049: The Residual Income Path to FIRE | Eric Chang

In today’s episode, Eric shares how he achieved FIRE by building multiple streams of residual (aka passive) income—all before the age of 30! From marketing consultant to real estate and entrepreneurship, Eric’s story is fascinating, inspiring, and motivational.

Be warned: Eric’s energy and enthusiasm is contagious! After hearing his story, you’ll have an overwhelming desire to build your own residual income! We hope you enjoy the interview—it’s a fun one.

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Money Mechanic
Hello, listeners. Welcome to Explore FI Canada, where we sit at the roundtable with Canadians, and share their thoughts, ideas and personal journeys to financial independence.

Chrissy
Thanks to Matt McKeever for sponsoring Explore FI Canada. Matt is a Canadian investor, CPA, entrepreneur, and real estate expert who achieved FIRE at age 31. Do us a favour and check out his YouTube channel by searching Matt McKeever or using the link in our show notes.

Money Mechanic
Hi, Chrissy.

Chrissy
Hello, how are you doing?

Money Mechanic
All right, welcome listeners. It is Explore FI Canada again. I am the Money Mechanic. And as usual, Chrissy is with me.

Chrissy
Hi, everyone. I am doing well here in Vancouver. It’s sunny again.

Money Mechanic
You know what? I wasn’t gonna talk about the weather today. I know. This is the problem is like, we’re actually always recording like maybe a week or a few weeks before this release, right? But yeah, I actually had a text started to my sister in Ontario today. And then I stopped it because I think it’s a, we do that from the west coast. And it’s rude, but also thought, you know what, everybody’s still kind of like locked at home. So let’s just not even talk about what’s going outside if we’re outside. It was a nice day. Speaking of the weather, we don’t want to pick on him too much. But we have a guest joining us today on the show. And we’re going to dive into his FIRE journey, and how he got there and how real estate played a part in that. So welcome to Explore FI Canada. Eric.

Eric
Great to be here.

Money Mechanic
Yeah, thanks a lot for joining us. We are always interested in hearing stories about people that are this should be like air quotes, right? You are FIRE, but apparently you work too much. So tell us a little bit about how you got to be FIRE because I think that’s an interesting place to start a little bit of your background for the listeners.

Eric
For sure. But before I jump into it, apparently I have to hire a business mindset coach to tell me that I work too much. To say I need to reprioritize my life and then everything to be more in harmony. So then I can do even more and accomplish more in life. So much for that. Right? So yeah, the question about how I got into FIRE. It’s interesting because I had this vision and that, you know, when I was in university, I did computer science. And I picked that discipline because I wanted to be able to work from a laptop. I know it sounds super exciting. You know, most people are thinking about cool stuff. I didn’t have crazy dreams other than I thought it’d be cool to maybe work for Apple, Google one day and then just I really want to work on my laptop. So I can work on the beach. So that was the only vision right and I and I hung on to that vision and then start working towards different opportunities, ended up able to consult for a few companies using my tech background, then got into marketing naturally because of technology people are asking me to with a web that was taken off right people asked me to build websites to do SEO and then to run ads and you know, all that kind of things and and once you’d be labeled as a quote unquote computer guy, it’s like everything computer, you know, that’s you right? So that was a brand that was kind of established and then everybody just started reaching out to me and I picked up I got lucky that one client that I had ended up approaching me before I even graduated and say hey, can you I’m really interested in what you’re doing and then I don’t want to be a client because you charge too much so I want to hire you instead I’m like okay, let’s talk so we we started talking and then he owns a home decor business. So if you guys remember this was about boy 10 plus years ago, where there was a craze a huge fad that all of a sudden people start putting like difference like words on their wall like wall stickers, right? Oh yeah.

Chrissy
Yeah, vinyl lettering?

Eric
Vinyl lettering? Yes. Chrissy knows. Yeah, exactly. So we were actually the number two I don’t know if we actually got to number one spot but we were the number two company in Canada we own mostly the the West Coast like BC, Alberta, Saskatchewan market and few Ontario stores and then there was a competitor out east that all mostly the businesses out east and so I was mainly helping them scale the businesses on course on the marketing side and did really well because I wrote that that fad right it was just taken off like crazy. And when I signed the contract with the owner was you know it’s like, Hey, you’re fresh out of school. So this is how much you should get paid for like sure if that’s what you think so but I want to make sure I had a bonus kind of a commission you know, clause in place for just incentivize me And they’re like, hey, that’s fine. That sounds good. Because we’re nowhere near that number. We’re happy to give you that, right. So I got that done. And then we were able to double the company in about three years, little over three years. So as you can imagine, my pay was more than doubled in that timeframe as well. So that worked out really well, to the point where I was, I was earning a really decent income, right. And then there another opportunity came along that the guy that kind of saw what I’ve done, and he’s like, Hey, I, I want to hire you to do the exact same thing for my company. I’m wanting to grow, you know, I love your skill set. So my great, same thing. Let’s talk, you know how to, like compensate me. So now I have my level higher, much, much higher starting wage, but again, still put the commission clause in place. And this was a business in the preparedness industry. So I don’t know how much you guys know that industry. But that industry…

Chrissy
Is that stuff for preppers?

Eric
Part of it. So we also sell to government agencies. We also sell to preppers. Right? This is one of the demographics and

Chrissy
And if our listeners don’t know what preppers are. They’re…

Money Mechanic
Like the cans of food in the in the bunker, isn’t it? I’m picturing like, the Michigan militia or whatever. Right. Like, yeah,

Chrissy
Lots of toilet paper, lots of freeze dried food, that kind of thing. Bunkers. Yeah,

Money Mechanic
Hey, I’ve got an earthquake preparedness kit here. So I’ve got some preparations.

Chrissy
Yeah, we all should.

Eric
Yeah, that’s exactly it. And it’s good to be prepared, right? Yeah. As you guys can imagine, it’s very cyclical, right? For some reason, people don’t think about preparedness, when they need to prepare. For me think about it during a time of crisis. Well, and this is just a pure dumb luck, like, you know, we only get a few of these chances in our lives. So you know, if anybody’s listening to this, I would say, ride those waves, just because if you know, you’re given these opportunities, take advantage of it. And that’s exactly what happened. I joined the company, right before the financial crisis.

Chrissy
Wow.

Eric
So as you can imagine, right? People are freaking out thinking about everything’s going down, you know, mortgages are defaulting and people want to prepare. So we also is, in effect, doubled in a year and a half.

Chrissy
Wow. So can I just clarify it? So you were with the first company doing this? The vinyl decals for people to decorate with. And this is a separate individual who approached you to do this preparedness marketing?

Eric
Correct. So both of them are different business owners, small businesses and in the complete different industry.

Chrissy
Okay, wow.

Eric
And I was specialized in running their online marketing, or their marketing department.

Chrissy
Okay. Okay. And then you’ve left the first job and then move to this one. You weren’t doing both at the same time. Okay.

Eric
There was a there was a transition phase about six months to make it happen just to smooth things over for both sides.

Chrissy
Got it. Okay. All right.

Eric
So yeah, so then the second company kicks in, towards the end, you know, it was it was an emotional moment, like the owner, basically, just, you know, they’re great, awesome people they said, Hey, Eric, you’re making more than we are. We legitimately can’t… you’re worth every dime, right? However, we just can’t do this. And I’m like, I understand, right? It’s a business decision, I totally respect that. So I basically offered to cut my time in half to reduce the amount of pay that was taking in, and then move that forward to eventually they were at a position to sell the company. And I helped consulted a little bit on how to structure a business to sell as well. And so basically, in a way, I end up working myself out of a job, right. But great story, great experience, you know, I wouldn’t trade it for anything else.

Chrissy
So how much of the skills that you use on the job would you say were from school? And how much did you just learn? It sounds like you keep pivoting and pivoting? Are you just picking up these skills as you go?

Eric
I’m so glad you asked that because and for anybody that’s listening to this, we did not plan this. She literally picked that up. So this is something that I am so passionate about, especially with entrepreneurs is learn how to pivot. I actually gave a TEDx talk on the very same topic on this concept. So anybody’s you know, welcome to look it up.

Money Mechanic
I didn’t know you had one.

Eric
Yeah.

Chrissy
We’ll put it in the show notes.

Eric
It’s actually encouraging people to say or to not to say don’t give up and the reason is certain times certain life you know, if you get given the opportunities, learn to pivot, because there’s great opportunities that had so so that that’s what got me into that industry. And then I left because of that circumstance. And and there was another company I got involved because of the connection in that company. introduced me to the freeze dried food industry, right so So I was selling for this company that sells in the US in Canada, and then their suppliers that they’re buying it from. we’re transitioning that business model to start accepting distributors. Like they’re doing like a home party direct sales model. So I was introduced to them say, great, you know, I already sell this for this company in Canada. Now I have this opportunity to sell this, Canada and US, right, by become a distributor. So I took the opportunity and then got into the industry, and ended up selling so many canned foods, so many mushrooms and peas and corns. I’ve one of the favorite stories I’ve ever gotten was this guy just randomly called me from one of my websites and just say, hey, I want to buy $16,000 worth of beef. And you got to think about that, right? Like most of my customers buy like, you know, two, three hundreds dollars worth of food, because that’s all you need to like, store a little bit, right? You buy a little bit more? Yeah, you get this call. I’m just like, you’re yanking my chain. Right? Like, seriously, you cannot be serious. So I didn’t take it seriously. They took me a few times talking to him is like, no, this guy’s legit. Like he is like convinced that he needs this right. And it’s great. And he wants to be prepared. So work with him. And then that was a great order. And I loved it.

Money Mechanic
The guy’s got he’s probably got like a whole beef jerky line now that we can buy.

Eric
Oh, my gosh, I wish I can track him down. I really want to visit him one day one day, because I’m just like, dude, like, what did you do with it? Yeah. I’m coming over for dinner.

Chrissy
Yeah.

Money Mechanic
So with all this entrepreneurial experience, how did that help you prepare for kind of the next phase where you started? Because I kind of gather you started working more for yourself. You’ve done the work for these other companies, how did that turn out that you kind of created your own sort of empire as it as it were?

Eric
Yeah, maybe we wouldn’t call it empire.

Money Mechanic
Oh, come on.

Eric
It’s a small operation, but I’ve I have something big I’m working towards for sure. So Oh, one thing that you asked was very interesting for me is it’s all about, actually, if you don’t mind clarifying that question. Because I…

Money Mechanic
Yeah, I just was listening to your stories of these starting off with a small companies. And I can relate a little bit because I’ve worked for quite a few small companies. And you get into the nuts and bolts of the business. And it’s a great learning experience, as Chrissy highlighted, and I’m just wondering how all those now that learning experience, did you transition it into your own entrepreneurial ventures? And what did those look like on this journey?

Eric
Thank you. Okay. Yeah. So that’s a great, great point. One thing that I I’m not a natural born entrepreneur, I came from a family that’s very, very risk averse. Both of my parents are, I mean, I grew up in Taiwan. So you know, you talk about a Chinese Asian heritage, that’s very conservative, right? Like, everything they teach me is go get a job, go to school, get a job. When I told them, I want to quit school to do my businesses, they freaked out, right?

Money Mechanic
Yeah.

Eric
My dad made me promise to say, hey, please just just get a degree, I don’t care what you do, just get that piece of paper. And I never use a piece of paper, right? So but one thing I always learned is risk management. Right? So what that concept of being able to be careful. So that’s why I purposely when I first graduated, I didn’t want to just go do my own thing, even though sometimes when I was pursuing some of my entrepreneurial journey, I didn’t want to take 100% risk, right? So I wanted to hedge my bets by saying, Hey, I’ll work for somebody, and then use the resources that’s provided to me, and then say, let’s go figure out how to do marketing for this industry. That’s a taste test of how to do SEO, right and paid ads, right? I don’t want to go too technical about these terms, but all these different techniques, and then pivot and apply the same thing to a different industry. And then once I get enough of these experiences built up, that’s what ended up resulting me starting a marketing company. It was because of that, right? And it’s interesting, it’s just understanding all of these skill set. The things that people get hung up on is always about what you learned. What I’ve realized, nowadays, it’s actually not so much about what you learned. It’s about what the mentality that you gain from each experiences that you have acquired, right. And then that’s transferable, because that’s universal, technical skills. You can learn that you can hire people to replace you to do all of those things. And then they change to write from time to time, these these tech nut technology, change these marketing skills, they all change, but the mindset never change. And that’s something that I really wish I learned that sooner. I’ve kind of had to acquire that along the way to realize every step of the way, I have to elevate my thinking. Otherwise, I get restricted on the field I was playing in.

Money Mechanic
Mm hmm. Yeah. Now from your from the FIRE point of view, while you were working Those jobs and working your way up in the pay scale. Did you have an eye on the prize? Did you have a goal or a target at that time? Or was it kind of just built up on you? And you’re like, well, I’m making some pretty good money here. Did you make wise investment decisions during that time, we’ll get into a little bit of your real estate business as well hear what did that as you were progressing, because I think a lot of people that are on this journey to FI, some people set like really aggressive targets, and are shooting for those others or I’ve set like a slower FI type pace. You know, it’s a totally individual journey, for sure. It sounds like you were working super hard. You’re getting these these good raises and things like that. Did you have like an end game a goal in mind? Or was it kind of evolving as things changed along the way?

Eric
I love that question. And this is a passion topic of mine to help educate more people about FI and FIRE. So a lot of people tend to get hung up on the actual asset size that you know the the number that you need to have to retire. And that was an interest of mine, I got that never really was a focus of mine, I didn’t care to have how much money in my bank account or in my investment account or real estate portfolio. But what I focus religiously, was on the cash flow I was getting on a monthly basis. So I had a very intentional goal to save. And that was a goal I set in my early 20s is I want to retire before I hit 39. And I just want to be done. So I can in terms of I want to have the freedom, right. So I always look at how much cash flow I’m bringing in. So I become obsessed about looking for all these different ways to potentially expand my streams of income, like at one point, I think I counted, I have 18 different streams of income with some of them, you know, as high as bringing in, you know, $500,000 a month, actually more than that was to $2,000 a month, and then some of them was only bringing in 50 bucks a month. Right. But the crazy thing is people look at and say why did you work for that? 50 bucks a month? I’m just like that 150 bucks a month, I can tell you I received that residual income for 10 years. And that was actually simple. So I’m happy to share that. Right? it’s it’s a it’s a credit card service, right? So basically, it’s a, it’s a merchant account that I was able to introduce to my client, and then say, hey, if you use this service, right, helps you sell your products online. And that’s it. And I get a small, very small commission on the monthly basis. Front Desk, that that referral. And that’s it. But it’s completely passive. And I love that right?

Money Mechanic
So I’m like, go ahead. Go ahead, Chrissy cuz I like it. No, no, it’s okay. My head’s spinning a little bit. Cuz I’m like, I’m like, super excited. I’m like 18 streams of income! This is amazing!

Chrissy
Well, I want to kind of push on that a little bit. So yeah, you’re only counting on cash flow, and you’re not really looking at the asset side. These… some of the this cash flow will eventually dry up, like you said, One went for 10 years. But how do you handle that? Because as you get older, and you’re less able to maybe rustle up new income? How are you going to account for that?

Eric
That’s a great question. So what I did is, and that’s how I ended up getting into real estate was because I have that fear that some of these cash flow would dry up, I need something that will be longer term. So I look at the lifetime value of a specific cash flow source, right. Some of them might only just be two years, some of them might be 10 years, like that particular case. So then I need to gradually replace those sources. So then I take everything I’ve get. So my first goal was this, right, I need to get enough cash flow on a monthly basis to replace a regular income job that most people get. So I set the number at about $5,000. Because $60,000, you know, average Canadian income is a little lower in certain areas. But that’s, you know, an income that people could live, right. So that was my goal. So I want to get to that number. Soon as I hit that number, I realized, yeah, then I can actually quit what I’m doing, which was consulting, that I free up all my time to be able to develop more cash flow generating sources, right. And this specifically, real estate was one of them, because I want to be able to have a much stable, long lasting cash flow. But as most people may be aware, and for those people that don’t know, you know, listening to this episode, for real estate, most people think it’s great. It’s awesome. You can make a lot of money. Correct. However, there’s a saying in the industry, which is we’re asset rich but cash poor, right, because most real estate properties really only generates about $100, $200 if you’re doing really well $300 cash flow per month. So in that case, you can’t live off that, right so so many people got so excited about Real Estate Investing. It’s like yes, I love the vision, I want to do this. And I’m willing to quit my job and do this full time. And the first thing I said to them is, please No. Otherwise your wife will leave you.

Chrissy
You’ll be out on the street starving.

Eric
Exactly. Yeah. I mean, it doesn’t mean you can make a lot of money you can right.

Chrissy
Maybe if you’re in the US.

Eric
It’s still tough, like in the States, you know, people do well, though, really only get about $500 $600 a month in cash flow, it still need quite a bit of portfolio to get to that point, right. So usually, most people I’ve seen is takes about two years timeframe. If you want to commit to doing real estate, you know, actively to scale up to a portfolio that you feel comfortable enough to say, Hey, now I can transition out of my full time job to do that.

Money Mechanic
I’ve got a question. I mean, I guess we’re into the we’re into the real estate discussion. Do we want to pause and back up a little Chrissy? Or do you want me to get into the real estate? I want to go back to the streams income first?

Chrissy
Yeah, I think I think we have time to revisit the real estate.

Money Mechanic
I want to go back, I want to go back there a little bit, just because I have a bunch of real estate questions that I’d like to get into. But so from the passive streams of income before you got to real estate, were you? You know, I think a lot of listeners out there are probably going see talking about like having a whole bunch of side hustles like, you know, how do you come up with those ideas? I mean, I see the blog posts all the time, you know, like 10, great ideas for additional income or, you know, do this do that, and I’m not, I’m not a really good side hustler. I’ll admit it, like I’ve thought about it. I’m like, why don’t I buy a power washer? And then like, have some kid down the road? powerwash people’s driveways? And you know, there’s different little business opportunities. What did you do to come up with your passive income streams? How much front end work was there to get them started? And how much of your time ongoing commitment to the return like 18 of them sounds like a lot of work. But if it’s a little bit of front end setup, and then it’s residual, like you mentioned, the first one, how did you go about coming up with that? Did you have a formula? Did you just because of your online skills that kind of naturally lead into a lot of online stuff? Yeah, just kind of highlight some of those challenges.

Eric
Yeah, I wish I actually had a formula, because then I think I would have been, you know, I probably can tell you a different story, I would say I have 1000, you know, income streams now, because I, what you said now it actually made me think about that, after this call or this conversation, I’m gonna go develop a formula because I actually realized what I’ve done. But I’m happy to share that. So what I was doing was, what I don’t think was intentionally what just happened by accident, because I have this pursuit, right, this was a goal I set, I want to generate all these extra stream of income. So the biggest thing I did was, it was very different than most people pursuing a side hustle. Because side hustles, the way I look at it is, if you are just trading time for money, you only have so much time, right? So the only way that makes sense for me is I need to add income streams that I don’t have to do spend a lot of time. So I became obsessive with optimizing everything I’m doing. So for example, the credit card thing, it wasn’t my idea, right? It was a simple thing where I was actually consulting for clients, that client asked me to say, hey, go find me a credit card provider that can handle online payments, because we want to launch this store. Right? So I’m like, Oh, I researched it. And then naturally, you know, my brain started thinking, I wonder if they would do have some kind of partnership program. So I just, you know, call the company and say, Hey, is there like a business development, you know, affiliate program that you guys offer, connecting me with their business development manager? And we just started talking? And he said, Yeah, I’ll say I’ll set you up. Right. And that’s the start of that. And then that became a habit, I started realizing how many companies have a business development department, right? Or affiliate manager, they might not even publish them on the website, but if you call them or contact them, they’ll they love to figure out some kind of deals with you. Right? So the blogger, I, I take advantage whenever it’s there, really, you know, a lot of times, then you can also offer a discount to whoever you’re helping, or whoever you’re referring. So it’s a win win for everybody. And that you hit a spot on and that’s exactly what I did. I would actually offer them more competitive rates because of my relationship with the company that the the company actually asked me say, Why are you giving them such a good rate? You could, you know, make more money I was like, is because of this. I want to earn residual income for 10 years. Yeah. I don’t want them to switch the providers, right. Yeah. So I want to give them the best rate. So I actually negotiate it on my clients, we have to push them on giving me the best rate, but then I just take a little bit of tiny markup right. So then that gives them no reason because they I showed them you know if you look around right This is the rate that’s posted by all the other competitors. This is a great company. And I’m not just recommending this, you know, based on my selfish interest, it’s legitimate, you’re getting a good deal. And on my end, I don’t see anything wrong, I’m getting a little bit extra, you know?

Chrissy
Well, you’re still providing good value anyway, on top of your commission.

Money Mechanic
Yeah, it’s interesting, because I think there’s a lot of opportunities that that we miss. And when I say me, we it’s, you know, myself included, you know, just specific to my industry, there’s a lot of product that flows in and out, there’s a lot of shipment of parts and things like that. I mean, we physically use a vehicle to drive stuff up and down the West Coast. And, you know, there’s probably areas that could be done better optimized, if I put some effort into finding out and going, you know, maybe there’s ways that they can, the company can get a better value of something if I do a little bit of work and do some other negotiations. And I think that’s really interesting. I’m not, I don’t have that entrepreneurial skill set yet that I’ve developed to be able to go into that. But a lot of people are probably in a career a nine to five that has some angle that you may never have looked at where you can participate in the sort of behind the scenes of how the business operates. You know, I mean, everybody’s got an IT department probably right? And is there something that you can do there or, you know, procurement and all these things? And that kind of sounds like what you’re talking about, Eric?

Eric
And it’s spot on, right? So first thing you talked about, I want to say is it just all it takes is just to ask? A lot of times we are afraid to ask. And the people that are succeeding Are you know successful? They’re the ones that make that they go out right? All the political, you know, successful candidate, they ask for donation, right? They ask. And for me, that’s, that’s simple to just coming down to ask. And the second part is your right, because exactly what I did is I went from just the marketing services, you know, that I potentially could become an affiliate to introduce my client. The next natural thing was, what other software or other things can I sell? So ended up selling, or reselling, I guess I should say that a chat, a live chat service. Right. So if you are a company that you know, needs to provide customer service, for example, that people go to the website, they need to talk to you, customer service, right? There are companies out there that provide these software that would be happy to set you up as a referral partner and pay your residual income. Another company that you know, a lot of people we know in Canada, we’re proud of Shopify, right. Shopify has a program that anybody listening to this can go sign up today, right? become an affiliate referral partner, and promote Shopify. And that’s a great thing, the easy thing to do, especially during this COVID time, right, if you are a little bit entrepreneurial, feel like hey, I can help some people bring their businesses online, I already have a skill set. Now you simply say, let me become a partner with Shopify. And I’m going to bring business to Shopify, and I’m going to get an extra cut. And as long as these businesses stores are in business, you get a residual income forever.

Money Mechanic
Yeah, you know, it’s, this is good. This is an entrepreneurial stuff. We haven’t talked about this enough. Chrissy,

Chrissy
I know, it’s too bad.

Money Mechanic
A lot of a lot of discussion focused on our nine to five, where we’re trading our time for money, of course. But yeah, I think part of what I’m hearing too, is that you got to put in a little bit of time and effort to get these things off the ground, get them started, like you need to put in a little bit of effort to make them work.

Eric
And can I comment on this thought and what you talked about 9 to 5? A lot of people feel hopeless in terms of Okay, I have this goal, right? This, this, you know, Eric said about, okay, I want to, yeah, I want 18 residual income sources, like what you said right now, I made this public. And then people felt like, I can’t do that, because I have this nine to five. And I feel like that’s a mentality, challenge or issue, right. Because if you are a nine to five, you can easily start we’re looking at, you know, the job that you’re working in the software that you’re currently using, right, and then start looking at potentially doing exactly the same thing as what I’m doing. Because really, in effect, what I’m trying to do is I’m trying to add value, which is a very entrepreneurial thing to do, right? If you can add value to people, business or people’s operation, you can earn more income. And that’s all I was doing. As I went up just looking for all these different tools out there, I became obsessed with researching tools. So then I can bring these tools to increase productivity to the companies that I was consulting for. Or even better yet, some of the companies I don’t even consult for, it was just random things I you know, hear people talking online, I’ll just send them a link and say, hey, check out the software. Here’s the link, you know, and then full disclosure, I get a little kickback if you sign up, and some people do, and that’s, you know, why not? Right? I’m helping people in in effect, I get paid and compensated for that as well. And so that’s a win win for everybody.

Money Mechanic
Hey, Chrissy, you know we always forget to do?

Chrissy
What’s that?

Money Mechanic
Leave room for for our sponsor for this episode. So, on the note of affiliates and links, here we go. Here’s a quick word from our sponsor.


Chrissy
Hey, Money Mechanic, you use Passiv, right? How do you like it?

Money Mechanic
It’s great. It’s like my own personalized robo advisor. I set it up one time, then Passiv helps keep my portfolio balanced by securely connecting to Questrade.

Chrissy
Wow, sounds like Passiv saves you a lot of time.

Money Mechanic
Yeah, no more spreadsheets! And Passiv even has one-click purchasing, which makes life so much easier.

Chrissy
That sounds amazing. I also heard that Passiv added a new goal feature to help DIY investors reach their investment targets.

Money Mechanic
That’s right. The goal feature is built right in and helps you stay on track with your investments. Chrissy, did you know that Passiv is free for Questrade clients?

Chrissy
Free is good, especially when it normally costs $99! How can our listeners get in on this offer?

Money Mechanic
Just go to Passiv.com/EFIC.


Chrissy
Okay, we’re back. And I have one more question for Eric, about the… not side hustles, but the passive income, you say you don’t have a formula yet. So I’m not gonna put you on the spot if you don’t have an answer. But what if someone, let’s say a teacher? It’s like, how can a teacher create all these extra sources of income, like, they can’t even see past their job. And like you said, the nine to five, as a teacher, there’s hardly any resources coming in. So it’s not even really on on the job, you couldn’t even really recommend a lot of vendors and get a flow going that way. And it may even not be allowed, you know, being a teacher who works for the union, you may not be allowed to generate extra income through the school. So what would you suggest to someone like that? How can they get started with thinking up ideas for this kind of passive income?

Eric
Yeah, so the focus is not so much the passive income, I think that’s when people get really hung up. Because then when they don’t accomplish that goal, they get really disappointed. Right? The goal, or the focus should be on how can I help people? How can I create value? So then, for example, teachers have amazing skill set in terms of could be just the subject that they teach, right? So as we’re going into COVID, with, she’s going into QA, we’re coming out, thank goodness, right?

Chrissy
Yeah, yeah.

Eric
I was like, please no more. You know, but there’s this this complete transformation of online classroom that’s happening. And for, you know, I can just already think of an idea, which is right, like, if a parent is really eager to make sure that kids get the best education, and they might feel like their teachers not kind of communicating the way that the kids can understand. Right? They will be out there looking for could be chemistry, you know, better chemistry classes on their subject, right, to help the kids learn the materials better, right? So if you’re a really good chemistry teacher, put your materials together, and then maybe create an online course. Right? That can be a great way to add value to help people with that. And there’s so many ways to promote that these days, right? You can have a few different of your curriculum posted on YouTube to generate interest and then redirect them into your course, that could be a simple thing. You know, in terms of managing teenagers, you know, that is a tough, tough, tough crowd, right? So if you have a skill set, right, you could potentially roll out some kind of, you know, courses or, you know, guide right ebook, to teach people especially could be parents, right, how to get their family under control, or more, you know, harmonized with their kids, because it’s just, it’s a tough, it’s a tough demographic to deal with. If you’re younger teachers, such as elementary school teachers, same thing, right. Like, there’s a different challenge that comes from that group of age, you can also look at that. So the biggest thing is look at what you can do what your talents are. And I think that’s something that I I see a lot of people struggle with, and this is something that, you know, I will be actually introducing pretty soon down the road, it’s a some kind of coaching service help people really understanding their talent.

Chrissy
I was gonna say, you should become a consultant or coach, because you’re good at this.

Eric
Thank you. Because a lot of people and I have this saying, you know, that people look at their own story as ordinary because they just live in this story. But too many other people, their stories are actually extraordinary. Right? So think about what you do, and this isn’t something you keep doing and you start, you know, maybe take a little inventory, right? Just anytime you get praised on and say, Hey, people said I’m really good at this. Maybe there’s something more to it, right. And then people get really uncomfortable charging or putting the product out there, especially that people like to give a lot like teachers, you know, a service-oriented type of personality. Maybe the way to shift our mindset is don’t think about as what you’re charging. Think about How you’re helping, right? Because at the end of the day, if you, your product, your services that you put out there can help accomplish the goal and the results that people are looking for. Right, then you’re doing great service. And then if you’re really concerned about, you know, people not being able to pay for certain things, and offer scholarship programs offer opportunities for people to apply to get for free, right, so that you don’t feel bad that, hey, I can’t, you know, I don’t want to charge people when people can’t afford it, there’s a solution to any of these problems that, that stopping people from doing it. And at the end of the day, what I keep seeing is, that’s what stops you from actually making it happen versus doing it is it’s just a mindset shift.

Chrissy
I think you do have the formula already.

Eric
I just realized that. I just developed it on the air. This is great. Can I get a copy of this recording so I can put that into my course?

Chrissy
And I think you know, everything you said…

Money Mechanic
For a small residual amount, we’ll give you a recording!

Eric
Deal, deal!

Chrissy
Everything you said just now, helping others and focusing on that and what you’re good at and what you enjoy. It all ties into also what they teach you about blogging, you know, or podcasting, if you love it, and you Your goal is to help people, the money will come, you know, it’s not going to come quickly, and it won’t come right away. But if you keep the focus on being of value to people, then they will reward you because they want to and it’s not because you force them to or convince them to they really want to help you in return for your the value you give to them. So I I love everything you said it all makes sense. And it can apply to so many different areas of life and different industries.

Eric
Absolutely.

Money Mechanic
Okay. I’m dying to ask I’ve been waiting. You went into real estate to increase your monthly cash flow? Well, I don’t want to say passive income, because Real Estate’s not all passive, but you want it to generate long term wealth. And you did so through real estate. I just want to kind of go back to the beginning there and just say, Did you physically save up enough to buy your own rental? Did you become a working partner in a joint venture? What was the beginning the first property because a lot of us in this community are still at that stage where we’re not sure. The first one’s the most elusive? We don’t know the systems and everything in place. We’re in high cost of living cities, we don’t know how to make it work the first time. What was the first time for you for your real estate?

Eric
Yeah. And before I jump in, I’d like to clarify real quickly for the FIRE community. The big reason that got me is to stabilize my my residual, right is right, I wasn’t really like intentionally, I had no intention to build wealth. I was looking at this as a way to park wealth, just because I you know, I didn’t know much about real estate investing. So my very first property, I bought it when I was 25 or 24, around that range. And I had no idea what I was doing.

Money Mechanic
So did you, you saved up the downpayment, and you physically bought it yourself?

Eric
Yeah. So if I wouldn’t say that I will be lying. Cuz, you know, this is going public. So my mom, my parents did help me.

Money Mechanic
Okay, well, fair enough, whatever. But yeah, it was your own property is what I’m getting at. You didn’t partner with anybody.

Eric
You know, so it was my property. And then I bought it for my brother to live in and rent from me. So that’s how I was setting up as the first property.

Chrissy
And were you renting? Or were you still living at home with your parents? Like, what was where was your residence?

Eric
Yeah, so I wasn’t living there. That was when my brother and I was living. I was actually renting.

Chrissy
Okay, interesting. So you’re renting, and you’re going to buy to as an investment, not as, not to to live in? Okay,

Eric
I did that intentionally.

Chrissy
Okay.

Eric
Because I wanted to understand how investors think and how I can remove that, you know, some kind of, you know, barrier, not barriers, a separation, right. So that way, I can say, Hey, this is how managing a property and not living in the actual premise of the property feels like, there’s there’s always that fear that a lot of people have say, Oh, I can’t see this. I can’t you know, can I just use your cameras all over the house? No, that’s illegal. That’s creepy. But there’s that fear. Right. But yeah, you know, I wanted to be able to overcome that fear, because it’s a mindset thing. And so I forced myself to say no, I don’t want to be in

Chrissy
And I’m sure there was also the other piece where you’re Asian, and I’m sure it goes against Asian beliefs to rent instead of buy your own property, right.

Eric
Oh, my gosh, to this day, my mom’s still like, why are you still renting?

Chrissy
Oh, are you?

Eric
She’s like, What is wrong with you? I have…

Chrissy
You’re throwing money away, right?

Eric
It’s ridiculous. Today I have 20 doors now.

Money Mechanic
This is, that was gonna be my next question.

Eric
It was ridiculous, like I was just like, why do you Why are you do not have a home. I’m like Simple, right? Because from a business standpoint, I cannot write off myself, there is a strategy called Smith Manoeuver. And I’m sure, you know MM talked about in the past. So if anybody’s listening, go back to that episode. And that’s a really powerful strategy. But I did not know that before. clarifying that, right? So for me, I just, I can’t write up my interest. So then why would I ever do that? I want to, to make sure and then as you know, myself personally, renting it doesn’t make sense. It doesn’t matter to me. Because I actually operate a business out of what I rent as well. So that part of my rent is even as a write off, right.

Money Mechanic
Nice. So jumping in again, because my question to you was going to be exactly that. Here we are, from your first rental at 25, that you bought yourself to achieving your cash flow goals and becoming technically by all, you know, definitions FIRE, to Now you mentioned 20 doors. That’s pretty impressive. And for listeners that aren’t super real estate savvy, a door could be, you know, like maybe there’s an upper and a lower unit in one house or duplex that refers to specific rental door that a property. So without going like super into detail of every property, how what does it look like to scale to that point? That’s pretty impressive.

Eric
Yeah. And talk about again, you know, my background is in computer science. Yeah, I came from a background. My dad was a professor, He is a professor, he’s retired this year, right? He teaches mechanical engineering. And for people listening is like that, that has nothing to do with construction. Right. But that’s further further from the truth. And it just like, nothing, I have no background, and then the property itself always intimidates me. Like, I just, I felt like I don’t know how to be a tradesperson. I want to learn but I did couldn’t figure this out. But that’s exactly, you know, what we talked about earlier is that mentality, I realized, I put that in my head thinking I can’t do this, right. And I’m afraid of this, I got intimidated by this. So what I did was, first of the first few projects, I, my first project was about myself, and then you know, I bought another property with my brother. And pretty soon I just realized, I can only do buy and hold just because that’s the only thing I feel comfortable with, right? But anytime you want to deal with actual renovation stuff, I need to have a partner that really understand that. So I start partnering with people that have more hands on like their trades, people, they understand, you know how to do renovations. And I just watched them right? And watching how they do things, figuring out and then every once a while, you know, when there’s small repair jobs on some of these properties, I call up contractor and say, Hey, I’d like you to come give me a quote on how to fix this. With one condition. You’re going to teach me how to do this. I want to learn right? And someone just like looking is like what that’s weird. Some guys are like yeah, happy to teach you, you know, cuz and tradespeople are awesome. I love I love this industry. And you know, anybody that’s concerned about future of AI, right, like taking outsourcing jobs, this is one industry that will never go away. Right? So that’s another reason I wanted to learn because I wanted something to protect myself. So I picked up how to do tiling, I picked out how to do you know, basic things, dry walling paint, right, all these simple things start doing live event with a kitchen remodeling. And now you know, I can do probably a third of the rental now, right? The two thirds are still done by somebody else. And today, I don’t do these anymore. I have a team of people that take care of stuff like that.

Money Mechanic
I think it’s interesting. I mean, your story is one where you’ve you’ve really scaled out which is awesome. It doesn’t have to be the end goal for people in the FI community that want to get into real estate. For myself, personally, I’m actively trying to get into a rental situation. But I don’t have goals to get to 10 doors or anything like that I want to diversify away from the stock market because a lot of us have been putting socking away money into there. So I want some diversification. You get opportunities to make money in different ways in real estate, right? You get your mortgage pay down, you get appreciation, you could do forced appreciation, and hopefully you’re getting a little bit of cash flow too, right? So they all kind of factor into different goals in the in the FI journey. So now that you’ve got these 20 doors and you’re FIRE, you must just like sit back and collect rent checks, right?

Eric
You know, that, I do do that. However, I will tell you that my day to day right like I started the day on a bunch of calls, then hopped into a clubhouse for real estate investors. And then after that I did three appraisals. Because I’m currently refinancing a group of properties. And after that I got another call talking to a potential. somebody that’s really interested get into real estate investing and just don’t know how right it’s a friend of my sister and another lady that’s actually from Victoria, BC that just heard me from one of the real estate meetup groups that I presented and wanting to learn more about what I do and how you know what I’m doing in terms of scaling, then now I’m talking to you, right? So it’s a very interesting life that I didn’t expect. Like I, my goal to get to FI is to completely to check out right and I did the FIRE thing, like I legitimately checked out, you know, didn’t do anything really much for about close to about six months. I can tell you the first three months was great. Like it was the best thing ever. I’ve never spent that much time to make breakfast my life legitime I need to see if I can find that photo. It’s it’s epic. Like I spent about an hour and a half, making this like buff like Vegas style buffet. The whole table was full of different kind of food. And I’m just like, that was that was like right after I hit FIRE, right. I’m just FIREing. You know, just like I’ve done. I’ve left the job. Not doing anything, right. I’m gonna live the lifestyle.

Chrissy
And then how old were you then?

Eric
I think I was 29? 28?

Chrissy
You hit your goal. You wanted to get there before 30.

Eric
Yes, I did. Yeah, it was really cool. Yeah, absolutely. Super cool. And then two months, three months later, I crashed. Because, you know, I’m single, I didn’t have a lot of family to like, add value contribute. And then all of a sudden, I just like, man, I didn’t have any purpose in life. Right. And it’s interesting, as I talked to a few people that FIREd it’s a common thing in the in the community, where if we didn’t plan this out, right, it’s not a midlife crisis, or, you know, a retirement crisis. This is a quarterlife crisis, especially for people that hit it. Yeah. Right. Like, I’m just like, Frick, what is wrong with me? And I started looking into jobs and say, hey, maybe I should pick up something in the tech field, then I look at the requirements. I’m like, man, I left this industry for five years, I don’t know, half the things they’re asking, right? Then it got more depressed thinking, I’m like, I’m useless. Right? So it was a quite a journey to like, pull myself out. And then trying to rediscover what I should do and what I should, you know, focus on. And actually, I discovered it through humanitarian work. I got into I’m type A personality. So I need I need something I need gold to just keep me focused. So I when really obsessed with, like all in with humanitarian, started with just wanting to the first country in Guatemala, you know, did work, and then fell in love with it. And the fast track. year later, I got recruited into their leadership program. And then another year and a half, you know, from the very first expedition, I was leading these expeditions with people, you know, over. I think right now, over 700 people I have led and collectively raised, like millions for the humanity organizations that we are leading them for. And I love that right. I was telling the story to some of these people on the call today, that the biggest thing for me is, once you’re among the people that live off, like less than $1 a day, it changes your perspective, it changes your priorities and goals in life, right?

Money Mechanic
Yep.

Eric
So for me, now, I’m just extremely passionate for helping people to reach FI, the biggest thing is, because if you don’t reach FI, really, you can’t really create much impact in the world, right, you can do a little bit here and there, but you’re always trading your time for money, right. So you got to get to the point where you can start buying back time using some wealth that you have. And then, you know, this is the three layers of wealth concept, or you start with FI. And then the next layers is impact, which is what I was able to do with the humanitarian groups. And then the next layer is naturally, you know, a lot of billionaires talk about it’s the legacy layer. And then this is where I’m working on now is launched a legacy project, to help teach people use real estate. And I have a pretty ambitious goal to create 100 millionaires through real estate, so that they can actually go create more impact in the world. And that is a precursor that I use to filter the right kind of people because I don’t want just any kind of people to be joining us, right? We are really a group of very special people that are all passionate and serving. So that I believe that if I can successfully do this and serve these people, the world is going to be incredible, because the service that they’re going to get.

Chrissy
That’s… I I’m just speechless, listening to your story. And I love it because so many critics of FI or FIRE, they say that, you know, you’re just retiring to to do nothing at such a young age, and you’re not going giving that to the world but so many people in the community have, that have reached that milestone, they do give back and they they give so much more value than when they were in their nine to five jobs, because they’re now passionate and this Something they really care about, and they can do the work for free because they don’t need the money. And that’s where the real value comes in from your human capital can now go to help others instead of making money for yourself because you’re supported, you know, you set up these streams of income or, or your nest egg to generate income for you and your your financially okay, so now you can give back.

Eric
Absolutely and, and that’s, that’s probably the biggest misconception of FIRE, right? Because, and I’m not gonna talk about the different personalities out there. But everybody has different motivation to get into, you know, FIRE to reach the FI goal. I mean, it’s crazy right now, and I’m part of some of the groups that’s like Fat FIRE. And then there’s talks of, you know, Ultra-fat FIRE, it’s not even like Obese FIRE. I’m just like, Oh, my God, how high are you guys gonna go? And that’s fine. Right? Like, that’s, you know, there’s a space for everybody. But my biggest belief is, at the end of the day, right? It’s like, what is what why are we here? Right? And we can’t do anything with the money that we left behind. So if we are not going to take advantage of that, like, that’s put us to something good. Right. And, and I love the community that’s created the curriculum that’s being developed to teach the, the young kids you know, with the FIRE concept, right? I’m just blown away because like I said, like, I did this all by myself. And I’m not saying that to say, Oh, you know, I did this, right. I felt lonely through the journey. And now I go to FI like, FIRE meetups, you know, like, regularly, I try to attend all these events. I can, because this is my peeps. Right? This is a group of people that is super cool. Super awesome. And, you know, I’ll do a shout out to our last group camping activities that we were just, you know, hanging out and then having campfire talking about the price of butter, camping groups, we’ll talk about stuff like that, right. It’s just it’s awesome.

Chrissy
Was that organized by Jolie?

Eric
It’s actually by Erin. And as part of that,

Chrissy
Okay, I saw I saw pictures, and I heard about that camping trip. It sounded fun.

Eric
It was really fun.

Money Mechanic
We didn’t mention in the beginning, but you are in Alberta for listeners. So you are a fellow Canadian, along with the rest of us?

Eric
Yeah, absolutely. Yeah.

Money Mechanic
Wow. Yeah, I’ve heard some of this story before, but it kind of it’s a it’s an awesome story, Eric, and absolute kudos to you for for that mindset and, and helping the rest of us to see that that’s kind of where we may not know what our purpose or passion is, once we reach FI like, a lot of people don’t know yet what it’s going to be. And it’s okay, it takes time to figure that out. But it’s, it’s pretty cool to hear your story and the things that you’ve done since you achieved FIRE, and that you’re happy and busy choosing how you spend your time and, and make an impact with it. I think that’s really, really cool. So congrats on that. Great to have you on the show.

Eric
Absolutely.

Chrissy
Yeah, I’m glad to finally meet you Money Mechanic has been saying great things about you. And like, Okay, I gotta meet this guy, he sounds so dynamic. And there’s a lot going on, he’s got a lot of balls in the air, but you’re giving so much value back to other people right now. It’s, it’s amazing that you’re able to do that.

Eric
Thank you. And I’ll just add this to, you know, to people that are interested in continue to like, learn more, or want to like, potentially look at real estate as an opportunity as part of their wealth building strategy. Because I am very passionate about this. And then there’s a lot multiple valid reasons, especially, you know, the financial market right now is a little bit messed up, in my opinion, because of the way you know, massive amount of money has been printed into the into the system. And I really am passionate helping people protect their wealth. So if anybody’s interested if it’s okay with you guys. Absolutely. website with the audience here. Yeah, so the website is 100. So 100.properties. And that’s where, right now, you know, it’s not quite live yet. We’ll be live in a few weeks. And we will be publishing more of these things. And then, you know, you’re welcome to join our journey. Even if you feel like this is something that you resonate with, you’re invited to to join our tribe. Because we want to bring more like minded people to, to go reach by create impact, and leave a legacy behind.

Money Mechanic
Very cool.

Chrissy
Yes. Yay for that. Thank you, Eric.

Money Mechanic
Yeah, we’ll be looking out for that. And I’ve got to write that down. Because I don’t think you told me that last time we talked so it’s Yeah, up there. that’s starting to save some room. It’s only gonna be 99 because there might be one or two here and maybe 98. might join you might have to add a zero to that one. So the listeners hear this, like, what? Only 100 spots? Well, that’s awesome. Thanks again, Eric for joining us on Explore FI Canada. Chrissy, always a pleasure to have an interesting and this one was inspiring. I was inspired today.

Chrissy
Me too. I thought that we were going to talk about real estate and…

Money Mechanic
I kind of did too, but it was Kind of a side part. There might be a part two, because there might be part two, because I do want to go into like joint venture structures and how Eric sort of worked through all that. And whether you’re a money partner or the working partner. And there’s, there’s kind of a lot of mechanics to it there. And I probably don’t want to go too deep, because that’s part of his 100 project. But, but there’s a lot more on that real estate side of it. But I’m glad we didn’t just focus on that, because there’s always way too much sort of real estate talk. And I think the overview, though, the whole journey and his path to FIRE and where he is now is pretty cool, because we don’t hear a lot of the post fire discussion very often,

Chrissy
Mm hmm, as well as the mindset piece, you know, how does someone who’s so successful get to where they they are, right? It doesn’t just happen overnight. It’s something that you built over time. And it’s nice that you took the time to go through your story with us because there’s a lot of actionable info there for people to take for their own situations, even for me, you know, I was inspired by a lot of what you said. So thank thank you so much for sharing

Eric
Great being here with you guys. And it’s a blast. I always love talking to people that understand. I’m not crazy.

Chrissy
Definitely not.

Money Mechanic
Yeah, I think so many of us can resonate with that and go, Oh, yeah, the FI community. I think I might have found my people…

Chrissy
Yeah.

Eric
That’s literally how I felt, like, where have you guys been?

Money Mechanic
Right on? Well, we’ll probably look forward to having you on the show again, Eric. And for now signing off. Explore FI Canada. See you guys soon.

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2 Replies to “049: The Residual Income Path to FIRE | Eric Chang”

  1. I’m sure some listeners would really appreciate a deep dive into real estate investing for beginners, especially for those interested in JV partnerships or other more passive forms of real estate investing. Much of the content already available on this topic are created by RE Investor’s actively looking for money partners or trying to sell their REI courses/memberships to networking groups. So it’s hard to get unbiased opinion on what it’s like to be a money partner, whether it is a sound investment option, and advice on how to find a good active partner. Thank you for the content and keep up the good work!!

    1. Hi Andrew,

      Thanks for listening and commenting. This is an area I have been exploring for quite some time, and honestly there aren’t many resources. I’ve found that joining a local RE group, listening to the content at meetups, and reaching out to genuine members has been really helpful. If you don’t have a group near you, I would recommend https://thereinvestors.ca/ They do monthly meetups, and I’ve met the guys. They’re not TOO sales-y like most RE people, as you obviously have noticed. Really these kind of groups is where you’re going to find good working partners, in the end the relationship is much more important than the resulting investment. I’ve looked at JV, rent to own, private REITs, private lending, fractional RE, the list goes on. I’m currently signing the papers on a very passive RE investment with Epic Alliance, shoot me an email if you want to hear about it. mechanic@figarage.ca

      I think the deep dive idea into RE investing is a good idea, it’s a tough one though. Most RE people are way too advanced, and then there’s the rest of us that are still trying to learn. We’ll have to give it some thought.

      Cheers,
      MM

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