In this episode, we have a very insightful conversation on wealth-building and preservation with financial expert Whitney Elkins-Hutten. She shares invaluable tips and strategies honed from over 20 years of private investing, consulting, and leading companies.
Connect with Whitney Elkins-Hutten on LinkedIn https://www.linkedin.com/in/whitneyelkinshutten/
Connect with Ben Fraser on LinkedIn https://www.linkedin.com/in/benwfraser/
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Transcription
Unlocking the Mindset of the Ultra Wealthy
Whitney Elkins-Hutten: They’re really ultra wealthy. There’s the mindset that they come in with. They understand their wants, they understand their why, they know who they have to have in their world to meet their goals, not only from a skills standpoint. They don’t try to invest in every asset actively. They’re bringing the experts into their world that do this for a living.
They scale their networks. So they understand the difference between a want and a need. The biggest thing that I landed on is like, how do they start evaluating investment? And they understand that, especially as a passive investor, when they’re investing in other businesses, investing with other operators, they get to control three things past their goals, the risk and timeline.
They get to control who they invest with, where they invest. And what kind of deal they go into.
Welcome to Invest Like a Billionaire Podcast
Ben Fraser: Hello, Future Billionaires! Welcome back to another episode of the Invest Like a Billionaire podcast.
Introducing Whitney Elkins-Hutten and ‘Money for Tomorrow’
Ben Fraser: Today’s show, I’ve got a returning guest, a friend of mine. Her name is Whitney Elkins-Hutten. She just wrote a book called Money for Tomorrow and this is really good stuff.
So she talks about her reason for writing this book. She wrote it initially for her daughter and it’s all about not only how to build and grow your wealth. but also how to keep and protect your wealth. And if Whitney at all, she speaks a lot, does a lot of different coaching. She’s been in this space for over 20 years and she’s learned so much.
And this is just a pure pass on the knowledge to people that are a few steps behind. So she talks about making sure your goals are met. Align with where you want to be changing your mindset to help achieve where you want to get by mimicking the ultra wealthy and doing the things that they are doing to put yourself in a position to have the best chance of success.
And then the real big things, a lot of people don’t talk about sometimes are, what do you need to do to make sure you’re keeping and protecting your wealth and avoid building this most, you avoid erosion of your wealth. And then. Lastly, how to pass it on. So she has all these things. It’s a longer interview, but it’s so good.
A lot of good things. Definitely crazy to get this book and support what she’s doing. It’s called Money for Tomorrow. And again, if you’re liking the show, we appreciate the support. Make sure you hit subscribe. She doesn’t miss any other episodes and leaves a review. Share with a friend. I always appreciate all that. So with that. Enjoy the show.
This is the Invest Like a Billionaire podcast, where we uncover the alternative investments and strategies that billionaires use to grow wealth. The tools and tactics you’ll learn from this podcast will make you a better investor and help you build legacy wealth. Join us as we dive into the world of alternative investments, uncover strategies of the ultra wealthy, discuss economics, and interview successful investors.
Free Economic Report
Ben Fraser: Looking for passive investments done for you? With Aspen Funds, we help accredited investors that are looking for higher yields and diversification from the stock market as a passive investor. We do all the work for you, making sure your money is working hard for you and alternative investments. In fact, our team invests alongside you in every deal. So our interests are aligned. We focus on macro driven alternative investments. So your portfolio is best positioned for this economic environment. Get started and download your free economic report today. Welcome back to another episode of the invest like a billionaire podcast. I’m very excited to bring our guests today.
She’s a returning guest and someone that I love hearing her thoughts and perspectives. She’s been investing for a long time. It’s Whitney Elkins-Hutten, and she’s just written a book called Money for Tomorrow, how to build and protect generational wealth. I’m super excited about this.
And so awesome that you wrote a book, Whitney, you’re actually a repeat guest. So we had you on probably a year or two ago. And been a long time friend and in the same space as us. And so really excited to bring you back on to talk about this exciting thing you’ve just done. So give us a little bit, again, a background on you for those that are maybe new to you and then just the book and we’re going to dive right in.
Whitney Elkins-Hutten: Oh, perfect. Again, thank you so much for having me on the show.
The Journey of a Real Estate Investor
Whitney Elkins-Hutten: Again, my name is Whitney Alton Patton. I am the founder of Ash Wealth. I’m also the director of investor education at PassiveInvesting. com. I started off in real estate completely by accident, so I don’t have a degree in this but I have over 20 years of investing experience in real estate, so started off living flipping and house hacking.
I did really well on my first project didn’t, but my next project was in the middle of 2006, seven and eight. A little tough time then. So maybe people can identify with that over what they’ve been seeing the past 18 to 24 months. Really, I decided that I needed to figure out how to invest in real estate the right way.
Built a single family rental and small multifamily rental portfolio over 36 units over the next few years and then decided I need to go into larger projects for a variety of reasons. Partnered up on a 52 unit apartment building and then eventually got into a general partnership on over 10 multifamily deals and then scratched my head wondering, is it?
Which is going to lead to financial independence for me and granted, how quickly can you take chips off the table with your active income and put it into passive income is one methodology to do that, but also you have to think about the return on your time. And that’s where I became completely smitten with passive deals in real estate and all types of real estate, multifamily self storage.
Express car washes various businesses as well as debt and where we’re at today, personally not as passive investing. com, but personally, we have over 6, 500 multifamily units, 2, 200 self storage units, and 15 express car washes. As PassiveInvesting. com, we have made over 200 billion in purchases and have 1.4 billion assets under management currently.
Ben Fraser: That’s awesome. I love your journey and it’s so cool to hear you recap it again. And you’re, from your perspective, doing this for 20 years, you’re only starting from the ground up, right? And I think you started mostly in a single family, right? And then doing flips and then doing rentals and.
It made this transition at different points to then going mostly into passive, but you still have a lot of your own properties as well. And what really prompted you to write the book? I know, at this stage in life, you probably don’t need any more passive income. You’ve got a lot of it, but it’s really I know giving back, but what’s What do you feel like the education gap was or is for people that this book is solving right now and in the market?
Whitney Elkins-Hutten: I wrote the book specifically for one person and that was my daughter. So over the course of my investing I’m trying to put together a blueprint on how money works, how do you actually create wealth, how do you keep it, how do you grow it? And, this is really all the education that I wish I had probably learned in high school or like in my college days, right?
Wouldn’t it be nice if we came out of our educational career, knowing how money works, knowing how banking works, knowing exactly what assets we should invest in, and how to keep money in our pocket. And so as I’m learning all these things, I’m like, I’m looking in throughout the books that I’m reading, the podcast that I’m listening to, I’m noticing that there’s a big gap here.
Nobody has the end to end blueprint written down. And not even many what was it? Many master the game by Tony Robbins, that 600 page tome, like it doesn’t have an end to end blueprint. I’m like, wait a second, I need to write this down at least for my daughter so she can be a good steward for what my husband and I built for her.
And then. And, as I’m coaching and mentoring my own clients, I’m like, why am I just holding on to this for my daughter? They need this. And so I started sharing it with my coaching clients in a program that I call the investor accelerator and with my work at rashwealth. com. And then as I’m working with even higher level, passive investors, more seasoned investors, People that are high income earners.
Into their career, maybe even five to 10 years away from retirement. As I’m having thousands of conversations with these investors, I’m like, wait a second you don’t understand all the six ways to keep your wealth. Like you’ve been so focused on creating it with your day to day income and growing it, which are great.
Those are two skill sets you had to master, but there’s two, if you want to cross the finish line and actually build true wealth for yourself and generational wealth for your family. You have to master the other two skill sets, which is keeping wealth and learning how to pass it on effectively. And so really, why did I write the book?
For my daughter, but really also to help people get launched into their financial freedom journey. And if you’re closer to the finish line, make sure, go look at this blueprint and make sure you got your family, financial foundation in order.
Ben Fraser: I love that. You’re so right? Where there’s different books that focus on different parts of the wealth journey and so much of it is focused on the accumulation phase. And that’s a very important phase is if you don’t accumulate, then you won’t have wealth, but very few focus on that kind of keeping and protecting. And I think it’s such a different shift from, it’s got to make more income and I got to go do more investing.
And a lot of us are there, right? We want to, we’d have to get up that curve to get to a point where We can actually, see the forest from the trees and look a little bit further and think longer term, but it is a mindset shift when you shift from, I just got to get enough investments of passive income to.
How do I actually create generational wealth and what does it actually mean? And how do I pass this on? How do I raise kids that are not entitled and can understand how to steward this well and keep it going. And how do I not let, as you call, let’s get to this a little bit later, the four horsemen, try and.
Take away from the wealth that I’ve built. And so I love that you’ve done this and it’s, we’re going to give all the links at the end here so people can get it on Amazon and digger pockets. Everyone needs to be reading this.
The Importance of Strategy in Wealth Building
Ben Fraser: Let’s start from the beginning, right? So for someone that is newer to investing than to wealth building, they say they’ve got a great job.
They’re making a good income, but they can’t seem to get ahead. Talk a little bit about just. Why the mindset matters, why goals matter and really where people get stuck, right? Where they fall prey to different traps that they just aren’t even realizing, right?
What were some of the key shifts for you on your journey that really unlocked the momentum to where you’ve got to yourself now?
Whitney Elkins-Hutten: Yeah. If we think of wealth building as a game, right? Yeah. If you’re learning the game, you first have to understand what the objective is.
What are the rules and then the strategies to play? So think back I don’t know, Ben, like, when you were a kid I grew up learning how to play Monopoly. With my daughter, we taught her Monopoly, Cash Flow for Kids Catan. And at first, she was just like, okay, I understand, I get the objective, but I don’t understand the rules.
The rules are really complicated. We have to streamline that down into four major groups of rules that somebody has to master. And then we have to understand the strategies in each one of those categories under each one of those rules that makes the play most effective. What, as people are getting into investing, I think they kind of overcomplicate things from various angles.
They get really enamored by the tactic without fully understanding what it is they’re trying to do. Okay, now I know we were talking about mindset, but I think this is super important that we have the framework in place because it makes the mindset piece a little bit easier to understand the shifts that have to happen there.
And let’s take real estate, for example. I knew I would start, so, my first property I bought. Okay. Relationship failed. I had a house. I stuffed it full of roommates. I completed the rehab. I sold it 11 months later and I got 52 grand in my pocket and I realized I haven’t paid any of my bills.
But I got so enamored as real estate is a haptic that I didn’t understand why that worked. I didn’t know the strategy. Okay. So I think that’s super important as we go through our conversation today. Now when we touched on mindset. The key mindset shift here, there’s many, right? We have to understand who the little devil sitting on our shoulder that’s telling us that we’re an imposter and that we can’t do this.
What are all those ways that we’re sabotaging ourselves and getting in our own way? So the, I think those are definitely things that we tackle in the early stages and Money for Tomorrow, understanding on how to create wealth. But the biggest mindset shift that has to happen here is you have to shift from a mentality You’re somebody’s going to do it for you that you have to do it yourself, right?
Yeah, and it’s not like you have to rescue yourself. It’s like you get to do this. You’re empowering you with this, right? And that is, you know, there’s such a different way. It’s like I have to do this. Nobody’s gonna save me. Okay, if you guys aren’t good you have no idea what just happened or I get to do it.
I’m empowered. All right, am I going to mess up? Sure. Maybe. We have to have that kind of, visceral shift and it’s understanding that the world’s not out to get us. There are rules in place where we can succeed at. Not everybody’s out to get us, but certainly we don’t have plans with our money.
Somebody else does. I guarantee you. And then we have to move into okay, how do we fully understand who we have to become? We have to define what we want, okay. What is it that you want to do by investing? Okay. Are you trying to create financial freedom for yourself? Do you want your time back?
Do you want to pay off your debt? And that wants to change over time. Then we have to understand why we want it. We have to connect to them in motion because the want is going to keep us going on a day to day basis. But why is it going to be that North Star that’s going to let us know when we have reached the end, which freedom did we get?
Financial freedom, time freedom, choice freedom to create impact in the world, location freedom, right? Then we have to understand who we have to become to get it, right? Do we have to reorganize our self-talk? Do we have to tamper the saboteur that’s sitting on our shoulder? What skills do we have to have?
Okay. Like we were talking before the show as we both deal a lot with passive investors, in the various asset classes that we offer. And but we have to cultivate a skill set in our passive investors for them to understand what it is they’re investing in.
And then the network, who do you have in your network who can help you grow? And it’s all of these things combined.
Ben Fraser: No, that’s so good. You said so many things there. I’m going to try and keep my response to one or two things. But I think it’s so important, differentiating between strategy and tactics.
Because I think a lot of times investors confuse the two. And I’ve seen this so many times where someone gets excited about real estate. They get excited about it. Passive investing and syndications and, or different asset classes like car washes. And they just jump in because someone sent them the deal that, that, they, they know, or they just came across it on the internet or whatever the source that they found out about it was.
But it’s, I see this all the time where investors couple years down the road, they look back and what did I invest in? And it’s this. Messy sock drawer, just all the different random things that they invest in, and there’s no strategy, there’s no real focus.
And you look back and Oh, wow, I have way too much multifamily, in the Sunbelt allocation and, not enough in these other areas. And it’s just without the strategy informing the tactics, one, you’re going to not really understand what you have. You’re going to make it harder to achieve the goals you want to achieve.
And you’re really going to, yeah, probably make poorer decisions, right?
Understanding Wealth Preservation and Growth
Ben Fraser: Because if you don’t have that framework, so spend a minute on that, like where do you find, like you already hit some of those, like establishing what is your why and what are the things you want to achieve, but how have you seen it with you change the course when you have a good strategy and what should someone who’s earlier in the journey, like what are some of the questions they should be asking to help inform that strategy?
To then decide on the right tactic.
Whitney Elkins-Hutten: Yeah, great. And I think there’s a two pronged approach, so I’m going to offer two frameworks, one of which we already tapped on, right? Sitting down and really asking yourself, what do you want? Why do you want it? Who do you have to become to get it? Those three core questions are huge.
And don’t just ask it once, ask it on a repeated basis. And the reason why I suggest asking it on a repeated basis, is because of how I answer the question today, those three sets of questions. I’m going to change. Who I have to become to get it is going to change. My wine rarely is going to change.
And as I hit every milestone in my investment journey and move from financial security to vitality, to financial independence, to financial freedom, my wants are going to change. When I first started off investing, I did it by accident. I didn’t even realize. I was just like, Hey, like I was buying a house to have a roof over my hat head.
And all of a sudden I’m like, wait a second. This is amazing. Supplemental income. Oh, wow. I can make more money at this. And then in Canada, my day job do I really need to be traveling eight hours a week for my day job? Can I have location independence? And so as I’m working through all these questions I’m.
Getting enamored by the investment that’s right in front of me, not fully understanding that if I sat fully in that, under, answering that, what the why and who do I have to become to get it, I would have thought about it more great. That first flip went off them, put a lot of money in my pocket, but do I want to be doing all this work on nights and weekends to get it?
Do I want to be investing solely in my own market to do this? I, how do I scale a company? Now sometimes we have to do the dirty work upfront. Like I had to build that 36 unit rental portfolio to get the money to start investing in larger syndicated deals. I had to do it that way.
Because I didn’t have a high income net worth job. But what I lacked in my journey was I was constantly answering the question now, not looking at the questions that I needed to ask. What do I want my life to look like in 15 or 20 years? And that’s where I hit my biggest inflection point, like in about 2016, 17, now we’re having a baby girl home.
She’s super young. I wanted to spend more time with her and be available for her, but here I am working my day job, managing 36,000. Rentals and then granted, I was using property management and then also trying to start a syndication business at the same time, right? And so had I sat there, I might have, and I know you guys, you and you guys talk about this a lot, with, in Buffalo, like a billionaire.
I might have gone from this 30 single, 36 single family units, repositioned all that capital into a passive investment and totally skipped buying a multifamily building for myself in the middle. Like I don’t get a gold star for doing that. The problem is I didn’t ever ask the question, what do I want in 10 to 15, 20 years on the line?
Let me go build that portfolio. Yeah. So how do you do this? How does an investor avoid this trap first, answer those, what the why and that, who do I have to become to get it today? And then also for your future self. And then you have to understand your goals, your risk, and timeline.
And just to give you a quick framework here your goals are probably going to be aligned with what, one of, four of the seven pillars of what I call the seven pillars of wealth. Meaning you’re probably looking for, in some order, capital preservation, cash flow, equity growth, and tax benefits.
But the ordering of those, what you want, is going to be different for everybody. It’ll be, even just between you and I, it’s probably different. And this is where investors fall into a trap. They get enamored by a tactic. They go, because they probably invested in the stock market and they were chasing yield.
They were chasing the equity growth in the stock market and they’re like, I want to mirror that. So they come into real estate and they immediately look at the numbers and that’s how they invest. They invest in a deal based on the numbers without fully understanding. No. We got to go back and understand what the deal gives you.
Which of those seven pillars of wealth does that give you? And then, then we can get into who you are investing with? Where are you? What kind of asset class are you going into? I have a client that I’m working with currently right now. He has an amazing portfolio and it is one of those portfolios that looks like spaghetti got thrown at the wall and they admit that it was spaghetti thrown at the ball.
Ben Fraser: Exactly.
Whitney Elkins-Hutten: It would be fun to do a quick little exercise to demystify the portfolio. Just be like, okay, okay. Let’s put everything in its own category, organize the sock drawer as you put it and be like, okay, which of these pairs of socks do you like light and which of them do you wish you never bought?
Ben Fraser: Hmm. That’s a really good exercise to do. That’s awesome. Yeah. I love something you said earlier, but I just, I don’t want to skip over it because I think it is such a key mindset shift of taking the ownership over this, right? Because I think about the financial system. In general is just geared towards making you think one, either it’s too complicated for you to figure out, or two, just press the easy button to just stick into your 401k and 60, 40, and it’s retired, mid sixties and don’t think about it.
It’s just the system that makes it where you don’t have to think about it, but you, and it, most people, I think are they don’t give themselves enough credit for one, You have different goals than the financial system has for you. And two, you actually can figure this stuff out.
It’s not terribly complicated, right? And this book would be a great resource for you.
Unlocking Wealth: Insights from the 1%
Ben Fraser: So let’s shift a little bit to you talk about some principles that the 1 percent are using to master the creation of wealth. And so you got your goals, you got your mindset, now what do you do and what are the things that maybe you learned along the way that You know, you would do differently based on what you’ve seen in the interactions you’ve had with the ultra wealthy people you work with.
Whitney Elkins-Hutten: Do not skip over the point that you were bringing up as far as empowerment.
A Personal Journey: From Frustration to Empowerment
Whitney Elkins-Hutten: I just a quick little story after I read money master the game, by Tony Robbins, I was totally all in. I’m not a worried person at the company that I worked with. I’m like our retirement plan, fiduciary store going, Hey, we need to mirror Ray Dahlia.
It was all weather reports, oddities, real estate, all of this, and they were like, go away. They’re just like we’re going to offer you. Vt what is it? vt, SAX, right? Vanguard, just standard vanguard like, s and p 500, the bonds and stuff like that. And so it was, a lightning moment.
I’m like, I don’t even get to choose what goes into my own retirement portfolio. I don’t even get to choose what’s on the menu from each basket. This kind of sucks. But, so I was like okay with my outside fun, I’m going to engage Vanguard and try to, they have an advisory service, and I’m going to engage them because they’re the best at this, right?
And they’re going to help me build a portfolio. And I, mind you, I’ve already been doing a ton of research on this. I’m thinking they’re going to come back with something with three values, an all weather portfolio. And I wasn’t heavy into trying to build, scale my own real estate at this point in time.
And they came back with three tickers for me, 40 split between. I was like stocks and equities and then another, like a money market account on the side. I’m like, And I’m paying you for what?
That’s what I was like, okay, forget it. If that’s what you’re going to offer to me, I was like, I can do this better myself.
The Ultra Wealthy: Strategies and Mindsets
Whitney Elkins-Hutten: As far as what the 1 percent do The 1%, the really ultra wealthy, there’s so many things. There’s the mindset that they come in with. They understand their wants, they understand why they know who they have to have in their world to meet their goals. Not only from a skill standpoint, they don’t try to invest in every asset, actively they’re bringing the experts into their world that do this for a living, right?
They scale their networks. That’s huge. They understand the difference between a want and a need. That’s very huge too, but then I think whenever the biggest thing that I landed on is like, how do they start evaluating investment? And they understand that, especially as a passive investor, when they’re investing in other businesses, investing with other operators, they get to control three things past their goals, the risk and timeline.
They get to control who they invest with, where they invest and what kind of deal they go into. And then they also are evaluating every single investment they go into to see how many wealth pillars that actually get them.
Evaluating Investments: The Seven Pillars of Wealth
Whitney Elkins-Hutten: Now we touched on four and I encourage listeners to do this with your portfolio. Take all of your assets that you have and then grade them on the seven pillars of wealth.
How well does that asset preserve capital for you? How well does it create cash flow? What are the different ways it can give you equity benefits or help you grow equity? What kind of tax benefits does it take advantage of? I had a town wheel, right on my podcast yesterday and he just dropped the knowledge bomb on tax benefits.
It was super cool. How can it take advantage of smart use of leverage to amplify the growth of your wealth? And it has to be smart. It has to be the right leverage because we’ve had tough ways. We learned that in the past 12 months, right? They like inflation hedging assets, okay. Things that were valued are going to continue to go up, as inflation grows.
Okay. And then, they are always evaluating the operator. Who’s the expert there? Is it on their team or do they have to go find the expert? And, when you look at these seven pillars. The assets, the 1 percent invested are going to take multiple of those boxes or five, maybe all seven of those boxes.
Now if you evaluate stocks and bonds, what mood, like the core middle class, is investing in. They, it doesn’t even take one or two and so how can we expect to get ahead? How can we expect to get paid on multiple fronts where the market’s going up, down or sideways? It’s. If we’re not really taking care to understand how wealth is created, it’s not just cashflow.
It’s not just equity growth. Like it’s the combination of all of these levers, all these pillars together.
Ben Fraser: I love that. I think it’s such a cool exercise too, right? If so, you have made some investments, go through not only, trying to organize that and see, One, what do you like? What do you not like?
What do you wish you hadn’t done? But then also, what are the different categories that these are checking the boxes in? And you can, are these getting you closer to the goals that you’re trying to accomplish?
Building Your Financial Moat: Strategies for Protection
Ben Fraser: Talk a little bit about building your financial moat. This is a concept I’ve obviously heard Warren Buffett talk about, right?
Where they look for when they’re investing in businesses that have some type of moat, which protects them from competitors and protects them from. Things that can erode the value that they have in these businesses, but how do you apply that kind of concept of a mode?
In your personal finances as you’re building your wealth. And what does that kind of mean?
Whitney Elkins-Hutten: Yeah, absolutely. Yeah. And I love the fact that you brought it up in terms of business, because when I first started learning this concept and implementing it myself, I was actually following one of the board members of Home Depot and he always had this concept of building a fortress balance sheet.
And I’m like, frantically scribbling all the things down. Cause I was like, okay, I need to do this in my business as I’m building my real estate. And all of a sudden I’m like, wait a second, I need to do this in my personal business, just my household business. And again, that kind of taps into the mindset shift that people are chasing tactics that They’ll do.
They’ll put aside reserves for their single family rental, but they won’t have enough reserves for their own personal life. So how do you build your financial amount? Just to just touch on that few different ways, like one, you need to have ample reserve. We talk about that emergency reserves, even, if you’re new, starting off, can you.
Get to a thousand dollars, I think there’s like a crazy stat out there that 75 percent of Americans can’t, even if they got surprised with a thousand dollar bill, it would crush them. I went to the emergency room, like in January, you want to know what my bill is from that? Like you can just one crazy accident away, right?
So be sure to get your oxygen mask on first, get that, you know, start small and get three months built up of reserves. What do you need to keep food on the table? The roof of your head, the lights on, right? Then build up to six months and then nine months, 12 months, set aside your deductibles for your health insurance, your car, all of that, in case you just suffer a catastrophic loss, you can pay all your deductibles and you can, you know, figure it out for six or eight months. So make sure you build that, that, that core moat around yourself and then, other ways, that kind of play into the moat, understanding what your credit score is.
And I, you were on a podcast that ‘s titled invest like a billionaire. We would like to assume that everybody here knows what their credit score is or that they feel it. Very frankly, I can tell you even the most sophisticated investors sometimes do not know their credit score or are well protected from creditors and predators, right?
There’s, there’s all types of scams out there. So know your credit score, make sure you’re in tune with that. Also set aside a war chest of money to have to invest. So you’re, the moat can be defensive, right? Can you weather the storm, but also it’s offensive, right? Because in down times, like we, we could argue that we are right now.
This is where a huge amount of wealth is actually made. So you can have your defense in place. That allows you to play a good offense, meaning that you have your war chest of funds ready to go deploy in the best. That’s huge. You can, you can jump really quickly. There’s a quote in the book, Baron Rothschild 18th century or 1800, he said, Oh, gosh.
Oh, when there’s blood in the streets, right? Learn to invest when there’s blood in the streets and, we’ve heard that quote a lot, but the second half of the quote is even when the blood is your own.
Ben Fraser: Wow. I never heard that.
Whitney Elkins-Hutten: Yeah. If you look it up, that’s the part of the quote that doesn’t really get. It sounds really graphic, but the whole point of that is, even if you are going through the same experience as everybody else, if you have your finances in place, your oxygen map on, you can make offensive moves and a defensive defensive environment.
Ben Fraser: Yeah, I totally love that.
The Four Horsemen: Protecting Your Wealth
Ben Fraser: Let’s talk about the four horsemen.
So as you’re. But building the wealth, we’ve talked about accumulation, you get to the point where you’re starting to tick some of these financial goals and you’re sitting pretty, but now you gotta watch out. You gotta keep it, you gotta protect it and talk a little bit about some of the things that people may not even be thinking about that can erode your wealth over time that you need to be paying attention to and be proactive against.
Whitney Elkins-Hutten: Absolutely. Yeah. Absolutely. This is a concept that I learned from my own personal mentor years ago and really actually saw it play out throughout my life. Because a lot of impetus of this book came out of me settling five different estates in my family where the combined loss of these estates was 700, 000.
And that sucks in and of itself. And some people’s draws might be hitting the floor. Mine was to be truthfully honest, but you compound that loss at 7 percent over 30 years, that’s 5. 3 million. It could have stayed in our family. Okay. And it wasn’t just my family. It was my cousin. And my two cousins that this happened to as well.
And it doesn’t have to be this disastrous. Even a 10, 000 loss within a family can equal out to like just under a million dollars in 30 years. We wouldn’t want a million dollars in 30 years. So it was, so those lessons that I learned through settling these estates, just merely reinforced what my mentor had already taught me.
So sometimes you have to see it. You’re just like, okay, yeah, I know to watch out for that. I know that the oven’s hot, but it’s not until you put your hand on the oven. You’re like, yeah, that’s hot. Like I shouldn’t touch that. We can go, I’ll go through, I’ll name all six weeds that I think that you should, we talked about the four horsemen, right?
I’ll mention the four horsemen, but there’s really six things that you should keep your eye on the ball. And so making sure that you’re using debt wisely, you’ve got the right debt in place. Okay. And not just do you have the right debt in place? But if you’re trying to pay down things like credit cards, personal loans, student loans and stuff like that, then you know, the order of operations that you’re paying off in the right order.
All right. It’s not as simple as Dave Ramsey would have you do it. Or I should say there’s a better way, a more optimized way to eliminate debt than just doing a snowball or an avalanche. Okay. There’s a way that it can, you can be really eyes wide open of which debt you should eliminate and then make sure that you’re using insurance horseman.
Make sure that you’re outsourcing your liabilities correctly. And I have so many examples in my life. My father maxed out two health insurance policies. I’ve had neighbors close friends and neighbors here that lost their homes in an inland or urban wildfire two years ago.
And they were insured on that house. I have friends. Just a few weeks ago their car was stolen and didn’t have the right auto liability insurance on their, or comprehensive Sur Insurance on their auto and lost, he lost all of his work tools and the vehicle can’t get it replaced. Making sure that you have umbrella insurance to coordinate all these different things fill in the gaps because there’s a lot of gaps, right?
That you’ve got life insurance in place. Okay. That helps ensure. The debt that you have outstanding in your assets, right? Like when I die, I don’t want my family to have to sell the house to pay off like my side of the debt. Like I will leave them enough insurance money to where they can choose to either continue to invest with it.
Or if they want to keep the house, they can pay off the house. And so those types of things Ease in your retirement account. That’s huge. We talked about it, it’s funny because like when I read the blog, like Susie Foreman, Dave Ramsey and stuff like that, they’re all about limiting your banking fees and your credit card fees, low hanging fruit.
You should do it. Don’t have those fees. And the biggest fee is in your retirement account. Okay, you’re not losing just five or 10 or $15 a month. You’re losing hundreds, potentially thousands of dollars over the course of 30 years or more of investing. So take a look at those. When I took a look at my mom’s account and what her fiduciary was charging her, she lost over $200,000 in fees to the fiduciary again for that three stock portfolio from Vanguard Ably.
I’m not knocking Vanguard, but it was a little sappy. That’s one of the reasons why as real estate investors, we’re drawn to real estate as a tactic because that helps us save on taxes. Okay. But there’s a myriad of other kinds of muscles to flex to make sure that you can save on taxes.
The last, so those are the four horsemen interest, insurance, and credit. Eliminating the fees, understanding how to reduce your taxes, right? Those are all going to help you recoup tens, if not hundreds of thousands of dollars over the course of your investing lifetime. Keep that money in the family, but I’m going to name two others.
And that is, I just got a question to ask you, Ben, do you have a retirement account?
Ben Fraser: I don’t, I’m a, I’m all real estate. So I’m.
Whitney Elkins-Hutten: Okay. Okay. Just let’s say hypothetically. If you had a retirement account, would you want to retire on say 50, 000 a year, 80, 000 a year, something like that. More, yeah. Most people say more. The thing is your standard deduction as a married couple is like right around 25, 26, 000. That’s all that’s tax sheltered. So you’ve been shoving away for 30 years, all of a sudden your retirement account that is growing tax free, went in tax free, growing tax free, and now you’re going to take it on retirement.
And guess what? You’re going to lose a lot of taxes. And not only that, you’re going to Withdraw more than your standard deduction, which I plan on retiring on more than 25 or 26, you could trigger what they call provisional income and cause double taxation of other forms of income like social security.
So talk to an accountant like that to discuss how to organize your affairs because there are investments that actually don’t trigger provisional income. So if anybody’s five years, 10 years out from retirement and you have more than 500, 000 of your retirement account already, talk to a CPA, get educated on what to do.
And then the most important thing here to keep your wealth is to plan for your incapacity. And I don’t mean just, I don’t mean living well. I don’t mean, I’m sorry, I don’t mean will or trust. Create a living well. Have your powers of attorney, have your healthcare directors because again, if you don’t have a plan, somebody else does have one for you and nobody plans to die.
Nobody plans to have a slip, trip or fall that puts them out of commission. And so you just don’t want to be at risk of your health draining your accounts if you didn’t have a plan in place.
Ben Fraser: Okay. Last concept here I want to talk about and then we’re gonna give everybody the resources to go get the book because at this point.
They are, they got to read it. There’s too much good stuff in here.
Multi-Generational Wealth: Planning for the Future
Ben Fraser: Talk a little bit about making that shift to a multi generational wealth plan. And where do you see a lot of people miss the boat or kind of not do it right?
Whitney Elkins-Hutten: Yeah. And this is, we know we touched on all the different rules here, creating wealth, keeping wealth, growing wealth.
Now we’re in the last rule bucket, which is how do you pass it on? Yeah. Yeah. I think most of us really fully understand, yeah, we should have a living will or a trust in, or excuse me, a will or a trust in place. Okay. But that’s just part of the order of operations in order to pass well on effectively.
And I’ll tell you a little story. When my mom passed away, I knew there was a well, I just assumed it was in the safety deposit box. I was the sole heir and the sole executor on the estate. When I say error, remember, my mom lost 200, 000 in a range of air, does not mean that you actually get away.
So anyway, I’m trying to settle this date. My husband and I are going through her house and she has dementia, and it was just like, I don’t think she had thrown away a piece of paper in the past, like 25, 30 years. She was super organized. That was the bizarro part is that her filing, the filing cabinet was the floor, right?
Like it’s like everything was really piled up, like all the different bank accounts. And I’m like, thank goodness nobody decided to break in the house. Cause they would have had access to everything that they went under lock and key. Anyways. So we’re trying to find the will. I can’t find the will. I assume it’s in the safety deposit box.
It. There’s a copy there. I’m like, Oh my gosh, we got to find the wealth. And then, so here I am, I don’t know where any of the assets are. I don’t even know what the assets are, I don’t know where the will is. I don’t even know how to contact the water company or the electric company or anything like that because she never moved things out of my dad’s name.
So now I don’t have to, I don’t just have to get her off the account and have my dad off the account so I can start taking care of all this. And so passing wealth on effectively. There’s training your executor, okay, and that is one huge part of it. Like, where’s the willow, where’s the asset, okay, just give them a high level walkthrough.
If I pass away, this is why I want everything organized the way it is. These are all the contact information for all of my investments. I’m not going to give that to you right now. I’m going to put it under a lock and key, but you know how to get to everything in case something happens to me, right?
But then there’s also educating errors. Okay. Like they’re the ones that are now going to be stewarding whatever you left. And so that actually education starts now, right? They should be like looking over your shoulder as you build your portfolio, whether it’s actively or passively. They should be having, you should be playing games, reading books, talking about, how things are going to pass on to them, not just like them getting handed a piece of paper when you pass away and they, Susie gets 30%, Joey gets 30 percent and then, Bobby gets 40.
Why did Bobby get 40? I don’t know. Has anyone ever left a tip of the truss or the wall, right? That education starts now because, the whole point is we want the next generation to be good stewards. We don’t want to hand them a silver spoon. And so it can be stewards of information. It can also be stewards of actual assets.
And it can be a blend of both. And I strongly encourage a blend of both there.
Ben Fraser: Love that. Okay. For the big reveal.
Where to Find More Resources
Ben Fraser: We already said what the book is and where to get it. But those that weren’t listening, Whitney, where do we get this book and where do we where do folks reach out to you if they want to learn about some of your coaching and some of the investment opportunities you guys have at Passive Investing.
Whitney Elkins-Hutten: Absolutely. Yeah. BiggerPockets. If you get the book on BiggerPockets, you get a suite of tools that go alongside it. I understand some people love getting books off of Amazon because it drops on their Kindle. I do. You can also get it on Amazon. Totally fine. If you’re interested in one on one help, if you want somebody to help you, take you through this process of, Learning how to protect your wealth and grow it.
You can reach out to me at rashwealth. com. And if you’re interested in understanding the investments we do at passive investing. com, you can reach out to me at https://www.passiveinvesting.com/welcome-whitney/.
Ben Fraser: All right, Whitney. Thank you so much. This is so fun and really good stuff. And I know you put a lot into this and it’s really your journey and what you’ve learned and I’m sure a lot of people benefit from it.
So thank you so much for coming and sharing with us on the podcast.
Whitney Elkins-Hutten: Awesome. Thank you so much, Ben.
