Has anyone worked with Tardus Wealth Strategies?

[Jorge Borges]

Hello BiggerPockets members. Love his community. 

Have anyone of you hired Tardus for wealth coaching? They are the creators of the Income Snowball (i.e. Income Snowball, a system of investing in which a person can create self-sustaining passive income). I'm looking to find unbiased reviews of their service.

Thanks!

[Daniel Araque]

An important note to keep in mind is that your LOC balance continues to accumulate interest up until the day you finish paying it off, no matter how fast you pay it off. Unless you have a 0% LOC, any amount of LOC taken out will cost a little more than the original amount because of the interest accumulation.

Also, whatever monthly payment your bank determines, i.e $10K LOC at $300/month for x amount of months, that will eat up a portion of your total contribution.

For example, if your getting $400/month from your investment vehicle, plus $2,000 of your personal cash flow, that $300 bank note will eat up a portion of your $2,400 payment, and the remaining portion of that $2,400 will be applied to the LOC principal.

[Don Konipol]

Here’s what I know after 40 years as a successful real estate and mortgage investor, syndicator and wealth accumulator

1. I’m not at all impressed by the ‘positive’ experiences of people who have been investing for all of 6 months through one - tenth of an economic cycle

2. The educational system in the U S is extremely lacking in the field of business/economics if someone can write a book as simple as RDPD and have millions of people say that the simple concept of if you save money and invest it in appreciating/income producing assets you’ll be better off than if you spend it on unneeded toys has radically changed their life’s because they never knew of or heard of that concept before.  Educators, education administrators and politicians should be ashamed.

3. Same thing for the so called “infinity banking”.  Borrow money at 3%, lend it out or invest it at 6%, pay back the 3% loan and do it again. Save some of your salary and use it do pay down the loan.   Btw, wrap it all into an overstuffed single premium whole life policy and through the insurance industry’s lobbying of congress your income will incur taxes deferred to far in the future, and if you’re lucky enough to die before 71 you may never have to pay taxes on the income.  Possibly a good move, IF you don’t blow the investment or IF the investment doesn’t blow up.  If it does you have zero asset/income, a much larger debt secured by your personal residence, at just the time you probably also lose your job due to economic conditions, and all those nice folks teaching you about sno ball, infinity, you’re your own bank, etc., will be long gone.  They’ll appear again selling a different ‘financial concept/system/advice a few years later, with many having changed their names and residencies.  

4. No investment is risk less.  The higher the return the greater the risk. The peer to peer lending platforms as well as the real estate crowdfunding platforms are not having their investments chosen by Warren Buffet, or for that matter any money/investment manager employed by the big pension funds, endowments or ultra wealthy individuals that RDPD is always alluding to.  These platforms are run by techies with no investing experience.  For the financial side they hire third year financial analysts (3 years removed from college) because they cost one quarter of what a qualified employee would cost.  I know because I consulted for one of the largest real estate crowdfunding platforms. They has NO idea how to underwrite a commercial mortgage loan. No one on staff who had ever analyzed a commercial mortgage loan.  Yet their website stated that they crowdfunded AND VETTED commercial mortgage loans.

5.  Here’s the biggest risk.  The government closes the whole life tax deferral allowability.  Think it can’t happen?  That’s what the tax shelter investors thought in 1987. Not only were tax shelters stripped of their tax deferral capabilities, but they were stripped of it RETROACTIVE, allowing the IRS to recalculate tax shelter investors income going back 7 years.  With penalties and interest.  No telling what a desperate, bankrupt government will do.  The government used to be able to just print money to pay its bills.  Now with the resulting inflation it would cause people would move to crypto currencies.  At some point the gov bond market drys up, the gov becomes desperate for cash, and anyone with deferred taxes looks like a fatten cow ready for slaughter.  Just a little additional risk that probably wasn’t mentioned when they were explaining “infinity banking”.

[Tony Kim]

Quote from @Don Konipol:

Here’s what I know after 40 years as a successful real estate and mortgage investor, syndicator and wealth accumulator

1. I’m not at all impressed by the ‘positive’ experiences of people who have been investing for all of 6 months through one - tenth of an economic cycle

2. The educational system in the U S is extremely lacking in the field of business/economics if someone can write a book as simple as RDPD and have millions of people say that the simple concept of if you save money and invest it in appreciating/income producing assets you’ll be better off than if you spend it on unneeded toys has radically changed their life’s because they never knew of or heard of that concept before.  Educators, education administrators and politicians should be ashamed.

3. Same thing for the so called “infinity banking”.  Borrow money at 3%, lend it out or invest it at 6%, pay back the 3% loan and do it again. Save some of your salary and use it do pay down the loan.   Btw, wrap it all into an overstuffed single premium whole life policy and through the insurance industry’s lobbying of congress your income will incur taxes deferred to far in the future, and if you’re lucky enough to die before 71 you may never have to pay taxes on the income.  Possibly a good move, IF you don’t blow the investment or IF the investment doesn’t blow up.  If it does you have zero asset/income, a much larger debt secured by your personal residence, at just the time you probably also lose your job due to economic conditions, and all those nice folks teaching you about sno ball, infinity, you’re your own bank, etc., will be long gone.  They’ll appear again selling a different ‘financial concept/system/advice a few years later, with many having changed their names and residencies.  

4. No investment is risk less.  The higher the return the greater the risk. The peer to peer lending platforms as well as the real estate crowdfunding platforms are not having their investments chosen by Warren Buffet, or for that matter any money/investment manager employed by the big pension funds, endowments or ultra wealthy individuals that RDPD is always alluding to.  These platforms are run by techies with no investing experience.  For the financial side they hire third year financial analysts (3 years removed from college) because they cost one quarter of what a qualified employee would cost.  I know because I consulted for one of the largest real estate crowdfunding platforms. They has NO idea how to underwrite a commercial mortgage loan. No one on staff who had ever analyzed a commercial mortgage loan.  Yet their website stated that they crowdfunded AND VETTED commercial mortgage loans.

5.  Here’s the biggest risk.  The government closes the whole life tax deferral allowability.  Think it can’t happen?  That’s what the tax shelter investors thought in 1987. Not only were tax shelters stripped of their tax deferral capabilities, but they were stripped of it RETROACTIVE, allowing the IRS to recalculate tax shelter investors income going back 7 years.  With penalties and interest.  No telling what a desperate, bankrupt government will do.  The government used to be able to just print money to pay its bills.  Now with the resulting inflation it would cause people would move to crypto currencies.  At some point the gov bond market drys up, the gov becomes desperate for cash, and anyone with deferred taxes looks like a fatten cow ready for slaughter.  Just a little additional risk that probably wasn’t mentioned when they were explaining “infinity banking”.

Is there any way to give 100 votes for a post? Because this post is deserving of it. Every once in awhile here on BiggerPockets a product like this makes an appearance and gets pumped up very aggressively, and the unfortunate thing is that it makes an impression on folks that are new to investing or may not have much of a financial background.

Any seasoned lender will tell you that one of the most basic tenets of lending is that your loan must be secured or collateralized in some fashion. I can't think of anything riskier than taking a HELOC out of your primary home and using that to make super aggressive loans that are unsecured.

if you want to make aggressive loans and arbitrage that against the higher yielding loans, at least make loans that are collateralized. Why not invest in a BDC like ARCC, TCPC or GBDC? You're essentially doing the same type of strategy except you're not putting your precious primary home at risk. Nor are you making loans that are unsecured and uncollateralized. Plus these companies are subject to a lot of regulatory scrutiny (SEC, SOX).

This Tardus strategy truly makes me cringe. For those of you who haven't been doing this for a while, let me tell you that there were similar companies with similar strategies prior to the GFC, advising people to take helocs on their primary so they can arbitrage that into higher yielding investments. Where are they now? LoL, they were all wiped out of course. What do you think the odds are that a strategy like this will survive the next economic reset? 

Almost any strategy will do well during up time of unprecedented economic expansion. The true test is when things aren't going well and the investment is put under stress. This is why seasoned investors run a "stress test" when evaluating their investments. How bad do things have to get for them to still break even and how bad does it have to be for them to lose money. With the house of cards-like strategy with Tardus, it won't take much for it to come crumbling down. 

[Chris John]

@Georgy Cherkassky

"Not entirely, if your saving 1 grand a month for a downpayment on
property; your first property will be in three years and then you will
have to save for another 3 years to buy a second property, so on and so
forth."

This assumes that your first property makes $0/mo (or that you're saving $0/mo for whatever reason.)  If you were making $500/mo, for example, you'd save $36k in 2 years instead of 3, thereby accelerating the purchase of your second property by a year.  From that point, assuming another $500/mo, you'd then have 36k in 1.5 years, and so on.

Also, real estate allows for much better tax benefits, debt retirement, and appreciation opportunities (as well as increasing rent over the years).

[Don Konipol]

@Lindsie Akers

“

‘Peer to Peer lending (on Prosper) - Invested $10,000 initially - receive $320/month for 3 years. $320 x 12 months = $3,849/$10,000 initial investment = 38% CoC Return

The Legacy Income Model (this is a product a financial planning firm created specifically for Tardus clients) - Invested $10,000 initially - receive $310/month for 3 years. $310 X 12 months = $3,720 in a year. $3,720/$10,000 initial investment = 37% CoC Return”

So I’m confused by the above.  Are you stating that you have made, or have heard of an investment on Prosper of $10,000 that pays interest only payments of $320 per month for 36 months and then your principal of $10,000 is returned; or is the $320 monthly payment INCLUSIVE of principal and interest and the loan amortized over three years?   If it’s the former I find it hard to believe anything but the absolutely most risky loans if that would pay 38% annual interest; if it’s the latter then you DO NOT get your $10,000 principal back at the end of the loan term, it is returned monthly as part of the amortized monthly payment.  I this case your annualized return is 9.43%, not 38%.

[Tony Kim]

Quote from @Chris John:

@Georgy Cherkassky

"Not entirely, if your saving 1 grand a month for a downpayment on
property; your first property will be in three years and then you will
have to save for another 3 years to buy a second property, so on and so
forth."

This assumes that your first property makes $0/mo (or that you're saving $0/mo for whatever reason.)  If you were making $500/mo, for example, you'd save $36k in 2 years instead of 3, thereby accelerating the purchase of your second property by a year.  From that point, assuming another $500/mo, you'd then have 36k in 1.5 years, and so on.

Also, real estate allows for much better tax benefits, debt retirement, and appreciation opportunities (as well as increasing rent over the years).

Well what'dya know. Income snowball comes in many different forms! Also, as you mentioned, if you snowball using directly owned properties, you'll be paying very little tax due to a nice little thing called depreciation. Whereas, with P2P lending, everything will be taxed as ordinary income. Also, the interest on your HELOC will not be tax deductible. Much better to get traditional financing, secured by the property you're purchasing so that every single penny of interest you pay is tax deductible.

[Chris John]

@Tony Kim

Yeah, I'd heard of the "Be Your Own Banker" thing.  I've never really investigated it closely and I'm new to the concept of Tardus Wealth. 

I really like the concept of borrowing on a long term and getting paid back on a short term though.  For instance, I'd buy any functional house for the price of infinity, if I could only pay $100/mo for perpetuity.  It's kind of got my mind trying to find a time arbitrage situation as opposed to an interest rate arbitrage.

Like, is there any benefit to borrowing money on a 30 year term, investing it, and getting it paid back in 3 years?  And then just do that over and over?  In theory, you'd turn that money 10x over the 30 years and that alone should provide a benefit.  I just don't think that what is being mentioned here is better than the opportunity that I have to just buy and control my own assets.  I'd be lying if I said I wasn't trying to think of other, potentially more lucrative and less risky ways of doing something similar though.

I guess I've always known that part of the benefit of real estate was time arbitrage, but this is making me see it more clearly and in an entirely new way.

[Bruce D. Kowal]

One question I always have of anyone selling a wealth building strategy, whether it's a surefire way to trade options, or someone peddling the best algorithim for trading stocks and bonds:  if you are so smart, why do you need to work at selling the product? If I were wildly successful in implementing any strategy, I would keep quiet about it and enjoy my life.

It's like the tale about the gold miners in California during the Gold Rush of 1849:  the only ones who made real money were the ones selling the tools and supplies to the miners.  

Just sayin'

[Lindsie Akers]

Quote from @Don Konipol:

@Lindsie Akers

“

‘Peer to Peer lending (on Prosper) - Invested $10,000 initially - receive $320/month for 3 years. $320 x 12 months = $3,849/$10,000 initial investment = 38% CoC Return

The Legacy Income Model (this is a product a financial planning firm created specifically for Tardus clients) - Invested $10,000 initially - receive $310/month for 3 years. $310 X 12 months = $3,720 in a year. $3,720/$10,000 initial investment = 37% CoC Return”

So I’m confused by the above.  Are you stating that you have made, or have heard of an investment on Prosper of $10,000 that pays interest only payments of $320 per month for 36 months and then your principal of $10,000 is returned; or is the $320 monthly payment INCLUSIVE of principal and interest and the loan amortized over three years?   If it’s the former I find it hard to believe anything but the absolutely most risky loans if that would pay 38% annual interest; if it’s the latter then you DO NOT get your $10,000 principal back at the end of the loan term, it is returned monthly as part of the amortized monthly payment.  I this case your annualized return is 9.43%, not 38%.

No, not interest only. These are amortized payments that include a return of principal each month. The 38% cash on cash return is including the principal. (investments structured with principal & interest payments is part of what fuels the snowball at the beginning)

If you're looking for a standard return rate, yes you're usually looking at between 8-10% return on Prosper 

(Tardus is not affiliated with Prosper in any way and does not recommend specific investments)

[Lindsie Akers]

Quote from @Tony Kim:

Quote from @Don Konipol:

Here’s what I know after 40 years as a successful real estate and mortgage investor, syndicator and wealth accumulator

1. I’m not at all impressed by the ‘positive’ experiences of people who have been investing for all of 6 months through one - tenth of an economic cycle

2. The educational system in the U S is extremely lacking in the field of business/economics if someone can write a book as simple as RDPD and have millions of people say that the simple concept of if you save money and invest it in appreciating/income producing assets you’ll be better off than if you spend it on unneeded toys has radically changed their life’s because they never knew of or heard of that concept before.  Educators, education administrators and politicians should be ashamed.

3. Same thing for the so called “infinity banking”.  Borrow money at 3%, lend it out or invest it at 6%, pay back the 3% loan and do it again. Save some of your salary and use it do pay down the loan.   Btw, wrap it all into an overstuffed single premium whole life policy and through the insurance industry’s lobbying of congress your income will incur taxes deferred to far in the future, and if you’re lucky enough to die before 71 you may never have to pay taxes on the income.  Possibly a good move, IF you don’t blow the investment or IF the investment doesn’t blow up.  If it does you have zero asset/income, a much larger debt secured by your personal residence, at just the time you probably also lose your job due to economic conditions, and all those nice folks teaching you about sno ball, infinity, you’re your own bank, etc., will be long gone.  They’ll appear again selling a different ‘financial concept/system/advice a few years later, with many having changed their names and residencies.  

4. No investment is risk less.  The higher the return the greater the risk. The peer to peer lending platforms as well as the real estate crowdfunding platforms are not having their investments chosen by Warren Buffet, or for that matter any money/investment manager employed by the big pension funds, endowments or ultra wealthy individuals that RDPD is always alluding to.  These platforms are run by techies with no investing experience.  For the financial side they hire third year financial analysts (3 years removed from college) because they cost one quarter of what a qualified employee would cost.  I know because I consulted for one of the largest real estate crowdfunding platforms. They has NO idea how to underwrite a commercial mortgage loan. No one on staff who had ever analyzed a commercial mortgage loan.  Yet their website stated that they crowdfunded AND VETTED commercial mortgage loans.

5.  Here’s the biggest risk.  The government closes the whole life tax deferral allowability.  Think it can’t happen?  That’s what the tax shelter investors thought in 1987. Not only were tax shelters stripped of their tax deferral capabilities, but they were stripped of it RETROACTIVE, allowing the IRS to recalculate tax shelter investors income going back 7 years.  With penalties and interest.  No telling what a desperate, bankrupt government will do.  The government used to be able to just print money to pay its bills.  Now with the resulting inflation it would cause people would move to crypto currencies.  At some point the gov bond market drys up, the gov becomes desperate for cash, and anyone with deferred taxes looks like a fatten cow ready for slaughter.  Just a little additional risk that probably wasn’t mentioned when they were explaining “infinity banking”.

Is there any way to give 100 votes for a post? Because this post is deserving of it. Every once in awhile here on BiggerPockets a product like this makes an appearance and gets pumped up very aggressively, and the unfortunate thing is that it makes an impression on folks that are new to investing or may not have much of a financial background.

Any seasoned lender will tell you that one of the most basic tenets of lending is that your loan must be secured or collateralized in some fashion. I can't think of anything riskier than taking a HELOC out of your primary home and using that to make super aggressive loans that are unsecured.

if you want to make aggressive loans and arbitrage that against the higher yielding loans, at least make loans that are collateralized. Why not invest in a BDC like ARCC, TCPC or GBDC? You're essentially doing the same type of strategy except you're not putting your precious primary home at risk. Nor are you making loans that are unsecured and uncollateralized. Plus these companies are subject to a lot of regulatory scrutiny (SEC, SOX).

This Tardus strategy truly makes me cringe. For those of you who haven't been doing this for a while, let me tell you that there were similar companies with similar strategies prior to the GFC, advising people to take helocs on their primary so they can arbitrage that into higher yielding investments. Where are they now? LoL, they were all wiped out of course. What do you think the odds are that a strategy like this will survive the next economic reset? 

Almost any strategy will do well during up time of unprecedented economic expansion. The true test is when things aren't going well and the investment is put under stress. This is why seasoned investors run a "stress test" when evaluating their investments. How bad do things have to get for them to still break even and how bad does it have to be for them to lose money. With the house of cards-like strategy with Tardus, it won't take much for it to come crumbling down. 

Tardus has been in business for 20 years, with an A+ rating from the Better Business Bureau and has withstood the 2001, 2008-09 and 2020 recessions. The strategy was created over 6 years of research and development with arduous vetting from math professors, investment professionals and the US government in the process of receiving the patent. We work with many well-known financial and real estate vendors who have also vetted and trust our program. 

I believe some of you are missing the point. All Tardus is, is an education and coaching company. Our coaches meet with members on a monthly basis to help them learn to evaluate investments, do their own due diligence, and manage their own money. The Income Snowball is a strategy, that is now software, that just projects how long it will take you to create X amount of passive income if you invest on a certain schedule, also laid out by the software.

The concepts the Income Snowball uses - from cash flow investing, to using leverage, to investing in real estate or peer-to-peer - are nothing new. They're just normal investments that have been around forever. This is just a way of doing it that doesn't take 50 years.

[Chris OConnor]

Being a financial professional in the last 5 decades  I’ve seen a lot of different programs come and go. Most people realize that there are three distinct phases in their life when it comes to retirement planning. The first is asset accumulation. The second is the growth stage. In the third and most important is the income stage.

Conventional wisdom dictated that you could take 4% from your portfolio and not disrupt the principal. Unfortunately sequencer returns, or down markets,  rising interest rates and inflation can greatly affect your retirement income.

By using the process the Tardus has patented, I find that their innovative solutions to retirement income are a breath of fresh air. It is well worth looking into as I have found them to be extremely ethical and professional in my dealings with them.

[Tony Kim]

Quote from @Lindsie Akers:

Quote from @Tony Kim:

Quote from @Don Konipol:

Here’s what I know after 40 years as a successful real estate and mortgage investor, syndicator and wealth accumulator

1. I’m not at all impressed by the ‘positive’ experiences of people who have been investing for all of 6 months through one - tenth of an economic cycle

2. The educational system in the U S is extremely lacking in the field of business/economics if someone can write a book as simple as RDPD and have millions of people say that the simple concept of if you save money and invest it in appreciating/income producing assets you’ll be better off than if you spend it on unneeded toys has radically changed their life’s because they never knew of or heard of that concept before.  Educators, education administrators and politicians should be ashamed.

3. Same thing for the so called “infinity banking”.  Borrow money at 3%, lend it out or invest it at 6%, pay back the 3% loan and do it again. Save some of your salary and use it do pay down the loan.   Btw, wrap it all into an overstuffed single premium whole life policy and through the insurance industry’s lobbying of congress your income will incur taxes deferred to far in the future, and if you’re lucky enough to die before 71 you may never have to pay taxes on the income.  Possibly a good move, IF you don’t blow the investment or IF the investment doesn’t blow up.  If it does you have zero asset/income, a much larger debt secured by your personal residence, at just the time you probably also lose your job due to economic conditions, and all those nice folks teaching you about sno ball, infinity, you’re your own bank, etc., will be long gone.  They’ll appear again selling a different ‘financial concept/system/advice a few years later, with many having changed their names and residencies.  

4. No investment is risk less.  The higher the return the greater the risk. The peer to peer lending platforms as well as the real estate crowdfunding platforms are not having their investments chosen by Warren Buffet, or for that matter any money/investment manager employed by the big pension funds, endowments or ultra wealthy individuals that RDPD is always alluding to.  These platforms are run by techies with no investing experience.  For the financial side they hire third year financial analysts (3 years removed from college) because they cost one quarter of what a qualified employee would cost.  I know because I consulted for one of the largest real estate crowdfunding platforms. They has NO idea how to underwrite a commercial mortgage loan. No one on staff who had ever analyzed a commercial mortgage loan.  Yet their website stated that they crowdfunded AND VETTED commercial mortgage loans.

5.  Here’s the biggest risk.  The government closes the whole life tax deferral allowability.  Think it can’t happen?  That’s what the tax shelter investors thought in 1987. Not only were tax shelters stripped of their tax deferral capabilities, but they were stripped of it RETROACTIVE, allowing the IRS to recalculate tax shelter investors income going back 7 years.  With penalties and interest.  No telling what a desperate, bankrupt government will do.  The government used to be able to just print money to pay its bills.  Now with the resulting inflation it would cause people would move to crypto currencies.  At some point the gov bond market drys up, the gov becomes desperate for cash, and anyone with deferred taxes looks like a fatten cow ready for slaughter.  Just a little additional risk that probably wasn’t mentioned when they were explaining “infinity banking”.

Is there any way to give 100 votes for a post? Because this post is deserving of it. Every once in awhile here on BiggerPockets a product like this makes an appearance and gets pumped up very aggressively, and the unfortunate thing is that it makes an impression on folks that are new to investing or may not have much of a financial background.

Any seasoned lender will tell you that one of the most basic tenets of lending is that your loan must be secured or collateralized in some fashion. I can't think of anything riskier than taking a HELOC out of your primary home and using that to make super aggressive loans that are unsecured.

if you want to make aggressive loans and arbitrage that against the higher yielding loans, at least make loans that are collateralized. Why not invest in a BDC like ARCC, TCPC or GBDC? You're essentially doing the same type of strategy except you're not putting your precious primary home at risk. Nor are you making loans that are unsecured and uncollateralized. Plus these companies are subject to a lot of regulatory scrutiny (SEC, SOX).

This Tardus strategy truly makes me cringe. For those of you who haven't been doing this for a while, let me tell you that there were similar companies with similar strategies prior to the GFC, advising people to take helocs on their primary so they can arbitrage that into higher yielding investments. Where are they now? LoL, they were all wiped out of course. What do you think the odds are that a strategy like this will survive the next economic reset? 

Almost any strategy will do well during up time of unprecedented economic expansion. The true test is when things aren't going well and the investment is put under stress. This is why seasoned investors run a "stress test" when evaluating their investments. How bad do things have to get for them to still break even and how bad does it have to be for them to lose money. With the house of cards-like strategy with Tardus, it won't take much for it to come crumbling down. 

Tardus has been in business for 20 years, with an A+ rating from the Better Business Bureau and has withstood the 2001, 2008-09 and 2020 recessions. The strategy was created over 6 years of research and development with arduous vetting from math professors, investment professionals and the US government in the process of receiving the patent. We work with many well-known financial and real estate vendors who have also vetted and trust our program. 

I believe some of you are missing the point. All Tardus is, is an education and coaching company. Our coaches meet with members on a monthly basis to help them learn to evaluate investments, do their own due diligence, and manage their own money. The Income Snowball is a strategy, that is now software, that just projects how long it will take you to create X amount of passive income if you invest on a certain schedule, also laid out by the software.

The concepts the Income Snowball uses - from cash flow investing, to using leverage, to investing in real estate or peer-to-peer - are nothing new. They're just normal investments that have been around forever. This is just a way of doing it that doesn't take 50 years.

50 years eh? LoL. Well, sticking to the concepts taught here on BP will not take 50 years either.  Also, how much does it cost to get set up on this patented software system? $5K? $10K? Anyone who diligently reads this forum and uses the tools provided here can gain FI in ten years or less.  

I'll bet if you take this strategy on a forum that consists of accredited investors or qualified purchasers, you'd get laughed out immediately. Instead, your focus is on places like BP where less-experienced folks come as they want to put their money earned with blood sweat and tears to good use. 

[Chris OConnor]

Quote from @Tony Kim:

Quote from @Lindsie Akers:

Quote from @Tony Kim:

Quote from @Don Konipol:

Here’s what I know after 40 years as a successful real estate and mortgage investor, syndicator and wealth accumulator

1. I’m not at all impressed by the ‘positive’ experiences of people who have been investing for all of 6 months through one - tenth of an economic cycle

2. The educational system in the U S is extremely lacking in the field of business/economics if someone can write a book as simple as RDPD and have millions of people say that the simple concept of if you save money and invest it in appreciating/income producing assets you’ll be better off than if you spend it on unneeded toys has radically changed their life’s because they never knew of or heard of that concept before.  Educators, education administrators and politicians should be ashamed.

3. Same thing for the so called “infinity banking”.  Borrow money at 3%, lend it out or invest it at 6%, pay back the 3% loan and do it again. Save some of your salary and use it do pay down the loan.   Btw, wrap it all into an overstuffed single premium whole life policy and through the insurance industry’s lobbying of congress your income will incur taxes deferred to far in the future, and if you’re lucky enough to die before 71 you may never have to pay taxes on the income.  Possibly a good move, IF you don’t blow the investment or IF the investment doesn’t blow up.  If it does you have zero asset/income, a much larger debt secured by your personal residence, at just the time you probably also lose your job due to economic conditions, and all those nice folks teaching you about sno ball, infinity, you’re your own bank, etc., will be long gone.  They’ll appear again selling a different ‘financial concept/system/advice a few years later, with many having changed their names and residencies.  

4. No investment is risk less.  The higher the return the greater the risk. The peer to peer lending platforms as well as the real estate crowdfunding platforms are not having their investments chosen by Warren Buffet, or for that matter any money/investment manager employed by the big pension funds, endowments or ultra wealthy individuals that RDPD is always alluding to.  These platforms are run by techies with no investing experience.  For the financial side they hire third year financial analysts (3 years removed from college) because they cost one quarter of what a qualified employee would cost.  I know because I consulted for one of the largest real estate crowdfunding platforms. They has NO idea how to underwrite a commercial mortgage loan. No one on staff who had ever analyzed a commercial mortgage loan.  Yet their website stated that they crowdfunded AND VETTED commercial mortgage loans.

5.  Here’s the biggest risk.  The government closes the whole life tax deferral allowability.  Think it can’t happen?  That’s what the tax shelter investors thought in 1987. Not only were tax shelters stripped of their tax deferral capabilities, but they were stripped of it RETROACTIVE, allowing the IRS to recalculate tax shelter investors income going back 7 years.  With penalties and interest.  No telling what a desperate, bankrupt government will do.  The government used to be able to just print money to pay its bills.  Now with the resulting inflation it would cause people would move to crypto currencies.  At some point the gov bond market drys up, the gov becomes desperate for cash, and anyone with deferred taxes looks like a fatten cow ready for slaughter.  Just a little additional risk that probably wasn’t mentioned when they were explaining “infinity banking”.

Is there any way to give 100 votes for a post? Because this post is deserving of it. Every once in awhile here on BiggerPockets a product like this makes an appearance and gets pumped up very aggressively, and the unfortunate thing is that it makes an impression on folks that are new to investing or may not have much of a financial background.

Any seasoned lender will tell you that one of the most basic tenets of lending is that your loan must be secured or collateralized in some fashion. I can't think of anything riskier than taking a HELOC out of your primary home and using that to make super aggressive loans that are unsecured.

if you want to make aggressive loans and arbitrage that against the higher yielding loans, at least make loans that are collateralized. Why not invest in a BDC like ARCC, TCPC or GBDC? You're essentially doing the same type of strategy except you're not putting your precious primary home at risk. Nor are you making loans that are unsecured and uncollateralized. Plus these companies are subject to a lot of regulatory scrutiny (SEC, SOX).

This Tardus strategy truly makes me cringe. For those of you who haven't been doing this for a while, let me tell you that there were similar companies with similar strategies prior to the GFC, advising people to take helocs on their primary so they can arbitrage that into higher yielding investments. Where are they now? LoL, they were all wiped out of course. What do you think the odds are that a strategy like this will survive the next economic reset? 

Almost any strategy will do well during up time of unprecedented economic expansion. The true test is when things aren't going well and the investment is put under stress. This is why seasoned investors run a "stress test" when evaluating their investments. How bad do things have to get for them to still break even and how bad does it have to be for them to lose money. With the house of cards-like strategy with Tardus, it won't take much for it to come crumbling down. 

Tardus has been in business for 20 years, with an A+ rating from the Better Business Bureau and has withstood the 2001, 2008-09 and 2020 recessions. The strategy was created over 6 years of research and development with arduous vetting from math professors, investment professionals and the US government in the process of receiving the patent. We work with many well-known financial and real estate vendors who have also vetted and trust our program. 

I believe some of you are missing the point. All Tardus is, is an education and coaching company. Our coaches meet with members on a monthly basis to help them learn to evaluate investments, do their own due diligence, and manage their own money. The Income Snowball is a strategy, that is now software, that just projects how long it will take you to create X amount of passive income if you invest on a certain schedule, also laid out by the software.

The concepts the Income Snowball uses - from cash flow investing, to using leverage, to investing in real estate or peer-to-peer - are nothing new. They're just normal investments that have been around forever. This is just a way of doing it that doesn't take 50 years.

50 years eh? LoL. Well, sticking to the concepts taught here on BP will not take 50 years either.  Also, how much does it cost to get set up on this patented software system? $5K? $10K? Anyone who diligently reads this forum and uses the tools provided here can gain FI in ten years or less.  

I'll bet if you take this strategy on a forum that consists of accredited investors or qualified purchasers, you'd get laughed out immediately. Instead, your focus is on places like BP where less-experienced folks come as they want to put their money earned with blood sweat and tears to good use. 

There are two kinds of people in the world. Those that have a mentality of scarcity and those that have a mentality of abundance. 
I have no qualms about paying for a service that has a guarantee to increase my net worth more than what I pay to be educated. Do universities and colleges go this? Hmmm. Thoughts to ponder. 

[Tony Kim]

Quote from @Chris OConnor:

Quote from @Tony Kim:

Quote from @Lindsie Akers:

Quote from @Tony Kim:

Quote from @Don Konipol:

Here’s what I know after 40 years as a successful real estate and mortgage investor, syndicator and wealth accumulator

1. I’m not at all impressed by the ‘positive’ experiences of people who have been investing for all of 6 months through one - tenth of an economic cycle

2. The educational system in the U S is extremely lacking in the field of business/economics if someone can write a book as simple as RDPD and have millions of people say that the simple concept of if you save money and invest it in appreciating/income producing assets you’ll be better off than if you spend it on unneeded toys has radically changed their life’s because they never knew of or heard of that concept before.  Educators, education administrators and politicians should be ashamed.

3. Same thing for the so called “infinity banking”.  Borrow money at 3%, lend it out or invest it at 6%, pay back the 3% loan and do it again. Save some of your salary and use it do pay down the loan.   Btw, wrap it all into an overstuffed single premium whole life policy and through the insurance industry’s lobbying of congress your income will incur taxes deferred to far in the future, and if you’re lucky enough to die before 71 you may never have to pay taxes on the income.  Possibly a good move, IF you don’t blow the investment or IF the investment doesn’t blow up.  If it does you have zero asset/income, a much larger debt secured by your personal residence, at just the time you probably also lose your job due to economic conditions, and all those nice folks teaching you about sno ball, infinity, you’re your own bank, etc., will be long gone.  They’ll appear again selling a different ‘financial concept/system/advice a few years later, with many having changed their names and residencies.  

4. No investment is risk less.  The higher the return the greater the risk. The peer to peer lending platforms as well as the real estate crowdfunding platforms are not having their investments chosen by Warren Buffet, or for that matter any money/investment manager employed by the big pension funds, endowments or ultra wealthy individuals that RDPD is always alluding to.  These platforms are run by techies with no investing experience.  For the financial side they hire third year financial analysts (3 years removed from college) because they cost one quarter of what a qualified employee would cost.  I know because I consulted for one of the largest real estate crowdfunding platforms. They has NO idea how to underwrite a commercial mortgage loan. No one on staff who had ever analyzed a commercial mortgage loan.  Yet their website stated that they crowdfunded AND VETTED commercial mortgage loans.

5.  Here’s the biggest risk.  The government closes the whole life tax deferral allowability.  Think it can’t happen?  That’s what the tax shelter investors thought in 1987. Not only were tax shelters stripped of their tax deferral capabilities, but they were stripped of it RETROACTIVE, allowing the IRS to recalculate tax shelter investors income going back 7 years.  With penalties and interest.  No telling what a desperate, bankrupt government will do.  The government used to be able to just print money to pay its bills.  Now with the resulting inflation it would cause people would move to crypto currencies.  At some point the gov bond market drys up, the gov becomes desperate for cash, and anyone with deferred taxes looks like a fatten cow ready for slaughter.  Just a little additional risk that probably wasn’t mentioned when they were explaining “infinity banking”.

Is there any way to give 100 votes for a post? Because this post is deserving of it. Every once in awhile here on BiggerPockets a product like this makes an appearance and gets pumped up very aggressively, and the unfortunate thing is that it makes an impression on folks that are new to investing or may not have much of a financial background.

Any seasoned lender will tell you that one of the most basic tenets of lending is that your loan must be secured or collateralized in some fashion. I can't think of anything riskier than taking a HELOC out of your primary home and using that to make super aggressive loans that are unsecured.

if you want to make aggressive loans and arbitrage that against the higher yielding loans, at least make loans that are collateralized. Why not invest in a BDC like ARCC, TCPC or GBDC? You're essentially doing the same type of strategy except you're not putting your precious primary home at risk. Nor are you making loans that are unsecured and uncollateralized. Plus these companies are subject to a lot of regulatory scrutiny (SEC, SOX).

This Tardus strategy truly makes me cringe. For those of you who haven't been doing this for a while, let me tell you that there were similar companies with similar strategies prior to the GFC, advising people to take helocs on their primary so they can arbitrage that into higher yielding investments. Where are they now? LoL, they were all wiped out of course. What do you think the odds are that a strategy like this will survive the next economic reset? 

Almost any strategy will do well during up time of unprecedented economic expansion. The true test is when things aren't going well and the investment is put under stress. This is why seasoned investors run a "stress test" when evaluating their investments. How bad do things have to get for them to still break even and how bad does it have to be for them to lose money. With the house of cards-like strategy with Tardus, it won't take much for it to come crumbling down. 

Tardus has been in business for 20 years, with an A+ rating from the Better Business Bureau and has withstood the 2001, 2008-09 and 2020 recessions. The strategy was created over 6 years of research and development with arduous vetting from math professors, investment professionals and the US government in the process of receiving the patent. We work with many well-known financial and real estate vendors who have also vetted and trust our program. 

I believe some of you are missing the point. All Tardus is, is an education and coaching company. Our coaches meet with members on a monthly basis to help them learn to evaluate investments, do their own due diligence, and manage their own money. The Income Snowball is a strategy, that is now software, that just projects how long it will take you to create X amount of passive income if you invest on a certain schedule, also laid out by the software.

The concepts the Income Snowball uses - from cash flow investing, to using leverage, to investing in real estate or peer-to-peer - are nothing new. They're just normal investments that have been around forever. This is just a way of doing it that doesn't take 50 years.

50 years eh? LoL. Well, sticking to the concepts taught here on BP will not take 50 years either.  Also, how much does it cost to get set up on this patented software system? $5K? $10K? Anyone who diligently reads this forum and uses the tools provided here can gain FI in ten years or less.  

I'll bet if you take this strategy on a forum that consists of accredited investors or qualified purchasers, you'd get laughed out immediately. Instead, your focus is on places like BP where less-experienced folks come as they want to put their money earned with blood sweat and tears to good use. 

There are two kinds of people in the world. Those that have a mentality of scarcity and those that have a mentality of abundance. 
I have no qualms about paying for a service that has a guarantee to increase my net worth more than what I pay to be educated. Do universities and colleges go this? Hmmm. Thoughts to ponder. 

The concepts taught here on BP directly address the scarcity concept of investing in stocks vs. the abundance of investing in real estate. In your earlier post, I'm confused about why you felt the need to pontificate about the downsides of withdrawing 4% of your retirement portfolio on a periodic basis. This is a real estate forum, not an equities market forum. I've also never been a fan of investments that are subject to scarcity myself and feel that it's no way to gain FI. It's also interesting that you have two posts in this forum....and they are both about how great Tardus is. In fact, most of the pro-Tardus posts in this thread are from folks who had very little previous activity on BP. I wonder why.

I have no qualms about paying good money for good financial advice. Just make sure you know who you're giving your money to. 

[Don Konipol]

Quote from @Lindsie Akers:

Quote from @Don Konipol:

@Lindsie Akers

“

‘Peer to Peer lending (on Prosper) - Invested $10,000 initially - receive $320/month for 3 years. $320 x 12 months = $3,849/$10,000 initial investment = 38% CoC Return

The Legacy Income Model (this is a product a financial planning firm created specifically for Tardus clients) - Invested $10,000 initially - receive $310/month for 3 years. $310 X 12 months = $3,720 in a year. $3,720/$10,000 initial investment = 37% CoC Return”

So I’m confused by the above.  Are you stating that you have made, or have heard of an investment on Prosper of $10,000 that pays interest only payments of $320 per month for 36 months and then your principal of $10,000 is returned; or is the $320 monthly payment INCLUSIVE of principal and interest and the loan amortized over three years?   If it’s the former I find it hard to believe anything but the absolutely most risky loans if that would pay 38% annual interest; if it’s the latter then you DO NOT get your $10,000 principal back at the end of the loan term, it is returned monthly as part of the amortized monthly payment.  I this case your annualized return is 9.43%, not 38%.

No, not interest only. These are amortized payments that include a return of principal each month. The 38% cash on cash return is including the principal. (investments structured with principal & interest payments is part of what fuels the snowball at the beginning)

If you're looking for a standard return rate, yes you're usually looking at between 8-10% return on Prosper 

(Tardus is not affiliated with Prosper in any way and does not recommend specific investments)

Hi Lindsey.  Thanks for responding to my question
I believe you are confusing two different concepts.  The concept of cash on cash return is usually used for equity investments, and ALWAYS with the use of leverage.  The purpose is to calculate the return earned on amount of actual cash invested after paying interest on the loan used to purchase or invest in the asset.  For investments which return both principal and interest with each payment, it’s incorrect to consider the entire monthly payment as cash on cash return, as some or a majority of it is actually not a “return” in the sense of return on investment, but a payback of your capital.  So, if you invested $100,000 for three years and received 38,000 per year back AND your $100,000 back at the end of three years, then your return would be 38% annually, and your “cash on cash” return would also be 38% annually because you did not use leverage.
To calculate you “return” on investment where payments are fully annualized, so that each payment includes both principal and interest, we use a time value of money calculator.  We plug in $10,000 as the present value, 0 as the future value (at the end of the 36 months all the money you’re going to get has been returned so there is no longer any value to the investment), 320 as the monthly payment, and 36 as the number of payment.  The calculator finds that the annualized interest rate, or if you prefer return on investment, is 9.43%
I hope this clarifies.  It can be confusing, but it’s important to know the actual annualized return as well as the absolute return of any investment you make or contemplate making.  

[Don Konipol]

The concepts taught here on BP directly address the scarcity concept of investing in stocks vs. the abundance of investing in real estate. In your earlier post, I'm confused about why you felt the need to pontificate about the downsides of withdrawing 4% of your retirement portfolio on a periodic basis. This is a real estate forum, not an equities market forum. I've also never been a fan of investments that are subject to scarcity myself and feel that it's no way to gain FI. It's also interesting that you have two posts in this forum....and they are both about how great Tardus is. In fact, most of the pro-Tardus posts in this thread are from folks who had very little previous activity on BP. I wonder why.

I have no qualms about paying good money for good financial advice. Just make sure you know who you're giving your money to.

@Tony Kim

I couldn’t agree with you more!  Here are the top 5 signs that the “poster” supporting the company being questioned in BP forum is a shill

5. They have a total of 2 posts both defending the subject company, guru, method, etc.

4. They invoke a “holier than thou” attitude by alluding to their superior personal believe system, such a “I believe in abundance while you believe in scarcity”.  I don’t think they actually understand the concept of abundance and scarcity, it’s just one of many slogans thrown at them when the were pitched the subject product/service

3. They claim to be a “ professional money manager’, wealth manager, investment manager, financial advisor, etc.  Pull off the thin veil you discover they’re a disguised insurance salesman.  Nothing wrong with an insurance salesman.  Just hate it when they try to disguise themselves as a “financial advisor” and their solution to any financial problem is an insurance product

2. They act like the product or service in question is the greatest discovery since sliced bread,; that nobody else offers anything as good, and nobody else has thought of it.  Truth is the subject didn’t find a cure for cancer, they took the concept of compounding, wrapped it in a single premium front loaded whole life policy, and sold it to people who think RDPD is a Nobel Prize winning economic concept.

1. They can offer no concrete examples of how investing via the “concept” is any real advantage.  They Pooh Pooh the cost of the program as “insignificant” when you consider how successful you’ll be.  Instead of concrete actual results they throw around unique terminology like “ infinity banking”, ‘income snowball”, “velocity of money”.  Those terms seem to favorably impress people who are unsophisticated in finance as having found the holy grail of wealth accumulation.  It’s actually kind of sad that our education system is so lacking that people enter the adult world with zero competency in finance.  

[Tinley Jones]

I thought I would offer my knowledge to anyone who has a questions about Tardus or the income snowball method. A disclaimer that I am a coach with Tardus and a client as well, but I'm happy to share my experience or help with understanding if anyone would like. 

[Heidi Backer]

Quote from @Tinley Jones:

I thought I would offer my knowledge to anyone who has a questions about Tardus or the income snowball method. A disclaimer that I am a coach with Tardus and a client as well, but I'm happy to share my experience or help with understanding if anyone would like. 

Do the calculations factor in default rates? Prosper averages a 3-4% default rate (I would suggest 5% to be conservative).

I have been investing with Prosper since 2007 and their loans absolutely default. Assuming you invest $25 per loan with a 10k investment, that is 400 loans; and with a 5% default rate that would be $500. I think you would need to account for that with each “flip” - does it? 

It also takes 2-3 weeks to invest 10k with Prosper, so it’s not like on day one you invest and one month later you receive $300-320 back, so seems like you would need to be fairly diligent in record keeping to ensure you are using those payments to payoff the high interest loan. 

Assume you invest in paperstac instead…if those notes default what is the cost of exercising the lien and acquiring the property? Does the calculator factor that in as well?

I’m not debating the strategy or patent, I’m just not seeing the value in paying over 5k for “coaching” that may or may not yield the results the calculation illustrates. And the best part for Tardus is they are not making financial recommendations and there is no fiduciary duty, so if the strategy falls apart and one is left with 10, 20, 30k in high interest loans….well…sucks for the client, but Tardus continues to make money on their monthly fee after the first year. Sounds like a great “Rich Dad, Poor Dad” strategy…residual income, but for Tardus. 

As someone who has invested in literally everything you could possibly invest in…there is ALWAYS risk, and I did not feel like Tardis adequately explained worst case scenario. When I asked, what happens if I lose my job, the response was “we can make adjustments”…but if I lose my job, not only can we not pay back the high interest loan, we can’t pay the mortgage, the utility bill, etc.

I would love to hear about the cases that did not yield the illustrated results and why. 

In the meantime, I took my $5,500 fee I would have paid to Tardus, dropped it into Prosper and 2 loans have already defaulted (yup…not even a month in and not likely to see that $50 again).
 
I’ll flip that a few times and see how that works out. 
I won’t abandon the strategy yet, but I’m not convinced the coaching will provide value as Tardus is not selecting the investments for me and I’m still spending all my time with due diligence. 

To those reading, to be clear, I am NOT a Tardus client. I attended some webinars, had a strategy session and decided I could do it on my own, without the patented calculator. If there is a high interest, cash flowing investment, 90% chance I already have money invested, so I did not see the need to pay for the coaching. 

[Tinley Jones]

Quote from @Heidi Backer:

Quote from @Tinley Jones:

I thought I would offer my knowledge to anyone who has a questions about Tardus or the income snowball method. A disclaimer that I am a coach with Tardus and a client as well, but I'm happy to share my experience or help with understanding if anyone would like. 

Do the calculations factor in default rates? Prosper averages a 3-4% default rate (I would suggest 5% to be conservative).

I have been investing with Prosper since 2007 and their loans absolutely default. Assuming you invest $25 per loan with a 10k investment, that is 400 loans; and with a 5% default rate that would be $500. I think you would need to account for that with each “flip” - does it? 

It also takes 2-3 weeks to invest 10k with Prosper, so it’s not like on day one you invest and one month later you receive $300-320 back, so seems like you would need to be fairly diligent in record keeping to ensure you are using those payments to payoff the high interest loan. 

Assume you invest in paperstac instead…if those notes default what is the cost of exercising the lien and acquiring the property? Does the calculator factor that in as well?

I’m not debating the strategy or patent, I’m just not seeing the value in paying over 5k for “coaching” that may or may not yield the results the calculation illustrates. And the best part for Tardus is they are not making financial recommendations and there is no fiduciary duty, so if the strategy falls apart and one is left with 10, 20, 30k in high interest loans….well…sucks for the client, but Tardus continues to make money on their monthly fee after the first year. Sounds like a great “Rich Dad, Poor Dad” strategy…residual income, but for Tardus. 

As someone who has invested in literally everything you could possibly invest in…there is ALWAYS risk, and I did not feel like Tardis adequately explained worst case scenario. When I asked, what happens if I lose my job, the response was “we can make adjustments”…but if I lose my job, not only can we not pay back the high interest loan, we can’t pay the mortgage, the utility bill, etc.

I would love to hear about the cases that did not yield the illustrated results and why. 

In the meantime, I took my $5,500 fee I would have paid to Tardus, dropped it into Prosper and 2 loans have already defaulted (yup…not even a month in and not likely to see that $50 again).
 
I’ll flip that a few times and see how that works out. 
I won’t abandon the strategy yet, but I’m not convinced the coaching will provide value as Tardus is not selecting the investments for me and I’m still spending all my time with due diligence. 

To those reading, to be clear, I am NOT a Tardus client. I attended some webinars, had a strategy session and decided I could do it on my own, without the patented calculator. If there is a high interest, cash flowing investment, 90% chance I already have money invested, so I did not see the need to pay for the coaching. 

Hi Heidi,

When you're choosing your investment (Peer to peer lending is not the only one) coaches do discuss the risks with them and how you would mitigate the risk. The calculator that we use can factor in what the effect would be if you earned less. With your example of 5% default, if you had 400 loans originally and loss 5%, you would still have 380 loans paying. The return earned on the 380 would make up for the 20 you lost and at the end, you still wouldn't have had a loss of money, just a little less earned. Here is a link to Prosper since you're familiar with that site that explains what I'm referring to. https://www.prosper.com/plp/di... With any investment there are risks, but how much control you have to mitigate risk is what makes the income snowball a low risk strategy. You would be making another investment in just a few months and the number of loans would double from 400 to 800. Every time you stacked these investments and that snowballed, the risk would lessen. The use of leverage alleviates more risk as less of your own personal cash would be used and it creates a greater cash on cash return. If you've just put 5k of your own money into Prosper, you may not be doing it correctly.

Prosper does take a while to get funds invested, I encourage and teach all of my clients to track their investments. Prosper is not the only platform to use though. There are others that are a bit quicker in turn-around. I think what most clients have difficulty understanding in the beginning is the difference between interest rate arbitrage (which the income snowball is not) and what a cash flow momentum strategy is.  This video of a client being interviewed by Rent to Retirement resonates with a lot of people because of how he explains it. It's how quickly you get money moving. 

;t=2468s

The cost of the coaching is backed by a guarantee in each contract. You could also structure a plan that has the income snowball pay for the coaching fee.(I personally did this) 

I would say though that in the worst-case scenarios that you mention of loss of job and such, I view it as more helpful to have someone by your side helping you construct a plan through it who has been through hundreds of those situations before helping clients. Personally in this year alone I've helped clients get through divorce, leave their job to care for an elder parent, and leave the country for a mission trip with a cut in pay. The reason we are investment agnostic is so that we can always try to help you shape a plan that works best for you and not be swayed by personal interest of earning things like commissions.

Ending on this note in regard to the value of coaching, I think this is a great book about it for anyone who enjoys reading. "If How To's Were Enough, We Would All Be Skinny, Rich, and Happy."

https://www.amazon.com/Were-En... 

[Anthony Ng]

Quote from @Anthony Ng:

I just started with them. Going through my first flip. It is an interest arbitrage in the beginning. I haven't had my next meeting yet, but I guess through enough arbitrages, it accelerates the time it takes to get a down payment on a rental.

 I've been with Tardus for 5 months now, and I completely agree with all of the recent comments other Tardus members have left.

[Daniel Araque]

I'd like to hear from Tardus clients regarding taxes on the income they receive. Specifically those who haven't reached their milestone of buying their first rental and are still building up their snowball. 

[Joseph S.]

I too am confused by their marketing.  This is something that I'm leery of, even with hearing all the good news people are reporting with them.

[Georgy Cherkassky]

I also agree with what all the other members are saying. In the past 7 months being with Tardus, I’ve been able to generate enough passive income from my short term amortized investments that I am now getting ready to start buying RE investments every 4-5 months using the split strategy. This would not have been possible without Tardus if I had to use my own income. Tardus has been a financial blessing in my life. Very happy that I stumbled on this company last April. 

[Don Konipol]

Quote from @Tinley Jones:

Quote from @Heidi Backer:

Quote from @Tinley Jones:

I thought I would offer my knowledge to anyone who has a questions about Tardus or the income snowball method. A disclaimer that I am a coach with Tardus and a client as well, but I'm happy to share my experience or help with understanding if anyone would like. 

Do the calculations factor in default rates? Prosper averages a 3-4% default rate (I would suggest 5% to be conservative).

I have been investing with Prosper since 2007 and their loans absolutely default. Assuming you invest $25 per loan with a 10k investment, that is 400 loans; and with a 5% default rate that would be $500. I think you would need to account for that with each “flip” - does it? 

It also takes 2-3 weeks to invest 10k with Prosper, so it’s not like on day one you invest and one month later you receive $300-320 back, so seems like you would need to be fairly diligent in record keeping to ensure you are using those payments to payoff the high interest loan. 

Assume you invest in paperstac instead…if those notes default what is the cost of exercising the lien and acquiring the property? Does the calculator factor that in as well?

I’m not debating the strategy or patent, I’m just not seeing the value in paying over 5k for “coaching” that may or may not yield the results the calculation illustrates. And the best part for Tardus is they are not making financial recommendations and there is no fiduciary duty, so if the strategy falls apart and one is left with 10, 20, 30k in high interest loans….well…sucks for the client, but Tardus continues to make money on their monthly fee after the first year. Sounds like a great “Rich Dad, Poor Dad” strategy…residual income, but for Tardus. 

As someone who has invested in literally everything you could possibly invest in…there is ALWAYS risk, and I did not feel like Tardis adequately explained worst case scenario. When I asked, what happens if I lose my job, the response was “we can make adjustments”…but if I lose my job, not only can we not pay back the high interest loan, we can’t pay the mortgage, the utility bill, etc.

I would love to hear about the cases that did not yield the illustrated results and why. 

In the meantime, I took my $5,500 fee I would have paid to Tardus, dropped it into Prosper and 2 loans have already defaulted (yup…not even a month in and not likely to see that $50 again).
 
I’ll flip that a few times and see how that works out. 
I won’t abandon the strategy yet, but I’m not convinced the coaching will provide value as Tardus is not selecting the investments for me and I’m still spending all my time with due diligence. 

To those reading, to be clear, I am NOT a Tardus client. I attended some webinars, had a strategy session and decided I could do it on my own, without the patented calculator. If there is a high interest, cash flowing investment, 90% chance I already have money invested, so I did not see the need to pay for the coaching. 

Hi Heidi,

When you're choosing your investment (Peer to peer lending is not the only one) coaches do discuss the risks with them and how you would mitigate the risk. The calculator that we use can factor in what the effect would be if you earned less. With your example of 5% default, if you had 400 loans originally and loss 5%, you would still have 380 loans paying. The return earned on the 380 would make up for the 20 you lost and at the end, you still wouldn't have had a loss of money, just a little less earned. Here is a link to Prosper since you're familiar with that site that explains what I'm referring to. https://www.prosper.com/plp/di... With any investment there are risks, but how much control you have to mitigate risk is what makes the income snowball a low risk strategy. You would be making another investment in just a few months and the number of loans would double from 400 to 800. Every time you stacked these investments and that snowballed, the risk would lessen. The use of leverage alleviates more risk as less of your own personal cash would be used and it creates a greater cash on cash return. If you've just put 5k of your own money into Prosper, you may not be doing it correctly.

Prosper does take a while to get funds invested, I encourage and teach all of my clients to track their investments. Prosper is not the only platform to use though. There are others that are a bit quicker in turn-around. I think what most clients have difficulty understanding in the beginning is the difference between interest rate arbitrage (which the income snowball is not) and what a cash flow momentum strategy is.  This video of a client being interviewed by Rent to Retirement resonates with a lot of people because of how he explains it. It's how quickly you get money moving. 

;t=2468s

The cost of the coaching is backed by a guarantee in each contract. You could also structure a plan that has the income snowball pay for the coaching fee.(I personally did this) 

I would say though that in the worst-case scenarios that you mention of loss of job and such, I view it as more helpful to have someone by your side helping you construct a plan through it who has been through hundreds of those situations before helping clients. Personally in this year alone I've helped clients get through divorce, leave their job to care for an elder parent, and leave the country for a mission trip with a cut in pay. The reason we are investment agnostic is so that we can always try to help you shape a plan that works best for you and not be swayed by personal interest of earning things like commissions.

Ending on this note in regard to the value of coaching, I think this is a great book about it for anyone who enjoys reading. "If How To's Were Enough, We Would All Be Skinny, Rich, and Happy."

https://www.amazon.com/Were-En... 

 There's so much absolutely incorrect information in the above post that I hardly know where to begin....

1. The use of leverage alleviates more risk as less of your own personal cash would be used

No, it exactly the opposite.  The More leverage used the GREATER the risk.  If $10,000 is invested with no leverage, a decline of 50% in the value of the subject asset will result in losing $5,000.  If 50% leverage is used, $10,000 cash invested would buy $20,000 of the subject asset.  A 50% decline in asset value would result in a $10,000 loss, double the loss of the unleveraged asset.  Further, decline would result in loss of borrowers funds, resulting in having to pay back funds which are no longer available to earn income. in the case of using your home as collateral for the loan in question, the result is much higher monthly mortgage payments with no corresponding income offset, and much lower equity in the home.  this is not to suggest that borrowing to invest may not be a good strategy; but one must understand that borrowing INCREASES risk, not decreases risk.

2. The calculator that we use can factor in what the effect would be if you earned less. With your example of 5% default, if you had 400 loans originally and loss 5%, you would still have 380 loans paying. The return earned on the 380 would make up for the 20 you lost and at the end, you still wouldn't have had a loss of money, just a little less earned.

Let's talk about how it REALLY works. For the last 3 years the lower risk loans on the peer to peer platforms have been bid to where they're paying in the 7-8% range. If you invest $10,000 at 7.5% your BEST case scenario is collecting $750 interest over the course of one year. (Higher return is available but at a MUCH higher risk). Okay let's say 5% of your notes totally blow out. You've just lost $500 there so your income is $250. But wait - only $5,000 was your cash, $5,000 was from a HELOC. You paid 1% origination, closing, legal etc, and 4.5% interest. On $5,000 that's $275. What's a "snowball" called when you end up with less money than you started?

3.  With any investment there are risks, but how much control you have to mitigate risk is what makes the income snowball a low risk strategy. You would be making another investment in just a few months and the number of loans would double from 400 to 800. Every time you stacked these investments and that snowballed, the risk would lessen.

Apparently the only mitigation of risk in this strategy is "diversification".  Okay, we can't expect unsophisticated neophyte investors to utilize financial analysis, risk management, Monte Carlo simulation, etc to mitigate risk. And diversification is a powerful tool in risk mitigation.  However, once a portfolio is properly diversified in a rather small number of different investments, the portfolio has reached maximum risk aversion by diversification.  And while that number varies somewhat, the most common number of different issues that minimizes risk is 21.  So diversifying from 400 to 800 would do NOTHING to lessen risk.  Once again the OP is just plain wrong.

[Heidi Backer]

Quote from @Tinley Jones:

Quote from @Heidi Backer:

Quote from @Tinley Jones:

I thought I would offer my knowledge to anyone who has a questions about Tardus or the income snowball method. A disclaimer that I am a coach with Tardus and a client as well, but I'm happy to share my experience or help with understanding if anyone would like. 

Do the calculations factor in default rates? Prosper averages a 3-4% default rate (I would suggest 5% to be conservative).

I have been investing with Prosper since 2007 and their loans absolutely default. Assuming you invest $25 per loan with a 10k investment, that is 400 loans; and with a 5% default rate that would be $500. I think you would need to account for that with each “flip” - does it? 

It also takes 2-3 weeks to invest 10k with Prosper, so it’s not like on day one you invest and one month later you receive $300-320 back, so seems like you would need to be fairly diligent in record keeping to ensure you are using those payments to payoff the high interest loan. 

Assume you invest in paperstac instead…if those notes default what is the cost of exercising the lien and acquiring the property? Does the calculator factor that in as well?

I’m not debating the strategy or patent, I’m just not seeing the value in paying over 5k for “coaching” that may or may not yield the results the calculation illustrates. And the best part for Tardus is they are not making financial recommendations and there is no fiduciary duty, so if the strategy falls apart and one is left with 10, 20, 30k in high interest loans….well…sucks for the client, but Tardus continues to make money on their monthly fee after the first year. Sounds like a great “Rich Dad, Poor Dad” strategy…residual income, but for Tardus. 

As someone who has invested in literally everything you could possibly invest in…there is ALWAYS risk, and I did not feel like Tardis adequately explained worst case scenario. When I asked, what happens if I lose my job, the response was “we can make adjustments”…but if I lose my job, not only can we not pay back the high interest loan, we can’t pay the mortgage, the utility bill, etc.

I would love to hear about the cases that did not yield the illustrated results and why. 

In the meantime, I took my $5,500 fee I would have paid to Tardus, dropped it into Prosper and 2 loans have already defaulted (yup…not even a month in and not likely to see that $50 again).
 
I’ll flip that a few times and see how that works out. 
I won’t abandon the strategy yet, but I’m not convinced the coaching will provide value as Tardus is not selecting the investments for me and I’m still spending all my time with due diligence. 

To those reading, to be clear, I am NOT a Tardus client. I attended some webinars, had a strategy session and decided I could do it on my own, without the patented calculator. If there is a high interest, cash flowing investment, 90% chance I already have money invested, so I did not see the need to pay for the coaching. 

Hi Heidi,

When you're choosing your investment (Peer to peer lending is not the only one) coaches do discuss the risks with them and how you would mitigate the risk. The calculator that we use can factor in what the effect would be if you earned less. With your example of 5% default, if you had 400 loans originally and loss 5%, you would still have 380 loans paying. The return earned on the 380 would make up for the 20 you lost and at the end, you still wouldn't have had a loss of money, just a little less earned. Here is a link to Prosper since you're familiar with that site that explains what I'm referring to. https://www.prosper.com/plp/di... With any investment there are risks, but how much control you have to mitigate risk is what makes the income snowball a low risk strategy. You would be making another investment in just a few months and the number of loans would double from 400 to 800. Every time you stacked these investments and that snowballed, the risk would lessen. The use of leverage alleviates more risk as less of your own personal cash would be used and it creates a greater cash on cash return. If you've just put 5k of your own money into Prosper, you may not be doing it correctly.

Prosper does take a while to get funds invested, I encourage and teach all of my clients to track their investments. Prosper is not the only platform to use though. There are others that are a bit quicker in turn-around. I think what most clients have difficulty understanding in the beginning is the difference between interest rate arbitrage (which the income snowball is not) and what a cash flow momentum strategy is.  This video of a client being interviewed by Rent to Retirement resonates with a lot of people because of how he explains it. It's how quickly you get money moving. 

;t=2468s

The cost of the coaching is backed by a guarantee in each contract. You could also structure a plan that has the income snowball pay for the coaching fee.(I personally did this) 

I would say though that in the worst-case scenarios that you mention of loss of job and such, I view it as more helpful to have someone by your side helping you construct a plan through it who has been through hundreds of those situations before helping clients. Personally in this year alone I've helped clients get through divorce, leave their job to care for an elder parent, and leave the country for a mission trip with a cut in pay. The reason we are investment agnostic is so that we can always try to help you shape a plan that works best for you and not be swayed by personal interest of earning things like commissions.

Ending on this note in regard to the value of coaching, I think this is a great book about it for anyone who enjoys reading. "If How To's Were Enough, We Would All Be Skinny, Rich, and Happy."

https://www.amazon.com/Were-En... 

 Hi Tinley,

Thanks for the comments. I’m not saying it doesn’t work, I’m just saying in my experience, I do not see the value of the coaching. I did not use my own money, it was borrowed and it will be paid back in 1.5 months vs the 5.5 months predicted by Tardus (because, again, I am conservative in all my calculations, including my current cash flow). 

The video is great…as a marketer and former sales rep I can say it’s well done and addresses  all my objections, but the truth is Tardus still has zero fiduciary duty to their clients and the coaching is expensive. I am members of several real estate mentoring groups where we discuss wealth strategies and I don’t pay a dime for their expertise. 

Finally, I will say that all investments carry risk and I understand that Tardus is investment agnostic, yet it concerns me that on one side Tardus claims you maintain full control of your money, yet Tardus will help you find and select the right investments for your snowball. As @Don Konipol pointed out, leverage increases risk, it doesn’t reduce it, so once again, Tardus has no fiduciary responsibility and if one of the investments they “suggest” blows up, it is the individual left holding the bag, so to speak.

I am not a finance guru and while I cannot articulate as eloquently what Don was saying, I do understand it…primarily from real life experience. 

I am happy to see the strategy has worked so well for so many, but my question remains, what happens when it doesn’t work.

As an options trader there is a saying when it comes to the many “strategies” pitched by gurus…it works until it doesn’t! 

So what happens when it doesn’t?