Why Syndications Are the Key to Passive Income and Time Freedom

Before jumping into any type of deal, I could say this is the risk profile of the deal, and this is something I'm comfortable with to go invest and purchase a 200 unit apartment building, 100 unit apartment building, or a self storage facility out in Texas.

Welcome to truly passive income.

I'm Neal Henderson.

And I'm Clint Harris.

Today we're excited to have Spencer Hilligoss, CEO and co founder of Madison Investing, joining us on the show.

Spencer transitioned from a successful 13 year career in Silicon Valley Tech to becoming a leading figure in passive real estate syndications.

He's passionate about helping busy professionals create financial freedom through smart investing.

Welcome, Spencer.

Good to see you, sir.

Neil, Clint, very excited to start the day with you here.

So thank you so much for having me on.

I'm always amazed at the connections I have made in real estate investing over the years.

And you and I literally just shared an Uber from the Denver airport to downtown Denver.

I've just interviewed you on a previous podcast, and I've just followed your journey.

And anytime I get a chance to have you on and find out more about what you're doing, I love to do that.

So welcome.

Thank you.

And it is remarkable, right?

Like the twists and turns that life takes us down very much.

Remember the Uber ride?

I know, totally.

And there was a russian guy, guy that rode with us, and I've even reconnected with him and his name.

Yeah, there's a couple more folks, too.

It's a small world and an even smaller network within passive investing, private equity and real estate.

And so it's just remarkable in such a wonderful, beautiful way that we get to reconnect like this.

One of the things that I've appreciated is that Neil had a podcast before this one.

We've had opportunity to have a couple people on that he connected with years ago, and he's saying, you're going to really like this one.

That's what he said about today.

He's like, you're going to like this.

Spencer's greatest.

Really enjoy this.

And I think it's always cool when he had his road to family Freedom podcast in the past, there are interviews out there and he's been able to document things.

And then you get to fast forward and see where the journey's taken them, like where you are now versus where you were then and what you've accomplished.

And it's people that start down this journey always just keep going and you typically see that exponential growth.

So it's really great to see that.

For those that don't know you, and for my benefit as well, tell us a little bit about yourself, about your background, about your tech career and how you made the transition.

Yeah, happy to.

So I sit right now in a very fortunate position.

I feel like if I could go back to my tech career of 13 years here in Silicon Valley and try to explain how life is experienced for me and my family now, I'd be like, what are you talking about?

And not to say we don't work hard these days, we do.

So founding Madison investing with my wife and co founder and COO Jennifer.

I know that, Neil, you can relate to working alongside your spouse.

That's a separate podcast altogether.

It works really well for us.

Just to share a quick anecdote, my family and I and our two young boys, we went and lived in the balkans, like Croatia, Montenegro, the summer for about five, six weeks as a family.

I bring this up because like, it's living and working in a place, not vacationing.

Of course, there's some of that stuff.

But this is like a lifestyle by design moment for us.

It's the second summer in a row we've done it.

Last summer we did Portugal and we looking back to the career that I had in tech, I was across five different tech companies, starting financial companies like Intuit and a bunch of intuit competitors basically for 13 years.

But that lifestyle was working 80 hours a week in the office and grinding it out.

And flash forward to now.

Passive investing, entrepreneurship, these things have enabled a different lifestyle for us.

And of course, that's where the passion comes from for me to be able to impart whatever learnings and education I can to other folks that want to walk the same journey.

And it's there was no magic roadmap that suddenly I followed step by step perfectly.

And both of you guys, Clint and Neil, can attest to this.

Entrepreneurship is not a clear roadmap.

Words were never spoken.

Oh my goodness.

It's like hacking through the forest, figuratively with your machete, decision by decision, guided hopefully by some principles and goal setting.

So for my story in a nutshell, run Madison investing.

Its a passive investing club where wed find great deals from great sponsors and invest ourselves with them along with our members.

And it started with us just putting our own money into buying some rentals, some single family rental properties in the Bay area.

And wow, our money went quick on that one.

Buying a $430,000 duplex for $100,000 down and getting $200 a month in cash flow is not what you call a cash flow win.

I know were talking about truly passive income.

I guess that is passive income, but its not nearly enough dollar for dollar.

And also that taught us the lesson of rentals are semi passive.

Theyre not bad.

Were still going to probably buy more in the future, but for the tool that they need to be we had to look elsewhere.

So we ended up getting a portfolio after that of up to five single family rentals in the midwest, much more economical.

We got up to five of those things at pop, which is mind blowingly affordable for us on the west coast, $250 a month in cash flow on those much better.

But then we learned still semi passive invest.

So we've sold those since.

Eventually we got to investing as LP's in multifamily and self storage and those have been our two primary real estate assets we focused on.

We've been LP's and we've exited deals now I think 17 times the last couple of years has been dynamic.

That's the most neutral word I can come up with for the last couple of years.

We all know what we're talking about.

These interest rate spikes, some oversupply issues and certain markets mean that what I banked on for some of those investments were truly passive income, just to use the show name like it wasn't that.

So I tough good learnings, tough learnings on some of those deals.

But now looking forward, feels so much more armed to be able to make informed decisions for our own capital and also for the investors that trust us to be able to go and find good stuff.

But one more thing I'll mention is that I did grow up in a real estate household.

My dad was a broker for about 30 years and residential single family here in the Bay Area.

And that's what scared me into tech brokerage is a really.

I have so much respect for brokers of all types, whether it's commercial, residential, et cetera.

It's a very narrow slice in view of what real estate is though, right?

But that's all that I thought it was.

I was doing open houses as a teenager because he made me.

I had to clean out fridges for properties to prepare them and like, he runs the gamut.

So I'm like, let's go do the more cool sounding thing to tell my friends at Silicon Valley coming out of college, let's go work at tech companies.

And I found myself in a leadership career which I never really would have cared about as a punk rock kid who played metal and punk bands growing up.

So it's a wild journey.

The life takes us on and now here I'm just grateful for where it's taken us so far and where it's going to take us next.

I love that.

And my wife is a full time broker and it's so true.

People think that is real estate investing and that's what it is.

And there's so much more.

And she's doing that transactional trading time for money thing and I try to be on the side of it where we're building a legacy and working towards the future.

It's a husband and wife that you truly have to have balance because one's paying the bills and one is building the dream.

So that's the idea, right?

Not paying the bills and my wife is paying right now.

Boy, do we have equity.

Yeah, exactly.

Truer, more timely joke has never been said.

My goodness.

So Spencer, we hear a lot of this same kind of timeline of people that get into real estate.

You're going to do the single family homes or small multifamily rentals and then you move on to a portfolio and you seem to have move fairly quickly past that.

Some people would call it failing forward or moving forward in a faster way to become an LP.

And now you've got double digit exits and multifamily and self storage.

A lot of people at that point, how did you decide to settle on, hey, I want to be a limited partner investor because a lot of times that person that we find is, you know what, I've tried a lot of other stuff.

I just want to be a limited partner investor.

I want to take my money, put it with someone else with their time and experience and sit back and reap the benefits and Im willing to take a little bit less to not have to be the active investor myself.

And I can diversify and spread it out with different operators and different opportunities and different assets and different geography.

A lot of times that guy has messed up a lot of other things or pushed for a lot of years and just gotten tired and they're like 55 to 60 and then they realize that by the time they're finally ready to be an LP, the most important thing that you have in terms of passive investments in this indication is that you have to give yourself some Runway, you have to give yourself some time for those deals to go full cycle before they start paying out in a meaningful way.

How did you go from a duplex to a small portfolio of single families and be like, you know what, we're going to be limited partners.

And then at what point did you decide were not just going to invest our money, were going to invest other peoples money.

And Im assuming pool that together to get better terms.

Like how did you end up there?

Versus, hey, Im a capable guy.

I can go, I could be a general partner.

I can operate deals on my own.

How did you decide to go in that direction?

Oh, man, I wish I could say it was a quick, simple answer at the moment we made that decision, Clint, but I appreciate you asking.

So for context for folks.

So Jennifer, my wife and co founder, and I were both working w two jobs in the Bay Area, two very different industries.

She was not in tech, I was in tech, but really just, she was leading CPG, e commerce groups and stuff.

And I was doing operations leadership, sales leadership and tech companies.

So we were making great w two income.

That was when in the fifth company, tech company, I was at the final one before I ended up on the Ripcorde and going full time at Madison investing.

That was actually a real estate tech company that a mentor of mine nudged me to go into.

This is called lending home.

Previously, now theyre Kiabi.

Theyre still out there.

Theyre one of the biggest fix and flip lenders in the country for single family homes.

I dropped into that place having really strong leadership experience, management experience like the business acumen.

But I went in with very little origination like loan and debt knowledge at that point.

And I was brought in to go and figure out how do you scale and turn around and grow an origination group that is doing eventually 600 loans per month.

So getting my hands deep into the guts of a business like that, I started to see the economics on the inside of that.

I'd be like, wow.

Whether it's a HGTV recently watched person good on them who just is about to go flip their first home, or it's a person who's got a full blown flipping business for single family homes scaled right across the country and they're doing parallel flips.

Like, I saw how many zeros were coming out from these transactions and I was like, wow.

Like, what?

And what am I doing?

And we were doing well, but I was, we were dumping money, maxing our 401 ks out.

So proud of it, batting ourselves in the back.

And around that time, though, it was like, let's do the math here.

And Jennifer and I were talking to each other.

We're like, I was working more than I'd ever worked.

I was doing 80 hours a week in office, not including nights and weekends, emails, et cetera, overhead for work.

We had young kids that were growing and the time was getting busy and I sat there and going I can't swing a hammer at all.

Like it's not my skillset.

Jennifer is handier than I am.

But I would say that I was not ready to go flip something.

But I knew the numbers.

I knew how to work with people I'd hired, literally like hundreds of people across different companies.

So I knew the people side well enough.

Partnerships and a mentor in real estate who I actually connected with through networking around that time he raised this incredible point that stuck with me when I was trying to figure out which direction to go next.

After we had bought that local rental we were like cool, there goes 100k for $200 a month in cash flow.

We had gone eventually and bought those single family rentals in the midwest.

He told me, this mentor told me, Spence, if you're going to go think about doing something bigger because I was thinking about trying to go become a lead sponsor, become an operator of bigger multifamily at the time and he said take stock.

Do you live in a money state or do you live in a deal state?

And that was formative for me because I sat there going what he's really getting at is am I going to be willing to move back out of California?

And I know that sounds derogatory to all my California real estate professional friends and it's not.

It's just some of the numbers pan out that way depending on what you're looking for cash flow.

But ultimately we had lived in Colorado for ten years roughly and but we're, we got roots here, we're not moving out of California.

Kids are in school, they're in a good spot.

So effectively I had to make this tough call to say lets figure out a different strategy where I was investing as an LP.

I just finished doing it in my first deal in multifamily and it was up to a really good start and we had done sequentially over months a couple more because we had a little head start.

We had great income and some cash saved up.

We also bought really early our primary home in California.

We got a good catch of the wave on the growth so we had some HELOC availability and rates were definitely in that magical range still that we're all looking forward to hopefully at some point in forever to come back.

But all that to say, we had some capital to go invest and when those deals went well as an LP.

At first, it was like all your coworkers and your network started asking you, that sounds really good.

Like, how do I do that, Spence?

Like, how do I.

How can you help me get into that?

And that's where the business, which was never planned to begin, that wasn't some master plan, but the business originated from me being willing to get on planes, double down on due diligence, really go out and invest your own money alongside people, vet the numbers, vet the people, vet the market, and then figure out ways to go out and try to enable other people to do what we've been doing successfully so far.

And that's from there.

The rest is history to a degree.

And it's taken many different shapes and forms and deals and markets and people and great sponsors and partners, et cetera.

But that was really the genesis of it is it came from just having the courage to go with that initial.

I think we did 25k on the first deal.

Watching how it went and then stacking over time.

Isn't it amazing how the power of mentorship or listening to somebody that's got years more knowledge than you do can literally be a time warp forward into how long it would have taken you to learn the hard lessons over finding properties that aren't going to cash flow and buying in California before you realize, yeah, I can do one deal, but that stops me from being able to do the deal after that in terms of a cash on cash return and having a mentorship or somebody in a position and you're willing to actively listen to them can literally save you 510 years moving forward.

And essentially his wisdom was, rule number one, you got to fish where the fish are.

And I love the question of, do I live in a money state or do I live in a deal state?

Because California is definitely a money state.

We have.

We're GP operators.

We have a lot of money that comes out of California.

Yeah.

Oh, there we go.

There we go.

Yeah.

It's auto adjusting a little bit.

All right, cool.

Hey, we can do the hard things, right?

Look, hey, the world can try to stop us.

My goodness.

All right, so as general partners, Neil and I were east coast, North Carolina, we have a lot of money that comes out of California.

Right?

So we have nationwide meta ads going out, and we have a lot of tech people, a lot of west coast people that have come to realize that, look, you got to fish where the fish are, and this is not it.

Right.

We live in what I would consider a deal state.

Obviously, it's changed a lot over the last couple of years.

But we're investing in the southeast secondary and tertiary markets.

So just the fact that a mentor is able to put you in a situation where it's a little bit of a know thyself moment.

So first of all, where am I?

Where's the opportunity?

Am I willing to move to where the opportunity is?

If not, then I need to be willing to take what I do have, which is capital in my community, and deploy that to where the opportunity is because we say the same thing over and over.

But you have to have three things to have success.

It's time, it's experience, and it's money.

Totally.

And you have the money in your market, but you can find the people in the other area that have the time and experience where the opportunity is because I think that's one thing that we actually leave out is we don't talk about the opportunity.

Right.

So you have to have all those things together.

So you start investing, sounds like in a fairly small way, getting your feet wet, learning how to underwrite.

And then you said with Madison investing, it became interesting how you started spending more time on planes and vetting and doing the underwriting and the due diligence.

And ive lived a little bit of that same life cycle.

And I think its funny where Im willing to be fairly cavalier with my capital and what Im willing to invest in.

Once other peoples money is involved, it becomes a lot more serious.

Thats right.

Now you have to be a lot more conservative with other peoples capital.

Obviously, youre talking to people about what youre doing and youre talking about investments and letting it be known what youre experiencing, good, bad and ugly.

Im sure.

What was it like when other people like, hey, I dont want to go learn all this, Spencer, youre learning it.

Can I just give you money and you invest it?

Talked about how that came to be and what happened.

And did you originally were like, if we pull together a bigger pool of money, we can probably get better returns?

Or is this something that you figured it out?

Because honestly, im looking at the dates on your bio and you were doing some of this stuff before it was cool.

Theres a lot of funda fund managers and a lot of code gps out there, but youre doing it before I knew what those terms meant.

So how did that evolve?

Yeah.

Gosh, there's so many nuggets there I want to and threads I want to pull on because you've made so many good points right there, Clint, and all the thoughts about markets, et cetera, as well, I think back to the before, it was cool era, and I completely agree with that.

Taking a step back in the journey for folks to sit there and say, like, the way I thought about it, I was working full time, making good money.

And I, whether it's my other tech brethren in the Fang companies or beyond, and they're sitting there going, I want to participate in investing in this hard assets asset class.

Right?

The first inclination for so many of us, myself included, is I'm going to do it just like I've done everything else in my career thus far.

I'm smart, I'm capable, I can work really hard and push through barriers.

I'm going to go do this damn thing myself because I'll do it better than anyone else.

And I'm so grateful to have been pulled into a tech company that was also a real estate tech company.

So I could see what it took.

I could actually see what is the effort required, like the sweat equity, blood, sweat and tears, because that is the first inclination for so many of us, right?

Like we, we say we can do it, schedule be damned, personal life, health be damned.

I'm going to go do this in addition to my already demanding day job, and I'm going to do it actively.

I'm going to go become the real estate operator.

And that was my path initially, and I want to make that abundantly clear for folks and for our discussion as well.

Like, I read to nights and weekends, like 24 books in an 18 month period.

I listened to 400 podcasts.

Just quality education, just like the one we're having here today with you guys and digesting that, trying to synthesize that, put it into practice.

And I don't think that's necessary to that degree.

For someone who wants to be just an LP, passive investor, that's overkill.

That was also procrastination.

After a time, you think you're moving forward and you're just reading books galore and doing some spreadsheets.

But that's important, though, because you do need some education.

And this is a solemn responsibility for our own capital, too, just for our own money.

We worked hard for 13 years to go build up capital reserves and buy a house, raise a family.

I don't want to just go throw a five digit number.

That's a lot of money.

I don't care how big a person's net worth is.

That's a lot of money.

So how can I de risk these things, these investments as best I can?

So I think that context is important.

Underwriting from a single family perspective, I had nailed a, from a multifamily perspective, I invested heavily, effort wise and coaching program wise, and spent a lot of time networking.

And to get back to your question, Clint, it was around that era where I was, I had already been so far down the education rabbit hole, waking up, doing the job before the job, as it were.

2 hours a day, every day of the week, religiously putting away the guitar, the Xbox, all the nerdy, selfish, fun, youthful things that are I selfish to go and indulge this pursuit and build that knowledge base?

And then around that time, it was like, I think that I can go and do this not just for my own capital, but so many folks in my network and my colleagues were saying, we want to invest in this thing, too.

Can you help us just wrap our heads around it more?

And I happened to get network and at a meetup@biggerpockets.com and at conferences, I met some sponsors, met some sponsors and I built a relationship with them and eventually got more active for a time.

Like, literally getting more active being involved in the GP team.

And that's when I was like, I think that's about as far down that rabbit hole as I want to go.

I don't think I, the asset management part, day to day, was not my cup of tea.

And so I was fortunate enough to be given a chance to join some GP teams along the way and participate as an active member, in addition to bringing some capital from myself and from our network.

And that's how it happened.

It's, in hindsight, it's, oh, it just happened by itself.

But a lot of that stuff was hundreds of hours of hard work to somehow be in the right place in the right time before it was cool.

And so I'm not sure if that actually answered your question there, Clint, but it is truly about making sure that before jumping into any type of deal, I could say this is the risk profile of the deal.

And this is something I'm comfortable with, to go invest and purchase a 200 unit apartment building, 100 unit apartment building, or a self storage facility out in Texas.

So many of us in this space all have such similar journeys that the bigger pockets, the podcasts, the books, and there is a real tendency, it's not uncommon to see people, like you said, where you just read books and you just watch podcasts or listen to podcasts, and you never take action.

And I think there's often, there's two things at play there.

It's one, either you never meet that mentor who's really actually been there.

Like, you're hearing about how people are doing all these things, but you're not actually, you've never actually got in the trenches with someone and learned it, which is where I think you really start to understand how it works and do it.

Like, you can read all the books, you can listen to all podcasts, or it's just somebody who just has no time.

People overestimate how much time they have.

You work Energizer Bunny here, or we all, as energetic as we are, we all have varying levels of energy reserves and lifestyle and time.

Like kids.

I discovered real estate, like, shortly after my wife and I had a baby.

Oh, man.

And that is a terrible time to want to get into active real estate investing.

But what I did is I took that time to learn.

And then once we started coming out of that black hole of early parent of a newborn, then I started being able to start to take action.

And Clint said it earlier, we say it all the time.

In order to be successful in real estate, you need time, experience, and money.

And we've talked already about the idea.

Do you come in from a money market or deal market?

And what you're getting when you invest passively in a syndication is you are leveraging, you're leveraging another person's time and expertise.

And with that time and expertise, they're able to find the deals.

And we say this often around this office, this isn't a hobby.

We have a team of people who are out there digging for deals, analyzing those deals, and vastly more of those deals do not even come to the general partners table.

They get passed on.

And then once we've decided, all right, we're going to pursue it, now you're talking negotiation.

You're talking finding the lending for it, going out and finding the investors, because you're not talking a $400,000 deal, youre talking a $5 million deal, talking a $24 million deal.

Yes, youre talking $100 million deal in order to really operate at scale.

And I dont know what the point of all that diatribe was.

Go ahead, Clint.

I want to expound on that a little bit because you talked a little bit about the analysis paralysis of people that dont really do things.

Theres something else here that I dont think we see that often.

And I didn't have a leadership role like you did, or nearly, probably the same level of financial success.

I did have a 16 year career in cardiology, implanting pacemakers and defibrillators, and was a pretty successful sales rep and territory rep.

And one of my biggest fears was I started dabbling in real estate with a financial goal.

And what I realized is that after I achieved the first level with a portfolio of Airbnb properties, that I did it wrong.

I should have been focused on time and location independence versus just the money side of things.

I like to think that I would have done it, but we'll never know.

The reality is my company made some bad decisions and I got let go.

And in retrospect, it was the best thing that I didn't have to come up with an excuse to all physicians who are my best buddies, why I was leaving them.

That decision got made for me.

Most of those doctors are investors with us.

And in retrospect, it worked out great.

But what we don't see that often is somebody that had your level of financial success realized that you want to go in a different direction and try something different because you had the financial side of things, right?

Yep.

You're working so much, you got two young boys that starts to play into the pictures.

The reality is, like most of us, when we look at the ceiling of what we can do in our job, we're looking at a dollar amount.

Right.

And I think that a lot of people, once they hit that and they realize they've achieved that at the sacrifice of something else, that as you get older, as your relationship with your spouse changes, as you bring children into the picture, your time becomes worth more than the money.

Totally right.

And how you spend that time often includes location independence.

And usually by the time people get there, a lot of times from my background, it's physicians, cardiologists, electrophysiologists that hit this, like, peak performance level and they realize they're not happy, but they can't really go do anything else because they have those golden handcuffs and they've gotten used to the house, the cars and everything else.

And I don't think that we see it that often.

So I want to make sure that we point it out.

Is like you were on the top of the mountain, right?

Like, I'm sure you had ups and downs and peaks and valleys and we all have.

Business is business, but at the same time, like, you achieved everything you wanted to make a move from that.

Where you're in the short term, giving up the financial independence in the pursuit of the time and location independence and hoping, betting on yourself that you're going to make it up in the long run.

And you and your wife are doing this together like you're in it, right.

This has got to work.

There's no other option.

And that resonates with me ultimately.

I'll never know if I would have been brave enough to do that because the decision got made for me.

But when you're willing to walk away from that, it's really nice to have the conversation a few years later and see that you guys just spent two summers in a row that you spent time overseas.

And by the way, I'll just throw out this information, may even be old, but I've got Madison investing down with 2.3 billion in acquisitions and 20,000 units.

To be clear, of course, that pieces of those things, we're not the lead sponsor.

Yeah, of course.

And yes, the whole is greater than the sum of its parts, but it's more than you would have ever done as a general partner by yourself.

Right.

You are a limited partner partnered on deals that are bigger than yourself.

It also means you're not the one putting your time into that.

So, like, in retrospect, look at this.

Like, it only took you ten years to become an overnight success.

Yeah.

You know what I mean?

Like, people see the numbers and what you accomplished.

The shift in my mind is like, this is your years down the road of what we are trying to accomplish, but you just did what we want to accomplish.

Like, I've got two boys about to be, one's turning five this weekend and the other ones, it will be too soon.

And im looking forward to a little bit more stability where we can take the five, six, seven weeks off a summer to travel because the financial independence is only worth so much.

Right.

I always say that, like, whatever youre doing, if that glass ceiling is not enough for what you want for your life, then the only real risk is not doing something different.

Totally.

But thats really scary when youre making a move like that and hoping to make it up in the long run.

So I think for me, and I'm sure you would agree, the biggest thing is marrying correctly and having someone that you believe in a common vision.

So like just, it's unbelievable success.

And I appreciate the value of us being able to talk about these years later when you're reaping the rewards of that.

And the final thing you mentioned there, because, gosh, there's so many great points right there, Clint, that I didn't know you were going to close on the comment about matters that you marry.

We don't have to go deep on this, but man, do I validate that comment.

I think that is still, this is own podcast in its own, like I said earlier, but completely agree.

And it's thank you for sharing your story as well.

Just about your journey.

The forced change is one of those things that in hindsight can be, could be a gift as well.

You're giving me hope is what I'm saying.

Maybe this is how gonna work out.

How old are your boys?

Ten and six.

Okay, so you started traveling when they were eight and four?

Yeah.

Traveling big when they were eight and four?

Yeah.

All right.

I got two years.

Yeah.

One thing I want to mention too is that and we're coming up on time, but when trying to draw from motivation, like early in that journey, the hardest thing where most people get stuck and where certainly I almost did as well, is finding somehow the motivation when caffeine isn't going to get going to get you there, when, you know, coffee is not enough to get you up.

i'm not that guy.

I needed extra motivation and clarity to get up and do 2 hours of what most people consider pretty boring, dry work, underwriting multifamily deals, and reading a book that's about technical investing or finance that would have put most people to sleep.

So drawing motivation comes from clarity of goal setting.

And this is not in the abstract, to be very specific.

Like Jennifer and I cleared the calendar when we realized we had to do something about this.

We hired a sitter, got time, two old days in our house, and we set goals with time bound goals.

This is how much income we want to have per month coming in.

And by what time.

And there was tears, there was reconciliation, there was laughter, there was every range of emotion you can imagine.

And that's not to scare people.

It's more so to make it clear that that's where we got down to a number that said, this is how much per month where I can quit my job.

And that ended up being 70% replacement of my income on my side.

And Jen and Jennifer still worked.

And I quit five months before COVID hit.

That wasn't part of the plan for Covid to come in.

So I bring all this up just to say the clarity to push forward, whether it was in your story, Clint, where it's like, wow, I have to go make a change because the change was brought to me.

Or if it's like we're making good money on our end, but life something off, right?

It's not something that is not calculating correctly in this life equation.

We're not spending enough time together as a family.

Health is not prioritized as much, et cetera.

So something has to give.

And so that clarity of goal setting is paramount for people to go and start getting clarity on where, how are they going to wake up early or do their night owl thing, whatever their jam is, to go and learn this stuff, to start taking action.

This is happening at a really weird time.

I feel like this podcast is like directed at me.

A couple a month or two ago, we interviewed John Hewitt from Jackson Hewitt tax service and went up and ended up having dinner with him.

And just incredible entrepreneurial man.

His best friend is a guy named Gordon D'Angelo.

Hes a salesman, but more importantly, hes a visionary and hes an educator.

And he wrote a book called Vision.

And after having dinner with them recently, I read that book, listened to the audiobook.

As I mentioned, ive got an almost five and almost two year old.

So I listened to it twice because I got very distracted the first time.

And on the way in this morning, I started it for the third time.

And the reason I did is because my wife Abby and I are reading it together.

And it's more my workbook format.

And it's at this day, this age, I want to be in this physical shape.

I want to be in this emotional state.

We want to be in this financial state.

We want to accomplish things on.

This is ten years out.

This is five years out.

This is 20 years out.

What do we want to do?

And it's an opportunity to get a little bit weird, right?

Let's have some really big scary things and then work backwards from the details and a lot of times I think sometimes, at least I've found that I don't have to make some of these big scary decisions.

If I have the goal and then establish the timeline, the decision gets made for me and it helps alleviate some of that analysis paralysis.

That's awesome.

You guys are doing the same book at the same time, by the way.

That's magical.

Thank you.

It's, yeah, it's special.

Neil, to be honest, I guess you didn't have to be here for the podcast today, but I appreciate you sitting in.

No, I'm not ready to stick by yet, unless you, unless you've got to go.

Spencer, I don't know if you've got a time, if you're running out of time.

I can answer that very quickly.

I think top of the hour, but yeah, top of the hour.

Okay.

All right.

Cause I wanna, I actually wanna, before we say goodbye, I'd like to try and get just a few sort of actionable items that our audience can take away from you.

And that's one the mindset shift from being a tech worker who's maxing out their 401k into probably what was stocks, which is very much the nest egg approach.

Yes.

Where you're just counting on the appreciation of the, of a paper asset that you've bought, and then it's someday you're going to start drawing some of that down to then focusing.

As real estate investors, we also talk about, we focus on cash flow.

And I want to just have you talk about that mindset shift and also how you approach that now that you primarily invest in as an LP.

Yeah.

And boiling things down to simple principles has always been the most potent thing to drive action in me day to day.

And it's so much easier said than done, man.

Especially when you're hit with a investment summary PDF, you're looking at an amazing looking deal to invest in something where you're, let's say, on the stock side.

I'm staring at my 401K nest egg growing and being like, wow, I don't think I want to touch any of this.

Let's just keep that train going.

Uh, ultimately, I remember the day very specifically when Jennifer and I talked and I was like, I'm going to stop contributing to my 401K down.

The first step was down to the company match.

And I'm only speaking for myself here.

I'm not giving anyone advice.

This is just what I have done and my personal opinions on stuff.

Disclaimer provided I turned it off and it gave me the chills a little bit because I was scared.

I was like, this is contrary to what everyone says you should do.

And later I turned it off all the way.

And eventually I had four just to talk about retirement before we get back to cash flow.

I had four legacy 401 ks.

From being a tech company, you go through tech company in the long run, at a company, it could be two years in the tech industry.

I had four leftover 401 ks.

I consolidated them into a self directed solo four hundred one k.

And I've invested in, I think, 15 or maybe 16 deals across self storage, multifamily, mobile home parks, medical office bots and precious metals, crypto.

I've used it for a bunch of other stuff now, but I still look at it.

A key learning that I look at when it comes to all investing is the word and instead of the word or.

And this might be a little contrarian within the real estate space, because we all clearly, I'm biased toward investing in hard assets.

We all are.

But I do think that keeping an and approach across the board for us, like a portfolio approach so that you're balanced, it still makes sense for us.

But we go in with a simple goal in mind for every investment we make, which is figure out, like, is that investment for cash flow or what's the goal for that money?

Is it to generate income or is it to generate growth?

And I dare someone to go try that because it's harder than it sounds like.

It's harder than it sounds to go say, okay, I'm going to invest this 50k, this 100k in this deal for cash flow.

Be like, cool, wait till tomorrow, and another deal comes across your desk and it has like a three x equity multiple.

Basically saying in three to five years, you could triple your money.

You're not going to get any cash flow, though.

Like that decision point is really hard because our lizard brain kicks on.

The amygdala is just like, hey, that number's bigger.

I like that number.

But to say that is everything, that goal setting exercise is everything when it comes to big goal setting at the top years out back to the conversation we're having a moment ago, Clint, have, has someone set that compass point, that anchor point for why they're doing what they're doing in the first place?

Or are they just doing it to quote, unquote, diversify?

Which is fine, too, by the way.

I'd say that's probably the majority of where folks end at.

They're like, I have too much in my Nvidia stock.

Literally a conversation I had yesterday good on this person.

They bought Nvidia stock twelve years ago.

He's like, I have too much Nvidia stock and my equities are looking great.

I need to diversify.

Cool.

But ask the second question of what does that actually mean for some folks?

Their numbers are so big already that might not really matter to them.

And good on them if that's where they are.

But for the rest of us, goal setting from cash flow or for growth and being specific about that is incredibly helpful.

Trey Spencer Hilligoss I always enjoy talking to you, my friend.

We're going to have you back in a year or two and see where you're at.

But if any of our listeners want to find out more about Madison vesting and you, where would be the best place for them to do that?

Yeah.

And folks can find us@madisoninvesting.com.

we have a club signup page.

You can just put your information in and I'll reach out.

Like, I set up some time to chat.

But yeah.

Neil, Clint, this is fun.

Like, I love nerding out on this stuff with you guys and just honored to catch up with you in this format.

And Daniel, amazing to reconnect.

So would love to come back.

Sounds great.

Madison, really appreciate your time.

Yeah, sorry, I was looking, we're going to cut that out right where he ended looking at Matt.

I was in my hand, I'm saying Madison investing.com, madisoninvesting.com dot that's where I was going straight after this.

Spencer, thanks, man.

We'll cut it right there at the end of your words.

Appreciate the time, man.

That was cool.

We went a little bit deeper than a lot of people go, so I appreciate your willingness to do that.

Yeah, what a journey.

Hopefully.

I didn't know we're talking, you guys are trying to run a show.

Not at all.

We're just trying to connect and learn and that helped a lot.

Thank you so much for listening and watching the truly passive income podcast.

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