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Christopher H. Loo, MD-PhD: Welcome everybody to this week's podcast episode for the Financial Freedom for Physicians podcast. I'm your host, Dr. Christopher Loo. And as I talk about four pillars of freedom: time, financial, location, and emotional freedom. And the podcast started out with physician guests and audience, and now it's expanded. So I'm always trying to add a new twist, keep things fresh. And in that light, today we have an entrepreneur from Denver, Colorado. His name is Erin Shine, and he is the CEO and founder of AttainableHome.com. And we're going to talk all about inflation and real estate investing tied with sustainability. I'm really excited for this show. So Erin, welcome.
Erin Shine: I appreciate that. Thanks for having me, Christopher.
Christopher H. Loo, MD-PhD: Yeah, I know, we got connected on PodMatch. We were talking backstage, and you have a really interesting twist and story. So tell the audience about yourself and how you got started.
Erin Shine: Thank you. Yeah. So going back to late high school, early college, I was always interested in sustainability, sort of a mix between environmental and business savings. And, I was like, Okay, how do I go about this? Through college, I had an undergrad, but I changed my major four times, and sort of discovered finance and real estate that way, which I really ended up loving through school. But I was one of 5000 undergraduates graduating in 2006, in August. And I was just like, what do I do with this? And so I did a bit of research and just packed the car, that was Central Florida, and drove out to Denver, and chased down solar companies for two months, basically walked in every week until they hired me. I didn't have much, but you just go for it. And that started my career in sustainability. My first job out of college was solar door to door, like we're getting now. The door knockers and the flyers. And I was in Costco at the end caps all weekend, selling solar. And so, sales training, and that's how I cut my teeth.
But that was frustrating, because in the last recession, the payback on your money was so long, it was like 22 to 25 years on your money. And it didn't really make sense. And that only translates to a few percentage points return on investment. So I got into energy efficient lighting, actually, I found that through doing trade shows. I worked for a company that went under in 2010, in the last recession. And then two weeks after getting laid off in Boulder, Colorado, I started my own.
So I was one of the first energy efficient lighting commercial distribution companies in the country, and grew pretty quickly. I had it for seven years and had a nice exit in 2017. And rolled all the capital into real estate. I have always loved real estate and started investing in 2009, in my own properties and rentals and primary residences. But now I'm in residential, commercial, crowdfunding deals, which are really popular lately, especially for physicians. And I'm not a physician myself, but I've a lot of friends from Denver. When I lived there, like half of them were doctors, and I just saw them going through residency and the pain and the hard work and different things you guys go through. So it's a lot of fun to be on this podcast.
Christopher H. Loo, MD-PhD: Yeah. So interesting, because you're the entrepreneur that did everything from the ground up, and you’ve got a lot of experience in the sustainable industry and now real estate. So I know you wanted to talk about the economy, and why real estate really fits into that paradigm, and especially in today's narrative. So tell us more about that.
Erin Shine: Sure, yes. And to bring it all the way around, what I do now with Attainable Home is sustainable investing with real estate, sort of combining the traditional real estate investing principles, with solar and energy efficiency, electric cars and Tesla and all that stuff. So that's what I'm doing now, which I'll cover. But I think it's really important, especially in a profession like yours, and anyone listening, who I mean, I can't claim to relate, but I've seen it because we would do these brunch conversations. And somebody, an anesthesiologist would say, Oh, I just got my student loans, down past 200 grand and things like that. And it's just like, you worked so hard for so long into your thirties and beyond, and you don't make much, relatively. And then all of a sudden you get a massive salary, and that's all gravy.
But you have a lot of numbers flying around. And I think it's really important, not just for physicians, but for anyone to really understand a bit of the core monetary system and how it's built, because we're all swimming in it. And it does go into general personal finance principles, financial literacy, but I'd like to talk through it this way. And we're all sort of swimming in it. I mean, technically, it's called a fractional reserve banking system. It's a debt based system. And the money that we all use, and this is pretty much every major country on Earth. You have the country itself, the government, and you have a central bank, in our case, it's the Federal Reserve, in England is the Bank of England, or the European Central Bank, the ECB, and so forth. And a little exercise I like to run through. Let's say, you and I, there's 100 podcast bucks between us, we're the full economy, right? $100. And I need a loan at 5%, I will pay you in a year. So I owe you 105 podcast bucks in a year, right? Well, if we're a closed economy, and we don't make the money in the system, where do I get the $5 to pay you at the end of the year? Well, it has to come from somewhere, because you lent it to me, I owe it to you. If I don't owe it to you, the whole thing falls apart, trust and everything like that. And sort of how that works functionally in our society is the Federal Reserve, it's created out of nothing. If that makes sense.
Now, that concept took me like three weeks to wrap my head around, when I first stumbled across thinking about it like this way. But being a debt based system, you cannot roll money back and not create new money to fill in all these promises, and productivity increases and so forth through society. So I owe you 105, and whoever makes the money needs to create essentially $105, or the whole thing falls apart. And that's a very simplistic example of how this monetary system works. But it also means you cannot go backwards. And every major country through the last hundreds of years has had the same exact system. And if that makes sense at all, that's sort of the baseline for all this talk of inflation. And, we're going back to the 1970s and the 40s. We've had these cycles hit us before, where we have to define inflation, which is just creating more monetary supply, and sort of the devaluation of our currency is the flip side of it. Which also means the erosion of purchasing power. And we can get into assets and investing in real estate, if you like.
Christopher H. Loo, MD-PhD: Yeah, go ahead.
Erin Shine: And first, too, I mean, I have a couple bills here, I'll just show up to the camera. If it makes sense. These are hyper inflated bills that you can, that you can buy on eBay, this is a $50 million Reichsbank Mark from 1923 Germany. And it's 100 years old, going back to World War One, when Germany owed all these reparations and stuff, and the other one is the Bank of Zimbabwe, which is a $100 trillion bill. [laughs] I think it's like, I think it's like 16 zeros or something on here, but I think it was like $3 on eBay.
But throughout history, it just shows that different countries hyper inflate their currency into nothing. And so the whole point of even mentioning this, is that with investing, it's effectively what we're doing, you must own assets to keep ahead of this. And essentially, they call it getting out of the rat race or having your money work for you, or things along those lines. That's basically what we're doing. Because if you own real assets, and we can talk about what those actually are, how to define it, you can stay ahead of it. So it doesn't matter how much money is created, you still own assets, and they go up with inflation and with money creation.
Christopher H. Loo, MD-PhD: What's interesting is that, especially for real estate, for entrepreneurs, business owners, even the physician community, it's all about real estate. Tell us, why is that?
Erin Shine: Well with physicians specifically, normally or most in most cases, you're gonna have a really high salary, which means you have a lot of taxes. I mean, I've had friends, they're so excited about their new job as a surgeon, and then they're like, oh my god, the taxes that got taken out of this. So real estate itself, and things like crowdfunding partnerships and things that you can invest in are good tax savings. You're kicking the can down the road effectively for a little while. But real estate itself, like owning rental properties, it's the biggest tax deduction you can do that I know of, and I do this for myself to keep my own taxes down. So taxes number one.
Now let's talk about what an asset is. I would say anything that has scarcity. Cars generally are not, even though in the last year used cars went up. That's the inflationary environment we're in. And now some argue that we're in stagflation, which means you don't produce any more. The economy isn't growing, but the monetary supply is growing, the amount of money they're printing is growing, so everything goes up. But there's no growth. And so, what an asset it is.
Land, for instance, you can't make more of it. So that qualifies as an asset. Art can, in the eye of the beholder, Rolexes, things like that, even though we're in a down cycle at the moment. Anything that produces money, anything that creates money, like businesses, stocks, bonds, right? Real Estate, rental income is the same. So real estate covers so much of it, it's an asset, it's scarce, it produces rental income, it's an inflation hedge, which means the more money they print, the houses generally go up. And over the past 120 years or so real estate has gone up, I think 3.2% or something like that. But the last look at the last few years, it went up 10 to 20%. And that's cooling off because the Federal Reserve is raising rates to make it cool off. They sort of engineer these cycles, because inflation is out of control. And regular people can't buy houses at these prices. So things are cooling off in part, for those reasons.
Christopher H. Loo, MD-PhD: Yeah. So interesting. And physicians love real estate because it's something tangible, so they can see it and hold it. And art, too. Especially in times of crises, people hold things that are of value.
What's interesting is that you have this sustainability piece, and then you tie it into sustainable real estate investing, which is really fascinating. And I'd like to hear more about that.
Erin Shine: Thanks. Three years ago, I started Attainable Home. And after investing in commercial and residential, you have an exit, much like physicians. You normally have a bunch of capital leftover, and it's like, what do you do with it? And so one, it's not to lose it, general personal finance principles. One thing I wanted to say, too, it's not what you make, it's what you keep. So just make sure to be really careful about keeping up with the Joneses and things like that. I know I'm backtracking a little bit.
But anyway, with sustainability I've been in this industry my whole career. And everyone's talking about Net Zero and ESG. And, green this and Tesla that. And I really wanted to combine traditional real estate investing principles, with an easier way to do an actual net zero house. And a net zero house means a home that can produce as much energy as it uses. And I wanted to see if I could roll in powering the Tesla with it, I have a model three; or any electric car.
So Attainable Home, the concept is one doing energy efficiency, and then typically doing solar as a last case and sort of calculating all the way through your energy needs for the year. And then zeroing out your entire energy bill through that. And also, sticking to home value increases from the savings you're getting on the utility bill, and then perceived value. And otherwise, what I found the ROI from doing sustainability stuff is actually higher than your typical real estate investing ROI. So you're increasing not only your nominal rate of return, but your percentage as well. If that makes sense.
Christopher H. Loo, MD-PhD: Yeah, that's interesting. So you're adding more value and then you're also being more environmentally friendly and at the same time, cutting your costs and your energy bills. What's interesting is that you approach the renewable energy world with the real estate investing principles. How do you approach that in terms of an overall macro perspective?
Erin Shine: In terms of combining sustainability or just the real estate, combining all of it? Well, with solar, for instance, studies are showing that 3 to 4% home value increase comes from owning the system, not renting it not leasing it. And so you can increase the home value by adding solar. And with the macro picture, and inflation and everything, there's two parts of it.
There's the capital increase part, capital gains, and then also the amount that it produces monthly, or yearly, or whatever. So what you're doing with efficiency and solar, on these homes that I find, is you're basically eliminating your energy bill, like $100 to $300 a month or sometimes much more if you have a bigger house with no more gas. And so you get the effective cash flow, which in my case, I'm in Florida now. But the last two houses I did for myself, anywhere from 12 to 20% ROI yearly cash flow, on the money you spend for efficiency and solar. And so it's like a bond or a dividend payment, but then you also increase the equity on your house. So you run your typical investing real estate calculators, and then tack on the efficiency and value increase from sustainability.
Another way to put this too is we all have energy bills in our home. And if you can do this, you're extracting more savings out of things that are already sitting there, because you're just paying the bill without even thinking much of it. And a lot of homes can go Net Zero these days, especially with how good the tech is now and how low the prices have gotten on these things.
Christopher H. Loo, MD-PhD: Yeah. It’s so fascinating to talk to you. And it's really interesting how you combine very new principles to existing industries. You mentioned you sold your business in 2016 or 2017. You did a lot of traveling and it sounds like you did a lot of personal work. What are some of the key lessons that you learned?
Erin Shine: Oh, good question. On the personal side, all the things you read about that the 80 year old retirees like to share with us, who had to learn the hard way. Went to Bali, did the Eat Pray Love thing for a bit, traveled the world. I mean, you find out, the highs don't last too long. I mean, I remember exactly when I had the wire come in from my business sale. It lasted about 10 minutes, and then all of a sudden, it's like, well, what am I gonna do now? I have to start another business.
And so, like a lot of us hard chargers and achievers and call us whatever. Work on being present, work on enjoying where you are, what you do, because it's endless. Things like keeping up with the Joneses, that'll kill you over time. If you can work on releasing some of that stuff, you'll just feel so much more calm and free.
And I roll a lot into business, just because I really love it and that's what I do. But Attainable Home for me represents a passion purpose project. Without the things hindering need before, because before it was just like how fast how far, how much money can I make? And I didn't know it at the time. But looking back, that's how it is.
And otherwise, you go through these phases like retail therapy, you buy all this stuff that you don't need. Today's luxury is tomorrow's liability type of stuff. And keep things simple, keep close friends. Understand that money isn't the answer. It doesn't make you happy. Yes, to cover some of the bases and a little bit more. But it's an endless sort of rat race that doesn't have much payoff if you go that way. So those are just a few that I can think of.
Christopher H. Loo, MD-PhD: Yeah, that's fascinating. And, to the audience, these are words of wisdom, from someone who's been there. The path. And if you thought everything is about money or what we refer to as the destination syndrome? Or just try to get there, get there, the arrival fallacy. So, I really enjoyed this conversation. And I know a lot of the audience is interested in learning more about you either from an economic real estate or sustainable sustainability perspective. How can people you know visit you and contact you and learn more about you?
Erin Shine: Sure, thanks. This has been a lot of fun, appreciate it. The website and the company is AttainableHome.com. I wrote up a bunch of case studies I did on these Net Zero homes and we have hundreds of articles on sustainability and electric cars and everything. And if you contact me through the website, I get those directly. So feel free to do that. And then we've got ebooks, you can download a guide from the homepage. And it's 40 things that people can do for their own homes to lower their energy bill. And if you have a bigger home, you're talking hundreds of dollars per month. So that's on there, too.
But yeah, that's the current project. And it'd be fun to chat with anyone.
Christopher H. Loo, MD-PhD:
Yeah. And for all the audience listening, Erin's links will be in the show notes and resources. It has been a really great conversation. I really enjoyed it. And we look forward to hearing about your future successes.
Erin Shine: Appreciate that. Thanks for having me on.
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.