[00:00:00] Travis Gibson: I have a portfolio of long-term hold stocks that I don’t trade. I just, I buy and I just hold, including index funds. And then I have a part of my portfolio that I trade actively. So that’s primarily what I trade actively. I encourage folks that trade or just short-term invest that when you realize a profit, just take it.

[00:00:50] Nicole Pendergrass: Oh, man. Oh, man, you guys are in for a treat this episode that I speak with Travis Gibson is phenomenal. I don’t even know where to start because we really discussed so much starting from the beginning of his journey. He actually grew up in a business and real estate-oriented family. He talks about his father, how his father did and still does love walking around to his tenants and collecting rent checks instead of transitioning to automatic deposit, which is still crazy to me. but you know, do what you do and he likes doing it. But then we transitioned to Travis’s journey and what he learned as a child in growing up and watching his family in business in real estate and how after graduating college, how he started acquiring properties and the strategy that he used was actually super smart. Everyone, I don’t even want to mention what it is because you will listen to it, but he get, everyone gets this lump sum of money a certain time of the year. But instead of using it for vacation or whatever else, he used it to buy a property. And that’s how uses down payment for a property every year, and just kept doing that year after year and accumulating assets, then transitioning and getting into stocks and trading. And so he’s not just in real estate, you know, he’s diversified into a bunch of different types of asset classes. And also we, at the end of the episode, we talk about the dynasty trust. Oh, my gosh. You guys don’t want to miss that part of the conversation. This episode, by the way, will definitely be split into two. We talked for so long. We had so much information that he was sharing. And I just kept asking more and more questions because I just needed all the answers. And I think you guys are going to appreciate that and you have to, oh, I said, I was going to tell you guys, you have to have your pen and paper ready. Don’t listen to this haphazardly while you’re walking around the house and doing whatever. Have a pen and paper handy so that as soon as something is told to you, you can go and jot it down and then start implementing, and digging in, and contact Travis and figure out how, like, he did what he did and how you can do it too. Like, just use the information he is willing. He’s an open book. He will, he wants to help people. So with all of that said, let. Tell you a little bit about his background. So he is the principal and founding member of a private equity investment firm called Freeman Equity, which has over 65 million in assets, under management. He has over 20 years in both public and private equity markets. He has extensive experience investing in self-storage facilities, residential mortgage notes, mobile home parks, and single-family residential acquisitions, also office buildings, and multifamily real estate syndications. So I didn’t even, we didn’t even talk about the mortgage notes and the mobile home parks. Oh, my goodness. I feel like I need to get him back on already now. But he was coming from a background in software engineering and he still is a software engineer full-time, W2, while he’s doing all these other things. But he has a wealth of experience in defining project requirements and managing development teams for Fortune 500 companies such as EDS, ECMC, and Apple finance. So without further ado here is Mr. Travis Gibson. Hey everyone. Welcome back again to the Share The Wealth Show. I am your host, Nicole Pendergrass. And this is the show where we talk about strategies to build, grow, and protect minority wealth. And today we have with us, you guys, this is just going to be crazy. I already, I have a feeling like the energy that we’re going to get from today’s conversation, and this guy is no joke. He doesn’t pull his punches literally and figuratively because he actually does. What is it? I don’t want to say martial arts ’cause I know it’s not that.

[00:05:01] Travis Gibson: I do Brazilian jujitsu, right.

[00:05:03] Nicole Pendergrass: Okay, I knew it was going to be something that I was going to miss, whatever. But yes, this is Mr. Travis Gibson, everyone. And he’s going to come and bless us today with some conversations, some insights, man, this guy does so much in the wealth-building arena. He’s in a lot of different avenues and I know peripherally some of the things he’s doing ’cause we’re part of the same group, but now I get to dig in and really, like, get the inside secrets and you guys are just lucky enough to listening to our conversation. Travis, welcome. Thank you for coming today.

[00:05:37] Travis Gibson: Thank you for having me. I’ve been wanting to be on your pod for a while. You know, you have the best guests. I always, I always get something from the guests that you have on. So thank you for having me. I appreciate it.

[00:05:49] Nicole Pendergrass: Yeah, great, and thank you for that, that compliment. I really try to make sure that everyone gets something from each episode that they can actually take and implement ’cause I’m all about implementation, ’cause the knowledge without using it is just wasted space in your brain, right? Okay. So I gave a brief overview of your bio and kind of what we are going to talk about, which I don’t know yet and I’m so excited. But anyway, can you give us a rundown of, I don’t know where I want to go with this, but it’s generally like, how were you raised without, you know, going crazy, but like that mindset, what kind of family dynamics were you raised into, like how that led you to what you’re doing today? And what, like the pivotal moments that kind of changed your mindset or changed your trajectory of what you’re doing now?

[00:06:38] Travis Gibson: Sure. I’ll give you the Cliffs Notes version. It’s a long story, but I come from a family of small business owners. Originally, I’m from a small town in Michigan, a GM town named Saginaw, Michigan, right outside of Flint. And we migrated out to California in 1979. My parents opened up a nightclub here in Sacramento and my parents actually ran that nightclub for almost 30 years. My parents still own the real estate. My mother is actually a realtor here in Sacramento still. Eventually, you know, she says she’s going to retire, but I don’t think she ever will.

[00:07:14] Nicole Pendergrass: Mine either.

[00:07:15] Travis Gibson: Yeah, so I grew up in an environment where we just acquired single-family properties. It’s just kind of what we did, and my dad used to take me to collect rents. And that was one of the things he still enjoys it. I mean, he’s in his seventies, he still enjoys going to his tenants’ door and knocking on the door and collecting rents.

[00:07:37] Nicole Pendergrass: So he still collects rents in person?

[00:07:39] Travis Gibson: Yes, I tried to get him, the only electronic payments he actually accepts are ACH from some Section 8 tenant that he has. Outside of that, it’s one of his favorite activities, is still going and knocking on tenant doors and collecting rent.

[00:07:53] Nicole Pendergrass: Oh, no, I figured that out real quick, because I was, and I was living in the same building as them. And I was like, I don’t want to go to the bank and have to cash this. Deposit your check by your phone, which I guess, but no, I just want it to be in my bank account. Okay, go ahead. I’m sorry.

[00:08:06] Travis Gibson: No problem. So, you know, I was taught early on to, you know, you buy real estate. You don’t wait to buy real estate. You buy real estate and wait. So, you know, after I graduated college, I was in a situation where I was making pretty good money on my W2, but I had no deductions at all and I was getting murdered. California’s horrible for taxes, anyway. It was bad back then.

[00:08:31] Nicole Pendergrass: What were you doing? What was your W2 when you first graduated?

[00:08:33] Travis Gibson: Oh, yeah, I was software engineer, so, that’s my trade. So my mother, being a realtor, was like, okay, you know what you need? You need some deductions, right? You know, you need a place to stay anyway, let’s buy you a house. So I bought a house and moved in it and house hacked it before that was an actual term. Like, I had two other rooms and I just rented them out. And, you know, I realized I I’m staying there for free. They’re paying my rent. So over the course of time, you know, this was my dad’s method. When you get your tax return, you take that money and you use it as a down payment on another single-family house. So that’s pretty much, that was the strategy that I followed for 20 years. I would buy at least one single-family a year, just like clockwork.

[00:09:18] Nicole Pendergrass: That is so smart. I’m sorry. My mind is already blown from that because, especially when you, all right, where were you buying? Because your tax return was not that big that you were buying a single-family house in California. Those are expensive. ‘Cause I’m in New York so I know I’m like you got to go to another cheaper market.

[00:09:36] Travis Gibson: I’m going to date myself for a second. The first house I bought here in California, I paid $88,000.

[00:09:42] Nicole Pendergrass: Okay.

[00:09:43] Travis Gibson: Yeah, so you know, most of those properties, 4x or 5x over the time that I held them. So what I was able to do is, you know, I’d buy another one and then I got married and once I got married, you know, we started a family, I needed a bigger house. So we would just, we would buy a house, we’d have it two years and then we’d buy another one and buy another one. So these were all owner-occupied properties. And, you know, I continued that until,, like 2008 where things got a little crazy for those that were in the market during that time. And particularly out here in California with the stated income and these crazy adjustable loans. So like my portfolio just exploded at that point, but there was a lesson in that because the properties that I bought correctly, meaning they had really good debt. They cash flowed. Those properties I was able to hold onto even after the crash, but half my portfolio, I lost in 2008. Lost it.

[00:10:42] Nicole Pendergrass: Okay. So I have to dig into that. You lost them because the debt was bad? Like you did with some of those stated income loans, you were just buying stuff that you know you couldn’t afford it with your income?

[00:10:52] Travis Gibson: Well, what was happening was, once the interest rates started adjusting, the rents couldn’t meet those mortgage payments anymore, right? So it’s a situation where you start kind of figuring out, okay, these, I want to hold onto these. They got to go. So that was the position I was in. The properties that I bought prior to kind of that run up, that cash flow that I had, you know, good fixed debt on? I had them until a year and a half ago when I sold them all and went into multifamily. That’s a whole other…

[00:11:23] Nicole Pendergrass: Yeah. So you, did that mess up your credit when you…

[00:11:26] Travis Gibson: Oh, yeah, it was horrifying.

[00:11:28] Nicole Pendergrass: You sound so happy about it.

[00:11:30] Travis Gibson: Well, you know, it was like going to college because, you know, believe me, it cost me enough. But it was a situation where, I had to learn that lesson and it was bad because, us, you know, we like to, you know, we like to kind of flex a little bit, right? And you know, I bought a big house in the pocket area of Sacramento’s, you know, it’s an affluent area. I put a pool in, bought a new Mercedes. I was bawling, like make no mistake about it. And I’ll never forget the day that the Lehman Brothers went under. I’m in the pool in the middle of the day. And I have the window open and the CNBC was playing and they, when they announced it, I’m like, oh, that doesn’t sound good. That doesn’t sound good. And within a month’s time, it was, I mean, everything had just started falling apart. So I went from like the highest of highs to like fighting for my financial life, like literally fighting. But the thing that it taught me was the properties, the assets that I acquired correctly, weathered that storm. So it changed the way I looked at risk and it changed the way that I looked at debt. So I’m happy about it now in 2022, but back in 2008. Yeah, I wasn’t happy. I was kind of depressed actually.

[00:12:46] Nicole Pendergrass: And you know what though, like you’re saying is good that you can actually look back at that and see, and talk about what you learned from that lesson. And then that’s what you’re supposed to view failures, quote, unquote. They’re really like just lessons. So now you’re going to take that with you forever. You know, you’re going to teach that to your kids. That’s going to be generational lessons, you know? All right.

[00:13:05] Travis Gibson: Oh, definitely.

[00:13:05] Nicole Pendergrass: So I interrupted you in your story. Keep going. This is great.

[00:13:10] Travis Gibson: Okay, so to your earlier point about credit? Yeah, my credit was in bad shape. I mean, I had a bunch of short sales, but the one thing that I did have is I had, one, I had the ability to earn, I had a, you know, pretty good paying W2 job, and I still had the ability to identify a good deal when I saw it. So it took me three years or so to start kind of positioning myself. You know, I saved up enough capital to begin, to start trying to rebuild. And the market, I mean, literally, you know, houses, that first house that I had purchased that was 88,000. It was worth 350,000. When all of this happened, but the prices dropped all the way back down to like 90,000. It was crazy. So you know, here here I am thinking, oh, yeah, you know, I’ve made it, you know what, no problem. Then all of a sudden, when you see your net worth gets cut in half, you know, 60, 70% it’s sobering. You’re like, oh, okay. I better do something. So what I started doing though, is my mother’s, you know, as I said, was a, is a realtor, and she would just continue to shoot me, you know, properties, and I’m like, oh, you know what? I found a lender that would, with my credit, give me a mortgage. So I just started buying single families again. I mean, at, you know, rock bottom prices. And I was able to build the, you know, not quite as big as I was, but I was able to build up a pretty significant portfolio again of single-family homes. But the whole time, I couldn’t stand being a landlord. I never liked it, and some people do. My old man does. So, you know, the calls when I’m on vacation or in the middle of the night. And because my old man never believed in property management, he taught me, you know, it was a waste of time, waste of money. You could collect your own rents. So I never had a property manager, so I just kind of had to, you know, deal with that until, like I said, around 2019, a buddy of mine who actually inherited a pretty substantial portfolio from his parents, generational wealth, we’ll talk about that in a second. He was telling me about multifamily, multifamily, multifamily, and I’m thinking, you know, I don’t have 5, 10 million to be, you know, buying an apartment building. You know, I can’t afford it. And he was like, no, you can invest with other people. I’m like, okay, well we’ll just kind of interesting capital, put it into a deal. And I saw all of a sudden, like an ACH hit, hit my account. I’m like, Hmm, I started comparing the returns, you know, the yield on my investment. I’m like, Hmm, I could roll the equity that I have in those deals into multifamily,, be getting a better return, all the tax advantages, and not have to deal with tenants. I’m like, okay, let me start building this out more. So that’s what kind of led me into that whole multifamily realm.

[00:16:03] Nicole Pendergrass: Nice. Nice. And you know what I think I kind of, I got to that mindset about not wanting to be a landlord a while ago, but I was like early in my journey, especially when I really dug into multifamily and joining these groups. But before that, I was just like, I want to just get the equity from this property and just concentrate on asset management. Asset management is enough working with the property manager on making sure everything’s operating right. But having to deal with the actual tenants? Like, I know how to be you know, professional, and hold in, and like, have my poker face. And I know how to deal with tough situations, but sometimes, man, they be pushing buttons. Do they not like, I’m trying here can you give me a break? Like, I’m not a slum landlord, but they don’t care and, you know, I mean, I get it, but you got to pay your rent, man. That’s it, that’s all.

[00:17:02] Travis Gibson: Yep. Nicole, I’ll tell you, I’ll tell you a very quick story. Out here in California, you know, cannabis started becoming legal. There’s a whole process of medicinal into like, you know, full adult use. And what was happening was folks were renting, you know, they would rent houses and they would go in and completely, you know, rip out the electrical, fans, and lights. So I actually had a property where, and I have known, but, you know, the thing about it is the tenant never gave me any problems, always paid their rent on time. It wasn’t a problem until the city actually contacted me. They had been contacted by the local electric company that they had super high power usage and they suspected them of running a grow op in one of my rooms. So once that happened, I contacted the tenant and actually went by to do an inspection. And when I went by, they was gone, they were out of there. But they had completely, like, I mean, there was water damage, you know, parts of the ceiling were torn out, there’s a bunch of trash and yeah, it was like, it was one of those things that, you know, in like 2017, 2018. That was really, really prevalent here in Sacramento, especially. So that was a learning experience for me, for sure.

[00:18:29] Nicole Pendergrass: So what did you learn from that?

[00:18:30] Travis Gibson: I learned that, you know what, it’s important that you trust, but verify. And they, you know, the tenant actually had done a fairly decent job at providing kind of a context for where he worked, where he was coming from, why he was moving there, but I should have dug deeper. And because I had enough units where I was doing annual inspections, I just, you know what, they weren’t giving me any problems. So I just didn’t get by. I just didn’t get by to do my annual inspections. And that’s what happened.

[00:19:03] Nicole Pendergrass: How many years was that tenant in there?

[00:19:06] Travis Gibson: They were in there a year and a half.

[00:19:07] Nicole Pendergrass: Oh.

[00:19:08] Travis Gibson: So I guess they were making pretty good money. Yeah, and like I said, always paid their rent on time. You know, if I had known, you know, maybe…

[00:19:14] Nicole Pendergrass: They were smart. They were making their money. They wanted make sure you didn’t come by for no reason. And that’s so easy, like time goes by so quickly. I live 12 to 15-minute drive from my property and I go over there as little as possible, honestly, like there’s not a problem. What’s the point of me going over there? I mean, it’s still not as legal in New York, I think, is it? I don’t know. Well, I need to check on that just to make sure we learn those lessons. See everybody learned lessons from people who have made these, you know, errors and learned them already. Don’t repeat them.

[00:19:49] Travis Gibson: Do your inspections.

[00:19:50] Nicole Pendergrass: So we are, we’re talking still about your journey. What are you doing now? You’re doing multifamily. We heard why you got and how you got introduced to multifamily, but you are now also active, right? So you’re not just putting your capital passively into multifamily deals, which you could do, but what what made you want to be active in it too?

[00:20:10] Travis Gibson: I wanted to learn the actual business of multifamily. And it is, I mean, it’s drastically different from your standard single family, you know, property just in terms of, you know, dealing with the scale, but also dealing with the mechanics of essentially a commercial real estate asset. So, because I was able to kind of see the value in multifamily, I thought, okay, well, great. Let me leverage my single-family experience and my experience in real estate and actually start doing my own deals and GP and my own deals. So there was a guy at Apple where I work, who eventually ended up leaving, starting his own company. But he and I were discussing things and he was like, yeah, you know, I got a deal in Kansas City and I’m looking for partners if you’re interested. I’m like, oh, that’s perfect. That’s exactly what I’m looking to do. So I was fortunate in that I was able to get in and learn as well as participate in a deal like, you know, I would hope that everybody gets this same opportunity because I learned so much in that process from, you know, just in terms of the legalities of structure and syndication deal, in terms of how to really do asset management, you know, how to deal with property managers, the whole due diligence process. I was able to kind of get in and learn while I was actually in a deal with capital raise and investor relations. So that was early 2020, like February, I believe, we closed that deal and this was right around the time that the pandemic, you know, actually struck too. And I’ll say this really quick, a lot of people were saying, oh, no, you shouldn’t be investing. No, no, you know, the world’s going to end. And, you know, because I had kind of been through an event, not similar, I mean, similar, but not the same. I thought, you know, I think things are going to work out and there’s opportunity here and I wanted to take advantage.

[00:22:10] Nicole Pendergrass: Nice. I love that. And see, just thinking in an optimistic viewpoint, there’s been, you know, things happen throughout history that have been horrific, you know, and that doesn’t stop the world from turning. You know, things are still going to keep going, and things will get better, and then they’ll get worse again and then they’ll get better again. It’s all cyclical. Like, life is cyclical. I know that you also have your take profits or don’t branding. What is that about?

[00:22:41] Travis Gibson: Well, I’ve been an options trader and a stock investor for 30 years. And one of the things I learned in that process is it’s important that you manage greed. It’s so easy to get sucked in, particularly when when you start talking about equities, you know, because the money comes so fast. I say this all the time. It’s easy to make money in the stock market. It’s hard to keep it. So take profits for don’t, that is the brainchild of that. Like, I’ve been to the highest highs and the lowest lows with the market. So I’ll say this, I have a portfolio of long-term hold stocks that I don’t trade that, I just, I buy and I just hold including index funds. And then I have a part of my portfolio that I trade actively. I encourage folks that trade or that short-term invest that when you realize a profit, just take it, spend it, invest it. What I encourage people to do is, and this is something that I did, particularly when we had the market run-up in 2020 after the pandemic, I started taking my profits from stock investing and using that as additional capital to invest in multifamily deals because I know, you know, it’s easy to make money in the stock market, hard to keep it. So to protect myself, I transitioned quite a bit of my stock profits into deals.

[00:24:05] Nicole Pendergrass: So I have so many questions. I’m not in the stock market like that. I just started buying index funds for my daughters ’cause I’ve just figured you buy a little bit, just dollar cost. I don’t even look at it. I just buy a certain amount per month. And then when they’re 20 they’re a portfolio of stocks will just be something that extra that they have on top of the real estate. But other than that, so like, how do you know when enough profit is enough profit? Like, are there metrics that you look at? I know, like you said, managing greed. And so, I guess, it’s not really like the casinos, like you, you feel like you’re up and you want a thing, but you want to step away like cash out your chips, but at the same time, you were like, oh, maybe if I do one more spin. You know, like, so what metrics do you have that you look at? Is there a certain percent above your, your purchase price that you decide, okay, that’s enough profit? Is there a certain return that you’re looking at before you sell?

[00:24:58] Travis Gibson: Yeah. I’ll say this. It’s important that you have rules, rules in life and certainly rules in trading. So regardless to what your rules are, I mean, they could be, you want to double your money or you want to, you know, you want to take profit at 25%, as long as you trade to those rules, there’s a good chance that you can be successful. So for me, short term trading, I’m looking, you know, anywhere between 15 and 20 percent return within a specific window. This podcast is not long enough for us to discuss option trading. So I won’t, but needless to say, what I’m looking to do is to figure out the risk that I’m willing to take. And I’m also looking for the percent of profit that I want to see. So in every trade that I do, I have a sale order for the top and a sale order for the stop that protects you from, you know, that gamblers policy that it’s so easy to kind of fall into where you think, oh, well, you know, I know the market and this is going to happen. Nobody knows the market. No one. Anybody that says they do or is selling a course that say they do, I question why they’re selling the course.

[00:26:05] Nicole Pendergrass: Very good.

[00:26:06] Travis Gibson: ‘Cause if you really knew, if you really knew, you wouldn’t have time to tell them that.

[00:26:09] Nicole Pendergrass: To sell a course. Do you have a course on trading?

[00:26:12] Travis Gibson: No and I’m going to tell you the reason why. I don’t want to be responsible for anyone’s loss. And the thing about it is, is my appetite for risk is going to be different than yours. I don’t know if you saw online, one of the things I was considering starting was a fund, a crypto fund, but when I started talking to folks, particularly, you know, people that I know well that have invested either in my real estate deals or just know me personally, I just wasn’t comfortable with the idea that they could lose all their money and, you know, anytime you’re investing in a volatile asset like that, you could lose all your money. Just the reality. So no, I will help anybody for free that asks, but no, I don’t want to be your guru, anyone.

[00:26:57] Nicole Pendergrass: That’s not a guru. That’s like just saving your time ’cause what if a hundred people listen to this and reach out to you and want to, then you have no time to trade yourself. Now you made a promise that you’ll help anybody who asks.

[00:27:11] Travis Gibson: I will. The thing about it is everything you need to know is out there for free. If you’re willing to actually take the effort and if you’re not, then there’s nothing I can do to help you.

[00:27:20] Nicole Pendergrass: Yeah. You don’t want to waste time with tire kickers. You want people who are actually going to take action and take the advice that you’re giving them. And you give a lot of information on your social media platforms when you’re, you’re talking about your trades, you have a YouTube channel, too, right?

[00:27:34] Travis Gibson: Yeah, I need to start doing more video. You know, it’s just one of those things where, I mean, you know, with the podcast, when you have, you know, you’re actively working, doing deals. I still have a W2. I manage software engineers for Apple, between those things, you know, I have a family and family responsibilities as well. It’s difficult, but no excuses. I’m going to be doing more videos. It is what I like to do. I just need to dedicate the time and just do it.

[00:28:03] Nicole Pendergrass: Okay. Yeah. You know what, and I honestly didn’t know that you still had a W2. I thought you were doing real estate full time because you’re like always, always around. That and trading. Yeah. I don’t know how you, I don’t know how you manage that because I feel like if I was trading, I’d have to be looking at it every second and I would get like, you know, my tunnel vision on my eyes and like, ah, what’s going on. How often do you set certain hours of the day that you’re actually trading and a certain hours of the day that you’re doing real estate? Like, how do you balance it?

[00:28:31] Travis Gibson: Well, what I do is, I don’t know if you’re familiar with Hal Elrod’s book, Miracle Mornings, but I’m a huge proponent of that. So you know, I get up at 5:00 every morning. And I have my morning routine of, you know, meditation, and reflection, and reading and exercise and journaling. And it helps me to kind of structure my day. And then from there, typically from a trading perspective, I trade. 6:30 till about 8:30, 9:00. And normally by that time, I’ve either made, you know, the profit I’m going to make for the day or I’m just done trading period. And you know, from there, I have, you know, I’m able to take investor calls, be on asset management calls, and look at deals, and underwriting, all those things that we all do. And then, of course, you know, my W2.

[00:29:22] Nicole Pendergrass: Wow. All right. So that actually, that was great. Like, that was a lot of background information I didn’t even really know about you. So let’s talk more about the plight of our community, and why more of us are not building wealth in a sustainable way, like, information is out there. Yes, it’s not all easy to gather. Sometimes there’s certain circles. You won’t know how the wealthy are really investing their money because you’re not in that circle. And some things are just kind of private, you know, and. I want to do some investigations and dig out. Like I just had a friend, one of my friends is a doctor and she’s really getting into investing more. And she got invited into this investment by one of the surgeons who makes $2 million a year annually. Like she makes nowhere near that, but she’s like, there’s no way, there’s no way anything that you’re investing in, I’m going to be able to invest in, but like she was able to, but now, like I have insight into this other little niche that I had had no idea existed, but I’m not even close to being ready to invest in that kind of thing. Like, I’m working on it. But I just think there’s just so much more information out there and how can we really, you know, mine that information and share it with our communities, so that people actually take action and feel like it’s something that’s attainable for them?

[00:30:50] Travis Gibson: Well, I mean, the first thing is you got to start where you are. So wherever that is, that’s where you need to start. You know, when you look at the statistics, I mean, they’re sobering. When you look at the difference between the median income of black Americans versus everyone else specifically, if you look at white families, for instance, the average black family has a median network worth that is 15% of the median white family, 15%. And you know, there’s estimate that by 2053, that the median income, the median household wealth for a black family will actually be negative. Let that sink in for a minute, right? You work your whole life and you literally have nothing. Now there’s a lot of reasons for that, but the thing about it is, and this is what I tell folks that I talk to all the time. You have to get started and at least for us as a community, we have to stop thinking that we need to buy a lottery ticket. We don’t need to buy a lottery ticket. What we need to do is we need to invest what we have over time in cash-flowing assets. So, you know, everybody wants to buy crypto and 1000x their money. Everybody wants to do that, but when you don’t have a whole lot of capital, it’s important, I mean, Warren Buffett talks about, the very first rule of investment is don’t lose money, right? So when you don’t have a lot of money to invest, it’s important that you’re super diligent in choosing the best possible assets that you can from a risk standpoint, but also from a growth standpoint. So regardless to where anybody that’s listening to this is the first thing you need to do is figure out what your financial goals are and then start extrapolating out from there. You know, I mentioned earlier, when I got started investing in multifamily, I didn’t have any idea that I could participate in buying an apartment. I had no idea. I thought that was only for the wealthy. But as I learned more, I realized that this is a vehicle that our community could really, really, we could gain so much from just participating in. I mean, it’s not necessarily, the community itself has, we have capital. It’s how we’re investing it. And it’s our investment strategy that is problematic.

[00:33:24] Nicole Pendergrass: Yeah, I wouldn’t even say how we’re investing it. Sometimes it’s just how we’re spending it.

[00:33:28] Travis Gibson: Oh, that’s a whole other thing.

[00:33:29] Nicole Pendergrass: That’s a whole other thing. And I think that that has some historical roots. All of it has historical roots, but the reason that we’re trying to or that we are spending money on things that are ridiculously expensive, and all the name brand stuff, and trying to flex, like you said, sometimes you want to flex and you’re trying to show off, you know, or keep up with other people that you admire and like the whole Joneses thing, but that just stems from us coming from not having a lot. And wanting to look the part and even for life and death situations, even, you know, back in the day, it was like, we are trying to look the part so that others wouldn’t treat us even less than they were already treating us. So you could maybe be allowed to walked down the street without, you know, with people, at least ignoring you, that was like, I guess a come up, you know? So I don’t know. But there’s so many reasons behind, you know, historically why we still spend today, but now, I understand the history behind it, but it makes me upset that like we can’t pull our mindset out of it. Like, and that’s by design too. So I don’t know what to think about it. It’s like sometimes when you think about the bigger picture of it, it just really does seem so helpless. It’s like, how can we really change it? I saw an article the other day that like we had the, I forgot how much, like in spending, billions in spending, but then our net worth was like still, our net worth was still so much less ’cause our money doesn’t stay in our community. We’re spending with everybody else and everyone else is purposely making products for us. And so our dollars leave us and go to everyone else. So I don’t know. I don’t know.

[00:35:09] Travis Gibson: We’re consumers. We’re not investors traditionally. But I mean, current stats tell us 20% of African American families have a negative net worth right now, today, 20%. And, you know, I’m getting older. I’m at a point now where, you know, retirement is on my mind and realize this, almost half of African American families have less than $20,000 in retirement, $20,000, right? So when I say you got to start where you’re at, and this is the big thing, and this is something that I’ve really tried to work on with not only my children, but also you know, my family and pretty much anybody that wants to talk about it is financial literacy is a huge component in this. Just learning how to manage your finances and from there, how to invest. It’s pivotal, right? You want to buy assets that appreciate over time. Not things that depreciate. Slowly but surely, like, you know, even if you’re putting away a hundred dollars a month, you know, and I mean, this is for folks that, you know, are maybe just getting started, you have to start at some place. You have to.

[00:36:27] Nicole Pendergrass: Yeah. And that’s kind of how I was ’cause I started, you know, I ruined my credit in college and I had a negative net worth because I wasn’t, I didn’t buy anything that was an asset. And I had school loans, you know, and so just move in because I ruined my credit like I had other debts, consumer debts, and just other things that was supposed to be a money-making opportunity that I sucked at, and I didn’t do anything with it, and so that just made me have even more debt. And so it took me a long time of changing my financial mindset to like get out of debt and really work on that and get my credit score back up to a point and then start slowly saving, like looking where I could purposefully decrease expenses. And in New York, your biggest expenses, your housing, because I was looking at my expenses ’cause I knew you have to decrease your expenses. Like, if I don’t think I can increase my income right now, I have to decrease my expenses. I’m like, okay, can I get rid of cable? It’s like, all right, it’s $30 a month. It’s $50 a month. Like, I’m not going to save that much by cutting out $50 a month. So I need something bigger. And what I had done is I had just moved into my own apartment, which is, you know, that’s the whole flex status symbol, like especially in New York. Oh, you an adult, you got your own spot now, you know, you’re not living with your parents. You’re not living with roommates. You, you’re on your own, you can afford your own apartment, right? That was the status symbol. That was a flex. The first year I was there, the second year, like that year that I was there was when I started really having this mindset about where I can decrease my expenses. And I was like, I’m not moving. I really love my apartment. Like, I’m not, like, I can still afford it. Let me look at all these other things that like $30 here, $50 here, whatever I could cut out. And then they send me the lease renewal and it was a $75 rent increase. And I was like, come on man. Like, I’m trying to decrease my expenses. I think that was the nail in the coffin for me, that made me say, okay, you know what, I can’t do it. I got to go find a room to rent. And that’s what I did. And I went and looked and I found an apartment. I went from living by myself to living with four other women in an apartment. And like the living rooms who have been turned into bedrooms, and that’s just like how New York is, but I was able to cut my living costs in half. So that would help me save a significant amount. And that slowly led to me being able to buy my first multifamily and use FHA and borrow from my retirement account. So like just pulling from all these other resources, but you have to make those hard, uncomfortable decisions first because otherwise you’re just, if you don’t want to get uncomfortable, you won’t grow, right?

[00:39:05] Travis Gibson: The ability to defer gratification is a big part of any sound investment strategy. Do you want a new car? Yes. Do you need a new car is the question, right? Are you able to generate cash flow from an asset to pay for it, whole other question. But starting off just your ability to defer gratification and actually, now you don’t save your way to wealth, make no mistake about it. You invest your way to wealth, but saving has to be a component, especially when you’re getting started. Like there’s, you know, if you don’t have the capital, there’s no way to invest, right? So delayed gratification is huge.