56. Taking Imperfect Action On The Way To Financial Freedom With Russ Morgan

PILF 57 | Imperfect Action

You don’t need to have 100% knowledge to make an investment decision. You need to be prepared to take imperfect action. Enter Russ Morgan, the Wealth Without Wall Street’s Founder and Partner, famous as “The Idea Guy.” He talks with Jim Pfeifer about how you can take action even if you don’t have all of the information. If you know less than 40% of what you need to know to make a decision, do more due diligence! If you have 40% to 70% of what you need – that is enough knowledge to take imperfect action! Don’t be afraid of failure; it doesn’t exist. You either learn a lesson, or you succeed. If you want more tips on how to succeed in your investments, tune in!

Listen to the podcast here:

Taking Imperfect Action On The Way To Financial Freedom With Russ Morgan

I’m very pleased to have Russ Morgan with us. He’s one of the Founders of Wealth Without Wall Street. It’s a community that seeks to teach business owners and families how money works to build savings, increase cashflow, and create passive income all without the help of Wall Street. This is going hit home for a lot of the left-field investors. Russ, welcome to the show.

Thanks, Jim. I’m glad to be on the show. It seems like we have a very similar background. I, too, came out of the typical financial advising space.

That’s what I want to hear about your journey because the community you have, Wealth Without Wall Street, has a lot of the same things that we are trying to do here to help people teach a different way. You don’t have to be in Wall Street assets to make money and build wealth. Start a little bit with your journey, how you came to where you are, the interest in money, and then what you are doing now.

I was a Certified Financial Planner at one point in time, which is very similar to reading your bio and seeing your story. There was this one-size-fits-all mentality that existed in the world in which I was in. When the market crashed in 2008, I was looking for better options. I happened to be at a conference in January of 2009, where I was introduced to a book and a man who taught me that the real obstacle we have out there is a lack of access to cash. That lack of access to cash has been the one thing keeping us from becoming financially free, thinking about how money works, and what financial freedom looks like.

I set off on that journey to try to learn a better way. It took me away from the traditional models, and I partnered up with Joey Mure. He’s my business partner and co-host on our podcast. Between the two of us, we started interviewing people traveling the country, trying to find better methods. It led us to build many different businesses and passive income streams ourselves to a point now that we share our passive income report with the world. Every single month, we talk about the good, the bad, and the things we are doing to try to grow.

The lack of access to cash led you to passive investing. Can you explain how that journey happened? We all need and want more cash but how did that turn you on to passive investing?

When we were in the investment space, there was only this limited box of options to choose from, at least the way that we saw it. The reality is that most people don’t even know any different because they don’t have money even to tell themselves, “I need to find things to do with this cash.” I have read books like Rich Dad Poor Dad, the little purple Bible that would tell you that million-dollar deals are sitting underneath your nose all the time. You just don’t know where to look for them. The reality is not that you don’t know where to look for them. It is that you don’t have money to take advantage of them if the deal is available.

If we are taking all our money, putting it into our 401(k)s, IRAs, and paying down debt, we are constantly sitting there in a position where we don’t have liquidity. Passive investing or any type of investing outside of the typical Wall Street model doesn’t even exist. When I’ve got into a position where I had cash, then I had to tell my cash what to do. That meant I had to get educated. That’s one of the biggest things that we are proponents of. You’ve got to learn, be an investor in yourself, and increase your knowledge.

 

You need to have a goal so you know where you’re going.

 

It took a lot of me traveling, interviewing people, reading a lot of books, and then taking imperfect action to find opportunities there. I would love to tell you I started and knew exactly what I wanted to do when I’ve got access to that cash but I didn’t. I started choosing models that were not too dissimilar from what I was working on and the Wall Street model, where it was the easy button. I didn’t understand the investments I was getting into. They were producing cashflows but unfortunately, I didn’t understand the reasons why.

I had one of those deals go bad. It’s one of those lessons that I’m glad to learn at the very beginning of that process that has then helped me say, “I need to be more knowledgeable in the things I’m putting my money in.” Not that I have to completely educate myself in every aspect of it but I needed to understand what questions I need to ask if I’m doing syndication. I need to know, “What are those things? Why is this syndicator like this investment? Why do they like the area that they are in? What is their experience of them?” You are investing in the person.

I want to back up a little bit. You said you need to get cash and then get educated. I would like to circle back to that. First, how did you figure out or what led you to believe that cashflow was the thing that you needed? That gets you into passive investing because that’s what produces the cashflow. What was the light bulb that went on that said, “I need some cashflow,” from different sources other than your income?

There are lots of different things. One is as I have four kids. As they continue to grow older, I realize anytime I want to do something, whether it’s a vacation or stay at home one day, and not go to work, I would always have this nudge in my heartstrings to say, “The only way this thing keeps working is if you have active income.” I knew intuitively that if I didn’t do something active, I wouldn’t produce income. I didn’t know what the alternative was. I saw the formula, and we copied it. It’s not ours. We would tell people that, “The formula of financial freedom is easy but the work to accomplish it is hard. Here’s the formula.”

Everybody knows this but just in case they haven’t heard you say this before, financial freedom is when your passive income is greater than your monthly expenses. When I was able to sit down and say, “I can figure out what my monthly expenses are but I have zero passive income,” as it relates to how close I am to financial freedom, I was 0% of the way there. That hit me square between the eyes.

If you are riding down the road now, you can do the math in your head. If you’ve got $1,000 a month coming in from an apartment complex, ATM machines, whatever syndication or other long-term rentals you are in, you take that and divide it into the amount of expenses you have. You will know exactly how close you are to that final destination. When I saw that formula, it gave me the light bulb moment.

I don’t want to bore you with a long story but I share this sometimes with our audience. When I was in college, I was on the five-year plan. Mostly because the first year, I chased a dream of trying to be a baseball player, and long after, I had injuries that were going to prevent me from being anything remotely close to a good baseball player. When I was in college, I remember sitting there through my second junior year.

I sat down with the guidance counselor and said, “The path that I’m on, I don’t want to keep on this path but I don’t want to extend it too long. I’m ready to get out.” She told me, “If you do this, you can be out in twelve months.” I will be honest. I didn’t even realize that was even a reality. I didn’t think that I was going to get out in a year, so I went and did those things. For me, seeing that formula of financial freedom, passive income greater than my monthly expenses gave me that goal to target, which I could run after.

PILF 57 | Imperfect Action
Rich Dad Poor Dad: What the Rich Teach Their Kids About Money That the Poor and Middle Class Do Not!

People talk about financial and time freedom, and what that means. You have boiled it down to the most simple, and it’s not rocket science. Your passive income has to exceed your expenses. What a lot of people get to is they leave that passive part out. Your income has to exceed your expenses. That’s great if it does but that doesn’t give you freedom. That means that you have enough money to pay for the stuff you need or want.

Putting that word passive in there changes the entire equation because now, you are going off and finding multiple passive income streams. You mentioned that’s the easy or the second part. The first part is you’ve got to have the cash. I know where we are headed here. Can you talk about where you get the cash and what you do with it?

This is the foundational principle that we use within our business model. Many of your readers are familiar with this. It’s become more of a household name than it was for me when I heard it back in 2009. It’s the concept of becoming your own banker and infinite banking. There are a lot of different books and people out there that espouse being experts in this space. I was privileged enough to happen to meet the man who wrote the book, Becoming Your Own Banker, Nelson Nash. He has since passed.

He lived in Birmingham. I met him at an event I was at in Orlando. I read his book, and on the back of it, when I finished it, I turned it over, and it said, “Rocky Ridge Road, Birmingham, Alabama.” I thought, “That’s amazing. This individual lives in my hometown, and I have traveled around the country to find out ideas. The guy here has an idea.” I would sit down with him for lunch, breakfast or on a phone call. I can’t tell you how many times a month over the ten-year time before he passed.

I was grateful to learn the simplicity that I shared. Having access to cash is the one obstacle that can make financial freedom a reality instead of a dream. We started implementing that in my individual family. He teaches you in this concept that there are many ways to get access to cash and where to put it. The choice that he used, which was one of the age-old financial products, was dividend-paying whole life insurance. I was sharing with my community that the first policy I bought had an anniversary.

In our inner circle, we were doing a talk, and I said, “I want to share this with you. I’ve got my new statement in.” It showed how much cash I put in that policy for the last year and how much the cash grew. It grew by 106% over what I put in it. It was what Nelson Nash taught me because he was showing me his policy statements, the things that he had had for 40 and 50 years. He said, “Russ, it’s not rocket science. We are building cash in a safe, liquid place that you can use to go do many things.” For us, we teach people. You’ve got to be a saver and have access to cash. We have made that a part of our plan to help people build these systems, and then deploy those systems to create the cashflow that we were talking about.

A lot of people in our community know about this concept and use it. It’s easy to understand but it’s a big hurdle to get over because if you take out your Google machine and google whole life insurance, you are going to get a lot of things that say how bad this is. That was the big hurdle for me because I did the research, googled it, and kept finding people saying it wasn’t the right product or it wasn’t very good. You are talking about your first policy. The first policy I’ve got, I sold to myself because I was an advisor, and I did everything wrong. I sold it to maximize my commission rather than maximize the benefit I wanted it for because that’s how I was taught.

In our community, we talk about how you have to find an advisor who is willing to structure the policy in a way that helps you. How do you explain this concept to people or get people to understand it without trying to force them into it? You are not trying to force anybody into anything but to understand that, “This concept can help you.” How do you explain that? How do you use the policy?

 

The Culture Index is a great tool to understand the characteristics of how someone will work within their job.

 

The hardest thing we all have to do is unlearn things. That’s why a lot of times, we have people that reach out to our coaches, and maybe their parents had shared, “This is what you need to go set up now.” They don’t have that bad information in their heads, so they are not trying to unlearn things, and it comes easy to them. For most of us, like you and I, that was professionally trained on how life insurance is a tool for the death benefit, and any other method is a bad use of it. It was hard for me to unlearn some of that stuff, not to understand why insurance companies set up policies and how we can set them up differently to benefit us.

We have many tools, so we have created a community that has a little over 5,000 members in it. In there, we have something called IBC 101, where we walk through and explain it from top to bottom. In that way, it shows examples. We walk through questions that they have. A lot of times, it’s just physically seeing it. The first thing that did it for me was sitting at that conference and hearing Nelson Nash speak. My ears were open. It was not the first time I had heard him speak. I had been at the same type of conference in different cities across the US for the previous years. For the previous years, I was an expert.

I knew exactly how money worked because the market was going well. This was the first year where the market had crashed, and all of my understanding of how things work had fallen apart. I had open ears, and like Paul in the Bible, the scales fell from my eyes. I went to this little breakout session, and this guy showed how somebody simply was using it to buy the cars of the lifetime and how that was creating a pool of cash larger than what they would have had. I was like, “If it’s so simple there, I need to be able to figure it out.” It took me about six months of trying everything I could to break it and say, “I don’t think this works.” Eventually, I did learn.

Thankfully, we have built processes to be able to help people understand it in much less time than that. Sometimes it takes that long for some people but most of the time, they are able to go through over a shorter time and learn how this applies. The second part of your question was, “How do we use it?” For me, I have a system of policies. I have over twenty dividend-paying whole life insurance policies on myself, my wife, kids, business partners, and other investors that I’m invested in, as well as former employees that we had bought insurance policies on.

People ask me all the time, “Do I need to have that many?” I say, “No, I just wanted that many. I needed a place for my cash to go.” When I was a kid, I used to save pennies for some reason. I would save them in little Mason jars, and whenever I took the top off and put the penny in, I could not close it. I would have to get a new jar to put the next set of pennies in. That’s the way I see my life insurance contracts.

I set them up to hold the amount of cash that I have coming in at the time and as it continues to expand. I set up this system and have large cash values since I have been doing it for a long enough time. I borrow against those cash values to invest in the deal. We invest in a lot of different things. We have over 25 short-term rentals, ATM machines, a land flipping business that brings in about $17,000 a month and note income, we own different eCommerce businesses, we are in multifamily syndications, and we have some traditional long-term rentals.

Every time we do anything, we start up a new business, which seems to be every 3 to 6 months. I will borrow against those cash values, deploy it as equity into that business, and as the business starts, cashflowing, I take that cashflow and replenish the loans that have been taken out. The beauty of this process is that the whole time, my cash values are growing. They have not stopped. It’s growing on the full dollar amount, not what I have left after borrowing against it. Insurance companies don’t require me to tell them what I’m doing with it, nor do they require me to have a credit statement or anything else.

It is ultimate flexibility. I don’t have a structured payment, so they don’t tell me every month how much I have to pay them with principal and interest or any of that. It’s a real benefit to me as a business owner, entrepreneur, and investor, to be able to use dollars in a place that otherwise I would not have kept. I could go on and on but that’s the gist.

PILF 57 | Imperfect Action
Becoming Your Own Banker: Unlock the Infinite Banking Concept

Some of the things you mentioned don’t seem very passive to me. When I’ve first got into real estate, I was active but I thought I was passive. I would buy turnkey properties or have a property manager that would manage them for me. I thought, “I’m a passive investor.” That was quite active. Now, I mostly do syndications, even those that have some active components at the beginning but once you send the wire, you are off the hook because then it’s out of your hands. You have no control. You talked about short-term rentals and ATMs. Those are very different. ATM is a very passive short-term rental but I would assume not so passive. Can you talk about that and how you decide what’s the next investment, whether it’s going to be active or passive?

Inside of our community, we have a three-step approach. We call it GPS. It’s like anywhere we are going that we have never been before. We take out our phone and plug the destination into GPS to get us there. That’s the three-step approach we have. First, you’ve got to have a Goal. You’ve got to know where you are going. The second step is to have a Plan. The first step in our plan is for everyone to understand their investor DNA. You’ve got to know how you see and add value to the world. Only then can you make good, sound decisions. I believe financially that will match up with that, and you won’t have a conflict.

I love to influence. I have been in business for a long time. There are a few things that I’m good at but there’s a handful that I am not. I want to be able to add value to businesses. I like businesses more than investments. It’s who I am. When I look at anything, I’m trying to figure out how I can make it into a business. I remember when we started interviewing people about short-term rentals. One of the first people we interviewed was the lady. She was doing well and had 4 or 5 units used up in the Nashville, Tennessee, area. She was telling me about how much cashflow they are bringing in.

I was like, “This sounds amazing. When are you going to get your next one?” She goes, “I have topped out.” I was like, “What do you mean?” She goes, “I just can’t. I’m constantly running things to the different units. I’m even trying to help sometimes clean when our cleaner is not available. To be honest, I don’t have any more time.” I thought, “That’s a bad idea. Why are you not hiring people to do this? Why are you not creating a business model? Why are you not following the emails, setting up an organizational chart, and finding ways to fire yourself at every point?”

When I kept going down this process, my business partner has said, “This seems a great cashflowing model but we clearly do not have the interest or the time to be the ones operating.” We set out with a business plan to hire an operator to make sure that the operator was well-trained and support that operator from a financial standpoint, and give strategic marketing and operations oversight to this individual.

We also hired somebody that was high autonomy. We use something called the Culture Index. I don’t know if you are familiar with that but it’s a great tool to help understand the characteristics of someone and how they will work within their job. We hired somebody with one of the highest autonomy scores you can have. We started that short-term rental business in June of 2020, and over the next 18 months, we went from 0 units to 20 units.

My business partner and I do not operate in any shape or form in this business. Our obligation is once a week, we would have an hour meeting with our operations person to sit down and for them to disclose what has happened since last week, what are they working on this week, and where are they stuck. We continued to add capital and strategic vision to the business.

It’s become super passive. I would have no idea what to do if anything went wrong. We now have invested heavily into finding ways to reduce our single points of failure in the business. We have bought insurance policies on that operator in the event that something were to happen to them. That’s how I do it. I like to see investment and see how it can make it a business. That’s what we did with our short-term rental business. We have a land flipping business. Many of your readers probably have heard of Mark Podolsky, The Land Geek. We are great friends with that group.

 

Make decisions that will help you avoid investing in the wrong deal.

 

We heard how that model was going out, finding small pieces of land, turning it around, selling it to people on owner finance notes, and creating a cashflow that way. It was amazing. The problem is we were not going to be the person going to find it nor wanting to be the people selling it or being the person that was making sure they were making the payments. We said, “How do we do this?” We failed the first time. We put some in place that was not the greatest fit. We didn’t understand the business well enough to realize we needed somebody with higher sales skills. We thought that person needed to have a lot more detail.

We then partnered with another operator who had all those things in place. We became equity partners with them. They run and get paid for the day-to-day. We are capital investors in the thing. We have a monthly meeting with them to do the same thing, to understand where the business is, what they are looking for, and where they are stuck. We have taken models like that many people will work on in an active role, which is fine. It just was not where our investor DNA lined up.

The thing you said about you are finding ways to fire yourself is great. That’s super powerful to think of it that way. If you want passive income and multiple different streams of passive income, you can do what I do, which is invest in syndications or you can also do what you do, which is invest in businesses. As soon as you can, fire yourself. Someone else managing, running the business, and you overseeing it is great. In your community, you are presenting opportunities to your members. How do they go about finding deals and deciding asset classes, markets, and all of that?

If anybody wants to get in and access it for free, you can go to WealthWithoutWallStreet.com/passport. That will take you directly into our community. You can get access to The Passport Challenge, which is the first step. That’s the goal part of the three-step process. Most of the members will ultimately gravitate toward either our inner circle, which is a group of people trying to get from 0% passive income to 100% passive income. For some of the accredited investors that we work with will get into our Passive Income Mastermind. In our inner circle, that’s where we are coaching people through the process of helping match their investor DNA to opportunities that they see.

We are more trying to equip them in that inner circle. We are not trying to say, “Here’s a deal for you to invest in.” We are trying to help them make decisions that will help them avoid investing in the wrong deal. In our Passive Income Mastermind group, that’s where we have people that are 7, 8, 9-figure entrepreneurs. They are looking to be truly hands-off for the most part. They have a successful business. They have built the income but they are either looking for financial security or time freedom. In that model, we have syndicators and other business investors who come in and share deals and deal flow with this group.

They are looking for opportunities to not only build the infrastructure to help them model it into growing it well past them. The goal behind that group is to equal 200% of our monthly expense needs and passive income but also to build ways to reduce tax strategies. In that way, we don’t end up giving the government every dollar that we make as we are on the path to creating more passive income.

Do you help your community vet a sponsor? If we are talking about investing in these syndications, how do you make sure that the sponsor of the syndication or the general partner is qualified and has a good history? One of the things people want to know most are, “What are the sponsors I should invest with, and how do I qualify them?”

One of the things we have done in either the inner circle or inside of our Passive Income Mastermind is walking them through some questions that they can ask, helping them be able to see that not all opportunities are good or bad. What may be a good fit for you may not be a good fit for me. We want to match that investor DNA to it but also then, “I have decided that mobile home park investing is what I’m into. I believe apartment complexes are where I feel more passionate about.”

PILF 57 | Imperfect Action
Imperfect Action: You have to match the person with the investment.

 

Let’s talk to the sponsors with a handful of questions. We give them a list once they are in there, and that’s part of our process. For us, we are not going to make the decision for them. I’m no longer an investment advisor. I gave that up a long time ago, so I’m not being the middleman in the transaction anymore. We are equipping them regardless if they are accredited investors, are having deals brought to them, and are investing in them. The deals are not coming from us. The deals are coming from outside people, and they are a part of the membership, so they get access to it.

That’s similar to how Left Field Investors works as well. We are trying to educate and provide a network for people that are looking to get into passive investing through syndications but we are not necessarily presenting deals or saying, “Go with this sponsor or that sponsor.” We are trying to give people the information so they can make that decision on their own. It’s repeatable. They can share it with the community. If you have good experiences, you can share them amongst the other people in the community. That’s a powerful way to do it. You used the term imperfect action, and that sounded interesting. Can you expand on that a little bit?

The former Colin Powell had a 40/70 Rule. It said that he needed at least 40% of the information to make a decision but no more than 70% of the information to make a decision. The concept was that without at least 40%, you could not make a good decision. You don’t have enough of the data but if you are waiting until 70% or further, you have waited too long. We see people on both sides of the equation, people that are firing off at the first opportunity that comes along.

I have been there. I remember buying my first rental property in 2006. I could not have been more excited. The opportunity of the lifetime, and soon, not a few years later, I was regretting that decision because I had not done my due diligence on what could go wrong. We see people who have that analysis paralysis, who need to get 99% of all the information for them to make a decision. What ends up happening is the deal’s gone. They don’t even get to take advantage of it or they never take advantage of anything and they are always asking and saying, “What if?”

That makes sense, and that’s the imperfect action. At some point, when you are within that 40/70 area, that’s when you pull the trigger and do a deal.

At the end of the day, we are going to make decisions that are either going to leave us with a lesson learned or success. I don’t believe in failure. I believe either it was a success or there was a lesson for me to learn from it. I have had a lot of lessons, and thankfully, I have learned from most of them. I have repeated a few but that’s on me. If you are learning around in the process, make small decisions and don’t worry about it. We are going to lose some money from time to time but learn through that process.

Don’t make humongous decisions that can be catastrophic to your situation. The engineer, doctor or dental class have lived in a world of perfection for so long. It puts them in this panic mode that they have to make a decision without having everything, so they hold and don’t do it. I always say you get to that 40% to 70% Rule, take action, even if it’s small, and you can learn from it.

Part of the inertia to get up and take that first action, especially for a new investor, it’s hard to send that first wire. It might be the most money you have ever wired anywhere. It’s very difficult. Putting it in the frame of, “As long as you’ve got 40% to 70% of the information, you can make a pretty good choice.” That’s powerful and could help people get going. You talked to a lot of new passive investors. What advice would you give them or some of the things they need to look out for as they are starting their journey?

 

Not all opportunities are good or bad; it’s about what may be a good fit for you.

 

The concept is very simple in our community. If you know where you are going, you can develop a plan to get there. If they go through that first step or The Passport Challenge, they understand why they want to create passive income. That why has got to be greater than the what and how. They’ve got to develop that. When they go through that second step, which is they get their investor DNA. The thing that we say is that when you go through that process, you will start to learn as a passive investor what type of passive investor will be a good investor.

Robert Kiyosaki has this saying, “There are no good or bad investments. There are just good or bad investors.” Most people have never figured out what a good investor looks like. For me, here I am, someone who loves influence. I’m result-oriented. I’m as patient as you can possibly be. I want to go fast. The first investment I bought was a long-term rental. There is nothing more boring than a long-term rental managed by a third party. It’s proven, and it works.

Once I had it, even before it went bad, I was like, “$150 a month? That’s what we are dealing with? How long is this going to take me to do something?” It was a bad investment for me because it didn’t align with who I was. There are people that will get into, for instance, short-term rental. It’s fast, quick, and creates results. If they are a slower-paced individual, they fret at the potential for a regulation coming from the government or HOA that could take their business out from under them without a moment’s notice. They sit there and panic the whole time. They don’t even like it. They don’t care how much money they are bringing in.

You’ve got to match the person with the investment. When you and I were investment advisors, it was this risk tolerance. Everybody was either between 0 and 10, “Whatever that was, that means you’ve got that much in stocks and the rest in bonds.” That’s not the way it is. We’ve got to match deeper the way that we see the world to the investments we are in. That’s what we take people through because we need to make sure that that’s right.

It took me forever to match myself to my investments. I was active, trying to be passive. I did a ton of different things, always chasing the shiny object. That’s a little bit about what you are saying. Match the investor to what you are investing in. If you can find the things you like and are interested in, you are going to be so much better of an investor and more comfortable if it suits you.

It might take people a winding road to get there but with the way your community operates, you set it up, so you have that map from the beginning. That’s super-valuable to people who are getting into it or experienced people still chasing the shiny object and have not figured out where they are yet. The last question I always ask is, what’s a great podcast you listen to?

There are so many podcasts. Here’s one that I love because I am a business guy. I’m someone who loves to find ways to improve in business. That doesn’t matter if it’s an investment, a business I’m in or if it’s our day-to-day business. It’s called The Business School with Sharran Srivatsaa. Sharran is a very powerful individual.

If you have never heard about who he is, he came to this country from India at age seventeen. Over the next years, he had 3, 4 or 5 different exits, and his latest one was a ten-figure exit. It’s somebody that gives back on his podcast because he has the time and the experience. He shares things in a very clean and concise way that I love.

 

There’s no failure. It’s either a lesson learned or a success.

 

If our readers want to get in touch with you, what’s the best way to do that?

If you go to WealthWithoutWallstreet.com/passport and join our community, we have a DM function in there. I would love for you to jump in there to DM me and say, “I learn about you on the Left Field Investing show.” That’s how we connect. You can download the app right in the App Store, Wealth Without Wall Street, and all of our content and stuff that we do is in there.

This has been a great episode with a ton of awesome, actionable information. I appreciate you being on the show. Thank you very much.

Thank you for having me.

What a great conversation that was with Russ. A couple of things that I enjoyed was the imperfect action, where if you can get something into that 40% to 70% knowledge range, then you can take action. You don’t have to get it all the way up to 100% because if you do, you are never going to take action because you can never be 100% sure. If you are less than that 40%, you need to do a little bit more due diligence to get comfortable with it. That 40% to 70% imperfect action is helpful in something like investing in a new asset class or with a new sponsor.

You want to make sure that you are working with someone you trust. If it’s a new asset class or a new deal, you get to 70% and feel good about it, you could go ahead. Another thing in the formula is obvious. As he said, having a passive income that exceeds your monthly expenses gives you financial freedom. If you are going to quit your job, you might want to build in a little buffer and not have dollar for dollar.

Too many people don’t look at the passive part. They think, “As long as my income exceeds my expenses, I’m fine.” As soon as you get it to the point where your passive income exceeds your expenses and you build a net cushion, then your W-2 or your regular day job becomes optional. You can do it if you want to, reduce your hours or you can completely stop and do something that you enjoy more. Financial freedom is about options. It gives you time freedom, which gives you options to do what you want.

The last thing I liked was the investor DNA. I’m a guy who chases the shiny object, and it took me a long time to narrow down the shiny object, so I chase less of them now. Matching your investor DNA to the investment you are making makes total sense. A lot of these things are simple things but if you don’t think of them or don’t intentionally plan for them, you are going to miss out on them.

Figuring out, “Am I someone who wants to do short-term rentals and all this stuff that comes with that? Even if I pass it off to somebody else like Russ and manage it from above, is that something I want to do? Is that the asset class that matches my personality?” As soon as you find some of those, that’s what you should be concentrating on and spend your time on. I’ve got a lot out of this conversation with Russ, and I appreciate that he was on the show. We will see you next time.

 

Important Links

 

About Russ Morgan

PILF 57 | Imperfect ActionWealth Without Wall Street’s Founder and Partner, Russ Morgan, is known as “The Idea Guy.” Russ began his professional career as an investment advisor in 2004 after graduating from Auburn University — a slight foray from 10-year-old Russ’ dream of becoming a professional baseball pitcher. After obtaining his CFP in 2008, Russ started IBC the following year, and eventually went on to found Wealth Without Wall Street in 2015. Russ’ mother was an enormous inspiration for him growing
up. As a single mother with two young children, she took a rigorous, accelerated track through college while working multiple jobs, all with the goal of bettering her children’s lives. When he’s not working, you can wave
to Russ on a boat at the lake pulling his kids around on a tube. And on Sunday mornings, he’s probably rushing to church with his family … only 10 minutes late. Russ’ creativity, fresh ideas, and knack for problem solving are indispensable assets to his role at Wealth Without Wall Street. Russ would describe himself as competitive, creative, and passionate; his colleagues would likely add that he is helpful and abundant. Russ hopes to be remembered as an innovator who loved to teach others, and he has a goal to one day serve in the mission field. Finishing the book is another more near-term goal. Aside from Wealth Without Wall Street, Russ learns from the Business School podcast with Sharran Srivatsaa and Donald Miller’s Building A StoryBrand book and podcast. Aspire Movement, Campus Outreach, and Young Business Leaders are three causes near to Russ’

 


 

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