What does it actually mean to be free?

Brent Neely: My dad worked six days a week for 30 years. And I don't mean that he had a long commute, although he had that too. I mean, he gave everything to a business that needed it, needed his time, his energy, his presence every single day. Welcome to the Wealth Cockpit. I'm Brent Neely and this is the story of why I've built everything that I've built. My dad's business was a family business, Emerald Pool and Patio, retail. It was extremely successful. It blessed our family for years. With good means, we weren't struggling. It's important to understand. This isn't a rags to riches story. This is a story about a trap that looks like success. My dad, he always said the number one rule of retail is that you have to be there. You have to show up. The door's open and you're there. The door's closed and you go home. And if you have multiple locations, which we did, you're driving between them. We lived in Cottage Grove, Oregon, and my dad was commuting to Salem for a lot of my growing up years. If you don't know Oregon, that's an hour and 15 minutes or more each way. Six days a week, sometimes seven. So, here's what my childhood looked like. He left the house about the time that I left for school in the morning. He got home for a late dinner. That was the day. That was every day. I played water polo in high school. There were a lot of games that he just couldn't be there for, couldn't make it. Not because he didn't want to, but because the business needed him. And he was working an hour and 15 minutes away. I also competed riding horses. I was mostly on the weekends, but a lot of weekends he was working. So he'd be stuck at the store and I'd be at a competition somewhere. And that was just, that was just how it was. It was normal to us. We didn't think about it being something wrong. It was just life. And look, my dad, he built something real. Fourth generation family business, Emerald Pool and Patio is still going today. Still successful. He provided well for our family. I'm not ungrateful for any of that. But here's what I took away from watching him. And I didn't fully understand this until I was older. Freedom doesn't come automatically, even when you work hard, especially when you work hard. My dad had a successful business. He had good income, but what he didn't have was time. The business ran because he showed up. If he stopped showing up, things slipped. So he never stopped. He's basically retired now. He does have a lot of time with his family today. But that doesn't give him back the time that he missed. You don't get your kid's childhood back. You just don't. That's the wound. That's where this whole thing starts for me. Not a financial failure. Not going broke. watching my dad succeed and realizing that success and freedom are not the same thing. So I studied, I read everything I could get my hands on. I was trying to figure out one thing. How do you not trade your hours for dollars? And like a ton of entrepreneurs, the book that really cracked it open for me was Rich Dad Poor Dad by Robert Kiyosaki. If you haven't read it, You need to. If you've read it, but you know the moment that I'm talking about, the realization that there are other ways. Income doesn't, your income doesn't have to be tied up to your presence. You can build systems and assets that work whether you show up or not. It's a totally different way of thinking. So the book didn't give me the answer, but it gave me the question. And once you have the right question, You can't unask it. So I made a decision that was honestly one of the hardest things I've ever done. I left our family business. Fourth generation, Emerald Pool and Patio, a great business still is a great business and I walked away from it. That caused some heartache at the time. I'm not gonna sugar coat that. When you're fourth generation and you step away, people have feelings about it. Family has feelings about it. and it wasn't easy. But I knew, I knew in my gut that if I stayed, I was signing up for the same thing that my dad lived. A successful business, but one that needed me every single day. Good income, but no freedom. And I'd be having the same conversation with my own kids 20 years from now, except I'd be the one that missed so much. I didn't want that future for my family. I wanted something different. Not different income, but a different structure. So here's what I did. My wife and I moved to Eastern Oregon, a very rural community. I describe to people how rural it is when I tell them that we live an hour and a half from the nearest stoplight. Not a lot of economic opportunity in the traditional sense, but a much slower pace of life. The kind of place where you can actually be present, where your kids grow up outside, where you know most of your neighbors, where life isn't happening at 90 miles an hour. And that moved force to question. How am I gonna make a living in this place with no major industry? Well, the answer for me was e-commerce. So I started building e-commerce companies. I started selling on Amazon. Online businesses I could run from anywhere. And from the beginning, I was intentional about one thing. These had to be scalable. And I defined scalable in a very specific way. I wanted to be able... to 10x my sales without causing me any more work. I want it to be numbers on a screen, not I need to go hire more people, I need to figure out how to ship all these orders, not I'm gonna work 10x the number of hours, not 10x my stress, 10x the revenue, same workload. I'll get into how I did that more in a later episode. But the bottom line is that it worked. Actually, it worked extremely well. I was extremely successful. The business grew really fast. I was making 15 to 20 % net profit margins. I had the freedom I'd been chasing. I could work from our place in Eastern Oregon, be present for my kids. Structure my day as the way I want it. So it checked the box. My dad never got to check. But, there's always a but, right? Well, two problems showed up. They were big enough to change the entire trajectory of my life. So the first was stability. Most of my revenue was running through a single marketplace, amazon.com. And I had limited suppliers. So I'm making good money, great money really. I have real freedom. But I'm looking at this thing going, this could all disappear overnight. One algorithm change, one supplier issue, one policy shift, and the whole thing unravels. I was free, but I didn't feel secure. Second problem, you probably know what this one is, taxes. If you have ever tried to run a cash flow intensive e-commerce business, or even any inventory-based business, you know what I'm talking about. So here's what nobody tells you about scaling a product business fast. And when I talk about fast, I went from zero to over $20 million in revenue in about five years. So my cost of goods sold was 45%. So for every dollar in sales, 45 cents goes right back out the door to inventory. I'm keeping 15 to 20 cents of profit on that dollar. which sounds great until you realize what happens next. The IRS wants about 40 % of your net profit, 40%. So you've got a growing company, it's thrown off cash on paper, but in reality, every dollar of growth eats capital. You're buying inventory ahead of revenue. You're paying taxes on profit that you've already invested. You're scaling up fast, which means the cash demand accelerates faster than the cash comes in. I figured it out at one point and it was like two or two and a half times. Every time I made a sale, I needed to x that money to buy more inventory because of the length of the supply chain, how long it took from the time that I had to pay for it to the time that I got to sell it. Because there was shipping, fulfillment, of course Amazon holds your funds. for two or three weeks to make sure that you deliver ⁓ the products to the customer. So it was a challenge. I was bootstrapping it entirely and I was short on cash. One year, a year where I had a ton of growth, my CPA called, we went through all my numbers and he forecasted close to a million and a half in a tax bill. I was gonna need to write a check for $1.5 million. to Uncle Sam. I had a problem, I had to figure it out. So either I could sell most of my inventory, not replace it, and kill my business, kill the growth. where I could figure out a different way. So that problem gets your attention. It sure got mine. So I'm sitting there thinking, I left the family business to build freedom. I built the e-commerce companies. I have the freedom. And now I need to write a check for a million and a half dollars to the IRS that I don't have. All my cash is tied up in inventory sitting in an Amazon warehouse. and go back to the first problem, the stability, how do you think that feels? I owe a million and a half, all my cash is tucked away in these little brown boxes in Amazon's facility. I'm reading horror stories of Amazon suspending sellers' accounts because of some silly thing. wasn't a real secure place to be, although it was very successful. See what I'm getting at? So that's when I started asking the real question. What if I could take these profits, put them somewhere that solved both problems at once? Somewhere stable. Somewhere that actually benefited from the things I was worried about, like inflation. And somewhere that didn't just reduce my tax bill, but could actually eliminate it? Is there such a thing? It sounds too good to be true. But that's when I found commercial real estate. And what I discovered completely changed how I think about wealth. So when you invest in commercial real estate, real assets with long-term fixed rate debt, three things happen. First, you get cashflow, real distributions, money hitting your account whether you showed up that day or not. Second, you get tax benefits that most people don't even know exist. It's called depreciation, cost segregation, and bonus depreciation. So I won't leave you hanging. The end of that story, as hard as it is to believe, that year with the million and a half dollar tax forecast, guess what? Commercial real estate brought that to zero. from 1.5 million to zero legally the way the tax code is designed to work. So. The third thing that I told you happens when you invest in commercial real estate. Hard assets with long-term fixed rate debt are a massive play in an inflationary depar... And the third thing I told you happens when you buy commercial real estate, hard assets with long-term fixed rate debt are a massive play in an inflationary environment. Think about this, inflation is crushing the middle class right now. Costs are going up, purchasing power is going down. But if you own a real asset, an apartment building or other commercial real estate and your debt is locked at a fixed rate from five years ago, inflation is working for you. Your rents adjust up with the market, your debt stays the same, your equity compounds. And that's why the top 1 % has been growing wealth exponentially over the last six years while the middle class is getting squeezed. They own assets. Now, most people can't go buy a large apartment building on their own. That's just the reality. You're talking about millions of dollars. So, what do they do? Well, a lot of people that are smart about this and are doing what they can, they go and buy single-family rentals. And that's where I started to. Here's the truth about single-family rentals. They barely cash flow. if everything goes well. You get a roof that needs replaced, siding, HVAC. If you have any big problem, they end up costing you money. You might do okay with long-term, with appreciation, if the market's good, but it's nothing compared to what a well-operated apartment investment can do. And the worst part, single-family rentals are not even close to passive. You're a landlord, you're fielding calls, You're managing tenants, you're coordinating contractors. You traded your W-2 grind, or in my case, my e-commerce grind, for a landlord grind. Yeah, you could hire a property manager, but you're still answering those calls. You're still managing the property manager, and it's a different boss. Same trap. That's not freedom. That's just a different version of what my dad went through. Have you ever talked to somebody that owns eight, 10, 15 single-family rentals, it's a full-time job. It is not freedom. Maybe even less. mean, our Emerald Pool and Patio store was open nine to six. We didn't get calls at one in the morning that a toilet was overflowing or there's a flood in the basement. So I set out to build something different and that's what Neely Property Investments is. Here's what we do. We buy Class B, multifamily properties, apartment buildings, typically 50 to 150 units in the Intermountain West. Idaho, Montana, Utah, markets where real growth is happening. Real value can be created and the fundamentals are strong. Me and my team do all the active work. I love chasing the deals. I love putting together a business plan. So I find the deal. I underwrite them, when I look at all the financials and the existing and I build a business plan. I run the financial modeling conservatively. I manage the assets, I handle the tenants. I put professional third party property management in place and I manage that property manager. The operations, the headaches, I love it actually. I treat every asset like it's a little business and I work to improve it. Better operations, better units, better tenant experience and increased income. So the value grows over the whole period. We'll get more into my business plans and how that really works in a later episode. But my investors, they write a check. They sign the documents and they receive distributions. That's it, truly passive. Not passive in air quotes, where you're still getting midnight phone calls, actually passive. And here's the part I care about the most. I invest my own capital alongside my investors in every single deal. My money goes in first. If I'm asking someone to trust me with their wealth, I should be willing to put mine at risk in front of theirs. So that's not a marketing line, that's alignment. And that's how I believe this should work. So I've done this for myself. I've done it for my own family's portfolio. I've been buying commercial real estate for over 10 years now. And I built Neely Property Investments so that other people, people who where I was making good money but watching it vanish to taxes, or people who were where my dad was working six days a week with no exit ramp, can get access to the same thing. Because here's what I've learned, and it took me a long time to learn this. Freedom doesn't come from making a lot of money. I'll say that again, freedom. doesn't come from making a lot of money. Freedom doesn't come automatically when you have a successful business. In fact, if you're not very intentional, a successful business can actually become more of a prison sentence than a career ever was. And there's a lot of you listening right now that know that exactly what I'm saying is true. So what does freedom come from? Well, freedom comes from building something that generates wealth, whether you show up or not, and then being intentional about how you live. My dad drove the same road for 30 years. Cottage Grove to Salem. An hour and 15 minutes, six days a week. The same highway, the same exits, the same routine. He couldn't deviate. The business needed him there. My life looks nothing like that. I can still remember my first solo flight. You're in the plane by yourself for the first time and it's just, it's this moment where you realize I'm actually free up here. Nobody needs me on the ground right now, I'm flying. And that feeling never went away. It just got bigger. I've flown my kids down to camp on the Snake River. We've flown over Wallowa Lake, looked down at the mountains together from the air. Those are moments that I'll never forget. And more importantly, moments my kids will never forget. I volunteer with Search and Rescue. I fly volunteer missions for Angel Flight, flying people who need medical care and can't get there on their own. I have time to do that. I have the freedom to show up for things that matter to me, not just the things that pay me. And I owe most of that to one decision, rolling a successful business into commercial real estate. Not walking away from success, not retiring, taking what I'd built and putting it into assets that generate whether I show up or not. That freed up everything else. My dad is basically retired now and I'm grateful he has that time, but he can't get back what he missed. So let me ask you this, and I want you to actually sit with it for a second. Are you working because you have to or because you want to? Do you have that freedom? If the answer is not yet, that's okay. That's where most people are. But the exit ramp exists. I built it. I use it every day. And I made it available to investors who are ready to start building something different. So if any of this resonated, here's what I'd do. Go to freedom.neelypi.com. It's a free calculator that shows you when your passive income could cross your freedom number. The point where work becomes optional. Takes about two minutes. No pitch, no sales call, just math. Run your numbers, see what it looks like. And if you wanna talk about what's possible, I'm not hard to find. I'm Brent Neely. This is the Wealth Cockpit. And I'll see you on the next episode. Thanks for listening.