How to Achieve Limitless Financial Freedom

Release date: May 18, 2022
Duration: 46min
Guest(s): Ken McElroy and John MacGregor
Ken McElroy and John MacGregor
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Rich Dad welcomes guests Ken McElroy and John McGregor. Ken is a Rich Dad Advisor, author, and expert real estate investor. John is a global speaker, best-selling author, and financial mentor. He is the founder of ThrivePath, LLC-The Revolutionary Process to Financial Freedom and Peace of Mind.

John, we are in a huge bubble, and I wouldn’t be in paper assets like stocks, bonds, mutual funds, EFTs. What are your thoughts?

“There's no question about it, this is the perfect storm. You just talked about the repo market. We've got interest rates that are going to skyrocket, the Feds already announced it. And inflation's out of control, I'm paying $6 a gallon for gas. We got supply chain issues, the Ukrainian situation that could turn into World War III in any second right now. So, we're in the perfect storm right now, and I do see we're heading for recession very quickly. And that's going to wipe out the 401K and also the pension market.”

Ted Siedle wrote a book called ‘Who Stole My Pension?’ and he makes his living suing pension funds. Anything you want to say about that?

“Yeah. Actually, I'm in that book a little bit. But I've seen it all throughout my career, and I've been doing this for 27 years. I'm working with thousands of individuals and small business owners of all walks of life, rich, poor, young, old, male, female, and all in between. And so often I've seen people come to me and say, "Well, my pension's guaranteed. It's in writing. It's a contract. They assured me." And they've worked 30, 35 years busting their tail thinking that they're going to get a lifetime income. And then their spouse, their surviving spouse, is going to continue on. Only to find out that these pensions are now being challenged in court successfully.

And when I say successfully, that means the company's winning. The employee, the long-term employee that gave everything they had to have this golden parachute, is seeing their benefits cut somewhere of 30, upwards of 50%. And this is only the beginning. And Ted talks a lot about that in that book, because we're now starting to see a wave of lawsuits that are happening. Because there's no money in these pension plans, they're underfunded. I don't care if there's a contract or not, if there's no money, there's no money.”

John, tell us about your book.

“Yeah. This was Robert's idea, actually. It's the Top 10 Reasons The Rich Go Broke. And so, for years I've been telling Robert these stories. Of these train wreck stories, as I call them. People that had everything, that I personally knew, and then they just lost it all due to a common underlying, actually a psychological aspect that not just the rich have, but most people have in society. And that's what I talk about. And I get to really the core reason people struggle financially. The core reason most people, 78% of people today are living paycheck to paycheck. Why 65% of people could not come up with $500 for an emergency expense. This book breaks it down based on all the experience I've had with thousands of people and gets to the core of why people struggle.”

Ken, you and John and others will be joining me at Limitless on June 9 th and 11th at the Western Carolyn in Scottsdale, Arizona. Tell us what is going to happen there at Limitless.

“Well, first of all, as you know Robert, we get asked to speak at lots of stuff. And I got asked to speak another real estate event, another real estate seminar. And I, like you, love real estate, but I don't think now's the time to invest in it or anything like that. So, I said, "Listen, if we do a financial education seminar to teach people about all the things that are coming," that's when we started putting our team together. Obviously, all the [Rich Dad] advisors.

We got George Gammon, and John's coming. We got, really an all-star team coming to speak. And really, it's all education, all teaching, all learning, and not investing. It's 9th, 10th, and 11th in Scottsdale. But if you're new and trying to find a real estate deal, then this is probably not the event for you. This is about managing your money, taking a look. And that's why I'm excited John's coming. His book is amazing, first of all. But the there's always been a big struggle... Or struggle. There's always been a push/pull between Wall Street and real estate. In fact, if you go on right now, it's all about stocks and all about wealth management. And it's always been a grab for people's money.

And real estate is the opposite, pretty much. And so, what we wanted, that's why when John's going to show up, he's going to talk about the industry. And what they do and what you can do if you have a lot of your money in, let's say with a financial planner or in stocks or bonds, or whatever. Just things that you can do. Not that you need to move it to real estate, just things you can do based

on what's happening today. Because it's kind of scary what's happening with all these bubbles.”

John, how close is ‘poor’ America to a disaster in this country, based on what we believe is a coming recession and/or depression?

“Within days. I mean, that's no exaggeration. It's coming, there's no question about it. I can ramble off all the statistics you want. And the traditional methods of financial planning do not work. Period.”

Limitless will be about preparing people for the biggest crash, but not for the new guys, right Ken?

“Right, right. And one of the things that you talk a lot about with, specifically Buckminster Fuller, is you got to work with the forces, not against them. And these things are coming. And obviously we're all trying to figure it out. And so, you're going to have varying points of view, which I think is really healthy. Because today, especially in the media culture, that's not really welcomed. So, you're going to have people that are going to talk about deflation, people that are going to talk about inflation, people that are going to talk about house crashes, and people that are going to talk about the markets going up. And I actually think that's healthy.”

John, what do you want to say about what is happening right now with the ‘bubble’ economy?

“The 401K was never meant to be the sole retirement vehicle. And now it is because companies are no longer offering pensions. Those that do are pulling them back. And we just talked about earlier, we're seeing these pensions challenged after the fact. And having on top of that significant number of pensions across the country, across the world in fact, whether it's corporate or public, they're severely underfunded. And they've been stolen from. And these and pensions are invested in stocks, bonds, real estate, and commodities. And then take into account social security, which will be bankrupt in 2034. And you just do the math. That's a factual matter, bankrupt in 2034. When you figure that 40% of people will be 100% reliant on their social security payments, it's a train wreck. I probably overuse that word now. I pulled up an article by Suze Orman. And it said, "We're in a retirement crisis, five things you must do." And I'm like, yes, we're in a retirement crisis. But it's budget, save money, cut up your credit cards, put money into your 401K. And then there was a last one was something about understand money. I don't know. It just, that's the kind of advice people are getting today. And that's why I'm so excited to be a part of this event because we're going to get to the heart of why people are suffering financially. Period.”

Give us a little background of yourself, John.

“Well, my dad was in banking, so I wanted to do banking as well as investing. And being in the financial world, I was able to do both. So, I did a lot of work with individuals and also small businesses, doing a lot of lending and mortgage stuff. It wasn't just all investing and financial planning. And then I went off and started climbing the corporate ladder. I was a national sales director, I worked for a very large money manager, I was a national retirement director. And got to a point though... And I'd always been working with individuals no matter what role I was in, but I finally walked away 10 years ago because of the frustration I had with my clients. And we would sit down, I'd show them the graphs. I'd show them that they're headed for disaster if they don't change their ways.

And they'd look at me and they'd go, "Okay, John, we're all in. What should we do?" I'd lay out the tactics, the strategies, and the plan. We would high five, we'd pinky swear. We'd shake, we'd hug. We'd all agree we're committed to the plan. And now these aren't poor people, these are high income individuals. These are two income households. So, this isn't poor people. And as soon as they left my office, they are on their way to Best Buy to buy a flat screen TV on an already maxed out credit card. So, all that planning, all that information, all that stuff had a shelf life of 15 minutes before they were back to their old habits and their old behaviors. Back to what I call living on pain island. And again, these aren't poor people. These are high income, earning people.

Educated people. Because if you're making this much money, you're spending this. If you're making this, you're spending that. It doesn't matter how much income you're making. Everyone knows what they need to do with money. Those five things that Suze Orman said, everyone knows to do it, but they don't do it. Because this isn't an information issue, this is a behavioral issue. And the only way to change these financial behaviors is at the core of your mental programming. And that's what I get to. And so, I've left all that traditional financial planning stuff to really address the real reason most people struggle.”

Ken, share your background with us and tell us how you got into the real estate world.

“I got into real estate in the late 80s. Of all things, managing. And then I was like, "Man, I'm managing for all these rich guys and I'm making them lots of money. And I need to be on the other side of the desk." So, I started buying, ran out of money, and started syndicating, and built my businesses from there. I've had lots of businesses. And today we've got a couple billion dollars under management. We're the general partner, we own, we manage them, build them, buy them, hold them. And as you know, we don't really exit on hardly anything. We have a staff of a little over 300, and we teach. Our investors are amazing people, and most of them were in the stock market at one point. Your largest expense in your entire life, is tax. If you don't know how to manage it, then you're an idiot.

The IRS basically tells you where to put your money. Literally, the tax code is a Bible that says, this is what you can and can't do. And so, as long as you just follow the pages that say this is what you can do. And one of the things they want is housing. One of the things they want is oil. Yeah, and food. They give subsidies and tax breaks to people who produce those things. Period. That's the way the world is.”

Ken, who else will be teaching and speaking at the Limitless event?

“I guarantee you; we're going to have 40 speakers. Most of those are going to come out of this crash in good shape. And that is the point. The point is, this is not flipping a house and trying to time the market.

These are strategic people that are trying to do strategic things and have done strategic things. We're going to have a number of entrepreneurs there. We're going to have key people that have started businesses locally, people that are doing a lot of real estate, a lot of gold and silver. We're going to have some crypto people there, financial planning, people there. And it's really for entrepreneurs, side hustles, trying to figure out a way to mitigate the storm that's coming.”

We might be going into the biggest crash in world history. The good news is we are going to make a lot of money, but unfortunately it will be money people are losing. Any comments on that, Ken?

“Yeah. This is a personal responsibility issue. I think in John's business, and I see it, people turn their money over to someone else and then they move on. And it's like it doesn't even exist. I know that if somebody took my money out of my savings account, I'd be all over them. I'm like, "Where did that go?" But apparently, they just don't do it when it goes to a pension or a 401K, or into these RSP plans.”

John, any thoughts?

“I'll add to that. I call it the chicken dinner syndrome. They get invited to the free chicken dinner. And they show up and they're impressed, they like the advisors and the slick presentation. And without hesitation, they're ready to hand over their hard-earned money without any questions. I mean, I saw it myself. They were like, "Hey John, we saw you on TV." Or you're referred, whatever. Just take my money. I would try to explain, "Hey, this is how much I charge. This is how it works." "No, no, no, no. I don't have time, just take my money." And that's probably the most dangerous words I've ever heard in this industry, "I trust my advisor." I mean, nothing can go wrong.

Yeah. So, for anyone listening to this, do not fall for that fiduciary. In fact, I can make an argument that a fiduciary is even less than secure than a non-fiduciary. It's a massive financial firm, and they've got satellite offices all over the country. And I kept hearing the radio commercials and I go, "I got to check this out." Because I do a lot of due diligence on other competitors, and I want to know what everyone else is doing. And so I went to the luncheon, and everyone was over 65, 70 years old. And you could tell they were ready to write the check before the presentation even started. I'm not kidding. And the big hook is a chocolate chip cookie. And that's my kryptonite. And I was even more disappointed when that cookie really sucked. I mean, it really was just wrapped in plastic.

So anyways, they do the normal presentation, the same song and dance. This is how the markets work, this is how we invest money and so forth. And so afterwards, every single person signed up for their consultation. Which is unheard of, right? I mean, you don't have that kind of a closer ratio in these events. And so, I meet with the local advisor, and this young girl who really didn't even make it out a basic training at a previous firm. But she was given a script, told exactly what to do. And I started asking questions. And the first thing she says is, "Wow, no one's ever asked me these questions." She wanted to end the conversation, move on, because there's other people in the waiting room. I finally lean in, I said, "You know what, by the way, who was that guy that was presenting? Do I get to meet him? Do I work with him?" She's leans in, she goes, "Don't tell anybody, he's not a financial advisor. He's a Hollywood actor." And my jaw dropped. So she goes, "Did you watch the Super Bowl last week?" I go, "Yeah." She goes, "Well, he was the lead in the Papa John's commercial." And sure enough, I pulled up his reel and there he was. Yeah, I could not believe it.”

Ken, what is our rule of thumb on holding real estate investment seminars?

“The bigger the brochure, the worst the deal. Because remember we were cruising along in the Javits Center in New York and these beautiful girls are standing there in front of these beautiful murals, and they had these big brochures, and they were trying to sell high rises in New York. These floors or condos. So, we were gathering all this stuff before our talk. And I said to Robert, I go, ‘Look how hard they're selling these.’”

All three of us will be there in person, at Limitless. Who else will be there, Ken?

“Tarl Yarber, who's my partner in this. We're having Brandon Turner from Bigger Pockets, he's coming. He's a big, big personality. We love Brandon. Mark Victor Hansen, Chicken Soup for the Soul. All the real estate advisors. I've got some legal guys; we've got some crypto guys. We've got a lot of local entrepreneurs. We've got the guy who founded LifeLock, Todd. We got some athletes that made a lot of money and made some bad decisions and good decisions. It's going to be fun.”

John, any ideas on what you’ll be talking about at this event?

“The target audience will be those who have 401k and IRA. I'm going to expose exactly what's going on. What they don't know because I've seen it. Most people have no idea what's going on with their money, how it's being managed, what they're being charged. All these slick jargon terms like fiduciary, and what that really means.”

Limitless is June 9th and 10th, in Scottsdale, AZ. Use this code Rich Dad for a 10% discount on tickets.