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Jorge Borges
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  • Billerica, MA
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Has anyone worked with Tardus Wealth Strategies?

Jorge Borges
Pro Member
  • Rental Property Investor
  • Billerica, MA
Posted May 8 2022, 08:10

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!

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Tinley Jones
  • Rental Property Investor
  • San Diego, CA
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Tinley Jones
  • Rental Property Investor
  • San Diego, CA
Replied Nov 4 2022, 11:47
Quote from @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.


 Hi Don,

I think I will only respond to you this one time because the use of negativity is not what this platform is for. I encourage you to come with an open mind to new concepts. You don't seem to have an understanding for the foundation of the strategy. It will be hard to understand my replies with out that information. Here is a link if you would like to have a listen. https://www.tardus.com/income-...

Your perspective keeps coming from an accumulation or arbitrage perspective assuming someone uses leverage to invest in a note and waits the entirety of the term of the note to do anything else. This is where you have to understand the purpose of cash flow momentum and what it means to stack cash flow. I will give you my real life example. The strategy is built on your own personal cash flow commitment. I myself, started with $1500/ month. I used a personal line of credit of $8k to invest. Every month I took my $1500 plus what I was receiving in principal and interest from Prosper (which averaged out to $260/month) to pay back the PLOC. Every month I applied my cash flow and what I was getting from Prosper to pay down my line of credit in about 4 and 1/2 months. The loans are still paying me for the next 2+years. I then repeated this but now took my $1500 plus the original $260 and the next $260 from my second lump investment and paid back my line of credit even quicker. This process is repeated over and over and over. The goal is not to be over leveraged but to base you use of leverage on your personal cash flow commitment. The goal is not about accumulating money based on the rate of return but to continue to stack and grow the cash flow. Eventually the amount you invest will start to grow and the cash flow accelerates quickly and that's why it's a snowball.

There is more than diversification that can go into risk mitigation even within prosper you can look at things like credit score, delinquencies, debt to income ratio, and much more.

I'm not here to convince anyone, just would like to share my experience and help to answer questions. 

Don, I hope you have a great and wonderful day! Good luck to you and I hope you achieve all your goals in life!

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Tinley Jones
  • Rental Property Investor
  • San Diego, CA
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Tinley Jones
  • Rental Property Investor
  • San Diego, CA
Replied Nov 4 2022, 11:58
Quote from @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? 



Hi Hiedi,

I'd love to help you think it through. I guess I'm a little lost in translation. You mentioned that your objections keep getting answered and at the same time are concerned for when it doesn't work out. What would be the worst case scenario you're imagining? Feel free to message me directly as well.


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Don Konipol
Pro Member
#1 Innovative Strategies Contributor
  • Lender
  • The Woodlands, TX
7,050
Votes |
4,935
Posts
Don Konipol
Pro Member
#1 Innovative Strategies Contributor
  • Lender
  • The Woodlands, TX
Replied Nov 4 2022, 17:10
Quote from @Tinley Jones:
Quote from @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.


 Hi Don,

I think I will only respond to you this one time because the use of negativity is not what this platform is for. I encourage you to come with an open mind to new concepts. You don't seem to have an understanding for the foundation of the strategy. It will be hard to understand my replies with out that information. Here is a link if you would like to have a listen. https://www.tardus.com/income-...

Your perspective keeps coming from an accumulation or arbitrage perspective assuming someone uses leverage to invest in a note and waits the entirety of the term of the note to do anything else. This is where you have to understand the purpose of cash flow momentum and what it means to stack cash flow. I will give you my real life example. The strategy is built on your own personal cash flow commitment. I myself, started with $1500/ month. I used a personal line of credit of $8k to invest. Every month I took my $1500 plus what I was receiving in principal and interest from Prosper (which averaged out to $260/month) to pay back the PLOC. Every month I applied my cash flow and what I was getting from Prosper to pay down my line of credit in about 4 and 1/2 months. The loans are still paying me for the next 2+years. I then repeated this but now took my $1500 plus the original $260 and the next $260 from my second lump investment and paid back my line of credit even quicker. This process is repeated over and over and over. The goal is not to be over leveraged but to base you use of leverage on your personal cash flow commitment. The goal is not about accumulating money based on the rate of return but to continue to stack and grow the cash flow. Eventually the amount you invest will start to grow and the cash flow accelerates quickly and that's why it's a snowball.

There is more than diversification that can go into risk mitigation even within prosper you can look at things like credit score, delinquencies, debt to income ratio, and much more.

I'm not here to convince anyone, just would like to share my experience and help to answer questions. 

Don, I hope you have a great and wonderful day! Good luck to you and I hope you achieve all your goals in lif

 I actually understand perfectly.  I have dual graduate degrees in both economics and finance.  Nothing changes the fact that using leverage increases risk, not decreases risk.  This is VERY BASIC finance 101. The fact that YOU don’t understand this, yet you claim to be advising others in financial/investing matters, is frightening.  Do you hold any financial advisor certifications?  CPA, CFP, MAI, CFA? Are you licensed as an investment advisor or investment sales representative?  Have you passed a Series 65 or similar licensing exam?

Like a lot of posters who post here with the sole purpose of marketing their product, you become very arrogant when someone points out obvious defects in you presentation, product or service.  You claim my critique is “negativity”, when in actuality it’s a listing of incorrect assumption statements in your post.  Many BP members rely on myself and a number of others to use our knowledge, experience and analytical ability and provide our analysis of the programs being offered on this site.  You can see what people think of my post by the 5,873 “votes” I’ve received.

You state that I don’t seem to have an understanding of the strategy you’re representing. I have a perfect understanding of the strategy.  I just don’t think it’s anything other than a very simplistic investment concept, it’s marketed as if it’s earth shattering with exotic names being given to mundane concepts, and overhyped and if the posters in this thread are any indication it’s being sold to people incredibly unsophisticated in personal finance.  Borrowing money at a low rate of interest and investing it at a higher rate is very basic.  Adding in paying off the loan with both return on the invested capital AND saving from salary is still extremely basic.  Calling it “snowball” and implying it’s an earth shattering proprietary formula is ridiculous.  

You’re also quite rude as well as arrogant when you tell me what this platform is for.  With 34 total post, you do not know what this platform is for.  I’ve been on this platform 15 years, and can tell you that this is EXACTLY what this platform is for.  

But then again I’m someone who has actually become wealthy through investing, not someone who teaches it without having achieved wealth, like the posters representing this snowballing nonsense.  So I’ll give you a few rules to follow when posting so you won’t make a fool of yourself in the future

1. Become expert on whatever it is your talking about, so that you don’t make a whole lot of incorrect statements in your posts

2. Lose the holier than thou attitude; this is personal finance not a religion

3. Drop the arrogant attitude when challenged, drop the canned responses, and actually address the comments or questions themselves

4. Don’t accuse people responding to you post of having negative characteristics, ulterior motives, or belittle them in any way

5. If you can’t explain something yourself, and need to refer to someone else’s explanation via video, perhaps you shouldn’t be posting about it in the first place.

In two years or after the next recession you and all your co workers will be selling something else when your “clients” are left with investments down 50% in value and homes with loans they can’t afford.  

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Replied Nov 5 2022, 14:23
Quote from @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 

Sir with all due respect, please stop berating and spewing negativity about Tardus. This does not give you any credibility but just makes you look silly. Based on your comments and negative statements it’s clear that the strategies and concepts that a Tardus teaches is beyond your level of comprehension. Please move onto the next forum on bigger pockets and comment there. We are not here not convince anyone but just offering our experience that we had with Tardus for the people that have questions and are interested. Your Negativity is not welcome. 

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Replied Nov 5 2022, 16:04

@Daniel Araque

I will not comment at all on tardus as I am not familiar with them- what I will note that people need to consider on a loan vs earning dividends is a loan the interest is ordinary income and you are receiving principal and interest back which if not immediately reinvested destroys your return

For example a 10,000 loan receiving 8% interest over 4 years of course will have high cash on cash because it’s all principal. Your interest over 4 years is $1,718. If you didn’t reinvest the principal and you are in the 32% tax bracket this is a 2.92% yield.

Spending the time to find a place to reinvest it, is it worth it or are you better getting something that can offer a 6-8% dividend and pay less in taxes on it and have less work?

This is not any knock on any strategy or company - just discussing if it’s worth doing all those short term type of loans vs something that issues you interest.

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Replied Nov 5 2022, 18:10

It is interesting. However, I don't understand how you get 'cash flow' the first couple years. You are using all the cash flow to pay of the loans.

I did a simple calculation that shows a 140K 'profit' minus the 48,000 you put in from your own cashflow. Leaving a 92K net profit. This is after a full four year putting everything back into paying of loans.

This is of course profit if everything goes well, but you have to wait just like investing in real estate, bonds, etc

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Replied Nov 5 2022, 20:38

@Chris Seveney

Thanks for the insight. It is definitely a question I will ask when I speak with the wealth coach.

👍👍

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Replied Nov 5 2022, 22:39

@Georgy Cherkassky

I'm sorry that I didn't ask you specifically for a response on this the first time.  You previously made the following statement:

"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."

I replied with this:

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).

Can I get your thoughts on this?  I feel like it's a fairly large opportunity cost to using Tardus strategies.

Thanks

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Replied Nov 6 2022, 05:52

The income snowball system will allow you generate large amounts passive income using the short term amortized investment. You can then use that income that to put downpayments on real estate properties at a frequent basis. Much faster than if you were saving your money in addition to cash flow that each rental will create. Tanisha, the creator of the patented system has a podcast on RTR describing how this is possible. I recommend watching it and you will understand.  

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Replied Nov 6 2022, 06:03

What I really really like about this income snowball strategy and drawing me into Tardus is that, in due time, I will have a snowball big enough to pay down a $70K+ down payment for a rental in no time, allowing me the capability to quickly purchase another rental and paying off THAT down payment in a short period of time. Rinse and repeat. It seems like the end goal is to make a snowball big enough to start getting into rentals rather than solely relying on investment flips from either Prosper, Legacy, etc. 

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Replied Nov 6 2022, 06:08

@Georgy Cherkassky

Can you walk me through the expected IRR of a Tardus investment? Is that something that's part of their proprietary calculator and financial coaching? I'd have to assume so as I can't imagine financial coaching without discussing it as it's one of the first things that is discussed in a proper finance course.

I mean, I think that's all that really matters anyway, right? If the IRR is higher than my real estate expectations, awesome. I should do it. If not, well, then I probably shouldn't.

Thanks.  I'm very curious to see your response as I'm wondering if there's anything to this time based (rather than rate based) arbitrage.  I'm having trouble with it as a thought exercise and would prefer to see cold, hard numbers.

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Replied Nov 6 2022, 06:21

@Daniel Araque that’s exactly right! You could not have said it any better. That is one of the main reasons that drew me to the Tardus system. I started with Tardus last April and now I am getting ready to use the money generated by the income snowball system to start putting downpayments on RE every 4-5 months. Remember that this is just one strategy that the Tardus coaches teaches, there a many other cash flow strategies that will help you achieve your financial freedom date faster. You can also use the income snowball to pay for other things such as vacations, debt, home renovations, you name it. (I just came back from a trip to Hawaii with my family and the income snowball system covered the entirety of the trip; none of my earned income was used! And it was a fairly pricey trip) The income snowball system can pay for big expenses and your still able to create passive monthly income alongside. It’s a truly wonderful system and will change your outlook on money. 

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Replied Nov 6 2022, 07:00

I like to see some examples as well.

I think most of us understand the concept now and it looks great on paper but..

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Replied Nov 6 2022, 07:50

@Georgy Cherkassky

If you truly desire to become financially independent you should learn from the experienced, successful posters on this forum instead of “shooting the messenger”.  My mother alway said you can’t teach stupid, but what the heck, I’ll give it one more try

I'll use an example with dollars, to make it easier to follow. Here is the Tardus wealth strategy in a nutshell, stripped of the fancy terms and fluff. Take your $5k of saving, and borrow another 5K by placing a home equity line of credit on your house. Then invest the $10k in something that pays more than the interest you're paying on the HELOC. So let's be generous and say you're getting a 9% return on your investment. That's $900 per year in earnings. Let's say you're paying 5% on the HELOC. That's $250 per year in interest expense. So your net earnings ( increase in wealth) is $650. By utilizing leverage you made $650 on an equity investment of $5000, or a return of 13%. IF you had just invested the $5k without the leverage of the HELOC then you would have earned $450. So by utilizing leverage you earned $200 more. Your rate of return was 13% versus the 9% return not utilizing leverage. The only question is if the increased risk of loss is worth the extra return.
The second part of the Tardus strategy is to pay off/down the HELOC by using both the income earned on the investment AND wage/salary income or income from an outside of the subject investment source.  So save $362.50 monthly from your salary and use it to add to the interest income from the investment and pay off your HELOC.  Then Do it all again.  The naive and unsophisticated Tardus participants think “I started with $5,000.  Now I have an investment worth $10,000. Wow. I doubled my money!  NO, Virginia, there is no Santa Claus.  Your investment was NOT $5K.  It was $5K PLUS the $362.50 you contributed monthly to pay down the HELOC.  So your actual investment was $4350 plus $5000 or $9350, which is exactly the difference between the $10000 your investment is worth and the $650 you earned.  Truth is you could have invested just the $5000, added the $362.50 monthly to the investment on a monthly basis.  You would have earned 9% on the initial $5K invested, or $450.  The $362.50 invested monthly at the same 9% would earn $184.00 interest. So your total investment at the end of the year would be the initial 5K, the 362.50 invested monthly or $4350, and the $184 interest earned on the monthly $362.50. A total of $9534.  So by using the Tardus “system” (which anyone can easily implement and which has been discussed for many years on BP), an additional $466 was earned at an increased risk.  IMO this is much too little additional return to put your personal residence at risk.  But everyone has to make there own decision.

By the way, I read through Tardus website, and a couple of VERY INTERESTING items popped out.  Other than the two principals, an executive assistant and two managers, everyone one else associated with Tardus is either a”wealth coach” or a “client success coach”. These are NOT employees according to the website, they’re independent contractors who receive 1099 at the end of the year.  But what’s MOST INTERESTING is


(Remote - Independent Contractor)

We are currently seeking confident and ambitious sales professionals to join our first-class team as we continue to expand throughout the country. This role is a fully remote independent contractor position (1099 role) with flexible hours and unlimited income potential including high monthly commissions and monthly residual pay.


(Remote - Independent Contractor)

We are looking for influential and approachable financial coaches to support our clients and help them succeed with our system. This role is a fully remote independent contractor position (1099 role) with flexible hours and unlimited income potential including high monthly commissions and monthly residual pay

The above is copied directly from the Tardus website. Both the “wealth coach and the “financial coach” are compensated by “high monthly COMMISSIONS’.  It is a well established belief in the financial industry that there is an inherent conflict of interest when financial advisors are compensated on sales commission.  You as the consumer of financial services will NOT be getting unbiased advice from anyone associated with Tardus no matter what the title or position. You will be receiving a sales pitch. BECAUSE THIS IS HOW THESE PEOPLE EARN A LIVING, BY SELLING THE TARDUS PRODUCT.  

Look, if you need to pay someone $5K to tell you to save money and invest it instead of spending it on throw away toys, then so be it. Just be aware that (1) you can easily do whatever it is Tardus is selling much cheaper elsewhere (2) Tardus special investments for members only are mundane investments available at the same terms to anyone with a computer and internet connection and (3) the strategy of borrowing from a HELOC to juice returns carries with it a much greater risk than is apparently disclosed.

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Replied Nov 6 2022, 09:38

I agree with most of what you mentioned sir.

Couple of points that I want to mention. Tardus relies on paying off the line of credit faster with your own cashflow + principal and interest from whatever you use (notes,..). Rinse and repeat, so you end up with more principal/interest and so fort. Which, without a lot of defaults would yield in a high return.

Two, many regular people perform better with a coach and having some initial investment in a product. Which leads to discipline and the willingness to succeed.

Three, I still want to see a concrete example of some of these returns.

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Replied Nov 6 2022, 10:17

@Don Konipol

Great post.  Fantastic breakdown.  Honestly, I don't mind the extra risk vs. return of the Tardus strategy.  An extra $400 on 10k is an extra 4%, so not terrible. 

My issue is the opportunity cost of not getting appreciation, depreciation, debt retirement, etc. in real estate.  Paying 5k and saving an extra 5k a year for the right to hopefully make 10-12% when you can apply that money into real estate and make 25-35% pretty easily (by utilizing leverage, tax benefits, appreciation, debt retirement, etc.) is what kills me most about the strategy.

To each their own though.  I'm not a Dave Ramsey guy, but people swear by him too, I guess.

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Replied Nov 6 2022, 10:21
Quote from @Don Konipol:

@Georgy Cherkassky

If you truly desire to become financially independent you should learn from the experienced, successful posters on this forum instead of “shooting the messenger”.  My mother alway said you can’t teach stupid, but what the heck, I’ll give it one more try

I'll use an example with dollars, to make it easier to follow. Here is the Tardus wealth strategy in a nutshell, stripped of the fancy terms and fluff. Take your $5k of saving, and borrow another 5K by placing a home equity line of credit on your house. Then invest the $10k in something that pays more than the interest you're paying on the HELOC. So let's be generous and say you're getting a 9% return on your investment. That's $900 per year in earnings. Let's say you're paying 5% on the HELOC. That's $250 per year in interest expense. So your net earnings ( increase in wealth) is $650. By utilizing leverage you made $650 on an equity investment of $5000, or a return of 13%. IF you had just invested the $5k without the leverage of the HELOC then you would have earned $450. So by utilizing leverage you earned $200 more. Your rate of return was 13% versus the 9% return not utilizing leverage. The only question is if the increased risk of loss is worth the extra return.
The second part of the Tardus strategy is to pay off/down the HELOC by using both the income earned on the investment AND wage/salary income or income from an outside of the subject investment source.  So save $362.50 monthly from your salary and use it to add to the interest income from the investment and pay off your HELOC.  Then Do it all again.  The naive and unsophisticated Tardus participants think “I started with $5,000.  Now I have an investment worth $10,000. Wow. I doubled my money!  NO, Virginia, there is no Santa Claus.  Your investment was NOT $5K.  It was $5K PLUS the $362.50 you contributed monthly to pay down the HELOC.  So your actual investment was $4350 plus $5000 or $9350, which is exactly the difference between the $10000 your investment is worth and the $650 you earned.  Truth is you could have invested just the $5000, added the $362.50 monthly to the investment on a monthly basis.  You would have earned 9% on the initial $5K invested, or $450.  The $362.50 invested monthly at the same 9% would earn $184.00 interest. So your total investment at the end of the year would be the initial 5K, the 362.50 invested monthly or $4350, and the $184 interest earned on the monthly $362.50. A total of $9534.  So by using the Tardus “system” (which anyone can easily implement and which has been discussed for many years on BP), an additional $466 was earned at an increased risk.  IMO this is much too little additional return to put your personal residence at risk.  But everyone has to make there own decision.

By the way, I read through Tardus website, and a couple of VERY INTERESTING items popped out.  Other than the two principals, an executive assistant and two managers, everyone one else associated with Tardus is either a”wealth coach” or a “client success coach”. These are NOT employees according to the website, they’re independent contractors who receive 1099 at the end of the year.  But what’s MOST INTERESTING is


(Remote - Independent Contractor)

We are currently seeking confident and ambitious sales professionals to join our first-class team as we continue to expand throughout the country. This role is a fully remote independent contractor position (1099 role) with flexible hours and unlimited income potential including high monthly commissions and monthly residual pay.


(Remote - Independent Contractor)

We are looking for influential and approachable financial coaches to support our clients and help them succeed with our system. This role is a fully remote independent contractor position (1099 role) with flexible hours and unlimited income potential including high monthly commissions and monthly residual pay

The above is copied directly from the Tardus website. Both the “wealth coach and the “financial coach” are compensated by “high monthly COMMISSIONS’.  It is a well established belief in the financial industry that there is an inherent conflict of interest when financial advisors are compensated on sales commission.  You as the consumer of financial services will NOT be getting unbiased advice from anyone associated with Tardus no matter what the title or position. You will be receiving a sales pitch. BECAUSE THIS IS HOW THESE PEOPLE EARN A LIVING, BY SELLING THE TARDUS PRODUCT.  

Look, if you need to pay someone $5K to tell you to save money and invest it instead of spending it on throw away toys, then so be it. Just be aware that (1) you can easily do whatever it is Tardus is selling much cheaper elsewhere (2) Tardus special investments for members only are mundane investments available at the same terms to anyone with a computer and internet connection and (3) the strategy of borrowing from a HELOC to juice returns carries with it a much greater risk than is apparently disclosed.

Don, 

This is at my house. I have to remind myself from time to time.. you did a good job breaking it  down. Some people might need that particular program so to each his own. At least it’s not another wave of flat earth apostles.

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Replied Nov 6 2022, 16:03
Quote from @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'

Exactly. That doesn’t just cover the topic at hand it covers so many other aspects as well. The people spending all the time trying to sell a program typically has not became rich with what they are teaching themselves.

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Replied Nov 7 2022, 14:44
Quote from @Don Konipol:

@Georgy Cherkassky

If you truly desire to become financially independent you should learn from the experienced, successful posters on this forum instead of “shooting the messenger”.  My mother alway said you can’t teach stupid, but what the heck, I’ll give it one more try

I'll use an example with dollars, to make it easier to follow. Here is the Tardus wealth strategy in a nutshell, stripped of the fancy terms and fluff. Take your $5k of saving, and borrow another 5K by placing a home equity line of credit on your house. Then invest the $10k in something that pays more than the interest you're paying on the HELOC. So let's be generous and say you're getting a 9% return on your investment. That's $900 per year in earnings. Let's say you're paying 5% on the HELOC. That's $250 per year in interest expense. So your net earnings ( increase in wealth) is $650. By utilizing leverage you made $650 on an equity investment of $5000, or a return of 13%. IF you had just invested the $5k without the leverage of the HELOC then you would have earned $450. So by utilizing leverage you earned $200 more. Your rate of return was 13% versus the 9% return not utilizing leverage. The only question is if the increased risk of loss is worth the extra return.
The second part of the Tardus strategy is to pay off/down the HELOC by using both the income earned on the investment AND wage/salary income or income from an outside of the subject investment source.  So save $362.50 monthly from your salary and use it to add to the interest income from the investment and pay off your HELOC.  Then Do it all again.  The naive and unsophisticated Tardus participants think “I started with $5,000.  Now I have an investment worth $10,000. Wow. I doubled my money!  NO, Virginia, there is no Santa Claus.  Your investment was NOT $5K.  It was $5K PLUS the $362.50 you contributed monthly to pay down the HELOC.  So your actual investment was $4350 plus $5000 or $9350, which is exactly the difference between the $10000 your investment is worth and the $650 you earned.  Truth is you could have invested just the $5000, added the $362.50 monthly to the investment on a monthly basis.  You would have earned 9% on the initial $5K invested, or $450.  The $362.50 invested monthly at the same 9% would earn $184.00 interest. So your total investment at the end of the year would be the initial 5K, the 362.50 invested monthly or $4350, and the $184 interest earned on the monthly $362.50. A total of $9534.  So by using the Tardus “system” (which anyone can easily implement and which has been discussed for many years on BP), an additional $466 was earned at an increased risk.  IMO this is much too little additional return to put your personal residence at risk.  But everyone has to make there own decision.

By the way, I read through Tardus website, and a couple of VERY INTERESTING items popped out.  Other than the two principals, an executive assistant and two managers, everyone one else associated with Tardus is either a”wealth coach” or a “client success coach”. These are NOT employees according to the website, they’re independent contractors who receive 1099 at the end of the year.  But what’s MOST INTERESTING is


(Remote - Independent Contractor)

We are currently seeking confident and ambitious sales professionals to join our first-class team as we continue to expand throughout the country. This role is a fully remote independent contractor position (1099 role) with flexible hours and unlimited income potential including high monthly commissions and monthly residual pay.


(Remote - Independent Contractor)

We are looking for influential and approachable financial coaches to support our clients and help them succeed with our system. This role is a fully remote independent contractor position (1099 role) with flexible hours and unlimited income potential including high monthly commissions and monthly residual pay

The above is copied directly from the Tardus website. Both the “wealth coach and the “financial coach” are compensated by “high monthly COMMISSIONS’.  It is a well established belief in the financial industry that there is an inherent conflict of interest when financial advisors are compensated on sales commission.  You as the consumer of financial services will NOT be getting unbiased advice from anyone associated with Tardus no matter what the title or position. You will be receiving a sales pitch. BECAUSE THIS IS HOW THESE PEOPLE EARN A LIVING, BY SELLING THE TARDUS PRODUCT.  

Look, if you need to pay someone $5K to tell you to save money and invest it instead of spending it on throw away toys, then so be it. Just be aware that (1) you can easily do whatever it is Tardus is selling much cheaper elsewhere (2) Tardus special investments for members only are mundane investments available at the same terms to anyone with a computer and internet connection and (3) the strategy of borrowing from a HELOC to juice returns carries with it a much greater risk than is apparently disclosed.

While I had intended to not engage on this thread anymore due to the level of unprofessionalism, I do need to correct some misinformation being spread here on behalf of the Tardus team, for those doing their own due diligence.

Tardus financial coaches do not get paid a commission for any financial product or service. Neither does Tardus as a company. This is done intentionally in order to remain unbiased and be focused on what is best for the client.

Tardus has no investment products to sell you and receives no compensation for any investment you choose. Tardus even refuses to take referral fees from vendors we partner with.

- Tardus sales professionals (Wealth Coaches) are paid based on selling the coaching program. That's how any salesperson is paid. They put together and present a plan to a potential new member, and then the potential member decides if they like the plan, at which point they would sign up and buy the annual coaching subscription.

- Then, a member is transitioned to a financial coach who helps them implement said plan. The financial coaches (Client Success Coaches) are the ones who a client meets with on a monthly basis. They are on a commission structure, but it has nothing to do with selling anything. They are paid a commission based on the meetings they have with their clients. Basically, they are paid for their time. Just like any job.

Feel free to discuss this with any of our coaches, I'm sure they would be happy to share. In the coaching world, being paid as an independent contractor/1099 is considered the norm. There are also tons of financial and tax benefits to being paid as a 1099 that the team gets to implement as well.

--------------------------------------

The explanation of the Income Snowball strategy above is incomplete and inaccurate. I encourage anyone trying to learn how it works, to check out the educational videos on our website that explain it better. Something to note is it is not easy to be awarded a patent. Your concept must be verified, proven and unique.

In addition to the Tardus members who have responded on this thread, if you're interested in hearing from a real Tardus client who has been through the program, feel free to send us an email and we can connect you with people who have used the program. Bigger pockets doesn't allow me to post contact info here but you can find it on the Tardus website.

Lastly, to those of you who are considering Tardus (or any other coaching or investment program) - there are many reasons you might have ended up on this page. The truth is, a lot of people are lacking a financial education. If you can easily achieve financial independence on your own, that is great and maybe you don't need a coach! 

If you need help developing skills, changing your mindset around money, educating yourself on evaluating and choosing investments, or learning how to create passive income, it's okay if you can't figure it out on your own. Or maybe you're already on the road to financial independence and are just looking for new, faster ways to get there, for a proven plan to follow, or for accountability and a community of like-minded people. Either way, don't let people on the internet make you feel bad if you don't already know it all. Keep doing your research and keep learning, and keep chasing your goals, whether it's with Tardus or not.

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Replied Nov 7 2022, 15:48

Can you DM me the link or the contacts, please?

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Bob D.
  • Financial Advisor
  • Hingham, MA
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Bob D.
  • Financial Advisor
  • Hingham, MA
Replied Nov 8 2022, 05:41

Hi, I'm a long time Bigger Pockets fan and a financial advisor/CFP and former tax lawyer by trade. I've been advising high net worth families for ten years. I find that Bigger Pockets is a very high integrity/character company and generally does a wonderful job of weeding out the huckster gurus peddling their wares to folks that need a shortcut. 

I heard about Tardus yesterday because I listened to a RTR podcast and thought...what the hell are these people talking about? 

I tried to model out the income snowball system based on what I've read here and what I learned from the videos/podcasts. I have a call with Tardus next week to understand more. 

What I don't understand is how you transition out of constantly feeding the snowball with your own savings it just dies. The notes amortize and you can never really use any of your cash flow because you have to keep borrowing to buy more notes and keep paying down the LOC. I think you can model a decent double digit return but how do you transition to actually pulling money out?

I guess I'm missing something here...it seems like I'm stuck putting money into this system indefinitely. At no point does there appear to be an accumulated balance but rather just a series of payments coming. I suppose if I just paid off the balance and let a bunch of notes mature it would create a lump sum after a few years but I don't see how that's a true reliable cash flow stream. 

Does anyone have this successfully modeled out? And how was this granted a patent!? 

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Replied Nov 8 2022, 05:51
Quote from @Bob D.:

Hi, I'm a long time Bigger Pockets fan and a financial advisor/CFP and former tax lawyer by trade. I've been advising high net worth families for ten years. I find that Bigger Pockets is a very high integrity/character company and generally does a wonderful job of weeding out the huckster gurus peddling their wares to folks that need a shortcut. 

I heard about Tardus yesterday because I listened to a RTR podcast and thought...what the hell are these people talking about? 

I tried to model out the income snowball system based on what I've read here and what I learned from the videos/podcasts. I have a call with Tardus next week to understand more. 

What I don't understand is how you transition out of constantly feeding the snowball with your own savings it just dies. The notes amortize and you can never really use any of your cash flow because you have to keep borrowing to buy more notes and keep paying down the LOC. I think you can model a decent double digit return but how do you transition to actually pulling money out?

I guess I'm missing something here...it seems like I'm stuck putting money into this system indefinitely. At no point does there appear to be an accumulated balance but rather just a series of payments coming. I suppose if I just paid off the balance and let a bunch of notes mature it would create a lump sum after a few years but I don't see how that's a true reliable cash flow stream. 

Does anyone have this successfully modeled out? And how was this granted a patent!? 


 Bob, I had the same question. When will I be able to retrieve my personal cash flow back or even start spending from the snowball?

From what I understand, if your snowball gets "big enough" whatever that is, to each it's own. Let's say it's $7K/month snowball and your contributing $1K of your cash flow, then essentially you can stop contributing your $1K and let's say you want an extra $1K, your now using $5K to pay off that LOC. It might extend your LOC payoff by a month or 2. You're just going to have to make sure to continue the "flips" as the earlier established "flips" start expiring.

I am excited and looking forward to my scheduled phone call on Friday and have lots of questions. 

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Lindsie Akers
  • Investor
  • Orlando, FL
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Lindsie Akers
  • Investor
  • Orlando, FL
Replied Nov 8 2022, 06:26
Quote from @Clint Vanderlinden:

Can you DM me the link or the contacts, please?


 Just sent you a message!

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Replied Nov 8 2022, 06:34
Quote from @Daniel Araque:
Quote from @Bob D.:

Hi, I'm a long time Bigger Pockets fan and a financial advisor/CFP and former tax lawyer by trade. I've been advising high net worth families for ten years. I find that Bigger Pockets is a very high integrity/character company and generally does a wonderful job of weeding out the huckster gurus peddling their wares to folks that need a shortcut. 

I heard about Tardus yesterday because I listened to a RTR podcast and thought...what the hell are these people talking about? 

I tried to model out the income snowball system based on what I've read here and what I learned from the videos/podcasts. I have a call with Tardus next week to understand more. 

What I don't understand is how you transition out of constantly feeding the snowball with your own savings it just dies. The notes amortize and you can never really use any of your cash flow because you have to keep borrowing to buy more notes and keep paying down the LOC. I think you can model a decent double digit return but how do you transition to actually pulling money out?

I guess I'm missing something here...it seems like I'm stuck putting money into this system indefinitely. At no point does there appear to be an accumulated balance but rather just a series of payments coming. I suppose if I just paid off the balance and let a bunch of notes mature it would create a lump sum after a few years but I don't see how that's a true reliable cash flow stream. 

Does anyone have this successfully modeled out? And how was this granted a patent!? 


 Bob, I had the same question. When will I be able to retrieve my personal cash flow back or even start spending from the snowball?

From what I understand, if your snowball gets "big enough" whatever that is, to each it's own. Let's say it's $7K/month snowball and your contributing $1K of your cash flow, then essentially you can stop contributing your $1K and let's say you want an extra $1K, your now using $5K to pay off that LOC. It might extend your LOC payoff by a month or 2. You're just going to have to make sure to continue the "flips" as the earlier established "flips" start expiring.

I am excited and looking forward to my scheduled phone call on Friday and have lots of questions. 

This is where I get stuck as well. To get to that point you’ve been flipping over 2 years with your own cashflow. Granted a decent return is seen if there’s not to many defaults.
it’s an interesting concept for sure. The system also works better for people who have the savings and make a good income. 

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Replied Nov 29 2022, 21:44
Quote from @Peter Fife:

Conclusion, Tardus truly gave me a way to not be overwhelmed with trying to buy 15+ rentals to get to finical freedom, but gave me a greater understanding how to put everything I was learning together....

Hope this helps you and others.

 ---- 6 month update ----

I still feel the same as I did when I posted this, I'm pretty happy with the service they provide. I'm currently projected to earn 15% for my first year. Below is my tracking spreadsheet I've been keeping. 

I'm only showing the lower half of the totals. There are several rows above where I track each one of my investments, and what I receive above. Figured I'd just show the bottom line so to speak. 

* Flip Payments = Personal cash + all loan repayments received
* Income Received = All Loan repayments (this includes payments from my Own capital I put in upfront, so I'm getting my principle back)
* Passive Income received = True passive income from the leverage concept. Not my own capital, so all principle and interest are counted
* Interest paid = what I'm paying in interest from the loans
* Monthly CoC = Earned / Invested for that month only. Not something to be looked at monthly but kinda fun
* Loan Balance = Due to buying a car, giving extra to church, and kitchen remodel I needed a way to track my loan pay down progress

Gray shading is future/projected - listed only on interest & Loan balance. End of month I true up the actuals. 

--- 

My current projected invested amount is ~100k for the year where the Passive income received is ~15k which gives me a Cash on Cash of 15% This is my first year and I've been told this is higher than normal CoC. The reason I think is I jumped-started with ~40k up front, but that's my own capital that I'm getting back in the Income Received row, which is why I'm not counting that as passive income. However, it's giving me those extra payment amounts to pay off the other loans faster.

Since these loans are 3-5 years, they will continue to pay over that time while I continue to build the 'snowball.' 

My only complaints are these

1) The upfront 30 min meetings you get once a month are not enough. However, by 5-6 months I'm pretty comfortable and 30 mins seem to be enough time, but stills feel rushed.

2) I wish they would have some of their weekly meetings for '6-12' month clients. New clients tend to come to most of the meetings where I'm not getting a lot out of them, and wanting to hear more from those in my time line.

3) This is totally screwing with my YNAB method rule of giving every dollar a job. I'm now focused on putting my true expenses, those yearly expenses, into the process and then pulling the money when needed. I'm losing track of what I've saved for and how much. So struggling to figure that part out.