Why Real Estate Investing Alone Isn’t Enough to Build Lasting Wealth | Mike Milligan

Mike Milligan (00:00)
Real estate investing is like a subcontractor. It’s one small piece of a bigger plan. If all you’re doing is real estate investing, it’s kind of like having a house with only a kitchen in it because you haven’t diversified your living style. So what we look to do in the financial planning world is we look to use the tax code primarily to be able to reduce expenses that you have because taxes are the biggest expense you have.

Then we look to build an income stream, whether that’s for retirement or passive for you to be able to win back your time so that you can go live life.

Meghan Escobar (02:05)
Hello everyone. Welcome back to Real Estate Pros Podcast, hosted by Investor Fuel. I am your host today, Meghan Escobar, and I have the pleasure of sitting down with somebody a little outside of the box here. You know, we typically have people in the real estate industry specifically—builders, investors, loan officers. Today we’re bringing somebody on who has a little—a little bit of a different offer. And he is the owner and founder of 1.oak Financial, focusing on financial planning for individuals in the real estate space as well as entrepreneurs. But I truly think our audience is going to be able to walk away with some great insights today, learning about what it is that Mike is doing and how he is presenting his business to people in this industry. So Mike, thank you so much for taking the time to be here.

Mike Milligan (02:58)
Meghan, it’s great to be here.

Meghan Escobar (02:59)
Perfect. Let me dive in. And for those people that are listening in right now who might not know who Mike Milligan is or what 1.oak Financial is or what financial planning is as a whole, can you give us a 30,000-foot view of what it is that you are focused on these days and the markets you’re operating in?

Mike Milligan (03:18)
Yeah, I mean, I’ll even give you a real estate example there. You know, most people can go out and, you know, if you’re a developer or you’re just trying to find a dream home, you first have to go out and find a lot to build the house on. And then, you know, at that point in time, you could go to Home Depot because they got everything you need, right? They’ve got the cinder blocks and the two-by-fours and the sheetrock and the wiring and the electrical work. They’ve got the countertops and the cabinets, they got paint, they got roofing material. You could literally buy a lot, go to Home Depot, and have a house. But that is not what people do. People buy the lot, they go to an architect. The architect draws the plans for them. When the plans are done, they select the builder. The builder gets a subcontractor, and the subcontractors go to Home Depot, right?

So a couple of the steps are the same—lot, Home Depot, or whatever your supply store is, right? But like when people are working on the American Dream, their house, you know, things that they’re building, right? Helping other people hit their, you know, American Dream. There is an architect, a builder, and subcontractors, right, involved in that. And that’s really what like financial planning is. Financial planning is the architecture, the building, and the subcontracting out there.

You know, real estate investing is like a subcontractor. It’s one small piece of a bigger plan. If all you’re doing is real estate investing, it’s kind of like having a house with only a kitchen in it because you haven’t diversified your living style. So what we look to do in the financial planning world is we look to use the tax code primarily to be able to reduce expenses that you have because taxes are the biggest expense you have.

Then we look to build an income stream, whether that’s for retirement or passive for you to be able to win back your time so that you can go live life. Then over time—there have been short-term periods of time where if you needed cash or you needed a crunch, think 2007, ’08, ’09, where there was a lot of builders, developers, real estate investors who went bankrupt during that time. That’s why diversification is so key. Then finally, we all have an exit plan in this, right? We want to end life well, whether that’s coming to Puerto Rico and living where I live or traveling or buying a house on the lake in your state. We all have an exit plan, but we also need a health plan at the end. So we build long-term care plans and ultimately a legacy plan, so we don’t leave a mess to the next generation. So 1.oak Financial is about building the one-of-a-kind financial plan. I wrote a book about it. It’s available on Amazon. It’s called The One-of-a-Kind Financial Plan. I also wrote another book called Retirement Déjà Vu. But what we look to do is we help entrepreneurs take—instead of being like focused on one small thing, we build a total picture for them about what their financial life should be. Because at the end, money is just a tool. It’s not something we worship. It’s a tool that we use so that we can go out and live really a one-of-a-kind life.

Meghan Escobar (07:15)
I love that. And you know, one thing that really caught my attention when we were chatting before this podcast was your passion is to educate, coach, and plan.

Mike Milligan (07:25)
Yeah.

Meghan Escobar (07:26)
Can you talk to us a little bit more about, you know, why that’s so important? And another thing that I like about what you said is when you referenced like building the house, right? You have to first find the land and then like building the foundation. But having a strong foundation is the most important, right? Because you can’t get to the top or it’ll crumble right down if you don’t have a strong foundation. So—

Mike Milligan (07:49)
Yeah.

Meghan Escobar (07:50)
—and I think that goes hand in hand with, you know, having the proper education, making sure you’re being coached, and you have the right information to create that one-of-a-kind plan.

Mike Milligan (08:00)
Yeah, and I’m not—in the term of education, I’m not talking about like going to get a college degree or a master’s degree. What I’m talking about is more like common sense, tactical education. We have, you know, and if we all were truly honest with ourselves, there’s more about finances, about money, that we don’t understand than what we do understand.

And, you know, if you’re solely focused on real estate investment, it doesn’t hurt to go out and learn more about the tax code or about retirement income or about other solutions, right? It doesn’t hurt to do that because one day you may need that. You may need a transition to that. An education earned along the way—tactical education, ability to negotiate. And you negotiate better when you’re coming from a position of strength. And so, you know, the first three words in my personal mission—educate—is I think everybody should have a firm grasp of personal financial planning. And I’m not talking about like what they teach in high school, right? Because high schoolers are not ready to learn about stocks and bonds and real estate and mortgages and all that crap, right? Their brain is focused on, “Where am I going to go to the prom?” right? Or, “What am I going to do this weekend?” or, “What’s my college choice?”

You know, education—financial education—we just got it really backwards in the United States. And if you think about the reason why it’s backwards, it’s because if everybody on Wall Street, New York bankers, investment bankers, even like Charlotte, North Carolina, Dallas, Texas, where they’re becoming big financial hubs—if all of the education or all of the knowledge sits in these ivory towers, Wall Street-type bankers, well, they say things to you like, “Well, just trust me, I got it.” They say things like, “I would put my grandmother in this,” or “I’d put my mother in this.” But that’s not really education. You’re abdicating—you as the consumer—abdicating responsibility to something and something you don’t really understand. And as the world becomes more complex, the financial world becomes more complex, it gets harder to know what to go into. And so at the end of the day, what you end up with is underperforming assets, right? You may make 18, 20, 24% in your real estate portfolio, but you may have a million dollars sitting in cash in the bank earning 1%.

And so are you really optimized? You may not understand how to properly leverage different assets to have money doing two or three jobs at one time. And so that’s why I think education is so important.

You know, on top of being like the chairman of 1.oak Financial, I also teach at a university. I teach personal financial planning because I just feel so convicted about it. And then the second part of my personal mission is coach. And I work with financial planners, financial professionals around the country, entrepreneurs, to help coach them to navigate the tax system, to be better for their clients, and ultimately to help the people that I’ll never be able to help.

Meghan Escobar (11:35)
You know, that is something that I hear often for all entrepreneurs. And I don’t think you should feel bad because it opened up so many doors. I mean, after COVID or during COVID, I mean, this is where millionaires were being made.

Mike Milligan (11:51)
Well, I hate that. One of the things that I think it opened is it opened up people’s minds, right? It really let them realize that the status quo or the one-size-fits-all or the cookie-cutter way of doing things was not necessarily the way you had to do it, right? Right. We got shut down, we were living at home, and we connected on Zoom. You know, people still stayed connected. I mean, people died—don’t get me wrong. People got sick and people lost their business. People had to borrow a lot of money to just keep their—but like I felt like what COVID did is it allowed people to open their minds to a new way of doing things. I wish—my hope is that like our company, 1.oak Financial, in helping people be one-of-a-kind, realize—you know, I think what we do also is we help people open their minds to what life and the possibilities can be because it’s a different way of thinking.

And I hope we never have to go through something like that again to continue making change. I mean, listen, data centers are being put up everywhere, right? AI is here. There’s a shortage of real estate out there. Rents are through the roof and incomes are not going up. There’s a lot that is changing that, I’ll be perfectly honest, I think it’s permanently changed. It’s not going back to the way it was before.

And the sooner we embrace that—you know, hopefully we never have to go through another event like that, but the sooner we embrace that, the sooner we realize the opportunity that exists. That’s right. And that’s where—that’s really where we need to be pushing toward.

Meghan Escobar (13:22)
That’s right. You know, one thing that I like that just kind of downloaded for me when you said, you know, you hear that history repeats itself, it’s gonna happen again. But I love the shift that you put on it because, you know, another thing that I like to say is you never start over, right? So it’s like you always start from where you’re at. So you learned maybe that experience or whatever you went through in life, right—it wasn’t great, but you learned from that experience. So you’re never starting over; you’re starting from where you’re at.

Mike Milligan (13:52)
That’s—

Meghan Escobar (13:52)
Yeah, beautiful. Thank you for sharing that. So let me ask you this: What are you, Mike, focused on scaling or solving next? You know, what’s the next real big goal for you personally or with 1.oak Financial?

Mike Milligan (14:06)
I think our big—you know, I used to have this vision of being in every state and every major city with our logo, 1.oak Financial, on every major building, right? I wanted to scale and be in major downtowns at the top of towers. I think my goal has shifted, right? Not that I don’t think we can be that and not that we will not do that, but I think it shifted to being present and never missing a moment with everybody that we talk to. I mean, like we’re sitting here recording this. I mean, I cannot go and do a financial plan for somebody I’m meeting with at noon today or 2:00. I have to be present here. And it’s one of the things we talk about in our company all the time, is to be present. I think that—I think being present, the cumulative effect of that over and over again will get us to our eventual goals.

The—I mean, the one thing that we, you know, we always are concerned about is, what if regulation changes? What if the IRS takes a different stance on different—I mean, we can’t control that shit. I mean, I’m sorry to say it like that. We just can’t control it, right? We can control—you know, I can get up in the morning and go work out. I can come and get on my microphone—I can get on my microphone and talk to great people and try to come out of obscurity. That’s my—that’s the thing I’m trying to solve every day. How can I come out of obscurity? And when we come out of obscurity, the 20 to 30 new people show up on my calendar a week, or 30 people show up on Joseph’s or Marcus’s or January’s or, you know, everybody that works in our company—they show up to come and try to get solutions to the problems they have. Well, you know, I think we can end up across the country, but that is not the primary goal we work through. The primary goal that we have is to be present and to try to solve the people’s problems that are right in front of us, and continue to educate, because that’s the key.

Meghan Escobar (16:43)
Absolutely. And again, gems being dropped. I mean, you hear people say “the power of now,” you know, “be present.” Like we can’t go back in history. We don’t know what the future’s to bring. All we can do is focus on what’s in front of us. And I truly believe, you know, a lot of anxiety that people have today, no matter what walk of life that they’re in, comes from worrying about things that are out of their control.

Mike Milligan (17:10)
100%. I mean, I can’t tell you that—I mean, anxiety is a real thing. For sure. I don’t want to discount that. People suffer from that. It’s 100% real because of the scars that have been left on us in the past and the uncertainty of the future. That’s one of the things that we have to recognize is there, and then we have to try to overcome it the best we can and get help.

And so like if you have financial anxiety, right? If you feel like, you know, “Is real estate the right path for me?” right, based off my financials? If you feel like, “I don’t know, like I’ve got this other money sitting over here at Edward Jones or Fisher Investments, is that right, or should I take that money and put it in real estate?” right? You have to have a partner who will shoot it straight with you, right? I mean, like I don’t know—if you’re listening to this, I don’t know you, I have no reason to lie to you. I don’t, because at the end of the day, I have to protect my reputation. So if we talk to each other, I’m just going to shoot it straight to you, right? I will tell you, you know, what is happening in these other accounts you have, how they’re making money. I’m going to talk to you about the opportunities you have in everything and then how to structure it to optimize it from a tax standpoint. And hopefully—and hopefully at the end of the day, my work produces less fear, stress, and anxiety for people that we deal with.

Meghan Escobar (18:30)
That’s a beautiful thing to be able to solve for somebody, because you’re right, anxiety is real and people do suffer from it. So I love that you are, you know, hyper-focused on solving that problem for people. I think it’s so important. And we talked a little bit about how you travel all around, you know, masterminding, getting in rooms with people who can help you grow, can help you create, and, you know, use your mind. And I think that a lot of our—not I think, I know—a lot of our listeners, they’re either very early on in their journey, whether they’re looking to jump into entrepreneurship or real estate, or they’ve been in the industry for a while and just looking to level up. And I think it’s important for people to understand what building the right relationships can do for your network. Can you talk to us a little bit about what’s made the biggest difference for you, Mike, creating those relationships?

Mike Milligan (19:20)
Yeah, I believe that nobody really creates anything independently. I believe, you know, like people—I don’t know if you guys ever heard the term “signal” before, like signals being always tuned in to what’s going on, right? And not looking at anything else outside. And I just think that there’s very few people who have the gift to be in a signal, right, being in creative mode all the time alone. I think that masterminding is one of the most impactful things you can do. And it’ll stretch you, by the way. Get in a room that—and a lot of times masterminding, to get in a room that’s higher than what you are, you have to pay to be there. If it’s free to get in a mastermind room, what value is really there, right?

And if it’s free, you’re probably being used because you’re above or elevated above the other people there. And so don’t continue to go to a mastermind where it’s free for you. “Well, you know, I’m such a good guy, they always pay for me to come.” Well, that’s great, man. What are you getting out of that, right? What do you know, except for your ego? What are you really getting out of it? Sometimes you have to pay, right? I have paid probably seven figures in my life to get in rooms that I did not belong in. When I’m in those rooms, I learn something. Now, the rooms that I used to pay to get into, I don’t have to pay to get into anymore, but I haven’t stopped paying to be in rooms, right?

Because, you know, my goals are to be around high-level, high-level, enterprising entrepreneurs that are not just in the financial industry, but have been successful in real estate and tech and startups, angel investing, alternative investing, private placement. I want to be in those rooms because at the end of the day, when you’re in those rooms, the ideas may not be what you’re going to implement or you may not go invest in chips. You may not do a startup and bridge funding or bridge financing, but how they think allows you to bring that back to the industry you’re in.

And then, man, when you bring those independent thoughts in there, that’s how you change the industry you’re in. It’s other ideas manifested because you’re in—you’re in a room with great thinkers.

Meghan Escobar (21:47)
Absolutely. And you know, there’s a famous saying that goes around and says, “People who pay, pay attention.”

Mike Milligan (21:53)
That’s true.

Meghan Escobar (21:56)
And it’s—business, any business, especially real estate business, it’s a people business, it’s a relationship business. You have to create relationships. So it’s something that you can’t fake and you have to do. So if you’re looking to get into entrepreneurship or real estate, be prepared to shake hands and get in rooms, because it’s gonna be necessary. And before we wrap things up here, Mike, if somebody did want to reach out and connect with you, learn more about what it is that you’re doing, what would be the best way for them to reach you? Is it a social media account, or an email, or a phone number, or website?

Mike Milligan (22:32)
Yeah, so the easiest way is we have a simple text way, a simple short code to reach out to us. Like if you put in the phone number 600-700—600-700—to your text and text the word “IDEAS”—I-D-E-A-S, “ideas,” five letters—you can get directly to me and my team. If you want to go check out like my personal—my personal website, it’s MikeMilligan.com. It’s MikeMilligan.com. And if you’re more of the ones that are going to do much more research, you can go do that on LinkedIn—LinkedIn—and just search for Mike Milligan CFP. You’ll find me, Mike Milligan in San Juan, Puerto Rico. And if you want to learn more about the firm, it’s 1OakFinancial.com. That’s the number 1, 1OakFinancial.com.

Meghan Escobar (23:18)
Perfect. And we’ll be sure to drop those links below so you guys can just click it and get connected with Mike. So thank you so much for sharing your story, giving us your time, and more importantly, your perspective. I think you provided lots and lots of value for the audience today. We most certainly need more people in this space who are doing things the right way, being fully authentic, and I think you bring that energy to the table. So thank you again, Mike, for being here.

Mike Milligan (23:46)
Well, thanks, Meghan.

Meghan Escobar (23:46)
Absolutely. And for those of you that are tuning in, if you got any value from this, please be sure to hit like and subscribe. We’ve got more conversations coming in with operators just like Mike Milligan here, who are out here building real businesses in real time with real people. We’ll see you on the next episode.