E2A 054: Replacing Your Salary with Real Estate with Donny Mangos 

As entrepreneurs, it’s tempting to invest all profits back into our business. But that’s a risky proposition. When it comes to investing, diversification is your friend. And if you’ve ever wondered about investing in real estate, this week’s podcast guest has something to share.

In this episode of The Entrepreneur to Author Podcast, your host Scott MacMillan speaks with Donny Mangos, investor, Realtor and author of Replace Your Salary with Real Estate about writing his book as well as building wealth through real estate.

EPISODE LINKS

replaceyoursalary.scoreapp.com
replaceyoursalary.ca

GUEST BIO

Donny is a thought leader when it comes to personal financial planning and wealth creation. It's not about money, it's about the freedom that comes with not having to worry about money. There's a lack of financial literacy and information sharing among Canadians when it comes to Money and Donny's hoping to shine a spotlight on some of our financial issues and the salary dependence we face as Canadians.

CONNECT WITH DONNY

replaceyoursalary.ca/contact

CONNECT WITH SCOTT

Episode Transcript

Please note: The transcript is produced by a third-party company from an audio recording and may include transcription errors.

Scott MacMillan:

You're listening to the Entrepreneur to Author podcast.

Announcer:

Welcome to the Entrepreneur to Author podcast, the podcast that brings you practical strategies for building authority and growing your business. And now, here's your host, Scott MacMillan.

Scott A. MacMillan:
My guest today is Donny Mangos. Donny is an investor, realtor, and author of Replace Your Salary with Real Estate. I'm excited to have him on the podcast, both to talk about his book and his experience writing and publishing it, but also to talk about building wealth through real estate, which I know will be an interesting topic for our listeners. Donny, thanks so much for joining us today.

Donny Mangos:
Thank you for having me, Scott.

Scott A. MacMillan:
To start, I'd love if you could share a little bit about you and your professional journey for our audience.

Donny Mangos:
Sure. Yeah, so I was a typical university grad. I was a business grad, came out of university with high hopes of, you know, wearing a suit and tie to work and being the pro that my parents always wished that I would be, because I mean, my parents were literal farmers, Scott, literal shepherds back in Greece. So, you know, they had high hopes of, they went all in on me being a suit and tie guy in the office. And for a long time, I believe that. So I just kept going down that path and got a regular job, just like many of us do. And I just felt, I don't know, unfulfilled, unsatisfied working for someone else. So I guess I've always had an entrepreneurial spirit in me and I needed to nurture that. And that all came to a head really with my like origin story kind of thing for you. I was working for a large financial company. in Toronto and well if you want to hear my long story I guess we're on a podcast we can probably go into that so they can

Scott A. MacMillan:
We got the time.

Donny Mangos:
give you a little bit more of a scope into who I am. So I was working in IT at this point somehow I evolved from business grad into tech guy kinda into IT and I just I sucked at it but it was it was good money so I just kept going with it. Anyway I was a typical like nine to five or so I would always take that same kind of path, walk into the office, hit the elevator button, get to work, sit down, log in, all that kind of stuff. And every morning I would follow that same path, which for me is, it's just so frustrating, the routine and monotony of that kind of experience. But I got used to it and I just kind of had to suck it up every day. So every day I'm doing the same thing, same thing, same thing. And then one day, as like I'm doing my, I'm doing my part to fulfill the routine, going to the elevator, push the button, going up there. Walk across and I realized holy smokes an entire section of the office is is wiped out Just gone. Um, I don't remember seeing any notice of anything happening or like no renovations. They actually just got tossed They all got canned they all got let go an entire department and I remember You know in my walk to my desk every day. I would walk by this one dude and he was Just like an older guy just sitting there literally filling out forms on carbon copy, which is like the three ply back in the day you press hard and it gets through to the bottom page, rather than scanning, this is what this guy did. And this is like 2003, I'd say, or somewhere around there. And then I saw him basically lose his job. And I thought this guy's got no transferable skills. Like he's older, he's probably just, you know, coasting into the sunset. And now all that's changed for him. So my path was, holy, I cannot let this be me. I can't. I can't allow this. So I'm gonna stop doing these things that make me unhappy in exchange for a paycheque. I'm just gonna figure stuff out, chase a passion and put it all on me rather than put it on someone else who might decide to stop paying me one day. And that it turned into like my passion was, I love real estate. So how do I figure out a way to make that a part of my life and a part of my business, my life? And that turned into becoming a realtor, which became into starting a team and all this stuff. And here I am about 18 years later. still chasing what I love. Was that an answer to your question?

Scott A. MacMillan:
Oh, that's wonderful.

Donny Mangos:
Yeah.

Scott A. MacMillan:
Yeah, that's a great answer. And yeah, you know, I think any of us who've worked in the corporate world have had that same experience, right? Where, you know, one day everybody's working hard and the next day, you know, a bunch of people are gone. And that is a really sobering experience. Now, you've just published Replace Your Salary with Real Estate. Could you share a little bit about it? Who is it written for? And what is your goal for your reader?

Donny Mangos:
Sure. Well, the experience of writing a book was amazing. And I guess we'll get into that a bit later, Scott. But it was really, it was written for that guy I just described to you. I don't even know his name. Like whoever he was, which is essentially who I would have become kind of how I see it. Now that I'm talking about this, I wrote it for that guy in his past. If there was a way I can go back and say, Hey, before you go all in on this company, and hoping they're gonna take care of you for the rest of your life, maybe figure out a way to at least replace the need for your salary. Think about some plan B and plan C options just so that you have that buffer in case things don't work out the way you planned. So I wrote it for me. I wrote it for me when I was 25 years old. If I can go back in time and hand me this copy, this is what I would say to myself. I wrote it for like I have I'm a middle-aged man with a family. children and I wrote it for my peers to help them see a better future for themselves and they've got going on right now and help them realize like this house of cards, it's fragile and that you may not be OK. So maybe think about that before you just go all in on on on that employer and hoping that your pension is going to work out and things like that. So I wrote it for for those people primarily. When I was writing when I was writing the book, I just needed to get my thoughts to all the years of experience of building. portfolio in real estate and then disposing of some because that's kind of what the plan is in my book. I just wanted to document my process and writing that book really gave me clarity on what I have to say and making it concise, making it digestible and things like that. So I wanted something, I wanted a plan that I could follow. I wanted a plan that the 25 year old Donny could follow. I wanted a plan that my 45 year old clients can follow. Make it repeatable and make it clear the importance of doing this for your own benefit.

Scott A. MacMillan:
Mm-hmm. You did an excellent job of, I think, capturing that process. And how did you find the writing process? How did you find that process of, you know, getting that process of, you know, your investment process out of your head and onto the page?

Donny Mangos:
You know, Scott, when you, okay, so you decide, you know what, I think I'm gonna write a book. I've got some ideas, I wanna capture it all, I wanna put it in one thing, that thing is a book, and then you open up, you know, Apple pages, and I'm like, okay, so now what, right? Like, you stare at this blank screen, and it's, you have a little bit of panic in you, a little bit of anxiety, and you're thinking, what do I say, how do I start? So it was like that part of it was a little bit cumbersome just getting over yourself. And this is pre-chat GPT I'll have you know. But it really, I had some ideas. I just needed to get it out. I started with like researching how to write a book and just so I can get out of writer's block mode. And I thought, okay, I know what I need to say. I know my five steps. So that part, the body of it's taken care of. How do I lead into it? It's just a matter of giving it some thought, giving it attention. being intentional and setting aside time. So, you know, I told my wife, look, I have some things I gotta do. So I'll be in this room for a while. It might take me a couple of weeks or a couple of months. I don't know, but I'm just gonna go in there and I'm gonna write. I've got some things I wanna say. And then honestly, it was just verbal diarrhea. You just write. You just, it's easy for me to get my thoughts out onto my fingers. And I kind of write the way that I speak. So it was easy for me to just go ahead and dump it all out. It wasn't as it wasn't as difficult as I thought it would be truth be told what they took to get it all together. But I did have help. I did have instructions on on on how you know, how to how and when to place this part. When do you bring in anecdotes, quotes, you know, all that kind of stuff, case studies. So it was it was it wasn't very difficult. It wasn't too difficult because I had help.

Scott A. MacMillan:
Yeah, help is important. People have kind of been through it before and can kind of give you a bit of a roadmap, even though the ideas are authentically your own, it really helps to have a bit of a plan in front of you. How about the publishing process? Was there anything that was perhaps surprising, whether that's in a positive way or in a negative way?

Donny Mangos:
Sure, straight ignorant Donny, I've never gone through writing a book, so I don't know, like where does, when I finish, what happens next? Like how does that get to shelves? How does it get to Amazon and things like that? I had no idea, Scott. I just know that I knew what I didn't know, and I'm a big believer in involving who, not the how. So just rather than figure it out, have someone who's done it before figure it out for you so you don't make the mistakes. I just knew that I don't know how to get my my Apple pages or my Google Doc into this format. Like, how do I get this on the shelves? So I really didn't know what I didn't know on that part of it. And be quite honest, I still don't fully understand all the steps, but it doesn't matter. I knew that I was asked questions once I, once I, Grammar Factory, you know, this obviously published my book. I reached out to you and said, you know, I had met Scott before at an event. I said, Scott, I need help. I don't know where to go. And Scott, took care of it and just ask questions when they were appropriate, which is wonderful because I needed a leader. I needed somebody to jump in and say, first step is this, second step is this, and I'll come back to you in a couple of weeks with this. It was lovely. Some of the hurdles, like, I'm a writer here, so I'm documenting thoughts, and imagery is very different. So covers and things like that, that was frustrating for me. I mean, you know this, it was hard for me to, how do you articulate what you like unless you know what you like? So, I don't know how to describe. Do I like red? Do I like blue? I don't know. I know what I think looks nice and what I don't think looks nice, but can I articulate it beyond that? Not really. So that part of it was difficult for me, as you know, but in the end, all this stuff came back to iterations, iterations saying, all right, so you like this. That's cool. Why don't we just focus a bit more on these ones. and make some modifications, tweaks here or there, and see if that makes you feel good about it. And if not, that's okay. We'll go back to the drawing board. So I had a lot of help that way. So the biggest hurdle I felt was really just in design, which had nothing to do with really the contents of my book. And I would never have been able to do that on my own. Could you imagine writing an ad for a designer? Hey, I need a book cover that is something that I will like. I don't know what colours I like. I don't know what font I like. but go ahead and work with it and tell me what you got. How's that fair?

Scott A. MacMillan:
You know, it probably, you know, I'm not a realtor, but it's probably similar to helping somebody buy a home, right? Where somebody comes in and they have a maybe vague idea of what they want and, you know, you've got to show them a bunch of properties before you can get a feel for what's resonating, what isn't, and then try and, you know, get them to a place where, you know, ultimately they're really happy with the result. You've got to take a lot of the work off of their plate. They need to kind of feel comfortable with the process, but they don't need to understand all of the nitty gritty details that happen behind the scenes.

Donny Mangos:
So true.

Scott A. MacMillan:
So as you were talking about, I was thinking, you must have that experience from the flip side in the real estate space.

Donny Mangos:
It's very true, Scott. You might say, hey, Donny, I'm interested in a three-bedroom semi-detached house in Old Toronto, but then you keep sending me emails about four-bedroom in the suburbs. And it's very different than what we had agreed to, which is totally fine. But me on the other side now, me as a service provider, I would articulate it back and say, just so you know, here's the feedback I'm getting. You seem to be very keen on these ones. Maybe it's time we revisit. you know, what your goals and objectives are. So yeah, that's the benefit of having a pro on your other side helping to guide you because otherwise I'm showing you three bedroom semis and you're never gonna be happy because I'm just following your orders, but it's up to me to be the consultant, the leader, and come back to you with what I think are better options for you.

Scott A. MacMillan:
Yeah, really well said. Now, what are your business goals for your book and how are you using it to support your business?

Donny Mangos:
The book is more of an ecosystem. So it's gonna be, well it is. There's a scorecard as well as a quiz which is created off of the contents of the book to help anyone determine how dependent are you on your salary? Are you too heavy in on one income stream? Because if you are, you need to be made aware. So those two tie in together and then I hold a bi-weekly webinar for people to help them. go through the process of, you know, almost like a workshop, just getting in the head space where they're considering their finances, because money is an often dirty topic. We don't wanna get into it. We don't like talking about it. So for me, it's more of a for my clients, primarily to help them see the value in preparing for their future. So between the webinar and the dependence quiz and the book, it's really to create an awareness. and get them to introduce change into their lives. So, I mean, this is not really, it certainly is available to everybody on Amazon and all of that, and anyone who's interested in personal finance, I do think should read, because it's not about real estate, it's about planning for your future. It talks about RSPs, it talks about taxes, most importantly, and it just tells you why I think real estate could help be the solution to the problem that you're facing, but it's primarily, it helps to... Let my audience know, let my clients know, I understand this stuff for you. Let me be the leader in your life to help you navigate the next 20 years so you're all set. Your kids are in university, you can retire in Mexico, that kind of stuff.

Scott A. MacMillan:
Mm-hmm. Let's dive into that a little bit. Let's talk about wealth building. Why do you believe that real estate is such a powerful vehicle for building wealth?

Donny Mangos:
Great question, Scott. It's also in my book for sure, right? So most investment vehicles, okay, think of a mutual fund because that's pretty much where a lot of us end up because that's what everyone else does. And so we don't wanna stick our necks out. We wanna do what everyone else is doing for some reason. We just want, we think being normal is the way to go, which is almost, alternative word for normal to me is mediocre and that sounds harsh, but it's true. But we think mutual funds and mutual funds. Typically you put some money in and then you won't see it for years. And hopefully when you retire, it's worth a lot more than you put in there. So you just been feeding it, feeding it, feeding it. And if it appreciates in price, you make some money. Okay. So that's you're making money in one way and it's a long term game. Like any of those charts you see in your banks, you know, in your banker's office, it's all saying the same thing. Put your money in today, wait 6,000 years, and that'll be worth a lot more money. That's great. When it comes to real estate though, real estate makes you money in three ways. Well, investment properties I'm talking about here, not your home. Investment properties will pay you when you buy, when you buy or create an income property, you're creating housing for someone else. So there's the good of that, but they're paying you rent, in exchange you're paying your expenses. There should be a delta, there should be some money that you're making in the interim. Maybe not on day one, but you will make money on that difference between what you're bringing in and what you're paying. So that's cashflow. That's category number one. Category number two is anyone who owns their home knows when you have a mortgage and you're making a mortgage payment, each of that mortgage payment is being split up into two, not equally, but it's being split up. Some goes towards paying interest to the bank for giving you that money, and some goes towards paying down what you owe, your principal. So eventually, through the years, you will have paid down what you owe, which is directly attributing to your equity. So you are, if you had a $400,000 mortgage and through the years you paid down 100,000, you owe $300,000. Well, if you sell, you don't have to pay back the 400, you pay back $300,000 to your lender. That's $100,000 is equity for you. But the last one, category number three is appreciation. And appreciation is when you buy low, sell high. We have noticed in Toronto, in Canada, over any period of time, you can take the last year as a blip, sure, but leading up to it and... now that we are here on the way out, properties appreciate. There's no denying hard assets appreciate, especially and including during inflationary periods. So there's a lot of money to be made on appreciation and when I look at those three categories and I look at the tax implications of how those things are, how those gains are taxed, a lot of your money is being made in capital gains which is category number three and that happens to be the most tax preferred way of making money because the government in Canada only taxes you on half of the money you earn in that category. So not only are you making a lot of money in real estate, in appreciation, you're only paying tax on half of that gain. You get to keep a lot more after tax. So there's all of that, Scott. There's also a bunch of deductions you can create through property ownership, in Canada. So which reduces your ultimate tax liability. Why I love real estate, it is the best performing asset in my experience. and it is in a tax preferred category, that's why I think real estate is the way to go. Now, I also don't think it's the longest,

Scott A. MacMillan:
Mmm.

Donny Mangos:
you should hold it long-term, because ideally, I believe in using the gains you're making in real estate, and you can make wonderful returns in five years or 10 years. Once you do, you can use that money to create a never-ending income stream of cash to you each month, so essentially to replace the need or replace your salary entirely.

Scott A. MacMillan:
Yeah, really well said. And really, it's a really compelling proposition. And you go through all of that in your book. I think you do an excellent job of laying out that path to building meaningful wealth through real estate. Now, for our audience who are mostly entrepreneurs, which for better or worse can mean that income might fluctuate up and down from month to month, what advice can you share for putting your principles into practice for this group?

Donny Mangos:
So yeah, they don't have a salary for the most part. Like we don't get a salary. We are business owners and there is some fluctuation in how we see money. And I almost think this is even more important for people like us, Scott, because this is a way to introduce stability in a world where we don't have stability. We can't predict what's going to happen in our businesses. And this is gonna make money for us regardless of what we do. So... Just like somebody who's got a air quotes safe job, who's putting all the dependence on someone else for their finances. We also have dependence on clients and on our service offering, all that stuff. And it too could be, it could too also not work out. So this is a great plan B option. The reason why I love it for entrepreneurs is because once you qualify for that property, You do it once. You don't need to fund it also more than once. You fund it when you buy it. And then for the most part, you're off. Like there might be repairs here and there, sure. But you're not buying a new house every month, kind of like a pre-authorization where you just keep dumping money into it and dumping money into it. That's not a strategy I would use for an entrepreneur who's got limited ability to have predictable income. So I would say for entrepreneurs, for guys like you and I, yeah, I think it makes a lot of sense to... Find something that's solid and structural. Like it's a hard asset. We should be considering that in our portfolio for financial planning. I know it's taking away money from what you can invest in your business. I get that. And I'm not saying we shouldn't do that. These should both be considered and you identify where's your highest level of growth potential. And if you're looking like the next year, you gotta slow down a bit in your business for something else. That's cool. Maybe consider buying real estate now because in five years time, it's going to grow exponentially.

Scott A. MacMillan:
Yeah, yeah, so true. It's always so tempting, I think, for entrepreneurs to dump all of their investment back into the business. And I think that's a mistake, right? For the reasons that you shared. And so then you're faced with the same decision that regular nine to five-ers faced with. Where do you put that? those savings. Do you put them into mutual funds or do you put them into real estate or some other vehicle? And you know you you make the case very very compellingly in the book that real estate is a really really strong option. What advice would you share for someone who's considered writing a book in the same way that you have that supports their business but hasn't yet done so?

Donny Mangos:
I again, the experience of actually sitting down and and gathering your IP and getting it out into a single, a single source, a single page or a single app, whatever it's. It's liberating Scott and whether or not it gets published is another thing that that's that's amazing if you can get that far where you can where you can publish it. But I spoken to two people who noticed that I wrote a book and they're called their friends or colleagues and I've said I've been thinking about writing a book. or I've actually been writing a book and here I am, how did you experience this? It's, I can see the clarity and the spark in their eyes just sitting down and writing something out. They're creating something of legacy, of value that's gonna outlive them. Their thoughts are going to be able to be dispersed, you know, one to many. They can just create one thing and it'll get a broad reach if they want to. But just the actual effort of sitting down and documenting your thoughts is so... clarifying. It helps you identify what is my value add? Why do I exist? Why would someone work with me? When you sit down and do that, it's a wonderful experience to go through as an entrepreneur, just to identify your extra value add and your differentiator. the positioning that you have in their mind as a leader in that space, because you wrote a book on that subject, nobody can ever take that from you. There's not, I'm in a business where there are 70,000 realtors in my city, not even nationally, just in my city. I can count on my hand the number of authors in my business field. So it instantly propels you to a thought leader in your industry and... There's a whole bunch of good that comes along with that. Speaking engagements, which are wonderful. Bigger audience for sure. Stronger rapport with your own clients and your own audience. All these are side benefits to sitting down at a desk and getting your thoughts out.

Scott A. MacMillan:
Beautifully put, beautifully put. So this benefits both on the personal side and the professional side. Finally, Donny, how can people get in touch with you to learn more about building wealth through real estate, what you do, and how you might be able to help them?

Donny Mangos:
Of course, yeah. So if you go to www.ReplaceYourSalary.ca, you'll get the links to contact me, of course, but also the links to the webinar that we host. You'll get the link to if you want to look at the book, PDF or actually audiobook as well now or paperback. And we also have this the dependence quiz is linked in there. So you can just run a quick three minute quiz to see how dependent you are on your salary. Instant feedback, direct to your inbox about where you stand. So www.replacersalary.ca is where you can get ahold of me. Thanks, Scott.

Scott A. MacMillan:
Wonderful. We'll put all of that in the show notes. And Donny, this has been super helpful. Thank you so much for sharing your time and expertise with us.

Donny Mangos:
Thank you so much for joining us. Anytime, Scott. I'm a big fan of Grammar Factory. Thank you for including me as a guest, and I look forward to speaking with you soon.

Scott A. MacMillan:
As we wrap up this episode of Entrepreneur to Author, remember this. Now is the time. Time to write, time to publish, and time to grow. I'm Scott MacMillan. Until next time.