#121: Supercharging your W-2 Job can Accelerate your Financial Independence
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Today’s guest Christopher Nelson is a 2 x IPO Technology Executive, real estate investor, author, speaker, and the Co- Founder of Wealthward Capital. Christopher helps educate technology employees on how to invest their time and money, so they can grow their careers, build wealth, and make an impact.
In this episode, we’re discussing…
[1:34] His background and how he started a 2 x IPO Tech Exec.
[2:48] The importance of having the W2 at the beginning
[4:09] Some of the key points about growing their careers, building wealth, making and impact before looking for passive investing
[6:18] The pros of putting into your 401K, your IRA (100% free money) to built your wealth
[7:42] His professional experience in the field of real estate with Walthward Capital
[9:46] Why is he pivoting from multifamily asset class
[12:35] About the mobile home parks and he thinks just about affordable houses
[14:21] Some other reasons why people should be investing in real estate?
[17:36] If they work with accredited or non-accredited investors
[18:17] About his book and his podcast
Resources from Christopher
Tech Careers and Money Talk | Wealth Ward | LinkedIn | Instagram
+ Read the transcript
Mike Stohler
What if you could be doing something smarter with your money that creates income. Now, if you're wanting to get ahead financially, and enjoy greater freedom of choice, if you want a comfortable retirement, and you know you'll have more choices, if you can do more with your money. Now, if you've wondered who else is creating ways to make their money work for them, and you want actionable ideas, with honest pros and cons, and no fluff. Welcome to the Richard geek podcast. Where you here helping people find creative ways to build wealth and financial freedom. I'm Mike Stohler, and in this podcast, you'll hear from others who are already doing these things, and learn how you can too.
Hey everybody welcome back to another episode of the richer geek. I have got a richer Geek on the line now. He's an IT guy that get this. Christopher Nelson is a two time IPO technology exec, real estate investor, author, speaker, co founder of wealth, word capital. And what he does is he helps educate tech people, which is us on how to invest their time money so they can grow their careers, build wealth and build wealth, and make an impact.
How're you doing, Christopher?
Christopher Nelson I'm doing great today, Michael, thanks so much for having me.
Mike Stohler
Absolutely. Welcome to the richer geek. And we're gonna dive in. Just tell us a little bit about your background a little bit, you know, a two time IPO tech Exec.
Christopher Nelson
Yeah, I mean, so, you know, I saw working in technology as a way to generate, you know, a massive amount of equity to build out this pile of money that then I could go invest in real estate. And so that was my intention for many years. And it took me, you know, about 12 years in the industry to get to my first IPO and, you know, a lot of bumps and bruises along the way. But once I figured it out, then it was I actually worked for three companies that went through an IPO, I chose not to stay at one because it wasn't the right cultural fit. But out of the five startups that I've worked for, you know, three of them have gone through an IPO event. And part of what you know, I'm here to communicate to your audience of, you know, tech geeks is you should always work for equity, in that you, you can invest yourself and your talents like an asset, and you can get a better return on them. If you do have a due diligence process.
Mike Stohler
You know, I completely agree with that. I hear so many, what I call it newbies that are wanting to get into real estate, and they say, You know what, I'm just going to quit my job. Right and go full in and I'm like, oh, screech, the brakes, you know, the importance of having the W two at the beginning. You know, talk to us about number one, banks probably required that, you know, it's, you can't do anything, if you want to do it on your own. Without that w two, you have to have that proof.
Christopher Nelson
That's true in the the reality is, is what I found is, is there was no greater way for me to accelerate and build my wealth. I mean, I went working for a company for less than a year from, you know, zero to multiple, seven figures, like there's real opportunity out there. And the thing is, is I think, especially for technology employees working at W two having a solid backstop, and then figuring out how to passively invest, I think is a is an accelerated way to get to financial independence. Like anything else, you have to do your research, you have to come up with a framework. But I would say that, especially now in a real estate market that's you know, overheated, especially in some asset classes, that in my mind is probably less risk with more upside.
Mike Stohler
Now, in educating these technology employees and you know, anyone that you come across, what are some of the key points that you can talk about when you're talking about growing their careers, building their wealth, making an impact? And then do we start then looking at passive ways first?
Christopher Nelson
Yeah, so the first thing I really talk about to people is grow your career right? Like not everybody is made out to be an entrepreneur. There are, you know, fabulous ways to create not just an income, but also wealth in working for technology companies and other companies as well. And the secret there what I want to uncover there is always work for equity. All right. We've for many of us who have read Robert Kiyosaki, Robert Kiyosaki has the four quadrants, right on one side he has, okay your W two job, you know, you're working for dollars, or you're, you know, contractor where you're, you know, you own your own time, but you have to time is tied to dollars, then there's being a business owner, what he doesn't talk about is there's this invisible bridge that lives between quadrant one and quadrant three. And I call that working for equity. And there's a huge advantage there. Because if you then grow your career so that you can be a manager, senior manager, director, you can garner enough equity in some of these technology companies to get you to a high six or seven figure pay day.
And when I try to educate technology employees on is that you get used, generally speaking, you're gonna have a salary, some form of bonus and equity. And if you're able to live within your salary, use your bonus for, you know, any type of fun vacations, things you want, and you invest passively your equity. I would argue that with a structured plan, you can get to financial freedom, significant financial freedom, where I'm talking, you know, 100 $200,000 a year in income a lot faster than you can by grinding it out in anything else, that you're not working for equity.
Mike Stohler
Yeah, absolutely. And we've preached that here. It's called diversification. Yep. You know, don't stop putting into your 401 K's, your IRA, those are important, specially if there's matching. Right, right. I mean, that's just it's free money. 100%, take that. Those bonuses, don't buy the car. Don't buy the fancy, whatever. Yeah, build your wealth. And I think that is just so important. And listen, everybody, you know, that is so true. And especially when you first do it, let the pros do it for you.
Christopher Nelson
I think so because there's a huge opportunity out there to number one, continue to focus on your career, because I also think that it's easy to get diluted in what you're doing. So let's say you go work for a tech company, you get some level of equity, then you pivot to try and go do something else. No, stay focused, and continue to build yourself as the asset garner more. And then I think, as you said, Michael, there are professionals that are people out there that are curating great investments for you find that select few that you want to work with, and create that passive income portfolio so that then you're then going to, again, accelerate your time to getting to financial independence.
Mike Stohler
And let's talk about your professional resume in the field of real estate. Sure, with wealth, ward capital. Talk to us about that a little bit. So well,
Christopher Nelson
for capital, you know, we, it's interesting that Wellford capital came into being with the idea to help technology employees, because here's my wife, and I had relocated from the Bay Area here to Austin, Texas, where we now reside, and we started investing passively into a lot of apartment transactions back in 2016, and 2017, when there was amazing cash flow, cap rates were much higher. We were telling people back in the Bay Area about the type of investments we had, many people raise their hands and said, We need help. My wife and I sat down and said, Okay, do we want to, you know, start creating a business to really help people. And we did, but we wanted to do it in a way where we are the lead investors, we're building a family portfolio so that we're truly investing in showing them how do you create a real passive income portfolio.
So anybody who invests with me, gets full visibility into our complete portfolio where we've put our money and right now we're close to have invested over a million dollars of our own equity tech equity into this and showing them the results that they can receive. And so we've done that and now we've we've invested in over 3000, doors of multifamily. And we also have created a fun last year that invested into some diversified ATM fund very high cash flow. And now our main focus is on mobile home parks. We've been spending, you know, the last year and a half ramping up on this asset class doing due diligence on phenomenal operators. And now we've been putting together a few investments because what we see in the marketplace of passive income, passive income investing is that we need to find other asset classes outside of multifamily that are going to bring us the cash flow that bring us the real independence.
Mike Stohler
Yeah, let's talk about that. You know, everyone listening today, you know, you've you've probably watched HGTV everyone wants to get into the fixer flips ever once the single family and then You know, the fourplex, then we understand that there's this stair stepping kind of way of going from one asset class to another. Why are you pivoting from multifamily? I think that's very important what we're seeing in the economy with inflation with the growing interest rates, what's some of the reasons why you're pivoting,
Christopher Nelson
pivoting from multifamily? Because over time, really, since 2019, is we've seen the cash flow starting to erode. As we've seen this, this really rapid compression of cap rates, and we're paying more and more for assets, what we're seeing is that, you know, the cash flow has gone from, you know, 1110, nine, a seven, but seven on the back end loaded, so that now you're really maybe getting 4% a year, we're seeing, you know, debt service coverage ratios are starting to drop. The risk profile of Poe is the meat and potatoes of passive income investing is now becoming riskier. Right. And you and I were talking about this a little bit, Michael is, when you start seeing interest rates, you're going to be above cap rates, that dramatically changes the risk profile of an investment asset class.
And so our research was we wanted something our criteria was, how do we get something as recession resistant? But our main focus was also where can we get something where the supply is either static or shrinking, right? We like the cash flow that you find in specific self storage, investments, but self storage, you know, you have to watch the supply, right? There can be an oversupply problem problem. What we saw in mult in mobile, home parks is supply is shrinking. And they're not building very many more of them. And the need for them is literally off the chart demand is I mean, the the affordable housing crisis we have here. So there was a way that we could, you know, in in our current investments, we are, you know, really helping our residents, we're helping grow a veteran owned operating business. And then we're providing some great cash flow, that, you know, again, as lead investors, we're very much focused on maintaining, you know, around a, you know, 10% cash on cash return for our entire portfolio. Because, again, that's what we're using as a major to get to our financial independence.
Mike Stohler
Yeah. And it's funny, when people think of affordable housing, you don't think about mobile homes, they're thinking about the tiny houses in these new houses and cramming a bunch of things in and listen to everyone that is, you look at the market today, you look at every city, the government, all the states are always talking about the need for affordable housing. And here you have it, you know, I'm sure that there, and I don't know, if you've looked at this, it's just off the top of my head that there's even some help out there to buy or build or create these mobile home parks, if that's what you want to do, just because of the need of affordable housing.
Christopher Nelson
Yeah, I think it's more of where there's the opportunity out there is there's a lot of owners, what we're seeing is that the profile now of a mobile home park owner is somebody who has owned it for, you know, 30 40 years, they built it. Now they're close to their own retirement age, they may be in their 60s or their 70s. They run it as a cash business, they're tired. So they generally speaking right at 60%, occupancy 50%, we picked up a park that was at 30% occupancy, but guess what, it was cashflow, because they had very low debt. And so they want out. And then for us, the value add is really just doing light touches to these homes and getting people in their living. Like it's not like there is a lot of opportunity. And this is where, you know, when when I saw there was there was the ability to then pivot to something where there's less competition. The challenge is really building out your own operations team and property management team. We just said let's go solve that problem with the right people. And and that's what we've done.
Mike Stohler
What are some of the other reasons that people should be investing in real estate?
Christopher Nelson
Well, I mean, I think people need to be investing with real estate, especially technology employees to get out of the volatility of the market, right. It's so interesting, as you know, we still have a lot of exposure in the stock market from our tech equity. And when all of a sudden that stock market is getting compressed, it's so nice to see oh, now all of a sudden on the real estate side, rents are bumping up values, the assets are increasing. It helps me breathe a sigh of relief, and I can go back to the days when we had over 90% of our wealth in a single stock post first IP Yo, and every day I was watching the market, I was nursing an ulcer now. I'm actually in the midst of chaos in the market, you know, you know, combat overseas, right? It's like, I'm actually feeling like, Okay, we have a good position for the family, I'm feeling that were well protected. So I think the non correlation with the market is great. And then I also think that, you know, getting this cashflow, being cashflow focused, and then getting depreciation to offset it so that we're really lowering our tax burden. I mean, that's something that is super important to everybody,
Mike Stohler
especially the tech people that are living in the States or the cities where there's a high tax bracket. You know, some of my investors are like, Oh, my God, Mike, you know, they were, the smiles were so big when they saw the K ones, right? And especially if they're living in certain cities that just love the tax, like, oh, my gosh, I get some of this depreciation, if we don't even make money, it's worth just the k one, just the reduction in the tax burden that they have. And, you know, those are some of the great things that people don't realize, you know, God's not making any more land.
Christopher Nelson Not at all. Yeah. So that's where I think there's, there still is a whole rich diversity of asset classes out there. And opportunity inside of real estate, even when you see again, it's all about like, I think the key to great investing is diversification, and understanding, what's the cycle on each asset class, so that you say, Okay, this one's heating up? Well, let me look around at some of these other asset classes.
Mike Stohler
Now, within wealth, word capital, do you do funds do you do syndications? What are you
Christopher Nelson
tool we use the tool that's right, for the you know, the appropriate investment, you know, we have done to funds and those work for those particular investments. We've also done, you know, many more syndications. And so I think as we proceed, we really then look at the investment. We look at the partners and we say, what is the right tool? For the toolbox? I think the challenge right now in funds is to really, if you're going to, you know, call out and say, here's the share class, here's a fund that we have, there needs to be line of sight to acquiring assets that will allow you to meet that return. And so that's where I think, you know, funds are tricky right now. And I do think that people need to make sure they're talking with their operators and saying, Okay, if you're going to have this fun, and so been for 18 months, like where are these assets that you're going to acquire that they're going to help you meet this return?
Mike Stohler
Yeah, that's so true in accredited investors only do you like to?
Christopher Nelson
I like to do both. I mean, you know, right now, we are looking at syndication that we're trying to put together so we can do some 506 B, because I want to help people on the journey to become accredited. I want to show them how do they, you know, again, build their technology, career work for equity become accredited, and sometimes doing a 506 b, where we can let some non accredited investors participate is so important, for the most part five of succeed just because it is it's so much easier to transact to grow your business to advertise. But we like to try and mix it up to ensure that we can, you know, serve everybody that needs help.
Mike Stohler
Okay, well, that's good. So you know, everybody, you don't have to be an accredited investor to necessarily to invest with Christopher. So you know, check that out. And it is wealth word capital. Now, let's pivot a little bit. You know, I love you've you have a book that you're editing, I love the title from no dough to IPO. Just has a ring to it. So let's talk about your book a little bit. Well, yeah.
Christopher Nelson
So I mean, that was that was my story. So my story goes like this is I was a, you know, 10 year technology. Yeah, had 10 years of experience in technology consulting, where I built this great experience in, you know, SAS software, you know, software as a service, right. And I was doing a lot of implementations globally. And what happened is, then I went to work for my first startup. And I done this not knowing that I was burnout from my previous job, that I was really making a very emotional decision. So I went to work for this startup company, and a year later, instead of working for some mentors, I was nursing an ulcer, and I was just really in a bad emotional state. It also coincided with a friend of mine and I had opened up a juice and smoothie bars in Tucson, Arizona, as a matter of fact, because we wanted to build the side business to then go buy real estate in Tucson, but you know, post, the great recession, the smoothies, the $4 smoothies, we're not competing against the $5 footlong.
So we've lost that business. So I literally found myself after a great career sitting here Nursing and ulcer, lost the business turned over all our money to the bank. And it was just done. And I was like, Okay, what am I going to do? And I realized that I had made a mistake in selecting this company, but I still had a lot of, you know, experience and in some results that I delivered for other companies in my previous job that I could still contribute. And what I needed to do was I needed to think like an investor, I needed to say, Okay, wait, where am I going to invest my talent. And so that's where I went back, I went back to work for Accenture for a short period of time contract, I put together this plan, I started doing due diligence on companies, because I said, you know, just almost like real estate, I wanted to do a value add play, I want to find a company that is 12 to 24 months from an IPO. And so I went through, and then I networked in and I said, I also want to make sure that I'm finding out who am I going to work for I want somebody who's going to be a mentor is going to cultivate my career. And it took me around, you know, 18 months to really find this person. And then I was able to then network in and get a job at this company called Splunk. I joined it in 2011 and joined as a director, which was my goal, because I knew I could get the amount of shares that I that I thought could get me to over seven figures. Less than a year later, we had an IPO that turned out to be double of everybody's expectations. And that was it. You know, and so that was really the story, this book, this this story is really that and then to show everyone that this wasn't just, you know, random chance, I went and executed again, I mean, I'd stepped away from technology in 2019, to go and pursue real estate had a thriving business there. But a lot of my mentors said, you're going to write this book, people are going to say, You got to you got lucky, you know, I mean, you joined the right team at the right time. That's how you got your championship ring.
So okay, let me go do it again. So I joined GitLab, in June of 2020, as the senior director, and then 17 months later, we went through an IPO. And again, it was a multiple, seven figure IPO, that now is, you know, going to put more fuel into the, you know, into the investments. And so this book is really to try and show people that if you move with intention, if you look at your risk profile, that you can really work for equity in a way that will bring you results. And, you know, part of this is, you know, interviewing people that have done this three or four times, you know, because people out here doing it, right? It's not like they're the people who fail at it, sit and say all of these things. But when you look at the people who are succeeding, there is a pattern to success. There's a framework that if you follow it, you can experience it, too.
Mike Stohler
And where can those people find that framework? Where can they get that knowledge? Is it in your book, you're talking about following this?
Christopher Nelson
Great, so it's in my book that's going to come out later this year. But one of the other things I'm launching is, I'm going to be launching my own podcast called tech careers in money talk. Right? So this is where if people go to tech careers in money talk.com, you can sign up for my newsletter, as I telling you about publishing the book, but I want to have a podcast and I'm going to be kicking off a little later this year, where one day is all career career growth. The second day is all you know, money. And we'll cover everything that tech employees love to talk about, you know, we'll talk about the NF T's we'll talk about crypto, but we'll also talk about real estate and other boring investments that are going to see you to financial freedom. Because at the end of the day, I want to facilitate this conversation for tech employees. Because as you know, Michael, we don't talk about it enough. And we have to be intentional if we want to achieve these results.
Mike Stohler
Yeah, it's so important because I think that the tech, the people that are in tech, there's two different kinds. You have the salespeople, you have the people then you have the people that they're hunkered down in the in front of a computer. That's right. And that's all they do. They make a good living. Oh, yeah. Okay, but they don't have they know that 401k They know the IRA, they know that that's not going to give them the lifestyle that they want 20 years from now, or 25, or whatever it is, they retire, but they just don't have they know one thing, program or software, things like that. They need the help. They need the mentors, and listen to everybody. I don't care how successful you are. I don't care how rich you are. Mentors are it's critical in every stage of your life. And it sounds like tech careers of money talk podcast that Christopher's going to be doing is right up that alley, and I applaud you for doing it and thank you for doing it. Um, so before we leave, and what are some of the other ways that everybody can find you?
Christopher Nelson
Well, so you mentioned before, if you go to wealth word capital.com, and that's wealth and then w ARD wealth word like moving you towards wealth, and then tech careers and money talk. And then if people are interested in our mobile home park offering right now they can go to thrive community dot fund, and they can find out what we're doing there because we will have a new offering that's going to be going live later in April.
Mike Stohler li Perfect. Christopher Nelson, thank you so much for coming on the richer geek and for giving us a little bit about how are you? Thanks for tuning in to the richer geek podcast, where we're helping others find creative ways to build wealth, and financial freedom. For today's show notes, including all the links and resources from our show, and more information about our guests, visit us at www.therichergeek/podcast. And don't forget to jump over to Apple podcasts, Google Play Stitcher, or wherever you get your podcasts and hit the subscribe button. Share with others who could benefit from listening and leave a rating and review to get the podcast in front of your eyes. I appreciate you and thanks for listening
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ABOUT CHRISTOPHER NELSON
Christopher Nelson is an experienced technology executive (2 x IPOs), real estate investor, author, and the Principal and co-founder of Wealthward Capital. Wealthward Capital is a real estate investment firm with a diverse portfolio of over 3,000 multifamily units, mobile home parks, and ATMs.
Christopher is the host of the podcast, “Tech Careers and Money Talk” where he talks with experienced technology executives about career journeys and how to select the right companies to work for. He interviews experts in the best way to work for equity, invest and achieve financial independence.
He is currently editing his book, From No Dough to IPO.