, if it cash flows, we actually buy it. So that's why I'm still buying. You know, the numbers make sense. And so 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. 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. And Robert, you said something earlier 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 knew and Kenny 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. They're retirement plan crashes. They don't know how to make money when the market's crashed. 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, Kenny says, what's your net worth? I said, oh, about a negative billion. Yeah. They don't realize that debt is money. Came 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 fricking economy grinds to a halt. Am I correct on that one? It's just like you said, Kim, 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 it'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. And then I mean, we pay him our taxes. We get this cash here. We move it to Kenny. And let's say we go from one 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 this 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, was 400 units. Vacancy was 900 percent. The place was empty. The prior tenant was a real thief. I went in there and stole all the copper wire and all the, you know, just chore everything apart. This place was a mess. There was nobody living there. Then they weren't collecting rent. 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 on the toilet in front of the fireplace. And I go, I'm walking out of here. And Kenny, Kenny goes, oh, this is wonderful. This is wonderful. Remember that one? Of course, a lot of stories like that. You know, if the property was probably 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 Kim kind of touched on this, banks actually get in trouble when they get their loans back. That's not a good thing. That's called toxic debt. And it affects the bank a lot. From a share of price, from a, you know, 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 the 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 just fix 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 are going on, the city council, the mayor, they all know what's happening at these places. And so when you go in and buy something and if you use new life into it and fix it up and get better people in there and the thing starts humming 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 the note for 20 million 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 put debt on it. We paid everybody back their initial investment. And we've owned that thing cash-free. You know, 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 Kim, you know, Kim and I donated part of the million here. I asked a column. The seven million in from the from the lie because cash is a liability to us because you'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 from your business because the depreciation from the real estate is offsetting that income. So it's an income from rich debt. Right. You understand that the reason we're bees and eyes is that by investing in real estate in the bee, we make the money in the bee, and we invest with Kenny in the eye, and that offsets our taxes in the bee. Am I correct, Tom? That's correct. Now, one thing that you mention all the time is in the eye quadrant. That's not just any investor. That's the inside investor. And that's very important in the US, 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 because Kim is an inside investor. She's professional. 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 the average casual investors never going to get because they don't understand how the law works. 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 fireplaces burned in my mind. And I realized the guy who owned it before waited, his business plan was to just strip it. Is that correct? He said he collected all the rents and stripped it. That was his business plan. So Kenny 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 as excited as Kenny because he knew he could fix it. Is that correct? Yeah, he was an expert. He was an expert 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 400 that we needed to fix. It was a 680 unit property. You know, it's just a, it's just math literally. As some units are a thousand bucks, some units are $10,000. 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 it was 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 was 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 firstly 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 benefits for. Yeah. And that's how you double your vote. That would be the worth of your property. So keep it 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 into the 20 million. In the asset column. In the asset column. We turned it into debt. We took cash, convert to debt. Kenny improves the property to 40 million. So meanwhile, we're making all this cash flow from the original 20 million dollars debt. Well, let's say he raises it to 20 40 that 20 million comes out as debt. Why is that tax freedom? 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 text 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 play your own money and you don't get to deduct 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. All over the world, you get to deduct interest expense, but you don't get to deduct the amount of money you put in as capital. So Kenny, that's calling him because, you know, when I went and I met Kenny for the first time, he uses 20 something years ago, everybody was flipping property. Remember that? Of course. Yeah. 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 100% of the tax benefits, correct? That is correct. So you leverage your tax benefits. In other words, you get five times the tax benefits, then if you just put down the, then if you paid cash for it. In the tax law, which is Tom's book tax-free wealth, there's appreciation, depreciation, and amortization. Right. So by doing this formula, appreciation is tax-free. Correct. Depreciation is income tax benefit. Tax benefit. And amortization is the bank that's for 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 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. It was like 80% vacant. It was a nightmare, but to Kenny on the finance side, it was an opportunity because he knew his business plans that 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. So that's the importance of a team. It doesn't mean don't start small. No, start small. Yeah. But the benefit is you always have dreams of going to big on this side here, right? Can I mean, 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 now, you know, the deals that we're doing obviously require like 20 million dollars down. And, you know, I use other people's money. So you go from, you know, using your own to learning how to use other people. And that's actually the way the system is set up. That's capitalism. Yeah, it's literally set up. Even people put their money in insurance policies and pension plans and 401(k)s 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 so you just want to be on that side of it, you know, we borrow from insurance companies. We borrow from pension groups. We borrow from banks. We borrow from like-life companies. When all this stockpile of money people are investing or saving, it needs to go to use of, there's a velocity of money that has to happen somehow. 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 they're doing. Because 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 want to go to the next level, start small, get Tom Spock and get Kenny's three books. Because it's a very sophisticated game. So anyway, I want to thank the two of you. Thanks for making it. 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. So Kenny says, I have 10 million for you. So where are we going to put it? You know, because if I take that money, it becomes tax. I've got to move it back into debt, not have moved it back into. And then Kenny's got to have a business plan that's going to take the 10 million. Let's say it turned into 20 million. Final word, Tom. This is 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 up your game, you had to had to increase the level of your team members. And that's critical because not everybody, 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. Thanks for your time today, because you guys, you're putting another big deal together. And please put together because I don't want to, I don't want to paint in our taxes. Well, first of all, I want everybody to know that we all kind of started without knowledge, all of us, you know, even on this, on this call here in the Zoom. And I didn't know how to do any of this stuff in the beginning. And I just learned and I said, well, 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. And I learned how to do that. And now they're like, how did he do that? And so the point is, you have to, 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 thing that you made was when you did a good job managing the 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, I increased the value of his real estate a lot, which was my job, by the way, I'm glad I did it. 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. Yeah. So anyway, thank you guys. And we, thank you, Kenny. Welcome back, Robert Kiss. Dr. Rich, share ready to show the good news and bad news about money. This one was debt and taxes while the government wants you to get into debt. And so everybody says, love debt. Frey. That's another point of view. We don't do that in the comments, Kim. Yes. This was a great, this was a great show. Really appreciate it. Always appreciate talking to Tom and to Kenny. Cause I always learned something because Kenny's always working on something and Tom's always learning more about what is happening in the tax laws. 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. 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 to 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 get Kenny's book, actually all his books, the rich dad, hang on. ABCs of real estate. The ABCs of real estate, the ABCs of property management and the advanced guide to real estate investing. And Tom real rights book is tax-free wealth. So I highly, highly, highly recommend reading those. How big was your first to know? Two bedroom one bath. How much? 45,000 dollars US. How much is your 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. And then a same formula is Kenny's talking about 400 units. Same formula. And what I did is when I came back from Vietnam, I wanted my rich dad to teach me, says, that's not his job. He says, you got to 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 island of Maui. And it was one bedroom, one bath condo was $18,000 down. And my job was to buy it with no money. So I put it on my credit card. I borrowed $18,000. I put it, I put, it was $18,000. I put 10 percent down. And I made $25 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, it 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, $18,000. dollars. I broke up my master card to put $1800 on it. And I was making $25 purely on debt. Because debt is government, government wants you to borrow because of 1971, the US dollar became debt. I just like using debt. I love debt. But that's why Kim and I have so much money to save and goal several 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 all for listening to Rich Dad Radio Show. And that's why you know, I just love debt and not paying taxes. Thank you all for listening to Rich Dad Show.