Christopher H. Loo, MD-PhD
A Fascinating Financial Discussion
Updated: Sep 3, 2022
Myles Wakeham (Be Unconstrained)
Note: transcription provided by Otter.AI, which is a technology company that develops speech-to text transcription and translation applications using artificial intelligence and machine learning.
Christopher H. Loo, MD-PhD: Today, we have Myles Wickham and he is the Financially Independent Contrarian coming out of Arizona. And today he's going to talk all about financial independence, freedom. Little bit of crypto, I know the markets, there's blood in the market today. But we'll talk a little bit about that and go from there. So Myles, welcome.
Myles Wakeham: Thank you for having me. Appreciate it.
Christopher H. Loo, MD-PhD: Yeah. We connected through a pod match. And what's interesting is basically you're part of the fire movement, and tell most people, your background, how you got started? And we'll go from there.
Myles Wakeham: Yeah, I'm a bit of an oddball. So firstly, I'm in my late 50s. So that will give you a sort of a general sense of demographic here. So I'm originally from Australia, which my accent gives away. I'm one of those very, very weird guys who was raised in the 60s and 70s in Australia at a time when there was this thing around technology, which I, as a kid, got really into kind of geeked out on. But there was no way to study it or learn it or go to college or anything like that, though, there was just nothing back in those days. So I ended up not even finishing high school and went straight in and started a software company, which for a 15 year old kid is kind of unusual. But I did that in the late 70s.
And then by the mid 80s, I had written software for governments, Departments of Defense, big corporations, Fortune 500’s, universities, chemical labs. What a way to welcome yourself into the real world. But I got a chance to spend time in all of those areas, because I could write software. And in the mid 80s, I had a chance to move to the United States, which I did. And I came basically with nothing but a bag of clothes. And I walked away through a weird series of events about five or six years later as a millionaire. And the way it worked out, was that this kid that had no university degree and didn't even finish high school, every time I go looking for a job where you can pretty much guess what they said. Immigrant no background, get out kid. I'm like, Yeah, but I just wrote software for a $5 billion submarine project we don't care about. You haven't got the papers. So I said, Okay, fine. So I just kept trying to keep pitching.
And eventually, I stumbled into this little startup in Southern California that didn't even have any buildings at the time, they were in construction. So I had a job interview in one of those mobile office trailers on a construction site. And they said, we're in this medical thing, I didn't understand it. They said, we need software, we need to build an entire organization. We need people who know how to write software. I'm like, Well, I'm your guy. You're going to hire me. I mean, I've just been told 20 times No. And they're looking at me, like from the other side of the desk going, is he going to work for us? We're in a mobile trailer. [laughs]
We both needed each other, I guess I took the job. And that company became Amgen, the world's largest biotechnology corporation, and when I got my salary package, they gave you this big swag of stock options, which at the time were a large amount of nothing. And then they got FDA approval. And I went from nothing to a millionaire like that. And it was weird. Like we had secretaries in the parking lot driving around a Mercedes. And you know, because they got a similar stock package, as part of their job offer. It was unusual.
But as it happens, I ended up having to go back to Australia because my mother fell ill and I had to go back there and take care of her. And that began a very quick lesson of losing everything very fast. I got divorced. I lost half of my money on that. I had bought real estate in Australia and I didn't want to let go of it. So I ended up assuming mortgages for the half of the property that I had to pay her out on. And then I thought, Well, okay, that's bad. But then it got really bad because I happened to go into a with some friends, we went on a vacation driving across the Outback, and we ended up having a massive car accident. And I was in a coma for three weeks and pulled out of a wreckage with a dead body on top of me, it was like being on the frontlines in combat.
And I saw the medical industry in Australia from the inside looking out, which was not, not from the doctors perspective, but from being stuck in a bad day for six or eight weeks and having to recover and coming out disabled and everything. And I lost everything. I lost everything and in wealth and lost everything in hope. And I was in a pretty dark place. But I said, You know what, I can build myself back from this. And I did.
So years later, I ended up getting remarried, moved back to the States, came back with this kind of hunger to reclaim where I was. And within five years, I was a millionaire again. But this time I did it with real estate. So it was a very different game. So yeah, it was a weird story. After that many things have happened. I've come through that. I've been around the block so many damn times now that I know what I'm capable of. And I know what the world is capable of, and what risk mitigation is all about. And these days, what I do is, I haven't had a job for 25 years. I live my own life the way I want to. And a few years ago, a lot of people came to me and said, Hey, Myles, how'd you do it? What do you do? And I'm like, Well, I did this. And they're like, well, that's really contrarian.
I thought, well, that’s funny, I don't hear that word that often. They're like, everyone here does everything by the book. You go to college, you do this, you do that, you get your student loans. And I looked at it, and I'm like, well, that doesn't work. Well, it didn't work for me. That was a weird thing. It didn't work for me. What I found was, it didn't work for a lot of people. It did work for some. And so therefore I couldn't say, you're right, I'm wrong. I was like, I'm different. And if you're interested in hearing a different approach to how this sort of stuff works, I can talk your ears off. But if you don't want to hear a different approach, and you want to follow the same social mantra, it's alien to me, and I cannot relate. And that's kind of, I guess, where I'm at.
Christopher H. Loo, MD-PhD: I love stories like yours, and I love guests like yours, because we have this narrative in society where it's like, you're supposed to fill in all these checkboxes. And this is the definition of success. And you're successful, or you're influential, and you check all these boxes, but what's really interesting is you basically have broken all the rules. And now basically, you've hacked the system. And I find individuals such as yourself extremely fascinating, because you shatter the idea that you need to be a certain way, and you have to do a certain thing. So, we can go from there.
What's interesting is that you became very successful, lost it, but then you built it back up. And you learn these lessons. I'm interested in the concept of traditional retirement early, and your thoughts about that, because I know you were part of the fire movement. And so talk a little bit about the traditional concept of retirement, and how it's changing.
Myles Wakeham: I wouldn't say I'm part of the fire movement, I'm part of the FI, the first part of that. Here's kind of something that I think maybe your audience might resonate with. If you're doing something that you're passionate about that you feel is your calling, that you're feeling like it's, it's validating your ego, you're providing service. That's not work. That's the purpose. And where we’ve gone as a society, where an 18 year old kid is put in front of the student loan debt contract, with absolutely no idea what they're going into, on the pretense of a leap of faith based on what their parents told them, what their student advisors told them, what their friends told them, was the world that they were going into.
And having raised a daughter who's 25 now and watched her go through the experience, I can relate to it. I think that what ends up happening is that we end up graduating some extremely smart, intellectually capable people who are miserable. I think the statistics show that 65% of all college entrance students actually leave college and go to work in their major. Most of them don't. And it's I look at college, from the point of view of having a hard education and a soft education. Hard being that, you're going in there to learn specific skills required for your calling. So if you're a doctor, or an engineer, or an architect, or a lawyer, you will lose your learning skills that are needed to be able to enter that field because they're highly people die if you screw up, right? So you've got to meet that barrier.
That's not the case for somebody studying political science, or SEO Marketing. Most guys are shoved into the same tertiary education, as a doctor, a lawyer, an architect is, which is why they ended up leaving with a lot of debt. And then that offsets their ability to buy real estate or buy their own home in a stage where they're, say in a quarter of their life where they're building it. So those that retire early, the word retire is kind of to leave something, right. And I liked the idea of never using that word in my syntax at all, because I want to have my purpose and do what I am calling it, and love what I do. And never consider its work.
The problem was we have a society in which it's very expensive to live, particularly if you're trying to live with status. If you want to buy that big McMansion, and drive the Ferrari or whatever you want to do. That's gonna cost you a lot of money every single month in cash flow. Wanna live like Ghandi? It won't cost you anything, but you're probably gonna have a hard time doing it in the United States. We have a system here where the basic rules of existence, physiological existence, require you to have medical insurance. Require you to have other insurances, require you to pay for power and utility costs, food costs, shelter costs, all those things collectively make it next to impossible to not have a job.
And as a result, people get into this job that they can't connect the job to the purpose. And then consequently, they do what everyone else told them. And that is don't follow your heart and what you want to do, follow what's going to make you enough money, so you don't die. All right, well, that's fine. But the narrative is wrong. Because if you don't know your purpose to begin with, you have absolutely no point of reference. So you can't say, well, my purpose is to be a physician. Okay, great, you're in the business of service, you're in the business of being able to solve problems at levels that few in this world can do. But there has to be your purpose, right?
If you chose that, because your dad was a doctor or your mom was a doctor or you know, whatever it was, then you got to hope that that's right, because what 12 years later, you're going to find out whether it's right, and by then you've already got the trappings and you've already got the debt load, and all of a sudden, you're stuck. And that's our world, right. And replace physicians with customer service guys at American Express or general contractors or plumbers, or auto mechanics or whatever. And it's exactly the same story.
So my point with this is that you need purpose. First, once you've established purpose, you establish a set of ground rules around you, or metrics. And then you measure your cost of living or what I call your burn rate against those metrics to have a number that represents your monthly costs. And then what you want to do is, you want to earn that number. And so you've got two ways of earning that number. You can sell your time by the hour, or you can own assets that pay you to own them. And I'll tell you this, the rich don't have jobs. So if the rich don't have jobs, they obviously have assets. So the best thing to do is use other people's money, buy the assets, then eventually own the assets outright. Let the assets pay you to live, and then follow your purpose. We're done here. That's it. But nobody teaches that, they don't teach that in high school or college or anything.
Christopher H. Loo, MD-PhD: This interview has probably been one of the best interviews that I've done because most of the guests talk about real estate or business, but what you're talking about is just freedom. And what is so fascinating is that it's just so contrary, it's counterintuitive. And you think you have to work harder, get all these degrees and get this high paying job. And so this is interesting. You also talk about financial sustainability over financial. So tell us more about what that is.
Myles Wakeham: So if you know these numbers, you know what your burn rate is and what it costs you to live. And you know that you need to achieve that. And your ideal way of doing it is through a thing I call smart income. A lot of people might call it cash flow assets. But I think that the world's changed, particularly in regards to technology. So what I mean by smart income is owning things that pay you to own them. And they can be anything from a dividend stock to a vending machine to real rental real estate, which is what made me wealthy. And I thank my wife for that, because that was really her direction.
But those things make you able to generate your burn rate. So, financial sustainability is when you hit 150% of your burn rate. It's a simple mathematical score, that you have to hit 150%, you burn right, with asset based income. So dividends from the assets. And the rule, typically, in financial sustainability that I teach is that no one asset should take more than five to 15% of your time. So the whole idea here is to make money without investing your time into doing it. It's completely the opposite of making money by selling your time by the hour, whether it be a job, you have your own practice, your own independent contractor, freelance, whatever it is, if you're selling your time by the hour, you're doing it wrong. In regards to financial sustainability.
Now you can play the game of making a lot of money, you could be making three quarters of a million dollars a year as a specialist in consulting in some field. The problem is that the government will see you coming. And they'll want half of that, if not more. And then you'll become the rich guy that they love to audit. And at the end of the day, you're carrying around the administrative burden of having to pay accountants, lawyers, staff, everything, to support this massive income that you're getting. And at the end of the day, it comes down to a simple phrase, which I use a lot for my community. I tell them, it's not what you earn, it's what you keep. And the problem is, we forget to look. Like a small business, when you look at a profit and loss statement, you see income, less your expenses is your net profit. Most small businesses, all they do is they focus on income, I've got to earn more income, more income, more income.
Meanwhile, their expenses are just ratcheting up so that the second they have a month where they don't earn that income, the expenses are still there, and they're taking away from their future earnings. If they keep five or 7% of their total net income as profit, they think they're heroes. Well, the way I work is that you've got to keep it all. So you've got to find a way that you're not losing what you earn. And if all you're doing is chasing increased income all the time, because you believe it's going to impress people that you don't know or you hate, or it's going to give you a certain level of status in your own mind of success. And you're not keeping that money, you're doing it wrong. And financial sustainability is the art of keeping the money you earn and not having to express toil to earn it in the first place.
Christopher H. Loo, MD-PhD: Yeah. So well said, it's all about cash flow and freedom. You have very interesting ideas. Now, we talked about all bills about financial freedom, and you have a lot of libertarian ideals. And, we'll get into this concept of how it applies to Bitcoin. Because it's a new asset class, it made the headlines just today. And just with all the liquidations and the whole recession and everything. So tell us about your story into crypto, and we'll go into it.
Again, for the listeners, this is not financial advice. And also a disclaimer because of market conditions, you should do your research and don't lose more than you can afford. So, talk a little bit about your story, and then we'll talk more.
Myles Wakeham: Well, being a software guy. I live in the world of technology and have for a long time and I relate to it. And in the 2000s I was writing some software that I was selling to people in the service management area. And this thing with the internet was coming about where people were no longer looking to pay for little shiny CDs. They wanted to pay a subscription for something that was being hosted on the internet. So I went ahead, in the early part of that decade, and I bought a big ton of servers and rented whole cages in big data centers and started setting up my own. What I guess we called a managed service provider operation. I guess a lot of people might call it an ISP, the easy way of calling it is the cloud. I set up my own, I was one of the very first cloud operators in Arizona.
When I was doing that, I went through this process where I needed to convert the software I've written before, into an internet hosted version of itself. And in, this was about 2007, where I started that. I got a certain way through it, and then realized that I needed to hire people to help me get through this, get over the finishing line. That was some time during that period and a number of years later. And I ended up hiring people from all over the world and had people working for me from Australia, Vietnam, India. And I had this one guy who was working for me who was one of the best guys I had, and he was from Bangladesh.
And the weird thing was at that time, we would come out of the post 9/11 period. And so Muslim countries were not necessarily trusted by the US Federal Government, and also by the banking industry. So when I'd get this guy working for me, who was fantastic. And I could send him the specification via email and get it instantly, he’d do the work. Send me back the code, I’d check it. It was great. And it was instant, right? When it came to paying him. It was a whole different game. I couldn't PayPal the guy. I couldn't Venmo the guy, there wasn't anything like that back then. I literally had to go to Western Union with a big wad of cash, and then send it to him. And I watched the money, when he eventually received it. He lost 27% of everything he earned to what I would call the trolls on the bridge, the money changers. I thought this was ridiculous, right? How on earth can this guy be incentivized to want to continue to work for me? Do I have to pay him 27% more to cover the loss in the interim? Or does he have to eat it? I don't know. But this isn't good. So meanwhile, we've been chatting. And this was about 2010, late 2010, I'd say. And he had said to me, Well, there’s this thing called Bitcoin, we could try that. And I'm like, Well, what exactly is that? Well, then I learned.
By about 2011, I decided that rather than taking a big chunk of cash to Western Union, I'd wire a big chunk of cash to this exchange in Japan. And I'd buy a ton of Bitcoin and I use it like a payment, because I can log in over the internet. There's all my bitcoin. And as he was doing my work, he'd sent me an invoice and I'd pay him the dollar equivalent in Bitcoin at the time. And I bought it for $7 Each back in those days, bought a lot of it, because I wasn't going to be wiring money all the time, because I'd just be losing it to the banks in wiring fees. The whole reason for doing it was to avoid that. So I just bought a lot of Bitcoin and sat on it. Well, that worked for a while and eventually got back to me and said, well, this is great. I've got this Bitcoin, but I can't spend it on anything, and I need to feed my family. And so, we worked out, there was this exchange in Hong Kong. And they’d just come out. And they had this thing where they were tying a debit card, like a MasterCard debit card, to a Bitcoin account. And if you put all your Bitcoin in their exchange, you could withdraw it with this debit card. And I said, Well, let's give this a shot.
So we did. I set him up with a debit card. He goes down to the local equivalent of a 7/11 in Dhaka, does this thing in the ATM machine and says he wants money out. It comes out charging, like 50 cents, and he's got money, and he pays 50 cents to get it. And I'm like, Dude, we got a solution here. This is awesome. Well, that led me into the whole Bitcoin world because I could see the power that this was going to have to the unbanked. The power there's going to have to the 8 billion or 7 billion at the time, people on planet earth that needed more than what Western banking was providing them. And this was the answer. And for me, as a software guy, I thought this is how I build up a great team of developers who I can and pay incidentally who are going to stay with me that they're not going to walk away for something else, because they take some two weeks to get paid.
And then what I saw was really unusual because if you read the original 2009 White Paper on Bitcoin, it's titled Bitcoin and Electronic Peer to Peer Cash System, meaning that it was designed for exactly the purpose that I was using it for, to pay people as a medium of exchange. Then it got morphed because all of a sudden, everybody said this thing's incredible and it's got a finite supply, it's got 21 million, can't be any more. So therefore the value of any bitcoin if we apply basic economic free market principles to it will go up based on demand and demand went up. So my little $7 Bitcoin very quickly became $1,200. And at that point, you're not paying anybody in Bitcoin anymore. Because you're saying, I'm keeping this thing, this thing's worth a mint.
Well, I continued to buy in and buy in on it. At the time, I rode that Bitcoin train all the way through to about 2017/2018, when it went to about 20k, which is actually surprisingly, not that far off where it is today. But when it was at that price point, I started to see factors of humanity. I didn't like scams, rug pulls. I saw miners that weren't mining anything and taking money and never giving it back. I saw just the worst part of humanity. I saw this crazy quest for greed and this insatiable appetite for more and more and more. And I said to myself, that's not me. I'm a pragmatic guy. I like the idea of the buck stops here. I like the idea of being responsible for my actions and, I also like the idea of being rewarded for those actions, but I don't like theft. I don't like grifters. I don't like all the dark side of humanity that started to show it’s true. And at that point, I said, I've made 1800x what I originally invested in this thing. And it was an accident, because I was using it as a medium of exchange. It wasn’t an intentional investment. But I can walk away right now very wealthy, I don't have to worry about it. And I can walk away with my head held high. So I did. And that's what happened.
And then people ever since, I get people coming to me going, how’d you make all this money? You know, Bitcoin, I gotta get into it. And I told them a little story about what I learned when I was a teenager in Australia. And the lesson was, that when you're a teenager in Australia, you live on the coast and I lived in a city on the coast. All my buddies, we all became guys who wanted to become great surfers, because that was what you’d do, right? You get your surfboard out and wax it down, stick it on the roof of your van or VW bus. And you drive out to the great surf and you go out there and think that you were some hot surfer and have the greatest rides and all that stuff. So I went along with it. And I went out there. And after a few days, I just got so beaten up trying to learn how to surf that I was ready to chuck it in because it was like, This is painful, exhausting, and I'm not getting it.
I decided to stick it out. I'm really glad I did. Because I started to learn things about nature and the universe. I learned patterns, I could see how waves come in cycles, I could see how waves start from nothing and rise up. And I could also realize that I'd never ever catch a wave. If I was trying to catch it when it was upon me. When it was passing me. I had to be well ahead of it and paddle like crazy before it got to me. And that's the only hope I ever got of catching a wave.
When I learned that lesson, I learned the rules of life. I learned that if you want to buy anything, you've got to be the guy surfing in the water prepared and ready and you've got to paddle before the thing gets to you. That's what I did with Bitcoin. It's what I've done with real estate, it's what I've done with everything. And that means that you've got to do the polar opposite of what your natural human instinct is. And that is when everybody else is out there making money. You want a piece of the action, your fear of missing out.
Christopher H. Loo, MD-PhD: Yeah, exactly. FOMO.
Myles Wakeham: FOMO is your worst enemy, because while you're chasing the dragon that everybody else is telling you about. You're missing out on all of the opportunities that come from being a contrarian, being the opposite. You never make money, buying something at its peak. And yet our society and media and our mentality is to put the spotlight on everything that's at the peak And then say, Oh, this is good. You need to get in on it. No, no, no. When everyone's put the spotlight on the things that are crashing, that's when you need to get in on it.
I had a conversation with somebody the other day who was telling me about how back in six months ago, you could get a home mortgage at 3% for a 30 year fixed mortgage. And today, there was an article, I think, on CNBC or something saying that by the end of the month, they expected home mortgage base rates to be at 6%. Double their interest rate? I said, Yeah, well, there's a lesson there. What do you mean? I said, Well, we should have gotten a home mortgage six months ago. Yeah. I mean, because like, that's when you get it, you get it when it's low. Because if you had bought real estate, when I bought real estate, they were 13%. So that was really good. Why weren't you out there doing this? Why did you keep delaying, delaying, delaying when you knew it was an all time low, and you knew it wasn't gonna stay there that long? Well, because society tells you not to buy it when it's a bargain. And then when you missed out, like FOMO, and it's now 6%, you can't afford it. That's when you put all your focus on real estate or on a mortgage. I don’t get it. To me, do the opposite of what everyone else does. You do pretty damn well on it.
Christopher H. Loo, MD-PhD: Yeah, this is a fascinating discussion. And I know a lot of people listening would be interested in finding out more about you, or visiting your website. And any resources or links, feel free to shout them out right now.
Myles Wakeham: Well, everything that I do, and where people can find me is at a website called beunconstrained.com. The thing I'm probably most noted for is that I do a weekly podcast called The Unconstrained Podcast that is pretty popular. And as a result of that, I find myself appearing on various shows all over the place. But I do this weekly podcast because it was kind of weird. Like somebody said to me the other day, you've been doing it for three or so years, why did you do it? And I said, Well, I have this daughter, and she's like all young kids, she's never gonna listen to what dad says. Because she’s got that typical punk rock mentality, which I had too, so I get it. You know, you want to forge your own way you want to, you've got to go around the block, and you got to find it out on your own, I get that.
But I wanted to capture these lessons that have come from living a really unusual life all around the world and doing the crazy things I've done. But I couldn't tell her. I had to put it out there and tell everybody, and then hope one day that she'd gravitate towards it when she needed to. And just so happens that as she gets older she needs to gravitate towards it more than she did if it was Dad just barking it down the line. So The Unconstrained Podcast is kind of my way of telling people about what I've learned in life, both monetarily and philosophically, my experiences living all around the world. And you know, we live half of the time in Arizona, half the time in Mexico. I go back to my home country, Australia, periodically. But to have the freedom to do that. And to be able to learn so much about the world and its history and what it's taught me and I'm constantly learning every day on learning something new. Just to be able to share some of those stories through that podcast has been what I do. So that's probably the main thing.
Christopher H. Loo, MD-PhD: Yeah, that's so awesome. So a really, really fantastic episode. For all the listeners, all of the resources and links will be in the show notes. And so Myles, thanks so much. It was a very fascinating discussion. I really love the principles that you talked about. And we look forward to having you as a guest on future episodes.
Myles Wakeham: Oh, sure. I'd love to, that would be great. Thanks for having me.
Christopher H. Loo, MD-PhD: Many thanks again for being here. If you’re new, you can find me online at Christopher H. Loo, MD-PhD, where I have links to other episodes or links to online resources that will support you on your financial literacy journey. I’ll see you there in on next week’s show. While I bring you thoroughly vetted information on this show regarding a variety of financial topics, I cannot promise you a one size fits all solution. This is why I caution you to continue to learn. Educate yourself and seek professional advice unique to your situation. If you want to talk to me, I welcome it. Please reach out via my website or email at Chris@drchrisloomdphd.com. I read and personally respond to all of my emails. Talk soon!
Editor's note: This transcript has been edited for brevity and clarity.