In this episode of the Executive Connect Podcast, Bryan sits down with Lane Kawaoka, author of The Wealth Elevator, to break down how experienced investors think about cash flow, risk, diversification, and tax strategy at scale. Lane shares how he transitioned from engineering into large-scale investing, why diversification across time horizons matters, and how sophisticated investors evaluate deals beyond marketing projections. This conversation is designed for executives, engineers, and high earners who want to move past basic investing advice and understand how real wealth is built through disciplined deal selection, conservative underwriting, and long-term strategy.

Chapters:

(01:10) From civil engineer to full-time investor

(02:36) What the Wealth Elevator framework actually means

(04:00) How wealthy investors invest off Wall Street

(05:38) Accredited vs. non-accredited investing explained

(07:34) How to evaluate risk-adjusted returns

(09:52) Why conservative underwriting matters

(12:50) Cash flow vs appreciation in market cycles

(15:30) Why time horizon manipulation changes returns

(17:15) Building a true diversification pipeline

(19:22) Real estate vs oil and gas vs private equity

(21:12) How investor relationships really work

(23:57) Why small checks can damage long-term access

(26:02) Taxes, depreciation, and oil and gas strategies

(29:11) Advice for high-earning corporate executives

(31:51) How to connect with Lane Kawaoka

Lane

(0:00) You’ve got to also kind of move fast, especially if you want to diversify your portfolio. (0:04) You can’t just sit around for the one deal because in reality you need to diversify into dozens and dozens of deals, in my humble opinion. (0:11) You’ve got to get going, right?

(0:13) You’ve got to build a pipeline of investing not only in many deals, but spread apart different time horizons.

Melissa

(0:20) Well, welcome to the Executive Connect podcast. (0:22) I’ve got Mr. Lane Kowalski. (0:25) Is that how you say it, Lane, today here with me?

(0:27) Kawaoka.

Lane

(0:28) Kawaoka.

Melissa

(0:28) Kawaoka, sorry about that. (0:31) So we’re here today to talk about wealth and wealth elevation and a little bit about real estate, it seems like. (0:38) So welcome to the show, Lane.

Lane

(0:40) Yeah, thanks for having me. (0:41) Aloha, everybody.

Melissa

(0:43) Yeah, aloha. (0:44) You’re calling in from Hawaii, right?

Lane

(0:45) Yeah, yeah, a little bit time zones a little bit farther behind everybody. (0:52) But yeah, we woke up out here.

Melissa

(0:54) Okay, all right. (0:56) Well, it seems like you started out as a civil engineer, which is ironic because my wife is actually a civil engineer and she does nothing with civil engineering now at all too, including running a podcast. (1:05) But can you tell our viewers a little bit about what caused the pivot from civil engineering to what you got going on today?

Lane

(1:13) Well, jokingly, I mean, engineers are broke, right? (1:17) We’re not doctors, we’re not dentists, we’re not lawyers. (1:21) You know, you’re never going to get super ahead being an engineer, unless if you go to a higher level sales or manager roles, right?

(1:30) But that’s pretty stressful. (1:31) But I realized this pretty early. (1:34) Started to buy little rental properties on the side.

(1:37) That was back in 2009. (1:39) By 2015, I had 11 little rental properties and then I went into larger commercial properties from there. (1:46) But I would say from my investor base, I definitely do see a lot of engineers.

(1:52) I think the analytical type, not afraid of playing around with a spreadsheet. (1:56) You’re there, so.

Melissa

(2:00) Yeah, you know, most of my buddies, so I went to engineering school too. (2:03) Most of my buddies are not in the engineering space anymore. (2:06) Maybe they’ve taken the route that you talked about, like the managerial route, or they’ve gone off and done their own thing.

(2:12) So it’s a very common path. (2:13) I think most people that are the analytical types like you’re talking about, tend to eventually find out that there’s better ways to make money than the way that they started, for sure.

Lane

(2:22) Yeah, yeah. (2:23) I mean, that’s where some professions work with people and engineers work with numbers. (2:30) So it’s kind of boring and not the most rewarding thing, I would say.

Melissa

(2:36) Well, tell us a little bit about your Wealth Elevator Framework. (2:39) It’s got a catchy title. (2:41) So what does that mean exactly?

Lane

(2:43) Yeah, I mean, so I wrote this book last year. (2:48) That’s, you know, I think it’s been well-received of the overall ideas that there’s different floors to this building, right? (2:55) And the elevator takes you up these different floors.

(2:59) When I was, you know, expanding my net worth, becoming an accredited investor and above, there was not really any books written for accredited investors. (3:09) You know, you see a lot of books out there for Dave Ramsey, Susie Orman, you know, how to get out of debt. (3:15) How do you keep a budget?

(3:17) You know, don’t go to Starbucks, get your latte, that kind of stuff. (3:21) But there was never really anything, you know, for the higher net worth investor. (3:26) And especially, you know, what do you do when you go over $5 million, $10 million, $20 million net worth?

(3:33) And this is, you know, like I mentioned, started with real estate pretty early. (3:38) By 2015, I had 11 rental properties. (3:40) And I think it was about that time I became an accredited investor, net worth million dollars or greater.

(3:46) And I started to meet all these accredited investors, right? (3:49) Before this, you know, my parents were not, you know, weren’t investing in rental properties. (3:54) I didn’t have a rich uncle.

(3:55) But I started to realize that the wealthy did things pretty similar, right? (4:00) They get their infinite banking life insurance. (4:03) They invest in alternative investments, real estate, oil and gas, all these things off Wall Street.

(4:09) And that opens up a whole new world of tax advantages too by doing a lot of that stuff. (4:16) And I was like, well, why doesn’t everybody do it like this, right? (4:21) Obviously I was stuck in cubicle land with my engineering coworkers back then.

(4:27) But so I put in a book and I realized that there was different stages to the game, right? (4:32) Like you just don’t go and buy an apartment building if you don’t have any money, right? (4:35) You kind of do what I did and you have to kind of step up and level up to each floor.

Melissa

(4:43) Yeah, yeah. (4:44) You know, I think ironically, the sort of like the securities laws are designed to protect the people that really need the extra yield and to have a really like a lower downside too, right? (4:59) You need the extra yield more when you’re trying to grow a smaller pot to start with.

(5:04) And ironically, you have more options for investment, you know, vehicles when you have more money.

Lane

(5:10) It’s kind of like- Yeah, I definitely think you’re right there. (5:14) It is, it’s frustrating, right? (5:15) Because I mean, not too long ago, I was a non-accredited investor.

(5:18) You know, my net worth was half a million. (5:21) I mean, I was still plugging away with little rental properties to build my net worth. (5:25) But you know, I was kind of stuck with option, limited options, you know, in that 401k world, that REIT world, which the problem with that stuff is you’re dealing with a whole bunch of middlemen.

(5:38) But once you’re able to invest directly, you know, through syndication, you’re kind of cutting out all those middlemen investing directly with the sponsored operator. (5:47) So there’s just less overhead. (5:49) I mean, you don’t have to pay for the big bank building or the big building in New York for the company, essentially, right?

(5:55) So, but at the same time, you know, we’ve seen some difficult times that come through over the last few years. (6:03) And you’re starting to see that, yeah, maybe it wasn’t the best thing to go in, you know, for non-accredited investors who can’t really sustain a loss, right? (6:16) Because in every risk, every investment, there’s risks.

(6:19) Typically, you’re having a bigger, you know, bigger risks like venture capital. (6:25) I just use that as an example, you know, pre-seed or even seed companies are going to have a lot more potential return than low rental property. (6:34) But you strike out way, way more.

Melissa

(6:37) Ready to lead smarter and invest wiser? (6:40) On the Executive Connect podcast, we unpack executive strategies for wealth and influence. (6:47) Hit the subscribe button now.

(6:49) Don’t just watch, act. (6:51) Right. (6:52) Yeah, I think that’s really generally a truism of finance.

(6:55) And I think when you’re on the operator or sponsor side, you start to understand it more too, because you’re the one trying to attract capital. (7:03) So the riskier your deals are or the riskier you are as a sponsor, the more you’re generally going to have to pay for the capital, right? (7:11) And on the other side of the spectrum, the folks that are investing money, if you’re being offered a higher return, there’s probably a reason why, you know, regardless of whether you understand it or not.

(7:24) So, I mean, how do you think about that just generally, like optimizing for risk adjusted returns, net of tax benefits? (7:31) What’s your general philosophy for that?

Lane

(7:34) Yeah, I mean, it’s not like you’re really going to find a screamer of a deal, especially like one of my criteria is like, I only work with sponsors and operators that have done, you know, just over a billion dollars, right? (7:47) You know, so a lot of those guys, they’ve done enough deals where they’re, you know, even if they find like the best amazing deal out there, they’re still going to give the LPs their fair share. (8:00) You know, whether that’s a 15, 16% IR, for example.

(8:05) If there’s any more, they’re going to increase the general partner split as they should. (8:09) And that’s just economics. (8:11) If people don’t think that’s right, probably you shouldn’t invest, right?

(8:15) Like that’s, you’re not a capitalist. (8:18) And I think that’s where, I, you know, you have a very fragmented world in a world of inexperienced operators just getting started, right? (8:29) Some of these guys will do 90, 10 splits, right?

(8:32) Which some unsophisticated investors will jump at, right? (8:36) They’re like, wow, 90, 10 split, I get 90% of the deal, but that, you know, I’m like, but guys, the most important thing is like, do you get your original capital back? (8:46) Is the sponsor proven, right?

(8:47) Are they going to steal your money, right? (8:49) For one. (8:51) So that’s where, you know, if you’re playing in a world of at least, you know, operators that have done at least a dozen, couple dozen deals, you’re typically not going to see the stated returns, projected returns dance around too much.

(9:06) And at that point, you know, at least we’re all firing down the range at the right target in a way, as opposed to just these random flyer sucker deals to put in there. (9:16) And from there, I think that’s where, you know, we bring in our experience. (9:20) We’ve operated, you know, dozens and dozens of these assets.

(9:23) So we kind of know what to look at. (9:25) You know, we take a look at the deal, no different than a family office. (9:28) And that’s what I kind of talk about in my book and how more sophisticated families look at these types of offerings.

(9:35) You know, you’ll get the PNLs, you get the rent rolls, and you’re not going to hear the guy spiel on the deal or their little marketing, you know, promotion on the email. (9:44) You’re just going to get the raw financials and the family office, or in this case, us, we have our own analyzers. (9:52) We know how to analyze the deal.

(9:53) We just need the raw financials, right, to input it into our spreadsheet. (9:57) Then we’re going to overlay our set of conservative underwriting assumptions. (10:02) For example, you know, we’re going to assume that that building is not 95% occupied, but maybe 92%, right?

(10:10) Or what is the reversion cap rate? (10:12) You know, the operator may use five and a half percent. (10:16) We may think it’s six percent, for example, which that’s going to drastically decrease the projected returns at the end of the day.

(10:23) At the end of the day, we’re underwriting the deal fresh ourselves. (10:27) And, you know, because not like we don’t trust the operator, we wouldn’t be investing with them in the first place. (10:32) But what I’m trying to do is normalize the deals that we get in and at least baseline, normalize them against each other, right?

(10:39) And essentially pick the best deal that is out there available at the moment.

Melissa

(10:44) Yeah. (10:45) Yeah, it’s striking to me. (10:47) I think if you do the math, how much of the types of deals that you’re talking about, which sounds like commercial buildings or maybe multifamily buildings, how much of the returns are really driven by that conversion cashflow assumption?

(11:01) You know, sometimes it could be like 50 percent or more.

Lane

(11:05) That’s the biggest movement. (11:06) I mean, if you wanted to, you know, for the operator to fudge projected returns on their underwriting spreadsheet, that is the one that is the top. (11:16) I would say the top three.

(11:18) One sells the fudge, you know, moving it up a half a percent one way or the other is usually like 20 to 40 percent returns at the end of the day. (11:28) So if you had a deal that they said, oh, we’re going to double your money, you know, which is 100 percent return. (11:34) If you normalize it, you know, say, you know, I’ve done this so many times, like if you take it from five and a quarter to five point seven five and increasing it of half a percent, which is an assumption that you’re selling it into a weaker market, which is great if you want to be conservative, that might bring those returns down from 100 percent to like 60 percent.

Melissa

(11:56) Right. (11:56) And that’s on a five year horizon, generally, or like what sort of horizon are you looking at for these projects?

Lane

(12:02) Yeah, I mean, you can run it on any time, time domain, right? (12:07) Typically, I like to just run things on a five year time horizon. (12:11) I mean, for most deals out there, you know, you’re not going to be in and out in a year, right?

(12:16) If not, then you have a loose value add plan, right? (12:19) It’s too easy. (12:20) You know, why isn’t anybody, everybody doing it?

(12:22) You know, or it’s based, if it was, it’d be based on dumb luck, market appreciation, assumptions. (12:29) But at that point, you know, you look at the reversing cap rate, for example, you know, that’s a big one to look at, I would say. (12:39) And that’s where I would say, you know, you can look at the occupancy, the rent increases per year.

(12:46) That’s a big movement there, too.

Melissa

(12:50) Yes. (12:51) I mean, you tend to focus a lot on cash flow. (12:53) It sounds like in your investing thesis, you know, why should people be focused on cash flow?

(12:59) A lot of returns really, at the end of the day, still are based on appreciation and appreciation assumptions. (13:06) But is it mainly because the cash flow carries you through the bad market cycles? (13:10) If you need to be able to have the optionality to sell whenever it’s most advantageous for you, or like, what is your general thesis there?

Lane

(13:18) To a certain extent, yeah. (13:19) On the surface, you know, if you have a property that hits 1.25 debt surface coverage ratio, where it more than pays its debt surface, you should be good to go, right? (13:30) There’s some other factors, like how long is your debt?

(13:34) You know, what we saw in 2023, when the market comes down 20 to 30%, and you’re forced to refinance, that’s going to be a world of hurt in that situation. (13:46) But yeah, I think, you know, going back to your question on you know, you were saying earlier, like the five-year time horizon, you know, the way I look at it is, if you’re in a race car, and if you and I were to compare our race cars, we typically go on a 0-60 tape measure. (14:12) Some cars have a higher top-end speed, some have a lower top-end speed, and a little bit quicker off of the line.

(14:21) But typically, you know, the 0-60 is the marker for car racing. (14:27) I don’t know. (14:28) I don’t race cars.

(14:29) I just watch a few Fast and Furiouses there. (14:32) But that’s why, you know, typically I like to run things out on a five-year time horizon. (14:37) One trick that operators will do is if the deal isn’t that great, they’ll run it off on a seven-year time horizon.

(14:43) And you know, you get that benefit of that hockey stick at the year six and seven, which will greatly increase your average annual return. (14:51) So that’s something you got to be careful for. (14:54) Again, that takes, you know, we run it on our own timelines, you know, but so that kind of, in a way, neutralizes the BS that we get from operators when they pull that type of stuff and run it on a six-year time horizon.

(15:09) But also, you know, some people will say, well, we’re going to refinance in year three. (15:12) It’s like, well, no, no, no. (15:14) More than likely we’ll not, right?

(15:16) Or maybe no more than this other deal we’re looking at, who is running it on a clean five-year, just straight exit at that point. (15:24) So again, those are some ways that we normalize these types of deals.

Melissa

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Lane

(16:24) Yeah, so everything I put in the Wealth Elevator book are things I’ve experienced myself. (16:31) Not that my journey is that special, but I think it’s a very common journey that a lot of people go. (16:39) You build your net worth from zero.

(16:44) It takes a while. (16:45) You buy some rental properties. (16:46) You get comfortable with alternative investments, but you get to a point when you become an accredited investor that buying these little rental properties is just too much legal liability.

(16:55) It’s nice to get in the LP position, but it’s just not scalable. (16:59) And that’s where you get into this world of, yeah, you understand how real estate works. (17:03) You understand a little bit how construction renovation works, but you don’t know how to look at these deals when there’s this kind of gamesmanship between the promoter promoting the deal and you are the investor.

(17:15) And then you’ve got to also kind of move fast, especially if you want to diversify your portfolio. (17:20) You can’t just sit around for the one deal because reality you need to diversify into dozens and dozens of deals. (17:27) I think I get this year, I just did my taxes.

(17:30) I think I got over the century mark, about 100 K ones I got last year. (17:36) Not saying that that’s diversification. (17:38) Maybe that magic number is double, but certainly five or six LP syndication deals is not diversification in my humble opinion.

(17:46) You got to get going, right? (17:48) You’ve got to build a pipeline of investing, not only in many deals, but spread apart different time horizons. (17:55) I would probably say four to seven years, be invested in a dollar cost averaging through that time.

Melissa

(18:04) Yeah, I think people underappreciate that point too. (18:06) Because like you said, the last few years has been brutal for real estate in certain areas of the country, at least, right? (18:11) So the different vintage of investments matters quite a bit for these types of investments.

(18:18) I don’t think it’d be any different than like an oil and gas investment. (18:22) Like if you invested in those at a certain period of time, they got caught, right? (18:27) During COVID and times like that.

(18:29) So how should people be thinking about that generally? (18:32) Should they be thinking about spreading their bets relatively evenly across some temporal space? (18:38) Or should they be thinking about really being able to recognize the best deal and sort of like doubling and tripling down on those investments?

Lane

(18:46) Yeah, I mean, I don’t give any investment advice because I’m not allowed to do that apparently. (18:51) But I’ll tell you what I do. (18:52) I mean, up until 2022, 2023, I had the vast, like 90% of my net worth in real estate, commercial real estate.

(19:01) Didn’t have any single family homes then. (19:04) Boy, did I get hurt. (19:06) But that was also what got me to the big dance at that point.

(19:10) Now a little bit wiser. (19:12) And now also seeing that maybe interest rates will not be 0% like it was the last decade. (19:20) Starting to make me scratch my head.

(19:22) And if not, that’s kind of the second reason for going after more diversification. (19:27) So what I look at more these days is more private equity, venture capital, investing in businesses. (19:32) Maybe a little oil and gas too, right?

(19:34) I mean, I think that’s the, you get in the real estate world, the apartments, office, which I don’t think I would, I don’t know if I’m a huge fan of that, but the mobile home park, self-storage, right? (19:48) It’s a standard options out there. (19:51) But what people don’t realize, and now I’m kind of getting more acclimated to it, there’s a world outside of that real estate world.

(19:58) Oil and gas is another ecosystem, right? (20:01) If people are Marvel, I like Marvel movies, right? (20:03) You got all these different worlds, these galaxies, right?

(20:07) And they all kind of collide. (20:09) And I think that’s the way of thinking about your portfolio, right? (20:12) You’re not just gonna get the earth dwellers, which I would say is kind of like real estate.

(20:17) There’s other things out there in the galaxy that same thing goes as a past investor. (20:24) You need to know the asset just well enough to invest and you need to grow your network to learn who are the players that you wanna invest with, but you don’t necessarily need to operate the asset. (20:39) And I think that’s where part of my whole wealth elevator, like we teach people how to invest, do some due diligence, but all that’s kind of in the book or on my website.

(20:51) The biggest thing is the community and the direct connections to the right people. (20:55) And that’s kind of where I think that’s our main thing that I do is like we do events here in Hawaii, people, other credit investors, meet other credit investors and that’s how you expand your network because at the end of the day, it is very much a relationship game.

Melissa

(21:12) Yeah, your network is your net worth generally for sure. (21:16) And you need to be comfortable with who you’re investing with. (21:19) What I always counsel investors on that have invested either in our deals or that asked me for advice is I don’t think relationships are forged over time too.

(21:28) So I generally think investing a small amount with an operator and developing that relationship makes a lot of sense. (21:34) Now it might be challenging if that very first deal that operator brings you is a really great one relative to the other ones, but you always have to be able to account for how the jockey’s gonna do too and not just the horse. (21:47) And nothing really beats that experience component.

(21:50) So someone that’s been in the game for 20 or 30 years, that’s seen all the various cycles really just has a different perspective than somebody that’s only been doing it for five years.

Lane

(22:01) Yeah, and going back to what I was saying earlier, I mean, all the deals are kind of the same, like relatively speaking. (22:08) Sure, some are in this location, that location, but unless you’re in, we’re talking about like angel venture capital deals where you’re looking to invest in open AI or the newest tech deal. (22:28) We’re talking real estate, et cetera.

(22:31) Like I said, if a deal is a streaming deal, the gender partners probably should take the extra profits. (22:37) Right, so whether you believe me or not, I mean, maybe that’s just like, just take it a little bit slower and don’t get like, I think that is a common thing that new investors get is they’re like, wow, this is amazing deal. (22:53) It’s like, well, dude, how many deals have you seen?

(22:55) How many girls have you dated? (22:57) This is the first one? (22:58) Well, maybe you should, I don’t know, maybe you should get married now.

(23:04) That’s like deals, they come all the time. (23:07) And by the time that general partner puts together the marketing package, which we do it too, right? (23:13) We’re like, okay, this is a strong deal.

(23:16) What do we want to go to market with? (23:18) What do we want to go out with projections? (23:21) I mean, every deal, the projections go out the window once you go into it, but it does set expectations.

(23:27) Expectations that hopefully will mean that you come back again the next time.

Melissa

(23:34) Right, right. (23:35) What’s your general philosophy on developing investor relationships? (23:39) Are you kind of of that same mind that it makes sense to date and start slow and then try to up investments from there or try to gather investments from investors at a small amount to start with, prove yourself and then be able to ladder up or kind of what’s your general thought process there?

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Lane

(24:29) Yeah, I mean, I think everybody starts off pretty slow or they do their standard small blind. (24:36) I mean, larger investors might do the 250 starting out, but I think what you’re saying earlier is very prudent, right? (24:45) Start off small.

(24:47) As a sponsor and general partner, I don’t like to take checks under 50, right? (24:54) Like you get under that mark, you just get a different breed of investors that are just probably not a good fit. (25:02) They should probably just go invest in the crowdfunding websites that are just broker dealers with that extra middleman layer and invest what makes them feel comfortable, a thousand, $5,000 at a time.

(25:16) That usually is kind of a turnoff when people are trying to shortchange you on 25 grand. (25:21) If they knew the industry, they would kind of know that that’s not really good etiquette. (25:27) I mean, you can do it.

(25:28) You guys can do it. (25:28) You can just do whatever you want out there. (25:30) But I think it’s usually a two-way street between operators and passive investors because we do that too, right?

(25:39) Like we’ll aggregate ourselves and go into a family office deal where everybody’s writing $5 million checks. (25:46) It’d be silly for us to try and get into that deal with anything under a million dollars, right? (25:52) And if we go in there and say, well, we’ll bring in 250 to test it out, we’d get laughed away and they would never tell us that, but we would just burn the relationship.

Melissa

(26:02) Right. (26:03) How do you think about taxes in general? (26:05) I know real estate has great tax benefits.

(26:07) There’s some special tax benefits for oil and gas investing. (26:12) You kind of think of that as like gravy or do you really kind of try to factor it into your investing assumptions on the buy side?

Lane

(26:20) Yeah. (26:20) I mean, unless you’re talking about opportunity zones, which I’m not a huge fan of because usually you’re in like junk areas, right? (26:27) I don’t like to invest in junk areas that take five to 10 years to turn around.

(26:33) Like all the taxes stuff with real estate is just a deferring game, right? (26:38) When you exit a deal, you have to recapture the depreciation, which in itself is playing. (26:45) If you’re able to leverage that game, that’s great for you, right?

(26:47) Like time value of money. (26:48) If you’re able to shelter 50, 100 grand of taxes today and next year, then you could place it and maybe in five years, that grows to even more. (26:58) And if you’re able to play what some people will call the lazy 1031 exchange where you always have a pool of suspended passive losses offset these gains, it can be a beautiful thing.

(27:10) At some point, you had to get off of the, what they call it, the golden hamster wheel, where we’re perpetually going into deals. (27:18) I think oil and gas can be a great opportunity for that. (27:21) I will say a big misnomer that we see a lot is passive investors.

(27:26) I mean, real estate’s great. (27:28) You do have some incremental tax benefits, especially in the beginning. (27:32) But unless you’re doing real estate professional status, you’re unable to attack your ordinary income.

(27:39) And not a CPA here, but if people need a referral to a good one, they can let me know. (27:43) But I think that is a big misnomer. (27:47) So for people with high incomes, typically over $300,000, $400,000 a year at least, there’s not many things that you can go after.

(27:57) Land conservation easements was a thing that people would use at one time. (28:01) They’re very risky. (28:03) I wouldn’t do it.

(28:05) And there’s the oil and gas stuff, right? (28:08) That’s nice to drop your income. (28:09) I think, what is it?

(28:10) You probably know better than I do. (28:11) You can drop your AGI 30% downward. (28:14) So that kind of takes the edge off a little bit.

Melissa

(28:17) Yeah, there’s IDC tax benefits. (28:19) And I think they just changed with the big beautiful bill as well. (28:24) That’s one of the exciting things about my wife and I for the opportunities is high active taxable income.

(28:31) The idea of suspending the losses in real estate isn’t really super appealing.

Lane

(28:38) Yeah, I would say every situation is different. (28:41) I mean, that’s why going back to, I like to jump on a call with my investors, build that personal relationship and share ideas. (28:51) I always tell them like, look, I’m not giving any financial or legal advice, right?

(28:55) But maybe these are some ideas to talk with your service provider, your CPA, right? (29:00) And these are just the things that I’ve kind of picked up talking to thousands and thousands of investors since kind of getting into this game a decade ago.

Melissa

(29:11) So, I mean, I think a lot of our viewers or listeners are corporate executives for the most part. (29:17) It’s Executive Connect podcast and they probably fit in the income profiles that you were talking about earlier. (29:23) What advice would you give to folks that are in that income range that are really struggling with letting go of the corporate job that’s paying them really well, but they really do want to be able to ladder up their earnings and their savings to be able to, you know, make any sort of adjustment in their career or their life less painful than it would be?

(29:46) Is it really mostly just to focus on cash flow or like how should they be thinking about that?

Lane

(29:52) Yeah, I mean, something I see very common when I talk to folks in that position is another option on the table is if they have a working spouse or going part-time or doing consulting on the side, that usually will drop them out of that highest tax brackets, right? (30:13) So if they’re making $600,000, they go part-time or their spouse stops working, you know, that drops them, you know, into the $400,000, $300,000 range. (30:23) The bad news is you make less money, right?

(30:26) So it’s this concept that I kind of call like for some people, you know, especially if their net worth is still growing, right? (30:34) Under $2 to $3 million, right? (30:36) If your net worth is under $3, $4 million, you still got to go, right?

(30:40) You got to burn hot. (30:42) You got to pay it. (30:43) You got to make a lot, pay a lot of taxes.

(30:45) Too bad. (30:46) That’s how it goes. (30:47) Sure, there’s other things you can do like oil and gas, that type of stuff.

(30:51) But it is what it is, right? (30:54) And that’s the kind of the beauty of my book, right? (30:56) Is you get to a point on the third floor of the wealth elevator, there comes an option.

(31:01) You know, maybe your spouse wants to stay at home with the kids. (31:05) Maybe you want to, you know, just take a hiatus. (31:09) You know, maybe it’s just one year that you dropped your income down and you, you know, do some other things and you relax a little bit.

(31:16) More for quality of life. (31:17) And that also drops your AGI down, right? (31:20) There’s all these other ideas.

(31:21) And I think that’s where like, you know, I tell my folks, like, don’t take my ideas. (31:26) Just this is where you got to meet the ecosystem, right? (31:29) Meet other people doing these types of things.

(31:31) And, you know, they can live the tale and tell you where the mistakes were. (31:36) But yeah, you’re definitely not going to find these ideas from the cubicle dwellers or your coworkers still stuck in their at race.

Melissa

(31:43) Yeah, for sure. (31:45) Well, Lane, thanks for being on today. (31:46) Did you want to give our viewers and listeners an idea about how they could find you or connect with you?

Speaker 1

(31:51) Yeah, they, they can check out my book, The Wealth Elevator on Amazon. (31:56) If they pick up a book and email us, the receipt will come up with the audio book and the PDF version for free. (32:03) They can email team at thewealthelevator.com.

(32:07) And yeah, if they’re a credit investor, they can reach out personally lane at thewealthelevator.com.

Melissa

(32:12) All right. (32:13) Well, thanks for being on the show today. (32:14) That’s the executive connect podcast.