How To Become A Millionaire In 5 Years

In this episode, John gives the action plan to become a millionaire in five years. He also breaks down the option of safely becoming a millionaire in 45 years - if that's more your speed!

 

To purchase John's newest book, visit: https://johnhopebryantholdings.com/financial-literacy-for-all-book/

To learn more about John's Operation Hope initiative, visit: https://operationhope.org/how-we-help/credit-money-management/

 

 

See omnystudio.com/listener for privacy information.

Episode Transcript

Speaker 1 (00:00):
Welcome the Money in Wealth with John Hobryant, a production
of the Black Effect Podcast Network and iHeartRadio. Yo Yo Yo.
This is John ho Bryant, and this is money and wealth.
We're talking about a topic that so many people are,

(00:24):
of course interested in. So let's get it out the way.
How to become a millionaire? Now? Only in the dictionary
let me just start here for anybody who thinks that
this is like putting something in a toaster. Only in
the dictionary does the word success come before the word work.
Because it's alphabetical, so nothing good comes easy. And whenever

(00:47):
you make emotional decision, it's going to be a bad one,
and we're going to get into that with this trending
topic around money. But I am I'm making this promise
to you in this hour, Within this hour, I am
going to break down for you and I want you
to go get my book. Financial Literacy for All, is
number one in business finance in the country on Amazon.

(01:08):
Financial Literacy for All as part of the Operation Hope
and Financial Literacy for All movement, and it's been out
for three months and it appears a lot of people
of color. I'm very proud everybody's buying it, but a
lot of people of color in particular are buying it
because it demystifies money. And I want you to see
it marked up. I want you to see underline. I
want you to send me notes with dog ears. I

(01:29):
want you to talk about this at the dinner table. Okay,
But I'm going to deal with something I don't specific
explicitly deal with directly in the books. I'm trying to
give you the foundation and the guidepost for just managing
your life. Right. So I'm going to break down if
you want. If your goal is to become a millionaire,
I'm going to break down in this hour. Get all

(01:51):
your friends together, share this with others. I'm going to
make this simple of how you become a millionaire and
is little as five years. You can also do it
in forty five years and take very little risk on
your way to do it. But before we do that,
I'm gonna share a disturbing trending topic and it is

(02:15):
his brother. This I'm gonna call it brother because I
don't claim this dude. This is young black man who
gets entitled about his girlfriend's not even his wife, his
girlfriend's money. And I'm always advocating buying a home. I
say this is the way, a way to build generational wealth.
This is the wrong way to do it. I'm gonna

(02:36):
let you listen to this because I want you to
hear the emotions and how frustrated this young lady is,
and she has to rewrite my opinion to be frustrated.
You want me to understand a lot of what you're hearing.
I'm gonna try to translate it for you, but I
think you'll get the message from the emotionalism here, and
then I will further break it down after it finishes.

(03:01):
We bought the house tripping. So he is walking her
in this house, and he says that she's tripping. She's upset.

(03:22):
Why would you do this with our money? She says,
getting it's fine, man, So the boyfriend asked the guy
to explain it to her. When he's been explained it,
he tells the dude he's not in part of this conversation.

(03:42):
Seventy percent her money. By the way, we had a relationship.
I told you get out to change just my Josney right,
just we bought the house. This is alarming, is distressing,

(04:09):
it's hurtful. Cover the furnace up with a curtain. So
she says, I need my money back to the realtor.

(04:30):
The realtor begins to explain that you're under contract, and
this is I guess the way it's structured. They can't
get the money back. The deal is about to close,
and I don't know how they did that, because either
he forged her signature of the boyfriend or he'd put
it in his own name, which is worse because seventy

(04:52):
five percent of the money is her money. But right
when she says I need to get my money back,
the boyfriend tells the girl girlfriend, not all the dudes
not in this conversation, leave him out of this. But
then when he wants to calm the girlfriend down, as
if she's some toy, again, it's seventy five percent of
her money here be clear, twenty five percent of his money. Maximum.

(05:16):
When he wants to calm her down from her emotionalism
over a decision that he made about the single most
important decision on investments that you can make as a family,
which is where you're going to live your own home,
he then invites the same guy he just seldom said
to be quiet. He's not part of this. He doesn't

(05:38):
invites that guy to shut his girlfriend down. It's toying
with her. She's clearly about to go left. And while
I don't encourage emotionalism and I don't encourage anger, I
do understand what she's going through. She trusts at him.

(06:00):
She says, we're not even married yet. Yes, I trusted
you to make this decision, but you should have checked
with me before you made a final decision. That didn't
mean to just go out and buy whatever you like.
I don't even like this how, she says. Clearly, she's
you know, a man may make the house a woman
turns into a home. Anybody common sense knows that. So

(06:22):
it's arrogant, it's narcissistic, it's it's it's presumption, it's entitlement.
It's it's disgusting what this dude did. And hopefully they're
able to resell this, this house and get the money out.
This relationship, I can tell you right now, is not
gonna last my opinion. Now, unless they just love drama

(06:48):
and this is just part of what they go through
and for some reason they're just hooked on pain, then
I don't know. Maybe it will last, but in anything
that I call common sense, don't hunt. This is not
going to sustain itself. And I feel sorry for her,
and brother man needs to learn some lessons about human decency, respect,

(07:13):
decision making in life. What do you think? What's your opinion?
Did he have a right to do this? It was
twenty five percent of his money seventy five percent of
her money. Did he have a right to do this
when she said, you're basically sure, baby, go find us
a house or should he have checked with her before

(07:34):
he made a decision for her? Okay, this is John
O'Brien and this is money and wealth talking today about
becoming a millionaire. Now you've heard me say over and

(07:58):
over again, real estate is the biggest business in the world.
It's the biggest business in the entire world, biggest industry.
Be very specific, in the entire world. Anybody who's a
millionaire was a man dollar net worth or more. The
likelihood is ninety percent plus that if they're a sustainable millionaire,

(08:19):
meaning somebody who's not just as a contract earning of
million dollars an income. By the way, income is different
from net worth. If they have a net worth of
a million dollars or more, and it is sustainable, meaning
it's not here today, gone tomorrow. There's a ninety percent
chance there's some real estate in that portfolio. Every millionaire

(08:40):
just knows that this is, you know, a basic part
of your building block. So the easiest way you build
wealth in America is home ownership. But forty one to
forty four percent of African Americans, as an example, own
a home compared to seventy five percent of our mainstream

(09:01):
counterparts who own a home. The tax system in America,
And no, this is not jeez, this is John's strategy.
How do I become a millionaire? No, I'm just giving.
I'm laying the foundation here. I'm I actually walk you
through how you can do this. I think with minimal
risk and maximum upside, both a short term strategy and

(09:23):
a long term strategy. But I want to lay the
frown foundation in the building blocks because we all start
in our knowledge of financial literacy, which I believe is
the civil rights issue of this generation. And why I
book wrote the book Financial Literacy for All, and why
I found it the largest financial coaching organization financial literacy
coaching organization in America, Operation Hope, And why I helped
to create federal note that helped it we created federal policy. Sorry,

(09:46):
we didn't create it. The president, President George W. Bush
and President Barack Obama executed federal policy at the federal
levels for the first time in this country on financial
literacy as a direct result of our recommendation when I
was a presidential advisor. So I know lot about this
topic of financial literacy, and I know that some of
us is what we don't know, that we don't know
what we think we know. So I try to lay

(10:08):
out the basics. Why do I say home ownership is
the easiest way to build wealth in America? Well, Number one,
the entire tax system is designed to encourage home ownership
and even a mortgage. So if you look at the
tax policy, if you rent an apartment, and as I've

(10:29):
said before, you could rent in places that you can't afford,
around people who don't want you with money, you don't
have to impress people you don't know and to have
conversations in the hall that don't matter. And you don't
own a thing, or you can buy something that you own.
And if you rent, by the way, you're opening up

(10:51):
that window and you're throwing money out that window, and
you have no claim to it. I have said before
on Roland Martin Show, and I believe I said it
on Charlemagne's program that I created from twenty seventeen to
twenty twenty one the largest minority owner of single family
rental homes in America. I sold the company Christmas Eve,
twenty twenty one. I'm still a passive shareholder, but I

(11:14):
don't have any material involving any decision making anymore. But
we built a portfolio of seven hundred homes, and we
gave them a lot of incentives for going from rent
to own and paying rent on time, and using minority
vendors and all that stuff, raising their credit score, all
these programs. But I encourage people not to rent for

(11:34):
me for life, like you know rent and whenever you
can move up to home ownership, there are no incentives
for renting. If you have a mortgage, you can write
twenty about any paying mortgage once a year. I would
encourage you, by the way, to pay a mortgage every
two weeks. Doesn't cost you anymore. I'll get in that
minute in a minute. But if you pay your mortgage

(11:55):
once a month, like most people do in this country,
two Thursday, mortgage is going to be mortgage interests, So
twenty years approximately, that thirty year mortgage, depending on how
your mortgage is structured, is probably mortgage. Interesting. Now here's
a good news. You can write that off your taxes
most of the time. So you now get the benefit
of the money you're paying on the mortgage you have

(12:18):
in the house, get that back in a tax refund,
whole or part. At the end of the year. You
get a benefit of the depreciation of the house. Okay,
you get a benefit of the appreciation of the house
the value increase, and you get to write off the
mortgages most payments against the house against your income. It's
a great deal. The tax system is designed to support

(12:42):
home ownership, and once you're in that house, there are
things that you can also write off that you spend
on the house. But that's a whole nother conversation. So
the tax policy isn't designed to encourage people to own
a home. Brothers going to say to me at a
session of your I was I think it was Roland

(13:02):
Martin again. My brother responded, you know online, Oh you know,
why should I Why should I buy a home? John
Brian talk I want to buying a home. I don't
own the home. The government owns a home. No, he said, sorry,
the bank owns a home. I don't own the home.
The Morris Company owns a home. My reaction if you
don't pay, if you don't pay that mortgage, yes, the

(13:25):
bank's going to own the home. Let me tell you something.
If I loan you some money to buy a house
and you don't pay, I'm going to own your home.
Real talk. You stop being my cousin Pookie. Then you
start being my uncle jojo U. Stop being my buddy
and my friend, and you start being my borrower. My

(13:49):
business contract. Uh, I want to say client, my business
contract recipient. H and soon the foreclosure notice recipient, because
I'm going to forkloths on you. Business is not personal.
That's another podcast I would do at another day. Business
is business, and we need to see it that way. Now,

(14:11):
if you pay that mortgage payment, you do own the home,
and you own all the interests tied to that you own.
As I said, you get the benefit of the appreciation
the value of the house after you bought it. You
get the benefit of depreciation, which is a tax strategy,
a tax reality really, and you get the benefit of

(14:34):
writing off mortgage payments which are tax deductible against your income. Now,
see a tax policy, see a taxman or tax woman
on this. Don't take my specific example. I'm just giving
you broad descriptions here, by the way, just to get
into depreciation specifically. It's really gives you some value on

(14:58):
the wear and tear and the aging of your of
your house over time. It's typically tied to rental on
investment properties, by the way, which I'm going to get
into on how you build a net worth, but I
wanted to at least cover all these different definitions so
that you're really clear on it. There's a depreciation calculation again,

(15:22):
talk to your tax pro on this. There's a depreciation
depreciation formula. Talk to your tax pro on this. So
when you're buying a house for yourself, you just really
you want to obsess on the appreciation, obsess on the
mortgage write offs. Okay, so now let's get into the
meat of the matter. Now that we've made a case
for your own individual homeownership for wealth creation, now let's

(15:45):
get into what I promised you building a million dollar
portfolio being being having a net worth of one million
dollars or more. Now, let me be very clear, making
a million dollars income is different than a million dollar
net worth. You can actually a million dollar income and
have a zero net worth. You make money during the day.
Thank you Tony Wrestler, my billionaire brother for giving me

(16:06):
in my business partner, and my friend for giving me
this very specific distinction during the time I was building
a company with him. Help me to focus on the
right thing. You make money during the day. You build
wealth in your sleep. That's what I call making money
during the day, making a living. Most people are obsessed
with making a living, but they're not making necessarily a life.
You build wealth in your sleep, stocks, bonds, investments, homeownership,

(16:31):
small business ownership. I believe education qualifies for that. You
build wealth in your sleep. It's compounding mechanism. Now, let's
now deal with how if you want to build wealth
a million dollar net worth minimum in five years. You're
in a rush, you're in a hurry to do this. Well, No,

(16:54):
let me deal with the easiest one first. Let me
deal with if you don't mind waiting, and you are focused,
you're on mission in your life, and you don't mind
starting this adventure this process. Your generation is going to
live longer because there's the health care and wellness mostly
wellness strategies. Now you're eating better, hopefully you're eating eating
fruits and vegetables and a balanced diet, and you're taking

(17:17):
nutrients and you're exercising. You're going to live a longer life.
You're going to live hopefully close to one hundred years
old years of age, at least to ninety, at least
to eighty. Right, So, if you're living in a seven
undredredit score neighborhood, by the way, you lived at least
eighty one years old. You lived in a five eighty
credit score neighborhood, five fifty credit cocre neighborhood. If you

(17:38):
look at the Hope credit score index, you live to
sixty one years old. I'll do a separate podcast just
on that. Yes, fifteen minutes apart you live, it's a
twenty year delta on life. You live twenty years longer
in a higher credit score neighborhood. It's mindset mentality surviving
versus a thriving and winning mentality is where you know.

(17:58):
It's a belief system. It's your emotional spiritual health basically
that is materializing in access, opportunity, belief, confidence, so on,
and so forth, the execution of your aspirations makes you
happier and less stressed out, and you're making better decisions

(18:18):
and you live longer. I'll get into that also in
a separate podcast. So, now you don't mind starting at
twenty or twenty two years of age, you're working somewhere,
you don't mind starting your journey. Now you've gone through college.
You know you've got some job or you're in college,
you've got some job that pays you, I don't know,

(18:39):
thirty thousand dollars a more year, okay, And you're going
to live on a budget, and you're going to in
this example, you're willing to put aside three thousand dollars
a year. Okay, this is the easy way over forty
seven years, forty five, forty seven years to make it
be worth a million dollars. You're going to take three

(19:01):
thousand dollars and you're going to put it in a
wroth ira. Now it doesn't have to be a roth ira.
It can be certain I'm trying to be careful not
to make certain stock recommendations here. It can be in
a certain type of investment account for publicly traded stocks.
It can be in an index fund. It can be

(19:21):
in a blue chip like a high quality stock portfolio.
You can deal with if you want to. If you
want to be culturally and enrich, you can deal with
a company like Aerial Capital Management, which is a black
owned mutual fund. My friend John Rodgers and Melody Hobson
found it in and run it. But do business with
whoever you like, whoever ye're comfortable with. But you can,
you know, let's just let's just make this simple and say,

(19:43):
through your four oh one K program at your employer,
you pick a basket or an index fund or whatever. Again,
I'm trying not to be specific here or in this
case again a wroth. I are a account and you're
going to set aside three thousand dollars a year. Now.
The key here is that it going to throw off
on average, give or take. Some years will be higher,

(20:03):
some years will be lower, but on average you'll probably
throw off about seven percent return. Okay, you're not going
to touch it. It's very important here. Put it in,
set it aside, and forget about it. Now. It's your money.
It's not going anywhere. It's not running off to China
or Russia around the world without your permission. Nobody's going

(20:23):
to steal it from you. If you ever get into
a desperate situation, I encourage you not to think about
it in this way, because you will go grab it
at some point. Something you will find to rationalizes is
to tell rational lies. You oil frill, find some reason
to go to go punch a hole in this account
and grab it. But I'm suggesting that you've invested and
forget it, set it aside, and forget it. You didn't

(20:45):
make thirty thousand dollars, you made twenty seven thousand dollars. Right,
You didn't make thirty five thousand dollars. You made thirty
two thousand dollars before Texas. You didn't make fifty thousand dollars.
You made forty seven thousand dollars. Okay, Now and budget
around it. Put that three thousand dollars size is going
to get you an average return. Again, some years will
be hired, some years will be lower of about seven percent. Now,

(21:08):
if you do that and do nothing else, you can
still live your life, go on vacations, enjoy yourself, and
as you over years, you're gonna make more and more money.
So this will become less and less painful. Because in
your earlier years you're probably making less money, particularly when
you start this when you're in college. Right, it'll be
a point you go get to a point where you
go forget about it. But if you do three thousand

(21:29):
dollars a year for forty seven years and follow the
calculations forty five to forty seven years, you'll be worth
about one million dollars. Do nothing else. Okay, you do
that for sixty years, you'll be worth about two point
five million dollars. And if you really want to be

(21:53):
a baller, and you start earlier, or maybe as a couple,
will you double down and don't get married and don't
get divorced? Okay, because you can break this. You can
cut this in this number in half and just do
it fifty to fifty. You do it for sixty five
years at three thousand dollars a year, you'd be worth

(22:14):
three and a half million dollars. But let's go back
to the million dollar number, because that's something most people
can see line of sight to. You know, it's forty
five to forty seven years, again depending on how the
markets do. But you know, let's say in five years
the markets don't do that great they do good and
they do bad. But over the long arc of time,
if you keep it in there, keep it the money

(22:34):
in the market for twenty years. There's never been a
twenty year period of time in the US where the
markets didn't on balance go up. I'm talking about the
stock market in this example. I'm not even gone in
real estate yet, right, so buy, So invest it and
forget about it. There's three things that have not gone
down in the history of the United States of America
stock market value, real estate values, and the GDP gross

(22:57):
domestic product the income of the nation. That doesn't that
They're not going to be dips. You go up, it dips, right,
but it always corrects above the line. It has always
corrected above the line. So invest it and forget it.
And that's the easiest way, and that is the least
volatile way, is the least risky way. Now you say,
I don't have forty five years. I'm not that patient.

(23:21):
I don't want to get married and rely on on
splitting this responsibility with my mate. I don't want to wait,
you know, forty five to sixty years, right, I want
it now. Okay, here you go, here's something. Now I
write all this down. I want you to get, when

(23:41):
you're twenty years old, a term life insurance policy. I
want you to get a policy for one hundred thousand dollars.
It'll cost you if you're in great health, you know,
it may cost you as little as ten bucks a month.
And the older you get, by the way, the more
expensive the policy. But if you're twenty three, thirty years
of age, thirty five years of age, and you're good,

(24:02):
good health, this should not be expensive at all. If
you can't get a million dollar policy, can't It will
cost you less than one hundred dollars a month if
you're in good health, fifty bucks a month. I've seen it,
all right. That's not the key to the policy, the
strategy either. But if God forbid, you dropped dead before
you and you've had children before you enter the heart

(24:22):
of the plan. I'm telling you about the minute you
get this policy and you pay your premiums and you're
having children, you're starting a family, you drop dead. I
don't know how long you only live, but I dang
sure not. We all will die, all right. It's not
a mystery. You drop dead. And now there's two things
going to happen. One you don't have to your family
is have to do a embarrassing go fund me campaign

(24:44):
to bury you. Right, that's just crazy to me. All
these celebrities doing go fund me campaigns to have themselves buried.
Its nuts. You know, you're making all this money and
two your descendants, your children, your wife or your husband
will be a millionaire in the example of a million
dollar policy or at least one hundred thousand there. But
they'll have money to buy a house, start a business,

(25:06):
go to college, reset their life, etc. Don't you want
that for them. That's not the strategy either of how
to become a millionaire. This is bonus stuff. I want
you to go. I want you to fill out one
page will so that you can direct your affairs. You know,
you may have a PlayStation, but you want to make
sure that PlayStation's going to whomever you wanted to go to.
You know, I mean Prince is upset in death. I'm

(25:29):
sure that he built this whole thing and like the
money had no control over his affairs because these thoughts
was gonna live forever or whatever, didn't get around to it,
didn't have a will, So he built a great estate,
great net worth, and then it went to people he
barely as I could tell, barely knew who happened to
be related to him, who are now paid, and I'm
sure doing things that he would not want done. Your

(25:51):
will is your direction post life on this earth, of
how you want your affairs to be out. I want
you to get a one page will. I want you
to execute it. I want you to finish it right.
I want you to file it right. I want you
to have a insurance policy. I mean a life insurant policy.
A term life policy is easiest and cheapest. Whole life

(26:15):
is better. But that's again, I'm not giving you investment advice.
I'm telling you how the minimum you should have. Right.
I want you to buy a home. Now, we're getting
into it, right. I want you to buy the worst
house and the best block. Okay, no mini mansions right,
no balling, no profiling, all right. I want you to

(26:38):
buy the worst house on the best block, in a
working class, a workforce neighborhood, near jobs, transportation, economic activity,
and commerce. Now, most inner cities in America are centrally
located real estate. They used to be the center of
whatever area that was until minorities moved in and other

(27:02):
folks moved out and try to create suburbs, and now
traffic so bad that the folks who moved in the
suburbs trying to come back and reclaim the inner cities.
You know, in the inner city in France is called Paris.
An inner city in the UK is called London. An
inner city in Turkey is Istanbul. Like inner city is
are prime real estate. Inner city in Greater New York
is called Manhattan. Right, So only in America that we

(27:26):
run out of our own communities because of you know, reasons.
I'm not going to get into and left poor people there.
But that real estate now is centrally located invaluable, and
I want you to own some of it now. And
a great example of this is Anacostia. If anybody knows Washington,
d c. Area, you know that for years and years
and years Anacostia was basically abandoned, and Frederick Douglas used

(27:51):
to live there. It used to be a very prosperous area,
but in the Industrial Revolution it was thought to the
worst place to live was on a hill next to
the water because during the Industrial Revolution the factories polluted
the air and polluted the water through dumping so you

(28:14):
didn't want to be anywhere near the water or a
hell with your home. But we now live in a
clean economy, don't we. Hello, we've gone from the industrial
age to the technology age, to the information age. We're
about to go into the AI age, all right, artificial intelligence,
and I'll do a whole podcast on that. Don't worry.

(28:37):
I'm working with my friend Sam Autman on the AI
Ethics Council that's coming up. But in that clean economy,
where's now the best land next to the water on
the hill? Go check out Anacostia. See what's happened. Poor
people were giving them a little voucher or you know,
encouragement here a couple thousand dollars or whatever. Move them out,

(28:58):
and now anacosiaus that real estate is invaluable. Same thing
happened in Harlem. You could give that property away thirty
years ago, give it away thirty forty years ago, tear
down you know today is seven figures in Harlem. You
can't you know? And I mean top seven figures, maybe

(29:18):
eight figures. And as soon as Bill Clinton moved into Harlem,
President Bill Clinton, you should have known and signaled that
things were changing on Harlem, is Upper Manhattan, even Detroit
with they're giving away homes for a dollar a decade ago.
Those homes now many neighborhoods and the hopes many neighborhoods
in Detroit are now valuable, right, and you can still

(29:43):
buy homes in certain neighborhoods. And you know Baltimore has
an oversupply. I'm not telling you to go buy in Baltimore,
so don't be blaming me for your decisions. I'm just
saying that these are you should do your own research.
But you want to buy in a neighborhood you're comfortable,
that you understand, but you need to buy modestly in
areas that fit the criteria that I outlined for you,

(30:06):
where there's robust engagement and economic energy vibrancy. And if
you see hospitals and universities and retail and restaurants and
transportation and ports and office buildings or whatever it is
your definition of economic activity and vitality, that might be
a signal. If you can find a house that is

(30:28):
modest on a decent block, then think about buying it
rehabbing it. Can get a rehabilitation loan from a lender
if you need to a construction loan. You can use
minority vendors from the neighborhood to help you do that work.
Make sure they're certified. By the way, don't go hire
cousin Jojo who has no skills. They will go. They

(30:49):
will take all the money with good intentions and then
say they're sorry. As you got to pay that bill,
you have to say, yeah, you are sorry, you are sorry, right,
but they were not gonna give you none of that
money back because they broke. If you want to, you
heard me say, if you hang around nine broke people,
you'll be the tenth. So get certified vendors to do
that work and hold them accountable every week. You want

(31:10):
to progress, report, don't let don't let time go by anyway,
buy it, rehabit, live in it. I want you to
buy something modest now, no mansions. I'm not talking about
millions of dollars a half million dollars. I'm talking and
you may have to You may not be able to
do this in the city you're living in. You may
have to go where the puck is going, meaning you
want to go where the market is going, where withere,

(31:32):
someplace is still growing. If you see on the front
page of your newspaper in your town, the real estate
values are at an all time high and people are
getting becoming millionaires and billionaires. Well, that deal is probably done.
That that money has been made Manhattan. The money has
been made. You can get a nice lifestyle, but you're
not getting rich or building wealth overnight in Manhattan on
real estate. That's not going to happen traditionally. And if

(31:52):
you want to go restructure some office buildings, which is
a whole other conversation, that's a different thing that takes
deep pockets and a lot of courage. I'm talking about,
you know, I'm talking about a second tier city. You know,
you know, Atlanta used to be considered a second tier city.
But there's there's suburbs outside of Atlanta. This is you know,
you know, there's seven counties that surround it Greater Atlanta.

(32:14):
Go to one of those counties. Go to some place
that's twenty thirty minutes outside of Atlanta, proper, Go go
drive the neighborhoods and find a home with it in
a nice neighborhood with a tree in the roof, right, right,
but buy something, or go to Columbus, Georgia, or go
go to, you know, go someplace out right outside of Nashville,
or go someplace, you know, Memphis, wherever it. I'm not

(32:36):
telling you where to go. I'm telling you what. I'm
telling you what you need to look for, right, And
it's not just in the Southeast. These are just examples
I can give you because I'm taking I live in Atlanta, Georgia,
so it's just something around the top of my mind.
I grew up in Los Angeles, and you know, you
can go to you know, places outside of La Lynnwood
and you know whatever, you know, Long Beach, whatever floats
your boat. Long Beach probably actually not a second considered

(32:57):
a second tier city anymore. It was when I was
growing up. But you got the message right, and my
mother bought in Rialto, Rialto. That property went up too.
That's an hour outside of Los Angeles. So I want
you to buy it, rehabit and live in it. Okay,
after a couple of years, I want you to get
that home reappraised, right and hopefully it's gone up a

(33:20):
little bit in value. I want you to pull out
and gets you Your credit score has to be you know, decent,
Hopefully it's seven hundred operation hope can help you get
there if you're not there already. Right, And because once
you get a seven hundred plus credit score, you're no
longer black or white or Latino or whatever you want
to color. You know you think it is an issue
black or Latino or brown or whatever or a woman, right,

(33:44):
you're just green in the computer at midnight just says
yes when you putting that application in if you have
a very high credit score, because it's just analyzing, you know,
your risk factors is not looking at what color you are,
whether you're male or female. Okay, So you're gonna take
a home equity loan, home equity line of credit out right,

(34:05):
which by the way, in most cases you can also
get a tax deduction on if you check with your
tax pro You're gonna use part of the loan, the
home equity loan. And I don't want you to sell
that first house. You just want to extract a little
bit of equity. Don't over leverage yourself, all right, a
little bit equity. You're gonna buy another home, hopefully more
modest than the home you're in. Hood adjacent okay, a

(34:28):
working class neighborhood, workforce housing preferably. Right, You're gonna buy
that house. You're gonna rehabit with hopefully again minority and
women owned vendors in that neighborhood, plumbing, heating, lighting, landscaping,
and roofing that like I did with Promise Homes Company
when I built it, when I built up the company,
when I owned it, And then you're gonna rent that house.

(34:48):
Now you may say, well, John, I don't have you
know whatever, I don't have the total down the down
payment for the new house, or I can't apply enough
money out of my home on a home equity line
of credit. Okay, you've got somebody in your family that
makes less than sixty thousand dollars a year. Okay, you're

(35:08):
going to form a limited liability corporation in LC. I
did a whole podcast on different types of corporate structures.
Go back and listen to that podcast on which structure
to choose from. And this example, it's an ALC. You've
got somebody in your family who makes less than sixty
five thousand dollars a year. I forget the exact cutoff

(35:29):
or earned income task credit, but I know sixty thousand
dollars is an easy number. And they live maybe in
the neighborhood or the area that you're going to buy
this house. Maybe you live in La they live in
pick the state, Alabama, wherever it is right and wherever
you're looking at doing this, and you trust them, you
have a good relationship. They're a hardworking person, right, no

(35:49):
emotions here, and they have three children. They make Ashley
as a teacher in that community. They make forty thousand
dollars thirty eight thousand dollars a year. There aren't. They
have a right to the Earned Income Task Credit. It's
a bonus for working. They're gonna get, in this example,
six thousand dollars cash. You can do this any time

(36:11):
of year. Amend your taxes, okay, operation can help you
with that as well. If you've never filed for eiitc
hold on now, it's retroactive for three years. That's right.
You get three years worth of the Earned income tax credit.
That could be as much as close to twenty thousand dollars. Now,
if you're buying one hundred thousand dollars house as a

(36:33):
rehab project, by the way, you can buy it for
sixty thousand dollars because it's got a tree in the roof. Right,
it's not livable. You get a construction loan for you know,
a total, a construction purchase and construction loan for a
total of let's say eighty five thousand dollars or ninety
thousand dollars. And so that's the lender saying, I'm gonna,
you know, we believe the house is worth one hundred

(36:54):
and twenty five thousand dollars or one hundred and thirty
hundred and fifty thousan dollars whatever, We're gonna give you
a construction loan for up to seventy seventy five percent
of that number. Okay, a purchase number, A purchase and
can we can and construction loan. They're going to purchase
the house and give you a construction loan so that
you can rehab that house. Now, if you're confused about
confused about any of this, just simply go to my

(37:15):
Hope Financial Coaches. Sign up, by the way to the
one million Black Business Program or partnership with Shopify and
truest Banks and Bank of America, Wells farg and all
these other partners that donate expertise and provide access to
capital to business owners in that program, including black banks.
By the way. So if you get confused, go get

(37:36):
an appointment with Operation Hope. But I'm walking you through this.
So you're gonna get the earning task credit. You're buying
this house for a modest amount of money. You're getting
a construction and rehab loan, a construction loan or construction
or a purchase in construction slash rehab loan orright so
rehab loan. It's a purchase loan and you can rehabit
with your own money. The money from the earn income
Task credit and your line of credit that I gets

(37:58):
told you to take out on you homelexicuity, a line
of credit or yes, a purchase a construction and rehab loan. Okay,
that allows you to do all that. You may not
need any additional capital. Maybe you need to put a
modest down payment, okay, but I've just given you two
ways to do a down payment, either through the home
equity line of credit. Do not over leverage yourself. I
would not suggest you go over seventy percent loan the

(38:20):
value of your primary residence. You don't want to stress
yourself out, and make sure you can afford the payment
for the first trustee and the home equity line of credit.
You don't by the way, you don't have to move
money out of the line of credit. When you get it,
they approve you for it. You can let it sit
there and do nothing, okay, and then you get the
earned tax credit. In partnership with a member of your family.
In this example, they contribute the money, you contribute the

(38:40):
good credit, et cetera, et cetera, the purchase ability, and
you guys share in the upside of this property. Now
that's up to you how you negotiate who owns what
in that LLC. I want you to wait another So
in this example, you've waited. The first deal was you
bought the house your primary resid you had two years.
Now you're waiting. Now you've you've finished through construction of

(39:03):
the rehabit this purchase home. You've rented it out, Okay,
and maybe you've got a Section eight certificate from the city,
or maybe you know you've gotten some other tax benefit
from the city because they were so happy you rehab
this property. Looking at every city, state, and federal program
available when you're doing stuff like this, the third thing
you're gonna do is you're gonna take now equity from

(39:24):
this second home all right, or the or the lone
of credit from your first home okay, or savings you
for that aside, and you're going to buy a third
rental property the same platform, same area, so that you
can do maintenance on all those homes. Right. I'm ideally
you want to buy all these three homes in the
same city. But you can do this where the two
rental homes or another city loan as there's somebody you

(39:46):
trust taking care of it, or you can get there
on a regular basis. I would suggest someplace you can
drive to if it's just you doing this. You don't
want to have something out of state you got to
fly to. You will always over calculate how often you're
going to go there, Like buying a time share, I
will go together all the time. You ain't been there
in years, and you upset and it ain't. That's the
one thing that's a one kind of real estate investment

(40:06):
I do not like is a time share. The only
time I lost any money was when I bought a
time share and I broke my own rule. I made
an emotional decision, but I was trying to impress a
gentleman who I won't mention. But he was the president
of a prominent nonprofit when I was coming up in
south central LA. I loved this man, and he knew
I loved him and admired him, and so he used
my emotions to get a bonus for himself and got

(40:29):
me to buy this time share that he owned as well,
and he had a referral fee for me doing it.
And I've owned that thing for thirty years and it
has lost money. I mean, it is horrible. I got
his horror. I gotta pay maintenance fees. And you can
tell him emotionally distraught about this. I'm I'm still I'm
talking about it. Not even that's not even the subject
of this program. I I did a whole segment, by

(40:49):
the way, just on on time share, so you can
go and check that out. So that's the only kind
of real estate I don't love. I don't. I don't
think that's a that's a good deal, do you that?
For lifestyle and not for investment. It's like, you know,
certain kind of bioin not bitcoin, but some kind of cryptocurrency.
Bitcoin actually it seems to have stabilized, but some of

(41:11):
these cryptocurrencies, it's just speculation, and that's what timesharees are
it's just speculation, so and it's cool if you can
afford to do it, but just don't do you, just
don't use your rent money. So in this example, I
told you get a will, I told you get an insurance,
a life insurance policy. I've told you to get your
earn income tax credit if you qualify for it, or
find out somebody in your family who qualifies for it,

(41:32):
who may become your investment partner. I've encouraged you to
use an LLC structure for the investment properties. I've encourage
you to buy a home for yourself. I've encouraged you
after a couple of years, be patient, get a line
of credit against that home. Do not take that line
of credit and go on vacation. Do not go buy it.
Do not go shopping at the department store, do not

(41:53):
go Craig Cray because you have a line of credit.
And don't sell that house. Because you sell the house,
you're going to get a capital gains tax hit. And
there's another thing you can do when you sell a
piece of property, which I'll get to in a minute,
to avoid a capital gains tax hit. But if you
take a loan against the house. It's not taxable. In fact,
it may be tax deductible. There's a lot of covering

(42:15):
in this podcast, so you may have to listen to
it over and over again. So I want you to
buy the house, a modest home that you can afford,
right in a neighborhood that is a good street, decent,
and near where you can go to work. But may
not be all the floss in that you want to do.
That's fine, floss later, all right, buy it, live in it.

(42:40):
The worst house on the best block because of the
other homes of that block. Are gonna pull your values up.
And the neighbor's gonna be happy you bought this house
and you rehabbed it. It was an eyesore. They were
so happy you bought this out. They may bring you
a pie. You're gonna own that home for a couple
of years. Then you canna use equity and or the
other strategies I mentioned you, and you're gonna buy a
second home, and then you're gonna buy a third home.

(43:01):
No many mansions, nothing fancy, right, workforce housing. You do
that three times. You do the other things I mentioned
to you. You have a million dollar net worth in
five years now, that's the way you do it in
five years. That's one strategy. Another strategy is to start
a business. Now you can take some money you've been investing,

(43:22):
and I'm not gonna tell you where to get this
money from. I want you to put By the way,
four oh one K programs are easy free money. If
your employer has a four oh wing K program, you
need to be in it yesterday. That's free money. They're
putting a dollar in for every dollar you put in,
it's your money for life. Do not pass go without
putting money into a four to one K plan. But
you're gonna find and there are ways you can use.

(43:43):
You can use that money to help you with a
down payment. It's another topic for another day. I'm gonna
deal with that with a fan question. By the way,
so you can start a business. You can start a
franchise business with money you set aside right or an
investment group you put together through an ALLC however you
want to do it. And in this example, I would
not encourage you to do something that's never been done before.

(44:05):
I want you to do something that has been done before.
It's an existing business plan. So an entrepreneur is different
than a business person. An entrepreneur is doing something that
has never been done before. It's from a whole cloth,
creating value out of nothing. That's me, I'm crazy. An
entrepreneur works eighteen hours day to key from getting a job.
We're nuts. But that's the highest risk in the highest reward.
A business person woman or a businessman is using an

(44:29):
existing business plan, a franchise. You know that they need
a local restaurant or a drive through restaurant, or a
little food store, or a gas station, or a beauty
salon or a nail salon. Nel salons tend to be
lower cost, consistent businesses that are needed in a neighborhood.
Every neighborhood needs twenty different businesses. Figure out what those

(44:51):
twenty businesses are. See if there's a franchise model for
it that has a brand name attached to an existing,
proven business plan. And typically if you you know, do
it right, You work hard, you don't pull money out.
You know as you're starting the business, don't go still
getting don't go listen lease in Mercedes. You know with
money you don't have trying to floss again. Flossing is

(45:13):
the death nail of building wealth right, keep that money
in the business and within five years, if that business
succeeds right, and if it's a franchise, there's a high
probability it will approven. Franchise for a basic need in
the neighborhood. Once again, you'll be worth a million dollars
in five years. About five years, I'm going to give

(45:33):
you an example of businesses to start if you keep
listening to this podcast and tell all your friends and subscribe.
By the way, I'm going to break down different businesses
in coming weeks that you can start, and I'm gonna
break down how those businesses work, how they what are
the risks, what's the profitability, how you structure them, which
what businesses in your neighborhood are doing well that you're
driving by every day. You know, when I was coming

(45:55):
up and I got my financial literacy course when I
was nine years old, I saw a muffler shop at
the first time. I saw the nail salon as a
business for the first time. And in all these places
I've been walking by all day. Now I understood they're businesses,
you know, I mean real talk. The drug dealer neighborhood's
a business person. It's not an ethical business or when
it's sustainable, and it's not good capitalism because good capitalism

(46:18):
where I benefit, you benefit more, and bad capitalism is
where I benefit you pay a price for it. But
everything around you is a business model. That's what I'm
trying to get you to understand. So I just gave
you three strategies to become a millionaire. Right. We did
this in less than an hour. I gave you a
slow bake, easy methodical. Put it on remote control. You're

(46:41):
not hurting anything because it's your money, is not going anywhere,
You're not losing it. Way to build them at least
a million dollar net well worth in cash. Better than cash,
marketable securities is in stocks. And by the way, here's
something no one tells you. If ever you get in
trouble and you've got a stock portfolio that you've built up,

(47:04):
you can get a margin account alone from you to you.
Did you know that for as much as seventy percent?
Don't leverage this up. Please don't go saying John Bryan
told me, actually, get a seventy percent loan against my
own account. I don't want you get any loan against
your account. I'm just saying I don't want you to
be afraid of becoming an investor because you know your

(47:25):
money's not in your hands. You can't always locked up.
I can't, no, no, if you have marketable securities, high
quality assets that your own. By the way, when you
buy one stock of anything, you have the right to
all the financials of that company. You want to buy
one share of Walmart. I think it is a great company.
By the way, my friend Doug mc millan, CE of Walmart,
is co chair of Financial Literacy for All with me

(47:46):
and his coach and has done the force for my book,
Financial Literacy for All. And he's a great guy, great friend.
But whether there's Tarja, Target or McDonald's, McDonald's, or whatever
it is you love, you know, whatever business, Nike, whatever
thing you love. Once you invest, you know, into one
share of stock, you have a right of the same

(48:08):
rights as Warren Buffett. You have the same rights. It's
whatever investor you've heard about who is legendary. You get
to look at all of their financials, all of their
financial reports, all their strategies. You get to go to
those shareholder meeting. I think you should give your kid
a stockport, a stock certificate framed. They don't do stock
certificates so much these days because it's all digital, But

(48:29):
you can still order one, and I'll maybe put a
link in the video version of this podcast. I'll put
a link where you can get a company that I
that I know here in Atlanta does stock certificates. You
can frame and for your kid's birthday or graduation, whatever
and put it on their wall so they can see it,
and they can they have a right to now, it's

(48:50):
just like any you know, like the biggest shareholders. They
have a right to go to the shareholder meeting and
vote and all that stuff. But you can now take
a loan against your own asset if you get into trouble.
So I just tried to square out and zero out
all of the risk, all of the downside, all of
the naysayers. Right, And what are black people in brown

(49:12):
people not doing. We're not investing in the stock market.
Last time I checked, eighteen percent of us were invested
in stock market. That number might have changed, but it
was a low number. We're not investing in home ownership.
Only forty one forty four percent of us own a home.
I've just told you it's the easiest way to build wealth.
We're not owning businesses in a way that compound and
build well. Ninety six percent of our businesses are sole

(49:34):
proprietorships no, which basically makes it them a self employment project.
It means you have a contract basically, and you're just
doing work on your own schedule versus working for somebody
else on their schedule. You think it's a business as
a hobby horse, Okay, it's a hobby, and it isn't.
That contract is over the money, we'll run out. And
that's why we're training you at Operation Hope in our
Small Business and Entrepreneurship program, or really tuning you up

(49:56):
through our one million Black Business program. We serve everybody,
by the way, but we hyper focus on the group
that we think have been left behind, like groups like
black businesses and Latino owned businesses. But if you poor,
white walk in the door, by the way, or middle
class or whatever will help you too. Right. So the
point I was making is that most strategies we're not

(50:16):
like we failed at them, We just never did them, right.
I just gave you two examples, stock market and real estate.
And I've already told you that over in the long
arc of history, these things have never gone down they've
only over time gone up. Now somebody, somebody's going to
again say, John, what do you mean there was a
there was a crash market crash two thousand and nine. Yes,

(50:37):
stocks will go up, they will crash, real estates will
they will crashed. Be a recession, they will recess. Right,
they will dip and they will correct above the line. Hello, Now,

(50:58):
let me go back to something that I said I
would explain to you, which is a tax exchange. So
I bought a piece of property in Los Angeles for
a couple hundred thousand dollars. It was a townhouse. When
I bought it, I was very proud of it. I
lived in it. It went down in value while I

(51:18):
lived in it. I was encouraged by my broke friends
to sell it. Now they broke again. Watch what you
pay attention to for advice. Right, my broke friends didn't
even own a townhouse. They were written talking about you
need to sell that. Just look, look, leave your bad
advice in your bad in your well intentioned bad mouth,
like in your head. Keep just say hello to me.

(51:40):
That's That's all I want to hear. Is you know
he's an old Southern saying no matter how much I
love you, my son or my daughter. If I don't
have wisdom, I can only give you my own ignorance.
So out of love, we passed down bad habits and
bad advice from generation to generation. Is what we don't know.
That we don't know. This killing is what we think
we know. We never got the memo. That's my third
or fourth book. The thing is my third book that

(52:02):
we never got the memos. Well, we don't know that
we don't know, so stop listening people who have give
you bad advice on no experience. Right, So that my
friends quotation Marks told me to sell my house. Luckily
didn't pay attention to on the condo. I moved out
and rented it out to you know, a tenant, and
they were slow paying, but they paid, and I had

(52:23):
to pay the property taxes every year, but it was
mostly covered by the renter. And I forgot about it.
I said it and released it, just like I told
you to buy it, put money aside, set and release.
I just forgot about it. And because I just figured,
you know, can't be you know, over time it will
at least be worth what I paid for it. So
a few years past and I moved to Atlanta, and

(52:45):
I'm trying to buy a piece of property that's, you know,
about seven hundred and fifty thousand dollars. And I call
my friend, a broker in Los Angeles happened to be
a person of color, Mister low is his name, And
I said, can you check on this property from me?
And he said sure. I said, well, what do you
think I can get for it? He said, well, because

(53:06):
I had a couple of properties I was selling this one,
you can probably ge seven hundred fifty thousand dollars for
I said, what did you say? What did you say?
Seven hundred and fifty thousand dollars. I bought it for
two hundred thousand change. It had gone down one hundred
thousand change. My so called friends told me to sell it. Hello,
five years six years later, is worth seven hundred and

(53:26):
fifty thousand dollars. It's worth even more now I sold it.
You have a year to do a tax free exchange,
which means you pay no taxes. And I found the
property that I wanted to buy, and I purchased the
property that I wanted to buy with the proceeds of
the property I just sold, and I paid no taxes.
So there you go, and you want to check with

(53:48):
your tax man and all this stuff. You know, don't
listen to me and say John Bryant told me to
do this. I'm just giving you, you know, examples of
what you can do, but you need to check with
your tax pro and or my hope, financial coaches for
exactly what you should do or how to do it.
It's go by the way. It's called a ten thirty
one tax free exchange in the Revenue the Internal Revenue Code.

(54:11):
But again, tech, check with your tax pro and see
how it relates to you. Okay, let's get to the
fan question. I just made you a millionaire. Well you did,
because you're going to work hard at it. But you
know now, there's no reason why you're not going to
be better off after you do this when you than before.
I mean, it's like somebody said, why should I try God? Well,

(54:31):
because God cannot possibly screw up and mismanage your life
worse than you have. So give them a try. Let's
see how that works out. And given it, it says universe,
in my opinion, you'll probably be Okay. I can't guarantee
you that being positive is going to make you a success.
But I absolutely guarantee you the being negative will ultimately
make you fail. I want you to be positive. I

(54:52):
want you to employ common sense. Literally every group of
people in this country, two hundred plus ethnic groups have
succeeded using free enterprise capitalism and a market economy and
the things that I've told you. The only three groups
that have been left behind African Americans, not all Africans,
African Americans. I'm gonna deal with Africans versus Africans or
blacks versus blacks. Is that a thing? And that's not

(55:13):
a negative situation. I mean, blacks are blacks? Is that
a thing? I'm gonna deal with that in a second
part a separate podcast, because it is a thing. But
African Americans, not African Africans or African Caribbeans. African Americans
who had a special treatment negative in this country, and
who's really there? Our self esteeming, our brains were messed with,
Our minds and mindsets were messed with right and Native

(55:35):
American Indians okay, they didn't have a good run. And
poor whites, yes, poor whites are those three groups that
did not use free enterprise capitalism in a market economy
to succeed. Two of those groups actually use a government,
and in government will help you cover your downside. And
we need good government. We need civil rights, but you
also need civil rights. We need not just red rooms

(55:57):
stopping bad things like this police discrimination and bias and
all the negative stuff. We need some green rooms. Access
to capital, access to internships, extra apprenticeship, access to apprenticeships,
access to credit, access to financing, access to you know,
opportunity and aspiration. Can I get an amen? This is
the church that what's happening now? And what have you

(56:18):
done for me lately? All right? So fan question? Can
I use my IRA? Let me see who this fan
questions for, give her some credit or him some credit?
It's at This is on Instagram at Willy eight seven
six at d A w I L l I eight
seven six. That's on Instagram. So thanks for the question.

(56:40):
Can I use my IRA to purchase my first home?
The short answer is yes, you can use your IRA
and they will again check with the tax person, but
they will allow you. Irs will allow you to withdraw
up to ten thousand dollars from a traditional roth ir

(57:02):
without an early withdrawal penalty. If you want to buy
a home as a down payment. By the way, if
you come from you need to use the funds within
one hundred and twenty days to if you're going to
use the funds to buy a home and limit I
think it's ten thousand dollars begin check with your tax
pro and or check with Operation Hope. But by the way,

(57:22):
you check with Operation Hope, and if you are from
an underserved population, you could qualify for a ten thousand
dollars In addition to everything I just mentioned, you might
qualify for a ten thousand dollars grant you don't pay
it back, a down payment assistance grant to buy your
first home. It is so much stuff going on out here.

(57:43):
And what Operation Hope does is serves as a nonprofit
investment banker to sort of concierge your financial empowerment experience.
Whether you want to be a small business owner, you
want to be an entrepreneur, you want to be a homeowner,
you want to be an informed asumer, you want to
get your credit score straight, you want to become an investor,
you want to become a you know, a titan, a balla,

(58:07):
a balla adjacent. You want to become a billionaire or
a thousandaire, right, I just want to buy some are
you know we're going to help you get set yourself free.
In order to do that, you need self determination. You
need to self determine yourself and you're not going to
do that in the current market economy unless you understand
how the economy works. You're not dumb and you're not stupid.

(58:27):
You are brilliant. Because you've been doing so much but
so little for so long. You can almost do anything
with nothing. It's what you don't know that you don't
know that is killing you. But you think you know.
It's time to give you the enlightenment and the tools
that you need to set yourself free. Go buy Financial
Literacy for all the book. I want it dog eared,
I want it underlined. I want you to have it

(58:48):
on the bus stop, on the car pool and when
you're driving. I want you to I want you to
have a reas to the family meeting, have dinner once
a week or what a concept dinner with your family,
talk about money. Don't come on by themselves talking. When
you go to bed tonight, that's that's you know, that's
a pillow you purchased right, whether you're renting it or
where you're buying it, whether you own it, you know,

(59:10):
it's always always kills me. People talking I don't like capitalism,
as their commenting on the phone, they bought with capitalism
from a capitalist. They bought it from Apple or Samsung
or whoever. They bought this phone from a capitalist institution
with the money they made, the capital they made using
their human capital exchange for their talents and skills. They

(59:33):
got a paycheck. That's an exchange of human capital for compensation.
I cover that in a podcast too, the six versions
of capitalism from lowest risk to highest. Go back and
read I'm sorry, listen or watch that. So yeah, look,
we're you're in the system, whether you like it or not.
You might as well master it. That's what I'm talking about.
Master it. This is John O'Briant. I'm out. Money and

(01:00:11):
Wealth with John O'Brien is a production of the Black
Effect Podcast Network. For more podcasts from the Black Effect
Podcast Network, visit the iHeartRadio app, Apple Podcasts, or wherever
you listen to your favorite shows.