Hey, what's up everybody? Kris Krohn here. And check it out. I've decided to put a
little series together on based on what I would do if I were mentoring a
15-year-old. And it just so happens that if I really want to do this, well I
need to find a 15 year old and tada! Where is he? Where did he go?
I got Jack Daugherty in the house. You might know him from YouTube. He's YouTube
sensation. And dude, he's been lighting me up the last several months with us. "Kris,
teach me real estate, teach me real estate." So, we finally found a time for
him to come meet me out here and we've just been going to school. He's
playing hooky right now. Because we got different school in session. So Jack, say
hi to the cam. -What's up everybody? How you guys doing?
Let's learn some real estate.
So, Jack all the guys here on my channel that follow me and subscribe to me, it's
all about how do I learn how to get in the game of real estate? How to make
money? And several of my YouTubers, they go on to become very successful in
real estate. But I know that I got a lot of young people on the channel here that
are asking, man, okay Kris, if you were mentoring a 15-year old, (Which I am
now.) what would I teach them? aAd what I'm going to do here in this short
video is I'm going to share with you 6 things that I think is most important
Jack for you to understand about making money in the game in real estate. Because
it is going to culminate and having a game plan. And what I'm going to do here is I
want to share with you the 6 things I think are most important for you to
understand to really get in the game. -Alright. -You ready? -Yeah.
-Okay. Awesome. Okay, the first thing. Something that we're not always taught
in life is that if the goal is to get to number 6 making money in realistic. So
I'm going to show you by 18 how to be a multimillionaire. And the first thing
you really got to learn is how to pay yourself. Now, this is kind of a weird
concept because we're taught to build skills, work for somebody else and get a
paycheck. But we're never paying ourselves. Do you know what we're doing
instead? We're paying our phone bills and we're paying a car, we're paying our
mortgage. And so most people, they don't do a really good job of making sure that
they get paid. in fact, they're too busy trying to pay all but other bills. And
here's what pay yourself means. You're young so you can do it I'm about to
suggest but for those of you that are older and have jobs... You know, for jobs, I
always say out the gate, you should be striving to pay yourself no less than
ten percent of your income. And if you're doing a good job on your budgeting, that
number is insufficient for the long haul. You need to get it to 20%. Now, but
Jack, see you live in a home under mom and dad roof. So, what percentage of all
the money are you making as a YouTuber are you saving? -Most... Most of it
that I don't buy stuff with or pay my taxes. -That's just like what what percentage of
all the money do you make are you actually saving for you?
-I'd say about 70%, 60%, 80%. I don't know. It's something around 70 to 80 percent.
-And it could be the more than that, right? -Yeah. -Because the reality is... Dude is a
YouTuber. He's put some good money away and the thing is right now, he doesn't
have to worry about some of the bigger expenses of life. Dad who's holding the
camera has to bear some of that burden. Right? So, he's in a position where maybe
he can save 80%. -Possibly 90. -And maybe even 90%. Here's what I want
adults to be striving for. You want to be paying yourself 20% of the money
you're making. If you're saying, "Kris, I don't got the money to pay myself 20%.
Don't you know how expensive it is to live?" I'm like, "But why are you
living?" Are you living just to pay bills? Do you
know how demotivating it is to go to a job? Work your butt off for 2 weeks,
kind of paycheck and say, "Goodbye. I don't get to save any of you." But that's
real-world. So, you're doing something really smart. And the older you get, you
want to you want stick with this habit. The reason why is because if you
pay yourself, guess what you can do with this money?
-Invest. -Boom! Right here, dude. He's got it. Number 2, is it means that you can learn how
to invest. And it's the second thing I want to put here, is you need to learn
what it means to invest. Now, having a job as an investment.
What does investing mean to you? -Putting money into something else
to get more money out of it. -Putting money into something else to get more money out of
it. So, for example, right now I'm going to upset some people watching this video. I
don't care. This society will say "Well, investing means put your money in a 401k
or it means putting money in an IRA or it means putting money into some kind of
retirement account. Putting money into stocks." And technically these are all
what the world would call viable investments. In fact, it's what most
people do with their money. But I don't consider any of these things investments.
So, I'm about to give you rule number 2. My definition of an investment is
something that pays you. If it doesn't pay you, I put it in a different category
called speculative. We'll put my money in the
stock market and over time, I expect it to get bigger. But here's my question: If
I put all my money in a 401k an IRA and stocks, then what am I getting paid day
to day month to month? The answer is nothing.
One of my partners just joined. He has a net worth of 1.5 million dollars and he
has zero residual income from it. And if you are cash poor and your money isn't
working for you and it because it's not paying you, in my opinion, you got a
problem. Because we're not living to be worth a certain amount of
money. Like you might say, "Kris, if I said I was worth 5 million dollars, how
cool would that be?" And I'd say, "It depends. What is your 5
million do for you?" Well, it doesn't pay me residual. Then I'd say... It then
you can feel good on paper. But instead of 5 million, how cool would it be if
instead, you had $50,000 a month residually coming in no matter what? I
would take 50,000 a month over 5 million
any day of the week. Well not only turn into that. But this is what you used to
live. -Yeah. -If this isn't actually providing like cash to you, you have a
problem. So, society is teaching us one way. So, rule number 1 is you got to pay
yourself. And then rule number 2 is you got to invest in something that pays you.
Don't lock all your money away in things. If you're going to put money in these, make
sure it's... He's not allowed? Oh, good. -Yeah, he's too young because remember,
we're training a 15-year old. Okay, number 3 is that your investments, they have
to grow. I want it to grow in 2 ways. You already talked about number 1. Well,
it has to pay me. It's got to give me something for investing in it. But number
2, growing means if it's worth $100,000 today, then
what's it going to be worth in the future by the time I sell it? It has to
appreciate. It has to become greater and value. So, if I'm buying something that
doubles in value in 5 years and then $100,000 now can grow
200,000. And that can always be factored into something called an ROI. What does
it stand for, Jack? -Return On Investment. -Boom! Again, he's nailing it. Return on investment. Which
means I put 100 in. If I double my money and it took 5 years to double
then we actually can find out, "Oh, that means I'm earning 20% a year
on my money. Now, my money is working for me instead of me working for it." So, these
are the first 3 lessons. And so, I just want to recap because getting on to
4 or 5 and 6 first really makes sense, you need to understand. Number 1,
you don't work for money. You got to work for yourself. And number 2 is
I'm going to put my money to work for me by investing it, I'm going to put it in things
that pay you. And then the third thing is it's not just has to give you something
on a regular basis but it's also got an increase in value.
Now, do you know jack, of any investments whatsoever, there any investments at all
that come to mind that pay you after you invest in them and also grow? -Real Estate. -Boom!
The kid is freaking it out naturally. Freaking crushing it. It's this game or
real estate. Now, I'm just going to share with you couple things that I love about
real estate. Real estate can do a lot of things for you but there's 3
important ones and now you already know 2 of them.
The first one is it should be producing cash flow which
means, after you get money, you pay the expenses like for example, if I the house.
I rent the house and I have a mortgage to pay what I owe the bank. But my rent
should be bigger than that. So the leftover money is called a cash flow. If
it doesn't have a positive cash flow, I'm not touching it. Number 2, is it has to
grow in value and that means equity. Equity is the word we use. So, if I buy
something for 100 grand and it becomes 150, then my equity
increase. This is like my net worth and this is my active income. And then the
third thing is that when you start making a lot of money, you're going to have
to owe a lot of this to the government. What is it? -Taxes.
-You owe a lot taxes. So, real estate done the right way. You've already... 15-year olds
already had to pay loads and taxes. So you understand the value of tax breaks,
right? -Yeah. -So, we were doing a little bit of a lesson this morning on how tax
breaks work in real estate. And I'm showing Jack strategy where all of the
money that you earn right here can all be canceled out by tax shelters. And real
estate can produce that for you. So, these are the 3 biggest things that I love
about real estate. I'll invest in business, alternative things as well. But real
estate is where I put probably 90% of my investments because number 1, every
time I buy a home I get richer every month. Number 2, if I buy it right, it
grows with equity. And number 3, the money I make, I don't necessarily have to
pay taxes on. Real estate. This is a really big thing now. In a moment, we're
going to be getting to your game plan and talk about what is Jack actually going
to be doing here as a 15-year old who is making a little bit of money here and
there through YouTube. How does he multiply that, double it, triple it, quadruple it.
Stay tuned. Hey, thank you so much for watching that video here. And dude, Jack.
Thank you so much for being here. I really appreciate it. -Thanks for having me here. I appreciate
it more. -Dude, I hope
that you get inspired by a 15-year old stepping up and saying, "I want to figure
it out." In fact earlier today, when I was asking, "Dude, what drives you? What
motivates you? Why are you so hungry to get into real estate younger than anyone
I've ever met?" Do you remember what your answer was? I just want to get a head
start and just be ahead of the game.
-Head start, head of the game, get in early. Whatever age you're at, you're never too
early. That's why I became financially free in my 20's. You can do the same no
matter what age you are. It's never too late to get the game. If you want to
learn your next steps of getting your own custom real estate game plan, click
the link below. Me and my team will chat with you. I'll send you one of my books
in the mail for free. And stay tuned because on the next video, we're going to do
part 2 of the rest of the principles coming Jack's way.