All Forum Posts by: 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.

0 Votes

Boston, Massachusetts

Quote from @Don Konipol:

Quote from @Tinley Jones:

Quote from @Heidi Backer:

Quote from @Tinley Jones:

Hi Heidi,

;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)

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!

5 Votes

Boston, Massachusetts

Quote from @Heidi Backer:

Quote from @Tinley Jones:

Hi Heidi,

;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)

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...

2 Votes

Boston, Massachusetts

5 Votes

Boston, Massachusetts

@Mike Helm Thank you for that. That would be greatly appreciated!

0 Votes

Hi, I purchased a seller financed home this year in Evansville, IN through my LLC. Has anyone worked with a lender they would recommend to refinance this type of deal?

0 Votes

@Paul Schu I'm still actively looking. I'll get my first property before too long. So far the REITs are nice to have on the side. I'll see how it goes in the future if the ROI continues I think I'll keep investing for a bit of diversity.

0 Votes

@Paul Schu no I haven't. I've made 2 offers on 2 different properties that didn't work out. Have started to invest some of my money towards REITs like fundrise and another site. Owning property is still the goal. It is just hard not having put a team together OOS so far. Still working though.

0 Votes

@Kelly Wiggs Thank you for the feedback. Do you self-manage your properties as well?

0 Votes

Evansville, Indiana

@Kelly Wiggs Do you mind sharing who you used? Are you still working with them? Any details or insight on how the process went?

0 Votes

Evansville, Indiana

All Forum Posts by: Tinley Jones

Tinley Jones has started 10 posts and replied 34 times.

Post: Has anyone worked with Tardus Wealth Strategies?

Post: Has anyone worked with Tardus Wealth Strategies?

Post: Has anyone worked with Tardus Wealth Strategies?

Post: Has anyone worked with Tardus Wealth Strategies?

Post: Refinance Seller Financing Evansville

Post: Refinance Seller Financing Evansville

Post: Evansville. Where do I start?

Post: Evansville. Where do I start?

Post: Recommendation for a General Contractor

Post: Recommendation for a General Contractor