The Million Dollar Letter

By Mike Johnson

Legal Disclaimer

I’m not a trained or licensed financial adviser. But I am a passionate and bright guy who has invested more than 10,000 hours studying the financial and political systems. I follow my own advice and learned how to retire early with passive income streams that are protected from inflation, taxes and low interest rates.

I’ve done my best to accurately share my own experiences but I do not assume and hereby disclaim any liability to any party for any loss, damage, or disruption caused by errors or omissions, whether such errors or omissions result from negligence, accident or any other cause.

Your life is different than mine. Your skills and experiences are different than mine. You are responsible for your own actions after reading this information. It’s your money, so make your own choices. I’m not responsible for any losses you experience. Do your own research and become your own expert.

Copyright Notice © 2014 Mike Johnson

The Million Dollar Letter

Dear Dave,

This is a Million Dollar Letter.

I’ve been writing it for 50 years. It’s my sincerest wish that the information in this letter helps you like it’s helped me. I’m not selling anything. My only requirement is that when you acquire your first million, you freely show others how you did it too. If you read this letter and take action, this letter is literally worth a million dollars to you.

This letter is rather lengthy so give yourself time and space to read it away from distractions. Turn off the phone, get in your quiet space and pour yourself a favorite beverage. You and I and this letter are about to rock your world.

We’ve been pals since the 3rd Grade. We live 1,000 miles apart but I think of you every day. The last time we got together, you reminded me that as a kid, I always said I was going to become a millionaire. And I have.

During our childhood bike rides to Dairy Queen and Gray’s Bay, whenever we talked about getting rich, we promised each other that when one of us became a millionaire, he would share how he did it with the other. Because you mean so much to me, I want to fulfill that promise with this letter.

I’m going to reveal one way to become a millionaire. I know this way works because I used it myself. But as millionaires go, I’m still a small fry. I’m a different kind of millionaire. I don’t have a million dollars in cash in the bank. I’m not out here writing checks for airplanes, limousines and caviar. And it would take over $5 million today to equal the spending power of one million back in the 1970’s.

I’m a “net worth millionaire” who owns physical, income-producing assets that generate enough money each month so I never have to work a schedule to earn money again. I purchased some Golden Gooses that will pay my way through life forever. Most millionaires fall into this category. My monthly income is fixed within a comfortable range, which gives me security and freedom and a nice amount of cash too. This allowed me to retire at age 52.

But becoming a millionaire is not what you really want. What you really want to become is an houraire. You want to become filthy rich with time. You want total freedom from any schedule and you think lots of money will do that for you. Money CAN do that because money is a tool that purchases time and toys and experiences. It’s a big tool and I’m going to show you how to get it. But never forget that time is the real value.

It took me nearly fifty years to learn and articulate what I’m sharing with you here. If you use this advice, you can get similar results in less than 50 weeks. SERIOUSLY.

The Secret You Are Never Taught in School or Life

So here it is. This is the information that can make you rich:

The rich buy assets. The poor and middle class buy liabilities.

Assets are things that put money IN your pocket like businesses and income-producing real estate. Liabilities are things that take money OUT of your pocket like houses, cars and toys.

The rich first buy assets that generate income and then use that income to pay for the liabilities that make life fun. The poor and middle class first buy liabilities that take their income so they become trapped in the world of employment and debt.

Rich people make their assets do the work and produce the money for them. Most rich people happily exchange a few hours a week managing their assets so 95% of their time is unscheduled. Poor and middle class people make themselves do the work to produce the money. Most then grudgingly exchange 50% of their life preparing for, commuting to, and working jobs to earn the money to pay their bills.

Buying an asset is like buying a money tree. The tree does most of the work for you. You just have to nurture it and harvest the crop. This isn’t magic. Millions of people are doing this. It’s just not widely taught and only about 5% of Americans have invested the time and effort to self-educate their selves and take action to become financially free.

I’m going to show you how to buy passive income streams. This is money that arrives in your mailbox each month without you having to work someone else’s schedule to earn it. It turns out that the conventional wisdom of trading your time for money is the LEAST effective way to earn the income you need to “retire.”

How the World Really Works

I’ve done something less than 1% of the population will ever do. I’ve invested more than 10,000 hours self-educating myself on the manipulated world economy and our banker-owned political system. I’ve also invested hundreds of hours learning how to create passive income that exceeds the rate of inflation in spite of the collapsing economy and corrupt leaders. Then I spent hundreds of additional hours learning how to protect it.

Nearly everything we’ve learned about money, jobs, education, savings, investments and retirement is wrong. “Conventional Wisdom” (our parents, our friends, our schools, our employers, our television, our newspapers and our financial “experts”) all tell us to get a good education so we can get a good job and build that into a lasting career. Then we’re told to save a portion of our paycheck and invest that savings to build up a large nest egg of at least a million dollars so we can retire at age 65 and live off the interest earned by our savings.

There are only three problems with this logical-sounding plan – it’s stupid, it takes 40 years and it doesn’t work for 95% of the population! Only 5% of all Americans are financially free. True financial freedom means that your assets pay you enough monthly income to pay all your personal bills plus more, without you having to work a job or a schedule.

Right now, millions of seniors who followed the conventional savings plan – who thought they were doing everything “right” -- still can’t retire because banks are paying less than 1% interest on retirement savings in a world where annual inflation is running over 10%. In other words, even though these seniors worked and scrimped and saved and invested for over 40 years and have saved one or two million dollars in their retirement accounts, they are LOSING over 9% of their purchasing power every year before they spend a penny! At this rate of decline, all of their purchasing power will be gone in 7 years. So they still can’t retire! ACK!

This is no accident. “Inflation” is actually a sugar-coated, polite word to hide the truth – prices aren’t going up, the value of the dollar is going down. So it keeps taking more dollars to buy the same goods.

Why is the value of the dollar going down? Because the Federal Reserve Bank (which is privately owned by bankers and is neither “federal” nor has “reserves”) is counterfeiting trillions of dollars out of thin air. Each additional dollar they keystroke or print reduces the value of the dollars and digits we already own. The US Congress unlawfully gave banks the power to create money out of thin air in 1913 on a vote that occurred on Christmas Eve. The “Federal Reserve Act” gave the privately-owned Federal Reserve the power to create money out of thin air.

This level of power has allowed the bankers to purchase every asset they desire and every politician they need to pass any laws they want, and to buy-off any enforcer of the laws to look the other way, giving bankers absolute power to do anything. Over the past 100 years, the Federal Reserve has overthrown our government by BUYING it.

We still have the illusion of elected leaders, but those leaders answer to the bankers. Both Democrats and Republicans are puppets of these bankers. That’s why nothing ever improves. Democrats and Republicans are like wrestlers – they publically pretend they are enemies but secretly, they both work for the same promoter – the bankers. Everything they do in public is just a fake performance to earn pay-offs and satisfy their promoters.

You can’t do anything about this. Your vote doesn’t matter. Your protests don’t matter. The corruption is too deep. There is nothing you can do to change the purposely imploding system before it collapses or undergoes “The Big Reset.” An imminent collapse or reset is a mathematical certainty.

But if you hurry, you can still become a millionaire AND protect your wealth from the coming Big Reset too. We’re going to use the same trick the bankers use – print money out of thin air. But we’re going to do it legally and morally. Keep reading.

The Direct, SHORT Route to Retirement

Conventional wisdom tells you to work a job for someone else, scrimp and save and invest for 40 years, trying to build a large enough savings account that will generate enough interest earnings to provide a large enough passive income stream to pay all your bills and “retire.” This forces you to spend the best years of your life chasing a plan that doesn’t even work for 95% of all people.

But this plan does work spectacularly for the bankers & elites who created your public school curriculum in the early 1900’s. These elites needed an endless stream of employees and soldiers to help them achieve their dreams. Their curriculum taught us to obey orders, respect authorities and strive to get a good job working for others. Of course the REAL money is made by the people who create and provide the jobs, not the workers. So you weren’t taught much about that. Doesn’t it make you angry to learn you were a pawn in a greater plan that you never even suspected? It sure infuriated me when I started my own self-educating.

So here’s a better plan: Vow to quit working for others forever. Just educate yourself on how to BUY a passive income stream so you can retire WITHIN THE NEXT 12 MONTHS.


Conventional wisdom was right on one point. You need a good education. But you need to self-educate yourself on the things that mean the most to you. Like learning how to BUY your own passive income streams so you no longer have to surrender half your life working a schedule for someone else. The 5% of Americans who have gained financial freedom have self-educated themselves to become their own authority on how to purchase passive income streams.

Everything you need to learn to retire within 12 months is in a book, online, or in the mind of someone who has already succeeded. All you have to do is read, ask and take action.

Yes, you actually CAN self-educate yourself to just BUY an existing monthly income stream from someone else and use that money to pay all your bills plus more, which releases you from having to work a schedule ever again. This passive income stream rolls in month after month and cannot be taken away.

So your new “job” becomes managing the manager of your passive income stream. This can take just a few hours a week, letting you ‘retire” the rest of the time. 95% of your time is then yours to do as you wish. If you get disabled, the income stream keeps coming. If you take a month off, the income keeps coming. Plus the passive income is worth up to 10 times its annual value if you decide to sell the income stream. No regular job can promise that.

BUYING assets that already provide passive income is the most income security you’ll ever have on this planet. When you own the income source, and it doesn’t require you to work a schedule to keep it going, you are in control of your time, your money and your life.

What Assets Provide Passive Income?

Businesses. The best businesses generate enough income to pay others to do the tasks and follow established systems. As owner, this gives you income without being tied to a schedule. You're in control. You have more time. You pay fewer taxes due to more legal deductions. You now have an asset you can sell for a multiple of annual net operating income when you're ready to do something else. Because others do the daily tasks, and there are systems to follow, more people are willing to buy this business. They're buying an income stream, not buying a job. If the business has great systems and great income you can hire a manager to run it and then just manage your manager. Businesses like this can provide great income and lots of time to spend as you like. Thousands of businesses like this are for sale right now. With self-education, you could just buy one of these types of businesses and "retire" with mostly passive income within months rather than decades.

Passive paper investments. This type of income promises earnings and/or dividends that allow you to live without working at all. Most people's retirement accounts are invested in paper assets, yet they know very little about these investments. Stocks, bonds and mutual funds fall in this category. Due to my 10,000+ hours of researching the current financial system, I don't trust paper investments. You are trading real money today, for pieces of paper that promise to pay you in the future. Right now the financial system is an unsustainable, corrupt mess that cannot be fixed without a massive reset. Stocks are massively over-priced, selling for insane multiples of annual earnings due to trillions of dollars being created out of thin air by the Federal Reserve that keep buying stocks. Suffice it to say that a massive downward "adjustment" is inevitable. When that happens, most stock and bond investments will be decimated (this includes your retirement accounts!). If you can't touch it, you don't own it. Until you cash out, paper investments are merely a promise to pay, not the payment itself.

Passive income-generating real estate. This could be either residential or commercial real estate. Residential is safer because people will do everything they can to keep a roof over their heads. A commercial business that rents a strip center space will bail out as soon as they see the business is doomed. America has seven times more retail space per person than the next closest country. This is way overbuilt. The economy is in the crapper and the middle class is being decimated by nearly 10% inflation and 23% real unemployment ( America could lose half its retail outlets in the next five years. So I recommend sticking to residential real estate for your assets.

What I Recommend

I recommend buying multi-unit residential properties over 30 units in size. Rentals are booming because only 20% of Americans now qualify for buying their own home. 52% of all Americans now have sub-prime credit scores. With self-education, you can teach yourself how to purchase and operate these properties. If your apartment complex or mobile home park is over 30 units, you can earn enough to pay its mortgage, all property bills, a manager to run it and all your personal bills too. This allows you to "retire" as soon as you stabilize your systems. There are thousands of these properties for sale right now, so you could just buy an income stream (even with little money down) and put your money woes behind you.

Because the properties are mostly passive, they sell for 10 times annual net operating income. That means that for every dollar you improve annual profits, the property is worth 10 dollars more. And passive income properties usually pay no taxes due to legal depreciation deductions.

I have chosen mobile home parks as my assets that generate passive income. More people can afford a mobile home than a stick-built home. They are willing to pay lot rent which gives you income without having to repair homes or apartments. Because mobile homes are expensive to move, turnover in the park is very low. Also, mobile home parks are far less expensive per unit than apartments or single family homes. And you can buy many units in one transaction.

As stated above, if you ever sell your mobile home park, it is worth 10X annual net operating income (or more depending on condition). Just a $10 monthly rent increase at one unit can increase profit by $120 a year. Ten times $120 is a $1,200 increase in park value. Now multiply this by 30 units and a $10 rent increase can add $36,000 to the value of your park!

What’s Right For You?

Mobile home parks felt right for me. You may select something else. If you have a restaurant background, maybe you should look at profitable restaurants that generate enough cash each month to pay all expenses, a manager to run it and leave enough to pay all your personal bills too. Then you’re “retired” having to just manage your manager. But restaurants are difficult to run and have many moving parts. If your manager quits, you’re back to working a “job” until you find and train a new one.

So the trick is to find a business that is very profitable, as simple as possible to operate and is for sale at a price that still leaves enough profit after paying the mortgage to pay all business bills, a manager to run it, and all your personal bills too. It’s also important to pick something you enjoy and can operate in a moral and fair fashion.

Some more simple-to-run businesses that come to mind are lawn care services, delivery services, carpet cleaning services, home & office cleaning businesses, campgrounds, storage facilities, local moving companies, hairdressers, scrap metal & recycling. The trick is to buy a business that is already successful and large enough to pay a manager and profitable enough to pay a mortgage, all business bills and all your personal bills too.

But not all businesses will sell for 10 times annual net operating income (NOI). The more involved the owner in the business, the smaller the multiple. Income-producing real estate gets the highest multiple. A business with a self-employed person who does all the work himself will sell for the smallest multiple, perhaps just one or two times NOI. NOI is calculated by taking annual sales and subtracting all annual expenses except for the mortgage.

But I Don’t Have Enough Money to Buy a Business!

Most people don’t have enough money saved to go out and buy a business for cash. This is fortunate, because that is nearly the WORST use of your savings. With REAL inflation (not the federal government’s fictional numbers – see for explanation) running over 10%, you want to use borrowed money to buy your passive income streams. Then you are repaying that debt with cheaper and cheaper dollars. This causes the inflation to hit your lender much harder than you.

If the business earns enough income to pay the mortgage, all the business bills and a manager to run it, you are getting the business “for free” anyway. With 10% inflation, your purchase price gets cheaper every year. Your dollar debt is fixed at one price when you get the loan but you repay it with dollars that are worth less every year. Because your purchase power is falling, you raise rents each year. So it gets easier and easier to repay that loan. This is a tremendous protection against inflation.

The good news is that you don’t need much or any money to buy a passive income stream. You are going to use borrowed money. In many cases, the person selling the business will owner finance, which lets you make him payments without even having to use a bank. Your down payment is negotiable and even that can be spread over many months or several years to get you into the deal.

But even if you need to use a bank, the news gets better. When you are buying a business, bankers aren’t looking at your ability to repay the loan, they are looking at the BUSINESS’S ability to repay the loan. They look at the amount of money the business generates. This is why you are only looking for businesses that provide passive income streams that earn enough profit to pay the mortgage, all business bills, a manager to run it and all your personal bills too. Of all the businesses for sale, only about 1 in 25 meets these criteria.

So you will have to look at lots of listings and pencil out lots of deals before you find something to pursue. But when you pursue one of these businesses that pencils out, the banker will be on your side to help you acquire it. And when you acquire it, your life gets 100 times better, you’re done working a schedule and your “retirement” is imminent.

Don’t freak out over this plan because it requires debt. There’s such a thing as Good Debt and Bad Debt. Debt that puts money IN your pocket is Good Debt. Debt that takes money OUT of your pocket is Bad Debt.

A bank loan for a property is Good Debt because even after the business makes enough money to make the loan payment, there is still extra money left that goes IN your pocket. By taking out that loan, you earn MORE money. The bank is happy because you are paying them interest on that loan. You are happy because that loan gave you control of a passive income stream. That income stream is “free” to you because it earns enough to pay its mortgage, all its bills, a manager to run it and all your personal bills too.

A car loan is Bad Debt because it doesn’t generate its own payment. YOU have to go out into the world to generate enough money to make that payment. Bad Debt takes money OUT of your pocket.

Can You Scrape Up $1,000?

Margie & I bought our first 32-unit trailer park for $1,000 down. We didn’t have the $400,000 sales price (we negotiated sellers down from $450,000). All we had was $1,000. So we went to the bank and found out their loan requirements. They said that if the park’s numbers justified it, they’d loan up to 70% of the appraised value of the park. (The park’s numbers DID justify it).

We took that info back to the sellers who were very motivated to sell and retire. The park was a massive fixer-upper. We learned the couple was just tired and didn’t want to fix anything before the sale and just get out of it. We said we’d buy it as-is and we convinced them to carry a second mortgage for the remaining 30% of the sales price. They were happy to do that because they were getting 70% of their money from our bank at closing. But they wanted to get all of the 30% we owed them within five years. So we agreed to make monthly payments to them as if the loan was for 20 years and then just pay all the remaining balance we still owed them 60 months later. That gave us 5 years to fix up the park and increase profits so we could refinance and pay off the sellers.

The sellers agreed. The bank agreed. We put $1,000 cash down and bought ourselves a mobile home park. It gets better. We closed on the 5th of the month which required the sellers to collect rents for that month and hand over 25 days worth of rent to us at closing. They also had to hand over all rental deposits they held from tenants. We ended up walking away from closing with over $6,000 cash. In effect, the sellers PAID us $6,000 to take their park.

The park immediately provided enough monthly cash flow to pay both mortgages, all park expenses, and still give us over $3,000 a month profit. Because we were earning income from another business we had started ourselves (a trolley tour business), we just plowed that $3,000 back into park repairs and improvements. Six months later, after learning the business and tenants, getting rid of bad tenants and raising rents in those vacancies, we hired a park manager to get us out of the day-to-day duties. The park income paid for her too.

By the way, we DID refinance this park five years later and pay off the 30% we owed the seller. Thanks to our dwelling and profit improvements, the park had appreciated in value from $400,000 to $900,000. It’s now worth well over a million and earns over $8,000 a month after paying the mortgage, a manager and all park bills.

A few years later we sold the trolley business. We used the proceeds of the trolley business sale to buy a second mobile home park that was in better condition and only had rental lots (tenants owned their own trailers). The seller financed the deal so we didn’t even have to use a bank. Both parks have managers and our only job is to manage our managers. Our income is 95% passive so we are “retired.” The parks’ monthly income pays for our entire life. Better yet, the parks grow in value every day.

So let’s review. We started with $1,000 and lots of self-education. We used other people’s money to purchase an asset that actually PAID us $6,000 at closing to take it over. The asset immediately paid for its own mortgages, expenses and manager AND provided us $3,000 a month profit. We used those park profits to make repairs and improvements which allowed us to raise the rents in units when they became vacant. Five years later, thanks to our improved dwellings, rent increases and management of expenses, the park had more than doubled in value and provided twice the original profit per month. Now it earns nearly three times its original profit.

Then we used everything we learned from the first park to buy a second, more expensive and easier-to-operate park, greatly increasing our passive income.

Like I promised to show you earlier, this is one way to legally and morally print money out of thin air.

Real Estate Earns Income Four Ways

More fortunes are made in real estate than any other way. Rich people buy real estate and rich people write the banking and tax laws. They have stacked the deck in their favor to make real estate a lucrative investment. So why not learn to do what they do? Here are four ways real estate earns money.

Equity. Each month, when tenants pay their rent, they provide the money you use to make the mortgage payment, which reduces your loan balance and increases your equity.

Depreciation. Due to this large, legal tax deduction, many income properties do not have to pay tax on their earnings. Paying less in taxes is like getting a pay increase.

Appreciation. As you increase profits by increasing rents and reducing expenses, the value of your property goes up $10 for every $1 in additional annual profit. (Most parks sell for 10 X annual net operating income.)

Monthly income. If you bought the property right, you'll have money left after you pay the mortgage, all its expenses and a manager to run it. This is income you can use however you like.

Rental property gets a bad rap sometimes from people who never owned enough units to make it profitable. If you own one unit and it’s vacant, you’re 100% vacant. BIG problem. If you own 30 units and you have a vacancy, you’re only 3% vacant. Small problem. If you own one unit and a tenant damages it, BIG problem. If you own 30 units and a tenant damages one unit, small problem. If you own one unit and a tenant doesn’t pay, BIG problem. If you own 30 units and a tenant doesn’t pay, small problem. More units = less risk.

Buy One Large Property and Retire This Year

Motivated people can use real estate to “retire” within a year of buying just one large enough property. All you have to do is start self-educating yourself, look for deals, practice penciling them out and take action. I was 100% self-educated using books, free online resources and my own meetings with sellers. I took no college classes. I attended no real estate seminars. I penciled out dozens of deals and visited four other parks before finding and buying my first one.

I finally took action because I tired of working a schedule and decided I was going to get free of it with passive income. I chose trailer parks. You might choose something else.

This type of thinking turns your world upside down. Remember how many trips we took as kids to that Dairy Queen? Today, I could buy a Dairy Queen. I could buy a chain of Dairy Queens. In fact I’ve had several chances to buy Dairy Queens. I turned them down because they didn’t pencil out to pay for themselves and earn enough passive income. I don’t want to buy a job, I want to buy a passive income stream.

Like I said earlier, you don’t have to have enough money on hand to buy a business with cash, you just have to understand how to buy it using other people’s cash. Once you learn those skills, you can buy anything that pencils out profitable enough.

But you have to have the courage to break away from the herd. 95% of the herd will never get financially free and most will never achieve their biggest dreams. To get a different result, listen to those of us who are already financially free. Nothing is more important than your own self-education. Everything you need to learn is in a book, online or in the mind of someone who has already done what you dream. Read! Ask! Take action!

My Favorite Resources

My best three resources to learn more about how to gain passive income and retire early are the book "Rich Dad Poor Dad: What the Rich Teach Their Kids That the Poor & Middle Class Do Not,” the website Creative Real Estate Online ( and the Daniel Amerman free course “Finding Wealth in Unexpected Places” (

“Rich Dad Poor Dad” introduced me to the concepts of assets, liabilities and monthly cash flow. It revealed that you don’t need to wait until you’ve saved a million dollars to retire, all you have to do is earn enough passive income each month to pay your bills. Once you achieve that, you can “retire” from working a schedule immediately. Then with all that free time, you’re able to find, research and buy other passive income streams so your income always goes up. Once you get one deal completed, the next ones are far easier because of your knowledge and confidence and improved credibility with banks and sellers.

The website provides hundreds of free success stories and how-to articles that motivated me and helped narrow my focus to trailer parks. I can truly say that 90% of everything I needed to know came from Rich Dad and My total investment in my passive income education was about $80 for books and a few hundred hours of time. Then I learned as I went as we operated our first park.

The Daniel Amerman materials graphically spell out how savers and investors are being systematically sheared so deeply and frequently that it’s now impossible to save your way to retirement. Your purchasing power is being stolen by low interest rates on investments, high inflation that makes those investments “look” like they gained even though they lost purchasing power, and high taxes on the numerical “gains” that were actually purchasing power LOSSES. Not 1 in 10,000 people will ever figure out how they are being massively ripped off. Read Amerman’s materials and you’ll be that one. He also shows you how to AVOID the rip-offs and actually GAIN while everyone else is losing. (Spoiler alert: Amerman proves that mortgaged income property is basically your only escape).

You Get to Create Your Own Life

Life is a process. Becoming financially free is merely a consequence of becoming the person who has learned enough to do so. This requires a financial self-education beyond what you learn in school and from “conventional wisdom.”

You’re certainly smart enough to tackle this. I know you have an incredible work ethic. If you just combine your smarts and work ethic with a dash of courage to take the needed action, you can free yourself from the world of employment forever. Within a year, you can achieve that financial freedom where money is working for you, you’re no longer working for money.

Becoming financially free is an amazing feeling. When you own income-producing assets no one can take them away. You can’t be fired. You don’t have to beg anyone for time off or a vacation. You don’t have to wear a costume. If you want a raise, you just raise rents/prices, lower expenses or buy another property/business. If you want a new toy or better house, you just buy another income stream to pay for it.

Financial freedom rocks! The money is nice, the time is fantastic, but the knowledge and confidence and appreciation and sense of achievement is really what makes for a fulfilling life. Once your monthly passive income exceeds your monthly bills, you no longer have to work a schedule. With motivation and self-education, this can happen decades sooner than age 65 and certainly within a year.

I “retired” at age 52. If I knew and applied what I’ve written here when I was younger, there’s no reason I couldn’t have retired at age 22, 32 or 42.

It is much more fun and exciting going through life on your own terms than working for someone else. You say who, you say when, you say how much. It is so fulfilling to creatively improve your assets and build your own world. You get to put a piece of you into everything you operate. You go through life looking at businesses not as a customer, but as a potential buyer. It really is a kick to drive by a Dairy Queen and know you could buy it if it earned enough profit.

That’s It

So that’s it. I have fulfilled my promise. I have shared how I became a millionaire. There are many more actual nuts and bolts activities to learn to master specific tasks. As you start your self-education, the questions will arise. That will attract the answers you need. It’s an inspiring journey and I envy you the joy of your new growth. Of course I am always here to answer questions or provide advice if needed. And when you achieve financial freedom, you too, will be happy to share how you did it with others. In fact, as a condition of reading this letter, I ask that you do so. Think of the decades we can save others by showing them how to “retire” within a year, rather than working their entire lives trying to save up something they can just buy.

You only have so much time. Passive income allows you to spend that time as you like. Can an old dog learn new tricks? I believe you can. I know the payoff is 100 times worth the effort to get there. If you want it bad enough, it’s all out there waiting for you. You deserve it.

Your friend,

Mike Johnson

P.S. This letter is only worth a million dollars if you take action. But hurry! The Big Reset is going to happen without warning and far sooner than most “experts” can even imagine. After the reset, no one knows what the currency will be or if loans will even be possible.

P.S.S. When you get close to acquiring your first passive income stream, call me so I can help you celebrate. I’ll show you how to protect it from the coming Big Reset.

P.S.S.S. I’ve written several how-to articles for Creative Real Estate Online ( and others that can speed your self-education. You’ll find them linked on the bottom of my website, . Make sure you read the comments under those articles too – they also share a wealth of knowledge.


All of this information assumes you don’t have any mental junk that self-sabotages your aspirations. If you have issues that make you doubt your worthiness of becoming a millionaire, you have to get rid of those issues first. The only thing that stands in the way of you and your goals is the junk in your head.

No sellers, no bankers, no Realtors are going to stop you from BUYING your passive income stream. They may put up barriers or raise objections that you’ll need to learn how to work around, but each of these challenges forces you to learn new things that will help you forever. A barrier is not physical. It is only mental. Remove the mental barrier and you can walk directly to your goals.

The End

(Frequently Asked Questions Bonus is Next)


How to Retire Within 12 Months: Frequently Asked Questions

By Mike Johnson

OK, you’re on the quest. You want to retire within 12 months. All you need to do is BUY a profitable enough business or income property and you’re done working a schedule forever.

This is such a life-changing goal that it is worth any amount of work it takes to achieve. Fortunately, the search is one of the most enjoyable parts of this process.

How Do I Find Passive Income Streams?

Step 1: Where do you want to live?

If you are happy where you are, start looking close to home. If you have always dreamed of living in a warmer climate, in the mountains or on the beach, start looking there. It is easier to manage the manager of your passive income stream when you are located closer to your property. Because businesses and income properties are for sale in all areas, start searching the areas where you want to live.

Searching where you already live is easier because you can easily visit properties, and easily manage them if you buy them. But if you live in a small town, there might not be many properties listed that meet your criteria. So you might have to increase your range to the nearest bigger town or city.

But if you plan to move to a different location upon retirement, you might as well start becoming familiar with that location and shop for passive income streams there. This will be more difficult due to travel, but ultimately pay off by completing two dreams at once – moving where you want and buying the passive income stream that lets you retire.

Step 2: Go Shopping!

Here are the best places to shop for your passive income stream.

Classified Ads in Sunday Newspapers

This is the obvious source. You’ll want to look under “Commercial Property,” “Businesses for Sale,” “Income Property,” “Multi-Family” and “Business Opportunity” headings.


Visit with the most visible commercial property Realtors in your search area and tell them what you are looking for. They often know of properties that aren’t yet listed, or once were listed but are now inactive. They will also know of any businesses or income properties actively on the market. If nothing is currently available, ask them to call you as soon as they hear of something.

Multiple Listing Service

Multiple listing services are often online for public access. Ask your Realtor for the web addresses, so you can do your own searches each week. Or just enter the “city name + multiple listing service” in Google to find listings in any target area.

Real Estate Guides

Depending on city size, these are printed weekly, monthly, quarterly or annually. Get the latest edition from a Realtor or convenience store. Ask your Realtor to mail you the new one every time it is published.

Send Letters to Local Property Owners

Many properties change hands without ever being listed for sale. Send a letter to the business or property owners that most interest you. Introduce yourself and ask them to contact you if they ever want to sell. Most owners will be flattered and at the least, save the letter for the future.

Speak to Bank Managers

Tell them you are looking to buy a profitable business or income property and would appreciate them telling you of any they know are available. Bankers know their customers and will know who is behind on payments, who has a property for sale, or who might want to retire. Use the meeting to build a relationship and discuss the bank’s commercial loan terms and qualifications. Then when a property does become available, you’ll know which banks are the best candidates for funding. is used by serious commercial Realtors, buyers and sellers nationwide. This site requires you to register (free) to access thousands of commercial properties all over the USA. They withhold some listings for their paid subscribers ($84.95 per month to get everything listed). I have used this service as both a free and paid member. Try the free service to learn the lay of the land and upgrade when you get more serious. Tip: If a listing is “inactive” click the link under the listing to learn more about the property. This will provide details from when it WAS listed. This is great info to find motivated sellers as it reveals the old price, time on market and ownership details.

State and City Commercial Property Websites

Just use Google to find these sites. For example, I found by searching for “Montana commercial property.” This great, free Montana site links to dozens of commercial property listings you might never find. Do the same for your targeted state or city.

If interested in mobile home parks like me, advertises entire parks for sale. Just click the tab labeled “Mobile Home Parks For Sale.” You can select listings by individual states. The listings often provide the park’s financial numbers, so you can pencil out parks immediately. The ballpark industry norm for mobile home park price is ten times net operating income. Any park listed for that or less is a potential deal.

Which Properties are the most profitable with the least amount of work?

I’ve owned businesses and I’ve owned mobile home parks. Businesses have many moving parts. A good manager can handle things for you if the business is very profitable and your systems are very strong. Businesses do NOT sell for 10 times annual net operating income so you can get in more cheaply than good income properties. But banks will finance some of these businesses for a shorter period of time, making your mortgage payments higher, which makes the businesses harder to pencil out.

I think mobile home parks that do not own any of the trailers are easiest and most passive income streams. You are renting out the lots only. So you have no repairs to dwellings, far less turnover (trailers are very expensive to move and set up) and better tenants (owners have higher standards than renters).

I own two parks – one owns no dwellings and rents lots only and the other owns most of the dwellings and rents those. The second park is more profitable but many times more difficult to operate. To get into a deal, you may have to buy a park that owns some of the dwellings. It is good to learn that side of the business. You can always sell those dwellings to the tenants on payments to make your park easier to operate in the future. But given a choice, lot rent-only parks are far easier to operate, have a smaller learning curve and are more passive.

Once you find a business or income property that interests you, your next step is to get the numbers.

How do I pencil out properties to determine if they will provide enough income for me to retire?

The first key number to get is annual net operating income (NOI). This is all annual income minus all annual expenses (other than mortgage, amortization and depreciation). You want ACTUAL numbers from recent history, not projected numbers of what could happen if the park is run well. The sales price should be no more than 10 times ACTUAL annual NOI and hopefully less.

Not all sellers will have their numbers organized for you. Many are mom & pop operators who never needed to create profit & loss statements for anyone. So you may have to collect the data from the seller and build it yourself. When you make an offer on the property you can request a 30 or 60 day due diligence period where the seller has to help you assemble all the numbers so you can independently verify they are accurate.

Typical expenses to gather if your Seller doesn’t have a profit and loss statement:

Property taxes, insurance, all utilities paid by the park, repairs done in-house and repairs by outside vendors, supplies for repairs and operating park, employee labor expense, lawn care, snow removal, tree trimming, advertising and miscellaneous.

To calculate annual net operating income, just subtract all total annual expenses (except mortgage, amortization and depreciation) from total annual income. What is left is annual NOI.

Bankers will discuss a term called “Capitalization Rate” or “Cap Rate.” This is a measure of how much return you get on your investment. For example, if you pay a million dollars for a property that earns an annual net operating income (NOI) of $100,000, your cap rate is 10%. You’re earning 10% on your million dollar investment each year if you paid cash to buy it. Just divide the sales price by the annual NOI.

The more active your participation in the business or property, the higher your cap rate should be. If you are trading more of your time running the property, you should be getting a higher return on your investment. Lot-rental only mobile home parks should get a 10% cap rate or more. Higher is better. A business that requires the owner to do most of the work would require a 50% to 100% cap rate to make it worthwhile. If your goal is to “retire” with 95% passive income, you don’t want a business that requires lots of your time. You want one profitable enough to pay a manager to do most of the work.

Businesses/properties with managers in place and good systems sell for a higher multiple of annual NOI (higher price). Those that require more owner activity sell for lower multiples of annual NOI (lower price).

So what does the financing look like?

Conventional loans from banks will typically finance 70% (in rare cases up to 80%) of the appraised value of a residential income property like a mobile home park. Businesses may be much less, depending on the appraiser’s review. The appraisal must be done by an independent appraiser chosen by your bank.

The value is established by three criteria in the appraisal.

1. Income: What the appraiser thinks is a fair multiple of NOI for that property.

2. Asset Value: Based on the value of all the assets that come with property.

3. Comparables: Based on comparisons to like businesses that recently sold.

You really have no control over the appraisal. The appraiser will come up with an overall value based on the three values he establishes above. The bank will use the appraisal as gospel. Appraisals are expensive and can easily run $2,000 to $6,000 depending on the complexity of the property. You can negotiate the seller to pay half or all of this. You can also ask your banker to add any portion you pay to the mortgage so you don’t have to come up with more cash to buy the property. It WILL come out of your pocket if you don’t buy the property and haven’t negotiated the seller to pay all of it.

Calculate the loan payments using 4.75% to 5.5% interest and payments spread over 240 months. This too, is conventional for bank commercial loans for residential income properties. A business loan may only be extended for 5, 7 or 10 years so your payments will be higher because they are compressed into less time.

To calculate your mortgage payment, use a free site online (just Google “Financial Calculator”) or buy your own financial calculator for about $35 at Wal-mart or an office supply store. There’s a small learning curve required to operate it.

This will leave a 20% to 30% funding gap for income properties. Ideally, this is the amount you pay as a down payment. This is the standard way most deals are structured.

But what if you don’t have 20% to 30% in cash for a down payment? You ask the seller to carry a second mortgage for some or all of this. I explain how to do that farther below.

When I look at deals, I always assume 100% financing when I pencil them out. So if the park is listed for a million dollars, I’d just assume 5.5% interest for 20 years (240 months) which is a monthly payment of $6,878.87. Now multiply this by 12 to see what a full year of payments adds up to ($82,546). If the park has a 10% cap rate, that means the NOI is $100,000 a year. Subtract the $82,546 mortgage from your $100,000 NOI and you see the park would earn $17,454 per year after paying all expenses and a mortgage that is financed 100%. This is $1,454 per month profit. If you could get your loan for 5% interest, your annual payments would drop to $79,195, leaving you a profit of $20,805 or $1,734 a month.

That’s not enough to retire on, but you can see that even with borrowing 100% of the sales price, the deal does earn you a profit as it stands. So how can we improve this deal to get us enough money per month to retire?

One way is to negotiate a lower price. If the property needs work, you have a better chance of getting a better deal.

Another way is to learn who is paying the utilities. Some parks pay some of the utilities for tenants as part of their lot rent. Water, sewer and garbage are sometimes paid by park owners. Over time, you could transfer these costs to tenants.

But the real magic of income property mathematics occurs when you consider rent increases. When a park is sold, the tenants expect the new owner to raise rents. This is your best chance of getting the highest rent increase possible. Typically, most sellers have lot rents that are below market rate. Long-time owners know their tenants so well that they hesitate to raise rents.

The most I would recommend raising rents upon buying a new park is $30 per month. If you have 50 lots, this is $1,500 per month increase for you. Add this to the profit we started with above and now your park is generating over $3,000 a month profit. Now we’re getting closer to an amount that can pay all your personal bills, allowing you to “retire.”

What does your $30 rent increase do to park value? Because parks sell for about 10 times NOI, every one dollar you increase profits makes the park $10 more valuable. If you can get all of that rent increase into your profit column at the end of the year, $1,500 a month X 12 months = $18,000 more NOI a year. Now multiply that NOI increase by 10 and your park value just went up $180,000! That’s an 18% increase in the first year!

In year 2 you might take a $20 a month rent increase or another $1,000 a month. Now your park is earning over $4,000 a month profit. This may be enough to pay all your monthly personal bills. If you have a manager (most can be hired for $500 a month to operate a 50-lot park) you could “retire” within 12 months with 95% passive income. Just manage your manager.

Remember we calculated this using 100% borrowed money. If you put your own money into the deal, your monthly payments will be lower, making your monthly profits higher.

Why Mobile Home Parks?

I invest in mobile home parks because I am a cash flow investor rather than a capital gains investor. My parks generate enough cash flow each month to pay the mortgage, all park expenses, a manager to run each park and all of my personal bills too. That allows me to retire now, which is priceless to me.

Capital gain investors buy a property and hope it increases in value, then sell the property and pocket the profit. People who buy houses and rent them out are capital gains investors. Their tenants pay enough in rent to pay the mortgages, property taxes and insurance but there is rarely much cash flow left after those bills. These investors are using the tenants’ rent payments to get “free houses” and expect to cash in far more after the mortgages are paid off, or if the homes appreciate over time and can be sold.

But there are capital gains taxes to pay then (15% to 24.5%) and the problem of where to park that cash to keep it safe and get a good return.

Houses are also very expensive each and because you can’t afford to buy many of them, you can’t get enough units to afford a manager so you end up managing them yourself. It’s been said that all landlords burn out within two years, unless they’re Superman, in which case they burn out in three.

In the mobile home park world, I can get tremendous capital gains too if I sell my parks. Parks sell for 10X annual net operating income. So each $1 I increase my profit adds $10 to the sale price. So even though individual mobile homes depreciate in value, value of parks is determined by net operating income, not the value of individual mobile homes. So a well-run park that keeps increasing profits will also increase in value which gives me the best of both worlds — cash flow that allows me to retire now and capital gains that gives me a big payday if I ever decide to sell.

How to Buy Parks Without Banks

OK. So I’ve convinced you to buy a mobile home park because you can buy enough units, with enough income to pay all its operational bills, its mortgage, a manager to run it and all of your personal bills too. You want to buy just one property so you can “retire” with 95% passive income. And you want to do this with little or no money down.

But how to finance it? Most banks today require down payments and tougher qualifications for approval. Their over-reaction to their self-caused real estate bubble has eliminated many buyers from gaining bank financing. Their loss.

Banks are just one source of financing, and not nearly the best one. Here are other ways to fund a mobile home park purchase without using a bank.

Get Seller Financing

In my reading and experience, over 30% of all mobile home parks are owned free and clear. The seller of a mobile home park is familiar with its cash flow. He knows the park is profitable and will continue to be if operated well.

He’s used to paying little or no taxes because of park depreciation and other legal business deductions. He certainly doesn’t want to sell the park for cash and face a giant capital gains tax. He just wants to retire from park responsibilities but keep the monthly income stream.

What a coincidence! You want to take over his responsibilities and pay him a monthly payment that will minimize his tax liability and earn him a fair interest rate. So you just have to convince him you’ll make that payment and operate the park well.

Here’s How It Works

I bought our second park with 28% cash down (I’d just sold another business) and the rest financed by the seller over 14.3 years. Why 28% down? The seller demanded it, and I wanted my cash in something I could control. Why 14.3 years? The seller needed a certain amount of income per month, so we set our monthly payment for that and let the amortization work itself out with the balance we owed.

Our monthly payment is a bit higher than a loan amortized longer, but the park easily affords it, it made the seller happy to do the deal and, as a bonus, the park will be paid off pretty quickly.

When we asked the seller how he established his asking price, he told us his financial planner told him that’s what he needed in cash to invest in mutual funds to earn a high enough return to get the monthly income he wanted.

When we showed him the park’s annual net operating income (NOI) and how 10 times that was the normal sales price for mobile home parks, it showed he had listed the park for $300,000 more than it was worth. We then offered to make our monthly payment the exact amount of income he wanted and offered to pay the full 10 times NOI even though the park had a few issues.

We also reminded him how many mutual funds had lost money. He’d have no security if he lost cash investments, but his investment in our 6.5% mortgage was secured by a mobile home park he knew produced good income. If we didn’t pay, he got his park and income stream back. If his mutual funds tanked, he’d get nothing back.

He accepted our offer, which gave us a $300,000 price reduction and seller financing. No appraisal was required because no banks were used. He was happy, we were happy, and the deal closed quickly without all that ponderous bank paperwork.

Spread the Down Payment Over Time

What if you don’t have 28% down payment in cash? Everything is negotiable. Motivated sellers may not require a down payment. Others will allow you to pay your down payment over time. Just negotiate the lowest possible amount and then spread it over 12, 24, or 36 months. Make quarterly payments in addition to the monthly mortgage payment you negotiated.

Obviously the park has to pencil out to afford both payments. You may work for 1-3 years earning equity only, but that equity will still be worth many, many thousands of dollars. Once the down payment goes away, you earn equity AND monthly income.

Trade Something for the Down Payment

Sellers want something up front to get an immediate payday and to make sure you have enough skin in the game to stick with the deal. This doesn’t have to be cash. Do you have an RV, ATV, car, boat, time-share, vacant lot, cabin, second home, small business or other asset to trade? Do you have skills to trade? The more you learn about what the seller plans to do with the proceeds, the more you’re able to give him what he wants within the limits of what you have.

Lease the Park

Most park owners just want to be free of the tenants and park responsibilities. If you can’t convince them to sell you their park, try for a lease option.

You agree to a fixed purchase price at a future date. But you take over the park immediately. You make a rent payment to the owner each month and take over all operations of the park and pay all the bills. You also collect all the income.

If the park penciled out correctly, you’ll easily pay your rent and have monthly income left over. If you negotiate well, a portion of the monthly rent will be applied to your down payment at the purchase date. Lease the property for 1 to 5 years and you’ll earn enough income to pay any reasonable down payment at closing and get a bank loan for the rest.

Many investors say, “If you can’t touch it, you don’t own it.” Mobile home parks are one investment you can not only physically touch, you can physically control.

What do I say to sellers to get owner financing?

When I’m negotiating with park sellers I always ask how they plan on using the proceeds. This helps me make an offer that works for everyone. Most sellers start negotiations wanting all the cash at closing. But where will they put all that cash that is safe and gets a good return? If they invest it in stocks and stocks go down, they have nothing. If they invest the money in a first or second mortgage with you, they’ll earn 5-6% (negotiable) and if you don’t pay, they get their income stream back (the park). A mortgage to you is far more secure and generates more income for the seller.

I also remind the sellers that stock brokers today are getting away with stealing clients’ money. Banks are also changing their deposit rules so if they start going under, they can steal depositors’ money. The truth is, if you are sitting on a lot of cash, you are a target to both governments and banks.

If a seller wants to retire, there is no better way than secure, passive income. With you making him payments, he has the security of passive income backed up by the park. He can’t lose even if you don’t pay. If he’s worried about the repossession process, you can add a clause in your contract that makes that process easier and faster to ease his concerns. You can also sign a quit claim deed at closing and have the closing agent hold it on file in case you don’t pay. The seller can then have the closing agent file the quit claim and take his park back.

Usually, a seller who wants cash at closing wants to pay off some other debt. Just find out how much he needs and structure your deal to get him that at closing. Perhaps a 50% first mortgage from a bank will do that and he can carry the other 50%. Or, if he can finance the entire sale himself but wants the cash sooner, offer a 5-year balloon payment. Your mortgage payment is still amortized over 20 years (or whatever you negotiate) and you make monthly payments. But in month 60, you have to pay the entire remaining loan balance. That gives you 5 years to increase the park’s value before you refinance and pay off the seller. You get into the deal, and the seller sees he gets all his money within 5 years.

Finally, if the seller wants to sell the park, most buyers will need financing to get it. This requires an appraisal. Banks will only loan a percentage (usually 70%) of the appraised value. If the seller’s books are weak or profits are weak, the appraisal will come in low and a buyer won’t be able to fund the gap. If the seller offers 100% financing himself, no appraisal is needed, which avoids all those banker hoops and makes the deal much more certain to close — and to close much faster. So if sellers want to sell, they’ll have far more potential buyers if they can keep banks out of the deal. This is done by sellers carrying the mortgage.

As long as you convince the seller you will run his park well and make your payments, he’ll be more flexible. It also helps if he likes you. Bonding with the seller is a must! This can’t happen going through a Realtor only. You must meet and speak with the seller to increase your chances of getting owner financing. The best way to do this is to insist the seller is present when you look at the property. He’s more of an expert on the property than the Realtor so you’ll learn more and have the chance to build rapport.

What’s involved in operating a business/income property and how do you find a manager?


Ideally, your newly-purchased business will come with a manager. But that doesn’t mean you don’t need to keep close watch. I used to oversee 55 7-Elevens and I can tell you from corporate studies and personal experience that employees are responsible for about 80% of all theft. So you are not going to blindly trust any employee, let alone the manager.

Before you buy the business, it is wise to ask the seller his opinion of the manager. Is he honest? Capable? Good with people and customers? Dependable? Have a good attitude? Coachable? Watch the manager in action as often as possible. If she appears acceptable, keep her on a probationary basis as you take over the business.

If the manager is not worth keeping or decides he doesn’t want to stay, you’ll have to temporarily take over the business yourself or recruit and hire someone with experience before closing on the purchase.

You will use the manager to deal with the day-to-day issues like operations, scheduling, ordering, training and dealing with employees and customers. You are going to keep track of the money, pay the bills and manage your manager. Managing your manager includes establishing your standards and tweaking the existing systems to get the results you desire.

As you deal with your inherited or new manager, you are evaluating him/her to see if they have the abilities you want. If not, you quietly look at your other employees to see if one of them is manager caliber. If so, you’ll make the change as smoothly as possible.

If no one on your team seems capable, you’ll have to hire someone from outside. It’s an employers’ market these days so a good ad will generate lots of applicants.

Remember that the goal of buying the business is to acquire a 95% passive income. Your role is managing the manager and making sure systems are in place for employees to properly run the business.

Income Property

In a rental business, your manager is going to help collect rents, deal with tenant issues and repair requests, supervise vendors, show and fill vacancies and maintain standards.

You want to handle as much of the money as possible (less chance of manager theft) and you want to keep control of paying the bills. In my mobile home park where I own no trailers, I only write about 4 checks a month. In my park where I own most of the dwellings, I write about 20 checks a month. This shows the complexity of owning the dwellings vs owning just the lots.

Utilities is another consideration. In the park where I own no dwellings, the city bills my tenants directly for all utilities except water and sewer. I pay that bill for tenants and my rents are higher to reflect that. I do not have to send my tenants any monthly bill. They just automatically send me my rent payment like they would a fixed car payment.

In my park where I own the dwellings, only the gas company, phone company and satellite TV company directly bills my tenants. I have to bill my tenants for their electric, water, sewer and garbage each month. This is in addition to their rent bill. Sewer and garbage are fixed costs so stay the same each month. But electric and water are metered to each unit so we have to read the meters and calculate the bills. This requires us to bill every tenant once a month for their rent and utilities. This takes several hours a month to compile. The manager then delivers the bill to each tenant.

Once again, a mobile home park with lots only is far easier to operate. No homes to repair. Very low turnover of tenants because trailers are so expensive to move. This means no showings, no screening new tenants, no advertising for vacancies. You just have to maintain your infrastructure – the underground water and sewer lines, your electrical boxes at each pad, your streets, your tree trimming and your common area lawns. A park in a southern climate avoids the winter issues of snow removal and water line freeze ups.

If your park comes with a manager when you buy it, and the seller recommends them, great. If not, ask which existing tenants would make good managers. It is always better to have a manager who lives on-site. They will see the problems and see them far sooner than an off-site manager.

I also prefer employing my own manager rather than using a management company. Management companies charge more and are not as easy to manage as a manager who works for you.

How does a business or income property protect me from low interest rates, high inflation and unfair taxes?

In today’s world, paper investments and jobs are the worst way to accumulate wealth. For starters, REAL inflation has been running near 10% for the past several years. Governments keep changing the formula to make it look lower than it actually is. See for a full explanation and to see the REAL inflation and unemployment numbers.

So if your paper investments are not showing a 10% gain, you are losing money. In today’s world, you are lucky to be getting a 3% gain. Low interest on your investments keeps you losing ground to inflation which means that despite your “gain” you are still losing 7% of your purchasing power each year. But the IRS doesn’t recognize inflation and still taxes you on the 3% “gain.” This is the triple whammy of low interest, high inflation and unfair taxes that is decimating most paper investors.

When you buy a business or income property with borrowed money at a fixed rate, inflation hits your lender far more than you. Each year, you get to repay your debt with money that is 10% cheaper due to inflation. You also have the ability to raise prices or rents to help offset inflation. So every year, your fixed-rate loans get easier to pay. This is a huge inflation hedge.

Because you own your business or income property, you control your income and expenses so can adjust them to get a larger gain than the piddly 3% paper investments are earning. If you want a raise, you raise prices, raise rents, cut expenses or buy another business or income stream.

Finally, due to the legal depreciation deductions the IRS lets you claim in business and income properties, your taxable income is greatly reduced, which greatly reduces the amount of taxes you pay. Income properties are the better deal with taxes. Due to depreciation, most large income properties pay little or NO taxes on their income, despite earning a great income.

So buying a business or income property with fixed-rate borrowed money, protects you from the toxic brew experienced by paper investments (and retirement accounts) of low interest, high inflation and unfair taxes.

Jobs are the worst because they offer the fewest deductions, making them the most taxed income. Wages rarely keep up with inflation so employees always lose purchasing power. Jobs also have the least amount of freedom and force you to work a schedule. Trading time for money is the worst way to earn income but is the way conventional wisdom tells everyone to do it.

As proven above, paper investments and savings are the worst way to accumulate wealth but conventional wisdom still tells everyone it is the best way. So you can see that the only way you will ever accumulate enough wealth or passive income to retire, is to stop listening to conventional wisdom and become your own expert.

What advice can you offer to get Realtors, sellers and bankers to want to do business with me?

Realtors: Tell them you are looking for the most profitable businesses or income properties in your area. Tell them you want one property that will earn at least $X per month after its operational bills, it’s mortgage and a manager are paid. You pick a number that exceeds the total of your monthly personal bills. Tell them you are ready to buy today. You also want to build rapport with the Realtor as you want them recommending you as a buyer to the seller.

Sellers: Get to know them. If you want any owner financing to close the deal, you’ll need to build rapport and get the seller to want to sell to you. If you don’t meet the seller, there is a 90% chance you’ll get NO owner financing. If you meet the seller and they like you, you have a 75% chance of getting some owner financing. The best way to meet the owner is to ask them to show you the property with the Realtor so you get the best answers to your questions. Show respect for their property and make sure the seller believes you’ll run it well and always make your payments on time.

Bankers: Learn their loan qualification criteria. Ask their application requirements. They want your business because you’ll be paying them hundreds of thousands of dollars in interest. You are doing them a favor by asking for a loan! Now go back and crunch your numbers and make a strong financial case that proves the property more than pays for itself. Commercial loans are different than home loans. Commercial loans are given based mostly on the income of the property, and far less on your income personally.

Banks are looking for the 5 C’s:

Collateral: The property has to be appraised at a value higher than the loan. If you don’t pay, the bank takes the property and sells it to get their money back. They want as much buffer as they can get.

Cash flow: The property has to generate enough income each month to pay all its bills, its new mortgage and have plenty left over as a buffer.

Character: Do you have a good reputation? Are you honest? Do you have skills and experiences that will help you succeed with the business or income property you’re trying to buy? If not, do you have an advisor or partner who will help?

Capital: How many assets do you own? This includes everything. The banker is going to want to see your balance statement that lists all assets and all debts to show your net worth. The higher your net worth, the better. He wants to see that you are currently meeting your obligations.

Credit: What is your credit score? The higher the better. Bankers want people who have proven they pay back debt on time. Any negative can be overcome. We bought a house three years after a bankruptcy, got a start-up business loan 5 years after a bankruptcy and bought our first mobile home park 6.5 years after a bankruptcy.


You really CAN buy just one large profitable business or income property and retire within 12 months. Yes, there is a learning curve. Yes, you have to leave your comfort zone. Yes, you’ll face some rejection as you walk this path. But you successfully face all these issues every time you get a new job. But the payoff is piddly compared to the payoff you get from owning passive income streams.

I can tell you from firsthand experience that being able to retire young with 95% passive income is worth it all 1,000 times over. It allows you to live the life YOU create, rather than the life others create for you.

Time is going to march on no matter how you spend it. If you spend it wisely by self-educating and buying a large enough passive income stream, you can be free of a work schedule and 95% retired within 12 months. Doesn’t that sound like a valuable trade?

All the best!

Mike Johnson