In this episode of the Second Life Method Podcast, host Kelly Maxwell delves into the metaphorical 'spider bites'—the uncomfortable truths and challenges—that entrepreneurs often face on their journey to growth. Drawing parallels between the unexpected pain of a spider bite and the unforeseen hurdles in business, Kelly offers insights into navigating these challenges effectively.
In today’s episode, Kelly discusses poverty and how it affects the financial mindset of people all around the world. While you don’t have control over where you start in life, you do have control over where you go and this episode will break down some of the fundamental components that make escaping poverty possible. Ultimately, achieving financial freedom is possible for anyone! 04:32 Why you should care about different perspectives 15:33 The pitfalls of poverty 26:38 A glimmer of hope 34:58 Ho...
In today’s episode, Kelly talks about what to consider when investing in real estate for both new and seasoned investors. Making good investment decisions will help you avoid future financial trouble and ensure that you get the biggest return on your investment. Maybe you’re buying your very first house for you and your family. Or maybe you already own several single-family homes and are ready to start investing in real estate. The categories discussed in this episode will help you on your path ...
In this episode Kelly talks about the importance of communication and putting your ego aside in order to nourish relationships. Speaking without ego is so you don’t make enemies everywhere you go and call attention to yourself, and then listening without defense means you can listen to someone who maybe you have offended in a way that will cause your relationship to be better and improve as you get into new territory with these people by being open minded and learning to listen without taking of...
Kelly is doing a follow-up on the Depreciation episode from yesterday and talking about 1031 tax exchange, which means essentially you pay no taxes when you sell a property and technically you postpone the tax, including any of the taxes associated with depreciation. This is not like a tax free situation, but rather you’re postponing the taxes you will need to pay and “kicking the can” down the road for that payment to a later date. You’ve gotta do everything right and there’s a whole etiquette,...
You’re probably wondering how on Earth the government is supposed to pay you to invest. Depreciation is one of investors’ and accountants’ best kept secrets for saving money at tax time, as well as helping people keep their wealth. The government provides a financial incentive for you to invest in housing and real estate, so if you wanna know how that works and how you can be paid to invest in real estate too, stay tuned for this episode. Kelly is reaching kind of a long stream of technical epis...
In this episode Kelly talks about how much profit goes into your pocket when you sell an investment property. It’s starting to be tax time again, so gain on sale is something you will want to understand. It is the taxable profit that is realized during the sale of a real estate asset or property. Because gain on sale is a pre tax measure, the actual amount of money that an investor takes home beyond the gain of sale depends upon his or her own personal tax rate and will require further calculati...
Today Kelly talks about the adjusted basis. This is a simple calculation that’ll help you understand more clearly what your position is in a given deal. What your REAL position is, both in a financial sense for the purpose of calculating profits and taxes, but also to learn to identify value and gain an advantage in a deal where other investors can’t identify that value, or you’re seeing things that they don’t see. It’s these little details and subtleties, especially in the tax code, that make i...
In this episode, we’re going to understand capitalization rate, and what makes a good deal and why. A commercial property, like an office building or apartment complex, is valued according to how much income the property makes, minus its expenses. Residential properties, such as singles homes, are valued differently, basing things on how much people are willing to pay and how much financing the bank will give to the lendee. Investors, brokers, and banks use the term cap rate in every day investi...
Today’s episode is a lot of fun. Kelly talks all about Net Operating Income and millions and millions of dollars, how those real estate investors who invest in commercial and multi family apartments end up with millions of dollars of what seems like liquid cash that they can go invest wherever they want. How do they do that? NOI is one of the most important calculations you will make as an investor and will be how you repeat what they do. Examples of operating expenses 2:05 Formula for calculati...
Have you ever thought about making an infinite financial return on your investments? Kelly had never thought about it either until he read it in investing books and he started to hear this term, infinite return, and he became very fascinated. So today he has a very special episode for you all on the break-even point, the moment in which we cross over and start to head over into Spring and Summer after the darker months. Starting a new business 1:40 Finding the best info and break-even point 2:45...
In this episode, Kelly wanted to show you a very useful investment trick that you can use the next time you’re out looking for properties, which is called the Rule of 72’s. This is kind of an older trick used mostly by a lot of the veterans of investing, but the definition is the rule of 72’s allows the investor to calculate the approximate number of years it’s going to take for an investment property to double in value at a particular rate of compound interest. So if you’re trying to figure out...
This is a topic that makes investors very nervous, but we must reckon with it. Kelly gets questioned all the time about how much cash someone should put aside for a rainy day in real estate. The words vacancy and credit loss make their ears sting, so today Kelly talks about exactly how much money someone should put aside for that inevitable situation where a tenant fails to pay rent. You are entitled to 100% of the financial good along with the bad 2:30 An example 4:40 When vacancy and credit lo...
This is something that has bothered Kelly for a while. It’s about manners and ethics, and don’t make a fool of yourself out there, which a lot of people end up doing. It’s a trap that many fall into where they brag about charging a client a lot of money for something they did very little work for. What you SHOULD be doing is looking to see if you actually add value to your clients’ lives/businesses, which is the inverse of that behavior. You can’t build a solid clientele and business by ripping ...
This is a shorter episode for you guys today. Kelly wants you to be getting out there investing, and building your money and empire. Listen to him explain this quick and easy napkin investment calculation metric to make a part of your due diligence process to help make your loans be more likely to be approved, which means you can buy more properties and make all the wealth and cashflow your little heart desires. What is debt coverage ratio? 1:00 Using this with banks 2:55 An example 7:45 “Once y...
There are times when all the stress of career, family, the risks in the market, changes in the government, and everything that’s happening, it all just gets a little overwhelming. There are times, while running companies especially, when things start to really feel like a grind and it becomes really hard to just keep going in the path that you are going, in order to run a small-medium company. Despite all these issues, there still seems to be those individuals who just seem superhuman who reach ...
Having a one million dollar net worth would make a huge difference for an individual and their family. Most people have thought about what it would be like to obtain that level of wealth, but most people haven’t actually considered the actual possibility of obtaining it. If you set the right goals and put in the right amount of effort, you can be the financial cornerstone for yourself and your family, on whom they can rely and feel a sense of security, and to whom they can look for wisdom and gu...
As mentioned previously, Kelly was in Las Vegas for the ISSA show, which features all the biggest facilities, maintenance, and cleaning companies brands from across the world. He noticed there was a large amount of businesses there that were geared towards helping you run your service business on a mobile phone, using apps that would simplify operations. Kelly realized a lot of the tech CEOs were very anti-social, which therefore turned him off and only confirmed with him that he did not want to...
Today Kelly is talking about an enormous investing hack that very few people talk about, which is making a list and writing down the things you have to do, and then do them one by one until you’re finished. He tells his franchisees this all the time. If they forget to do something, say the franchisee has maybe 3 or 4 main tasks that they really need to get done, to maybe onboard a new client, if they forget to do something on that list, his first question as a franchisor is “Did you write it dow...
In this episode, Kelly talks about the former Bigger Pockets host, David Greene, who a few years ago was let go from his host position, and then due to popular demand, started his own podcast, which soon became a hit show. The David Greene Show has broken into the top 10 business podcasts on Spotify and has done so on Apple Podcasts as well. Listen to Kelly discuss the direction and evolution that online education on investing has taken and why it’s good to be seeking the right kind of education...
Thanksgiving can be a great time to spend with family and loved ones, but it can also be a bit challenging at times to get along with those same people when everyone comes together. In this episode, Kelly gives some quick tips from his own experience and learning on how to interact with your loved ones this Thanksgiving, how to make sure it’s a good productive experience, and to reflect on some things you’re grateful for, living in a country where you’re free to become exactly who you want to be...
Kelly Maxwell is at the International Sanitary Supply Association show in Las Vegas. He looked at complete business software for JanSan companies, an aroma diffuser company out of Shanghai, and some technology companies he found could be very useful for a franchiser as himself. Join him today to hear some of the great things he saw and found could be useful for business owners. What Kelly has done here 2:15 Smart Inspect app 4:00 The Lavo Bot 6:00 Smart restrooms 8:00 “They tap into the power of...
Today Kelly talks about this awesome acronym he learned recently on a trip he went on while in the back of an Uber in Atlanta Georgia. The acronym is W.A.T.C.H. and it stands for Ways, Actions, Talk, Character, Heart. Kelly got talking to his African American driver, who discussed the plight of colored people and that they represent our nation’s greatest untapped resource in terms of labor, talent, and innovation. Kelly works with and helps many people of all backgrounds, including minorities an...
Some of the financial benefits of leasing your commercial vehicles for your company might surprise you. Kelly shows how having a company fleet can actually increase the value of your business, and help you recruit the best people, and help people long term. If you currently have company vehicles or will have them soon, and you have a franchised service business, perhaps you will consider some of this advice for your business. An example from Kelly’s life 3:20 Kelly’s first fleet 6:00 Tax savings...
When things aren’t going well and you’re a little bit broke, it can feel like everyone is richer than you. Everyone has what they need and you don’t. Everyone has a nice car, houses, and it’s all figured out. Then when you get a little money, you start feeling that you can do it too, but there are certain people out there who think a millionaire is a millionaire is a millionaire. They’re all created equal. That is not true. Net worth millionaires have a total value of assets that equal at least ...
Today Kelly gives his listeners some sound advice, which is to take your cues from wealthy people. It doesn’t matter if this person was accomplished at one point in time, or if someone is telling you to listen to someone specific that did such and such. Learn from the people who are actively out there, doing deals, and who have active relationships and contacts, and who have a finger on the pulse of the market. A sales person could be your stock broker, your real estate agent, the guy you invest...
Compound interest every time! Kelly helps you clear up this simple investment principle, as well as a few others over the next couple weeks, so come back to learn more in addition to this episode. Einstein called compound interest the 8th wonder of the world, saying “He who understands it, earns it. He who doesn’t, pays it.” The implications of compound interest are massive compared to investments earning simple interest. The definitions of each 1:25 Calculating simple interest 2:20 “The definit...
Kelly talks about CEO vs Founder in this episode and the essential difference between the two. We hear these terms a lot online, and the term CEO for example sounds very sexy and there’s some prestige. It means you’re a leader and there’s some kind of influencer of people and you have some authority. The other term can mean great wealth, and it can command respect. Both are considered successful by society. “‘Forget CEO. Settle for the title of founder.’ I thought that was good advice. Sometimes...
Many investors’ North Star is this cash on cash (COC) return measurement of investment. COC is a static measure. It’s simpler to calculate and takes into account fewer factors than IRR (Internal Rate of Return). With the election on the horizon and some changes happening in the country, these measurements will or should become very important to you over the next couple of months. Static measure is a measurement that doesn’t take into account time. Static measurement 1:30 Doesn’t take into accoun...
Kelly talks about IRR, or the Internal Rate of Return in this episode and simplifies for those of you who have a hard time understanding exactly what this means. Why do investors need this investment measure? Many just make sure the cash flow is positive and don’t bother to calculate the investments beyond the basics. Why would there be a debate about these metrics? This may seem slightly nerdy, but it’s for good reason, because our assets are on the line. A good reason to do this 7:30 Why you s...
