What It Takes To Be a Fund Manager...| Real Business Owners Podcast

Real business owner.

Real business owner.

Whatever your situation is currently is not your forever situation.

That's really what Real Business Owners is, man. Like, we don't care where you come from. Where are you going?

Our goal and our job is to reduce the mistakes that you have to make or the money that you have to lose.

You want to be an entrepreneur, you want to be successful, don't give up.

You learn, adjust, and continue to move forward. Welcome back to the Real Business Owners Podcast. This is episode 93. As always, Myself, Trevor Cowley. We got Kel Goodman.

What's up, everybody?

Guys, today we have an awesome guest for you. Uh, he's a, he's a Utah native as well, I believe. Were you born in Utah?

Uh-huh.

Yeah.

Okay, so he is a Utah— yeah, I know he lives here now. I didn't know for sure if you were born here, but, um, guys, we want you to welcome, uh, Bridger— is it Pennington?

Yeah, Pennington.

Yeah, Pennington. So Bridger's a, a young hustler, you know. I really wish I had the mind that he has at the age that he's at, right? Uh, there's certain people that you just know that are going to do big things, and Bridger's already doing big things, but your future is definitely super, super bright. Uh, by the time you're our age, you're going to be running circles around us if you're not already, you know? So, uh, we're excited to have you, dude.

So—

Well, thanks for the chance. It's gonna be fun. I'm excited to chat with you guys and hang out at the studio here in person. This is fun.

It's our pleasure.

Yeah, we prefer the in-person stuff rather than the Zoom stuff. It's just a different energy, right?

Yep.

So you're the founder. Is it, is it Blackbridge Holdings?

Yeah, Blackbridge Holdings. Yeah, that's our fund. So I started that about 4 years ago.

Okay.

We do short-term loans and debt out of that. Okay. And so it's, yeah, fund we started. We're launching— we've launched 2 funds out of there. We're launching a 3rd fund right now out of that.

So is that kind of your specialty then? Is that your main focus right now is, is starting funds with a specific purpose in mind, whether it's real estate development or this?

Yeah, exactly.

You don't really mix funds. Or do you segment them out? Like if you're doing loans over here versus real estate over here, or does some of them kind of mix in a little bit?

Yeah, it's a good question. Most funds, like even private equity hedge funds, real estate funds, most funds, unless your name's like Bill Ackman or Warren Buffett or something, most funds are very specific. They're saying, hey, we have this investment thesis we're going to go after. Like our new fund, for instance, we're going to go flip. We're going to find big box stores. I was talking to you before about this. Kmart, Shopkos, and we're going to convert them into commercial office.

Yeah.

In a very specific way at a certain square footage. So you get, usually it's very specific with our funds. And I will launch, you can launch multiple funds.

Yeah.

So my dad, for instance, and maybe if we get my story a little bit, this is how I got into this a little bit, but my dad is co-founder of a deca-billion-dollar family of real estate funds. They manage just over $25 billion in assets and they have 117 funds they run in multifamily and commercial office and they do Debt on different loans. They do senior assisted living, and each, each fund is a very specific niche.

So it's very niche, and, and it just goes deep into that, that, that niche, right?

Yeah, exactly.

And then if you want to do something else, you just kick up a new fund for whatever else you're, you're looking for money for. So is, is that how you got into the space then? You kind of watched your dad kind of do all this stuff and, and grow these funds and, and make a good life for himself, so you were like, hey, I'm just gonna follow suit, so to speak?

Yeah, so it's actually funny. I grew up in— so I say that about my dad, you know, huge, you think of this big number, but we grew up in a very average, normal, middle-class house. My dad drove a 1999 Ford Expedition with 200,000 miles on it. And we were just—

He's one of those guys.

Just one of those guys, right?

He's the Warren Buffett of Utah.

Millionaire next door, and I didn't know we had any money growing up at all. And he taught me about entrepreneurship and getting into business, so I got into college, I started, I was just like that kid with just a ton of energy, so I started 6 businesses my first 2 years of college. Anything I could think of, right? I did real estate wholesaling, I built websites, I did Chinese tutoring, I did like forex trading.

But you're trying to figure yourself out.

Exactly.

So you're just like casting as many lines as you can and see what bites, right?

Exactly, and I'm happy I did it, you know? And some of them, they all made a little bit of money, but nothing crazy. And finally my dad grabs me and goes, Bridger, I want you to go meet with one of my business partners. I think this guy can really help you out, and really, I think he can help you think things through. So we set this meeting, I drive up this area, super nice area, through a gated community, come to this beautiful white home. It's gorgeous, pull in the backyard.

Did you text your dad at that point and say, if this is your partner, why aren't we living next to him?

Exactly, I was like, what is this? Who is this guy? So I get out of the car, I walk up to the door, I'm a little nervous, like, this guy, this is a big house. And I knock on the door, I'm like a butler's gonna come and kick me off the property or something, right?

Security, Doberman Pinschers running out, you know?

Exactly.

Like you see on the movies.

Thankfully, he answers the door, And he comes in, we start to sit down, we chat, and we're talking about business and life, and I finally ask him, like, how did you get all of this?

Yeah, how did you build this?

And he kinda laughs, he goes, not very many people ask me that question. And I was like, oh shoot, like, I guess—

Am I crossing a line?

Yeah, like, I'm not supposed to ask rich people that question, right? And so, but he goes, no, no, it's fine, it's just unusual a little bit. And so, he goes on to tell me though that he was like me in his 20s, started a bunch of businesses, did actually pretty well, and then figured out what he called the secrets of the rich, the secrets of the wealthy. He goes, this is what all the wealthiest families in the world do. The Rockefellers, the Vanderbilts, you see the Trump family, the Romney family, all of them run funds. Or they will have their kids, they'll sometimes even cheat to get their kids into these best universities, right? Of course, yeah, yeah, yeah. Cheat to get them in, we've seen that. We've seen that on the news. They'll go do investment banking consulting and then they hope they go work in private equity, hedge funds, or they come back home and run the family office. And he goes, I've met a couple gentlemen that ran private equity funds and when I was, he said in his mid-30s, he said, I didn't care how long it took me, But I was gonna figure out what a fund was and how to start one and run one. And he goes, about 8 years ago, me and your dad started a real estate fund. And he goes, we currently manage $8 billion of real estate in multifamily. And to put that into perspective, Grant Cardone, Grant Cardone Online, they manage about $1.1 billion.

Yeah.

These guys are managing 7 times more than he does in multifamily, same exact space.

Yeah.

And Your dad wasn't flying around on the jet.

I know. So I was, I was super intrigued and I was, and I was talking to him and I go, hey, I've always heard find mentors. Hey, can you be my mentor? Teach me all this. He goes, Bridger, go ask your dad. Dude, your dad knows way more about this than I do. Go talk to him. Like, no, no, my dad's poor. We live in a crappy house. I want to learn from you. Like, come on. And he goes, and that's when he broke it to me. Bridger, me and your dad make about the same amount of money. And my chin dropped to the floor. And I got in my car, I drove straight to my dad's house.

I was like, Dad, what the heck?

Like, what's going on? You know, I'm already in college. I'm the youngest kid, you know, I'm in college and I'm like, why haven't I been able to order like a soda at Chipotle for the past 8 years? Because it's too expensive.

Yeah, I couldn't get a combo meal all growing up.

Yeah, exactly.

Yeah.

Yeah.

I hope he just laughed.

I know. Yeah, he did.

He laughed.

He goes, well, you know, I like to save and invest my money. My partner likes to show off and kind of spend his money. But yeah, we run these big funds and sorry, I'm going long on this, but long story short, He sat me down and taught me about funds, how funds work, the inner workings of the SEC, how to raise capital, how to file, how to, you know, compliance, all the kind of stuff with a fund. And about 8 months later, I was working at a company and I had an idea for a fund. We could lend money to some of their clients and do financing for them. Came back home, I talked to my dad, I said, Dad, I got this great idea. He sat down, we mapped it all out, we framed everything out, and I got it all ready to launch my first fund. I'm 22 years old, I'm excited, and I, for whatever reason, overlooked, for a fund you need money. Like, that's the basis of a fund, right? It's the most important thing. I just, I didn't really think about it much, and I thought, well—

Well, I thought the money came from everybody else.

Yeah, I thought everybody, yeah, so I figured out that part, but I go, well, my dad's rich. He loves me, I'm his son, he likes the idea, he'll totally invest. And so I remember it was a late Sunday night, I walk into my dad's office, I sit down, I go, Dad, I wanna thank you so much for helping me out. And I kinda gave him the pitch in my best pitch voice possible. I said, Dad, how would you like to be our first investor into this fund? And he kinda smiled and laughed and he goes, he goes, Bridger, he goes, I have the money to invest, but if I invest in your fund, I would ruin the experience of you going out and raising money on your own.

Right.

The first investor is the hardest investor. This will be a crutch that you'll never be able to recover from. And he said no. He kicked me out and he said, go figure this out. This is up to you. And so I took him up on the challenge. Over the next 6 weeks, I talked to everybody I knew.

You had something to prove at that point to Pops.

Yeah, had to prove it to him, and I went out and raised a whopping $49,000 from I think 6 investors who put in like $7,000 to $10,000 apiece. But, so that's super small.

That's still not bad for a 22-year-old that's just trying to figure things out, right?

But it's, I mean, if you know anything about funds, right? That's micro small. That's teeny. But it was enough to get started. We were doing these micro loans. They were $2,000 to $5,000 a loan. So, we started and we did these loans and our first group of investors got a 64% return on their money. And I sent them the money back and they were excited like, hey, let's do another. So, we started to launch a second fund. And since then, now we've raised and deployed millions of dollars in that second fund. And now we've launched a third fund, which I mentioned about the real estate. Moving to real estate more. We've soft raised about $18 million for that fund. So it's up and up, it's starting to go and take off. So anyways, that's what we decided, kind of did. And then about a year ago, we started to, a lot of people ask me how I started my fund. My dad, my brother's a securities attorney as well. So SEC securities attorney. So between the 3 of us, we got pretty good knowledge about funds. So we started an online product and course and podcast and stuff like that to just help people understand private equity hedge funds and stuff like that.

I think, I mean, even for me personally, if somebody's, Even at the level we're at, if somebody's like, hey, you should start a fund, it would feel overwhelming, like, to even think about, like, where would I even start?

Yeah.

Like, how would I even do that? Like, it seems like that you would already have to have very deep pockets to even start a fund, uh, just to get to the point where you can take on other people's money. So, I mean, I, I could see why it would be intimidating to a lot of people. So, you're taking kind of everything that you've learned and, and, and everybody in your ecosystem that have taught you and you're putting that into a course that you're currently selling, a coaching group. I mean, tell us a little. Is it a course or a coaching group or a hybrid of both?

Yeah, both.

We got both in there. So it's— we've, we've brought together myself, my dad, and about 7 other mentors that run funds. And we only find people that did it unconventionally.

Gotcha.

People that didn't do the Harvard route or the Ivy League. People like, just like us that are just regular entrepreneurs.

Where it makes sense to the average person where they can feel like, oh, well, if they can do it, I can do it.

So exactly right. So we have lawyers that come in. We have a whole programming group. We started it exactly about 1 year ago. We launched it, we've got about 1,100 students that have paid anywhere from $2,000 to $10,000.

To learn how to start a fund.

They come in our group and we've helped, we've got 4 funds that are over $10 million, we've got about 6 or 7 over a million, and we got 1 fund that just hit $500 million out of our group. And they've done that in 1 year. It's crazy to see what, and I don't take credit for that, but I take credit for just giving them the idea and giving them the vision essentially. And that's what my dad gave me, was the vision of this is possible, this is in with my scope, That's, that's all I could do.

That's, that's it, you know. And, and when we get messages even on Instagram, oh, thank you guys so much, and it's like, no, we didn't. All we did is give you some information.

Exactly.

The, the hard part is not getting information. The hard part is actually taking action on the information, because that's where people get paralyzed by fear, is taking a concept or information that they already know to be true and turning it into a reality rather than just an idea or a thought.

So yes, there is power in that. I love your guys' show too. I've been looking at your episodes and listening to them, and you guys bring on people that are seemingly regular people like anybody listening, and that's what I love too. I love to listen to people that are regular—

Yeah, that have done something.

Ended up with $100 million or $200 million. You know, if he could do it, I could do it, or if she could do it, I could do it.

What we're doing is bringing Basically, something that would seem impossible to an individual, we're narrowing that gap in terms of saying, well, so-and-so has this past, this past, this past, and they overcame all of that, and they still were able to do that. I have the speckled past, but I don't have to let that hold me back, you know, or I've had issues here, or whatever it is. And so, we're trying to pull that closer to them and bring that into their ecosystem, so to speak, to where they feel like it's possible, right?

Mm-hmm.

Because it is possible. It just, it does take a lot of, you know, banging your head against the wall, so to speak. And, you know, a lot of the grunt work of having to start the fund and, you know, get familiar with it. Like even the course or the coaching that you provide. Yes, you're going to have to invest time and you're going to have to learn information. And that's not the funnest thing in the whole world to do. The fun part is making money. But a lot of people just don't want to do the unfun stuff to get to the point where they can actually enjoy what they're, what they've Built, right?

Yep, exactly.

And so, um, tell us, you know, a little bit about how you present something to somebody to yank money out of their pocket, right? Or how do you, how do you build the trust? Is it normally referrals that you get? Where is that what it's getting to now to where it's like, yes, I've been, you need to invest with him. Like if I gave you money and was making money, then I'm going to obviously go to Kel and say, hey, Kel, Check this out. Is that really— is that where it's at kind of now?

Yeah, I would say 100%. Well, and the SEC has rules that you cannot publicly advertise your fund. Oh, I can't even run a billboard if I wanted to, or Facebook ads. It's against the law to do it for some of our funds. So people listening to this show, I'm not looking for investors.

Knocking on doors.

Yeah, it's a lot of— it's referrals. It's word of mouth. Yeah, and that's how even the biggest funds, my dad's big funds, or even huge funds out there, multi-deca billion-dollar funds.

So the only way that you get to the billions is by proving yourself. Mm-hmm. a billion times over on all these little funds showing returns, and then the funds just keep growing because the word continues to get out.

And typically, you know, your first fund or even syndication, for me, right, that was not— I'm not gonna be a millionaire on that first one, $49,000. What that was for was to prove to 6 investors that I could— I made a lot of money with Bridger. To hold your money. Exactly. But back to kind of your question though, where do you go about it? Yeah, how do you go about it? I asked my dad this 'cause I was 22. He denies me investing, right? And by the way, to date, he's never invested in any deal, project, anything. I pitch him all the time.

Smart guy.

I pitch him like once a month, I pitch him on something. He still always says, I'm gonna get him one of these days though. We're gonna get him on something. But, 'cause I was worried, I don't have the Harvard degree, I don't have the track record, I'm young, everything's against me. Like, how am I gonna do this? And so he said, Bridger, I want— he gave me an example, and I think this one, this changed my life, how I thought about money. He said, Bridger, imagine me and you just found a Lamborghini Aventador in Billings, Montana. There's a lady selling it, she's going into bankruptcy. We could buy the Lamborghini for $50,000 this Saturday. We've had a mechanic look at it, it's actually a legit car, and we have a verified buyer in California that already is gonna buy the car for $200,000 on Monday morning, okay? He goes, this is an example, just go with me, but this is it. And so, I, he says, could you find the $50,000 by Saturday? You can't use any of your own money. Could you find $50,000? Guaranteed, if you find $50,000 by Saturday, you'll make and your investor will make $150,000 on Monday morning. And I thought about it and I thought, well, you know, maybe a former boss or a college professor or a friend from high school. It's $50,000. I was like, you know what?

It got you thinking.

I was like thinking about it. I was like, you know what? I'll stay up late. I'll wake up early. I'm going to be running around. I'll fly across the country. $50,000.

You know what?

And it's 100%. He goes, 100%? He was like, yeah. I could do it. He goes, what about $100,000? Let's say it was $100,000. You're still going to make $100,000 this weekend? I go, yeah, dang straight. I'm going to make $100,000 this weekend. Like, I could do it.

Yeah.

I could— I think I could, you know, hit up enough people and I could put together $100,000. He goes, why? And I go, well, because you said it was foolproof. It was 100% guaranteed. There's not a possibility of losing money. And he goes, aha, there it is. I'm like, what do you mean? He goes, 3 minutes ago, you were telling me you're too young. You don't have the college degree, you're inexperienced, and all of a sudden you're telling me you could raise $100,000 by Saturday morning, right? What happened? The deal was so good, the deal was so foolproof, right? And he goes, that's the way you need to pitch your fund. He goes, the reason most people can't raise money is because they do not believe in their deal like you believe in that Lamborghini deal. They kind of hope, they think it might work, but if it loses money, you know, they're in and out. And so, this is, my dad said this is how they raised their first $100 million fund, was they would go, they found these great, the great multifamily deal or apartment complex in Miami, Florida. It's 50% discounted, it's a distressed asset in 2009. They would go to investor and say, hey, we're not from Harvard. You know, because they have Harvard guys pitch them all the time, these big family offices.

Mm-hmm.

Hey, we're not from Harvard. Okay, we're not sophisticated. 'Cause a Harvard guy will pitch, this is how they pitch. Hey, we're smart, we're from Harvard, we theorize that over the next 18 months, we're gonna go out and we're gonna find great properties, we're gonna buy 'em and we're gonna flip 'em. That's how they pitch. My dad and his partner would walk in and say, hey, we're not from Harvard, we're not sophisticated, however, we just found a property in Miami, Florida. It's appraised for $8.4 million, we just found it for $4.2 million. We have to close by the end of the month, you want in or out? You're smart. You've done a lot of real estate deals before. Here's a, you know, here's the—

Pro forma.

Yeah, here's the pro forma. Bring your real estate buddy in. If you can poke holes in it, poke holes. But if you can't, can we put you down for $500,000 in this deal? And my dad said 9 times out of 10, they chose the deal because they pitched the actual deal over the degree and the theorizing about it. So that's how we went about raising our funds, is we would pitch the deal To the investor. When I say deal, it's the investment strategy.

Yeah, yeah, yeah.

But we'd pitch that to investors and say, hey, poke holes. Let's go. Let's just focus on the deal. Look, you know, look there. And yes, there's something to run around in.

You get a yes without getting the full yes. The yes is based on them not finding any issues with the deal. And if you already know they're not going to find issues with the deal, you kind of get the yes saying, if you don't find any issues with this deal, can I put you down? And well, everybody's going to say yes if you can't find an issue, right? Well, sure, yeah, if everything looks good, why not, right? And so you're getting the soft yes when you already know they're going to look at the deal and it's going to be a good deal. Therefore, they're going to feel obligated. They already kind of made that soft commitment to move forward, right?

Exactly. And this is what we teach in our program and stuff. We call it the Fund Launch Formula. So step 1 is you— most people, if they go on— a Harvard guy that wants to go launch a fund, most of them say, hey, Go hire a lawyer. It's about $40,000 to $60,000. Hire your lawyer, get the docs all ready, paperwork, and then go and pitch your investors and hopefully you raise money. If you don't raise money, you're stuck with a $50,000 legal bill, right? The way we teach it and the way that all the entrepreneurs that I've brought on, they launch their funds, they would find a great deal or investment thesis. They would frame it out, build their pitch decks, go and pitch investors even before legal docs are done. I'd pitch you and I'd say, hey, Legal docs aren't done yet. They're going to be done in a couple of weeks. Yeah, but if it all checks out, can I put you down for, you know, $1 million or $500,000 or $250,000 on this deal? And you get soft commitments on that. And once you have enough soft commitments, then and only then you go and hire the lawyers and get the deal. And now if they don't like the deal, you ask them, well, what don't you like about it? Well, I don't like your team. Maybe you don't have enough experience. OK. Hey, what if we brought in a Harvard guy? Would you like us then? Yeah. Or hey, maybe you don't like deals in Miami, but you like deals. Maybe we're in Utah, right? In Utah. Yeah, I like those. So you go—

you can go back to step 1 and iterate.

Before you've spent any money. So essentially your investors are paying you to build the fund for them. They're paying you to build a fund that they want and love. And then once you have those soft— like I just mentioned, we have $18 million in soft commitments. Yeah, right. We just barely signed with our lawyers like yesterday to start our legal docs.

And that's the—

that's what we need to build a course on. That course on how you get attorneys to turn that over so quick. Yeah, I can't get nothing. I can't get attorneys to do nothing in 2 weeks.

Yeah, that's a course we'll buy right now.

I need attorneys to respond fast.

You know, no, Jim's, Jim's good, you know.

Jim is great, but he still don't turn shit around very quick.

I mean, they're all tough. Yeah, they're all busy getting blown up from every, every entrepreneur individual. So no, that's badass, dude. That's, that's super, super cool. And so you, so when you first started raising money, you just started thinking about who do I know that has like 5, 10 grand? And then you just started, hey, let's do lunch. Or, you know, how, like, how do you— how did you approach those first deals? Like, you know how people like, hey, come to this meeting, it's free lunch, you know, the MLMs, and then you're like eating lunch and then the pitch starts happening. Is that how you do it?

No, I'm thankful I didn't do that. No, you know, um, most people— and it's— I think every investor is going to be different.

Yeah.

And every way you find investors different. Um, something I do Is I'll go to like an event. We were at that event. You meet people.

So, you invest into maybe networks and get around high-power players that you know might have a little bit of coin.

Yeah, great way to do it is, yeah, you can buy, pay your way in, or even just, there's plenty of events. Even, I guess, even with COVID there's people meeting up or whatever. But I'll usually, you know, during while we're talking, I ask them, what do you do? They tell me what they do and I go, oh, hey, well, what do you do? Well, I run funds. You know, we do funds in these certain things. And actually, technically, I cannot pitch somebody a fund the first time I meet them. So the rule in the SEC is that would be under advertising, actually soliciting. So I'll— what I usually say is, hey, do you like deals? Like, do you like seeing deals? Like, I have a bunch. I always get, just because the nature of my business, I always get these hard money deals and real estate deals and land deals. And like, is that something that's kind of up your appetite? And they'll 9 times out of 10 say yeah. Like, everyone loves to look at a deal.

Yeah.

And I go, hey, well, let me get your email. If I ever get a good deal, can I send it your way? Oh, that'd be great. And so we grab emails and And what I do the next 2 to 3 months is that because I do get a lot of deals, I tell people everyone I'm running a fund and I tell people I'm looking for deals. So people just send me deals all day. I get email all day. And if I see a good one, I'll package it up and I'll send it to Kale and I'll say, hey, here's a deal, potential one. You want to look at it? And they go, no, I want to pass on this one. I'll send him over 2 months. I'll send him deals. And then now he knows me as the deal guy. He knows me as somebody that looks at deals and finds stuff. And then eventually I'll go, hey, Our fund is actually doing an opening. We're raising some money. Here's here's my deal. Do you want to do want to learn more? Is this up your and I say it's is it up your appetite? If it's not, let's just stay friends. It's fine. I'm not gonna pitch anybody. But if it's in your appetite, let's go talk about it. And if it's not, no worries. Let's just stay friends. And so I've that's been the the process a lot of times. Some various money.

So I like that.

So I've been pitched on all kinds of things over the years, right? One thing that never really sits well with me is because I've been approached by this. About this several times. These guys come to me, hey, you want to invest? Multi-family deal or whatever, right? But they just want to basically borrow your money and pay you a little percentage, and then once they refinance the deal, then they buy you back out. Like, cool, or you made 7% a year on your money for 2 years or whatever. Like, what? Like, I thought I was investing some into some equity, right? And it's so a lot of times I know there's these deals where that's really the the deal is they're just going to hurry buy you out, refinance, get you out of the deal, and you only made like. 7% a year, right? So I don't know, I don't like those type of deals. I always look for deals that are going to be more like equity, long-term, like you're a part of the ownership of this, of this deal. And so do you guys do deals like that sometimes, or is that like, do you stay away from those types of deals?

I'm sure there's like, there's different funds, I'm sure, right?

Yeah, with our, with me personally, ours is usually a, we stick pretty basic to a 2 and 20 model with 8% pref, 2% catch-up, things like that. But you can, the nice thing about funds—

You just talked over us, bro. Oh, sorry. 8% what?

We can go through that if you guys want.

Yeah, see, you know, we're having new people on. We learn too while we're on the show.

Why you guys— yeah, no, this is out of our world, right?

Oh yeah, yeah, yeah.

We get pitched on some, we're like, yeah, well, we can run through that.

Well, I was just saying with funds, when I say a fund too, just for people listening, all I mean is a pool of money, right? Yeah, that you can grab from and deploy into XYZ deal. The nice thing is the SEC is actually— it's very open. You can structure that pool however you Right. So you'll sometimes get pitched by a greedy manager. Hey, yeah, Kale, give me your money. I'll pay you like 6%.

Right.

And then I'm gonna take the lion's share. The bulk, right. And a lot of times you'll call that person out. Hey, this is an expensive deal. This is expensive. You guys are taking way too high a fee. I call, because I guess since most people don't know funds, I see a lot of funds pitched.

And then you just sort of—

And I call them out. I'm like, that's way too expensive.

Well, we won't name names, but on that event we were at, some of those deals that were pitched from stage, I was like, I don't know anything about this. And I'm like, I can tell that you guys are freaking raping people on fees.

Yeah, well, I always— I grabbed the mic. I grabbed— did you— I don't know if you heard me. I grabbed the mic and I go, can you explain? They were just gonna charge a 2% management fee, an acquisition fee, a disposition fee on the property.

Yeah, I was in there too.

And then they were gonna do like a 70/30 split with a 4% prep. It was super expensive.

Yeah.

If you know funds, it's very expensive. And I was like, can you explain, justify why you guys are doing that? And he was like, oh, I— because if in that case, if they made— if the property made a 10% return, Yeah, they would have made 6% and you would have made 4%, right? On the— like, that's how egregious— they're taking more than half, right? Of a— now, if the property made 100%, then, you know, you would make more.

But yeah, it's pretty interesting.

So yeah, yeah, crazy, man.

So there's plenty of sharks in the, in the get your money for a fund deal. I mean, I guess it's probably just like anything else. There's plenty of great business owners. There's bad business owners. There's good people. There's bad people. Good funds, bad funds type situation.

Yeah, 100%. Well, a lot of these, when I say funds too, most of those guys are doing syndications. They're saying, hey, let's syndicate some money. A little bit different than, hey, I'm setting up a 10-year close-ended fund. That's a little bit different.

Buying this, exiting here at this rate of return.

Usually those are, I would say, more honest and more thought through, 'cause it's a fund. A lot of the syndications can get sometimes slimy. Sometimes they're fair, and just depends. You gotta look at the paperwork, the fine print.

How do you spot the shitty ones?

Yeah, I was just gonna ask that. Like, what are some of the right questions people should ask If they were wanting to invest into a fund because they just don't know what to do with their own money, right? They know that people are making money, uh, with their money, but they might have $50 grand or $100 grand sitting there and they have no idea what to do with it. So they might as well give it to somebody that is very good with money and knows how to manage it and flip it.

And, you know, yeah, I, we actually generate returns. We put out a recent episode on this. Yeah, we called it the Lie of Averages. Like the law of averages.

Yeah, yeah.

Because as you get an IRR, is the most manipulated number on the planet. I can take my funds—

What's that, initial rate of return?

Yeah, internal rate of return, IRR, which is kind of the standard, I mean, number a lot of investment people use. That number, I was actually talking to a guy I talked to for a— he manages a multi-billion dollar fund. He's like, we can change that number if we want it to be an 11. We can, it's because the IRR number is based off of The, the, well, the US Treasury essentially of what you could earn in other places. And so, right now, I mean, you have $18 trillion trading at zero or negative interest rates in Europe. I mean, so, is that our basis? What basis do you use? So anyways, IRR can be manipulated. There's a lot of numbers that they'll use that is they can manipulate. They can, then they'll, hey, the time period too. Hey, you had 100% IRR over the last, 8 months, but if it was 12 months, that would have been like a -4%, right? Or over the last 6 years, you got a 22% return, but they didn't tell you that it was up and then it tanked to -20% and then it was up, right? If you're just looking at your time horizon as well. What I like to do, back to the question of how do you cut through the BS?

Yeah.

Number one, if I'm getting pitched anything, you got to like the idea, obviously. That's kind of the soft stuff. You like the idea, you like the team, you like the jockey. But getting into the weeds, I always get in the weeds of fees. Of, okay, tell me exactly your fee structure. All your fees.

Every fee.

Yeah. And I'm gonna say, I'm okay to pay you. You're a money manager.

Yeah.

You need to make some money, but I want to just understand how you're making money. Because some, like those guys were doing, they were doing a 2%, they said, we're doing a 2% management fee. What they didn't tell the group was they had an acquisition fee, 1 point. When they bought a property, they'd take a point.

Yeah.

And then they had a disposition fee when they sold it. Of another point, and then it was 2% a year. So, if they held that property for 3 years—

So, let's say it's $100 million. They're going to make $1 million right off the bat.

When they buy it. $2 million a year for the 3 years. That's $6 million.

Okay.

And then $1 million when they sell it.

So, now that's $7 million.

$8 million. Yeah, it's $8 million at the beginning and the end, right? Oh, yeah.

Yep.

So, they made $8 million. That's the— just the fees. And then a lot of, a lot of managers will split like a 70/30 split on top of that. So in that $100 million example, if you, if they made $11 million at the end of the day, first $8 million goes to them. Okay. And then there's $3 million left over that you guys split 70/30.

70/30.

So 11% return, which is not bad. It's a decent return on $100 million. You took home like what, 2.5%?

Yeah.

Something like that.

So they might talk about the number or the percentage that the fund has the ability to make And you assume that you're going to make that 11%, but in reality, the take-home is— by the time they, they, they pull the chips off the table that they're getting in terms of all the fees, it can dwindle down.

So what I like to ask, and this is actually— I met a guy, he runs— he manages about 150 family offices. He helps do— they have a conglomerate of 100, so he manages just around, I think, a billion dollars. With all these family offices. They're kind of mid-sized family offices, but he says, what we use is we just ask, because there's all these, the Sharpe ratio, and there's IRR and APY and whatever. He goes, just tell us the return we're gonna make every year.

Like, just boil it down to nothing. Yeah, what, after your fees, after everything, what could— what's my potential return?

What am I making? What's my high, mid, low?

Provided it does this, right? Yeah, in terms of your presentation. And then at that point, you can kind of boil it down to really understand what your rate of return would be, not the overall fund's rate of return.

Yeah, exactly. So I like that. If I'm looking to invest, I like to just boil it down. It makes it simple. What's my return? Right.

Rather than trying to understand all their fees. Yeah.

Be very clear too.

Just tell me what's mine, bro.

Over a 1-year horizon, 5-year, 10-year horizon, what have you done in the past? What was the actual— I don't want to hear the IRR of the past. I want to hear the returns to your investors over the past. It's a really great way to just cut through the BS and get down to the numbers as well.

Yeah.

What type of funds would you say are the best funds in terms of rate of return? Is it usually real estate? Is that— I mean, it seems like there's a lot of real estate funds out there. Is that like the primary, you know, focus for the majority of funds because of the return?

Yeah, I'm not gonna say best funds for financial advice, but the— there's a majority of funds are real estate funds. Yeah, because it's easy. Yeah, there's a lot of house flippers, glorified house flippers that are gonna go do multifamily, bigger buildings, whatever. Rate of return though, I mean, it just depends on the structure of the investment thesis. There's very low yield real estate funds which are great. They're just cash flow. They're going to buy really safe A-class type of properties. Hedge funds typically are looking for, you know, pretty good alpha, pretty— they're trying to beat the market year over year by, you know, 10 points if they can. Venture capital funds, right, are trying to go for these home run type of unicorn things.

Yeah.

So it really just depends on the thesis. But some hedge funds, Play it really safe. Hey, we're just, we're targeting for a 13% return. That was Bernie Madoff. Bernie Madoff, for 30 years, his whole fund was, hey, we're gonna get you 12% a year. It's 1% a month. And they, they, he gave his investors 12% a year for 30 years. And he was the greatest guy ever. He was the president of the NASDAQ. He was on the board of the SEC.

I mean, he—

He knew everybody.

Everybody loved him. It was, his story is wild. They— the SEC investigated, I believe, 2 times. They did a full— and they didn't find— yeah, oh great, we love Bernie, he's good.

Can't find anybody complaining really, so it must be good.

Yeah, and then finally it took an analyst at another firm, looked, had to look into the books and did his own audit externally. I mean, because he's at a different firm, presented the audit to the SEC and said, you guys need to go look at this again.

Yeah.

And, and then they finally were like, oh, this is a The biggest Ponzi scheme of all time. And, you know, Bernie took on it. It's that— that story is crazy.

That is insane.

I did watch it. What's that show called?

Uh, uh, Greed?

I think so.

What's that? Uh, American Greed?

Yeah, American Greed.

I think I saw it on that.

Yeah, that's a—

that's a good show sometimes because a lot of those guys, they could have been very, very, very successful in general. Like, they're pretty brilliant minds. In order to craft up all the bullshit that they're crafting up. So if they could do all that, they could have done it in the, in the right way and probably still made a lot of money, but they just stayed on the wrong side of things.

It's just like when you get a great sales guy, but he can't not lie on the phone. Yeah.

You're like, dude, you're so talented. You shouldn't have to lie.

Right?

Yeah.

It's like, just do it right, bro.

You're gonna make a lot more money.

It's like you're in blood or something. I don't know what it is. You have to listen to the podcast. I feel like they start out with a good intent, and then they just— like, I think Bernie, I think, you know, you just don't want to let—

a lot of fund managers or money managers, they don't want to let people down.

They don't let people down.

They just— and so what they do, it's like gambling or anything. Yeah, hey, we made a big loss. I'm not gonna tell anybody. We're gonna make it up over the next 6 months. It'll be fine.

Let's just get some more money. Let's do something else with the money. Let's try to create a return. And then if it fails, fails, fails, it's like, oh crap, we've just got to take this pool of money And pay people back, and then let's just do it that way.

And they just get put into this whole thing. And so I tell people, especially—

Almost too good to turn around, it seems like, right?

Yeah, exactly. So you just got to be honest. You got— and I think before you, man, if you're thinking of listening to the show or whatever, want to take someone's money, you got to really ask yourself if, if you're the type of person that can, that can handle the pressure and not kind of get, you know, seduced, right, by having access to large amounts of money. And feel like you're a deeply honest person. If you're not don't feel like you're deeply honest, you shouldn't just get— don't, don't even play with this. Don't touch somebody else's money because you're gonna go to, you're gonna go to prison. Yeah, go to jail. It's gonna be bad in the end.

Yeah.

And so just don't do it. Yeah.

Do you guys, since you have a course and you got all these students, I mean, is it, you, you know, you only target people that go out and get their licenses, or is a fund something you can put together with people have licenses but you not be licensed? Like, how does all that work?

Great question. I actually do not hold any licenses right now.

Right.

And I— we've landed 2 funds, launching our 3rd right now.

Yeah.

The licensing depends on what you're doing. My dad was great because I thought I'd have to get a license, a Series— usually a fund manager typically has a Series 63 or a Series 65, the 2 main ones. 67, or excuse me, Series 7, you can do it working at a broker-dealer. There's a couple other ones, but Series 65 is the main fund manager.

Where you can take on people's money at that point.

And you can take on investment fees, management fees. And this is kind of what we actually teased a little bit earlier. You were like, you just talked over my head. I'll explain that. Actually, I should explain that because that goes into why, what licenses. So imagine you had, let's say I'm pitching you guys a fund.

Yes.

And I'm saying, hey, our fund, we're going to target a 20% return. Okay. How is that return? So if our fund got a 20% return this year, how would it get broken out? My fund does an 8% pref. It's a preferred rate of return or pref. That's kind of the words most funds will use. So the first 8% goes to you guys. Okay? I don't make any money until you make the first 8%. Now, after 8%, we do— in my fund, we have a 2% catch-up. So, the next 2% go to the fund manager. So, the 9th and 10th percentile come to me. So, if this year we only got a 9% return, first 2%— You only make 1%? Go to you and I would only make 1%. Once we hit 10%, we then split 80/20. So, 80% to you, 20% to me. And then in my fund, actually, once I hit 20% return, we then split 50/50. So, 50 to you, 50 to me, which incentivizes me to get higher returns.

I was just going to say, there's an incentivized component there.

Exactly.

Because you're going to want to hit 25%, 30%, 40%, 50%, because then you're making more money.

I make 10% of that.

And I would rather have my money with somebody that's incentivized to make more of it, right?

Exactly, yeah.

And hit those tiers. It's almost like a sales rep. Making commission. You know, if they hit these higher numbers, you're getting paid more overall on all your deals. So it's forcing them to maybe push themselves a little bit more in order to, to, to dig deep and, and get those deals that they need to get that higher commission. It's the same concept.

So that, that performance fee— yeah, so there's in a fund, that's called a performance fee or carried interest.

Okay.

And you'll hear this on— once you hear it now, you'll start hearing on CNBC or whatever. It's a disputed topic because Carried interest, that amount right there I just explained to you, that goes to the fund manager, that 20%, that is taxed at capital gains rates. So, all these fund managers, like you saw Donald Trump and Mitt Romney, they don't want to give out their tax returns because both those guys run funds and all of their— most— that's why people go to Harvard and do all this stuff is to get that carried interest. That's where you make all your money as a fund manager. You're making— and it sounds like, oh man, you're only making like 20% on that, but you're making that on the entire fund. So if you're running a deca-billion-dollar fund, that's, you know, 2 points of that is pretty darn good, right? Yeah, right. And so, but that's taxed at capital gains rates. Trump changed it to a little bit higher, a little bit harder. It's like 25% now. Biden's probably gonna repeal that like he's repealed everything else.

Everything else, yeah.

But we'll see. Maybe he'll keep that one.

Everything.

Everything.

So the other part of that though, back to your question about, we can talk Trump and fees and stuff if you want to, but Is management fees. So that was the, you know, I talked pref, catch-up, carried interest. You also have management fees. And a lot of funds will charge, typically it's like 2% management fee. So that's taken off the top before you guys get your 8%. Now, when I started my first fund, my dad said, don't charge a management fee.

Yeah.

And so my funds currently, I charge 0% management fees. So I literally do not make a dollar until you guys make 8% first on your money, which seems pretty fair.

Yeah.

So investors like that. I'm like, hey, I'm putting my money where my mouth is. I make $0 until you guys make $8 million. So you make 8% first. And when I do that, I don't have to have a license. So if you're gonna charge—

A management fee, then you've got to come in with a license.

You need a Series 65. You're now an investment advisor. You're giving investment advice and you're getting paid for that advice. That's where you need it. Now, I say that, that's, that's in general at the SEC level. Every state has different laws and for different— there's a lot of exemptions. So if you run a venture capital fund, it's different. You actually don't need a license. Real estate funds, If you file under, it's called a 3 is what it's under, you don't need to have a license on that type of fund. You can still charge management fees without a license. So there's a lot of exceptions, but that's the general rule there. So I currently don't have a license right now, and I probably don't need one for this next fund. Yeah, it's a real estate fund because we're doing a real estate one.

Is your goal to eventually get one, or is that not something that you really care about at this point? Because you're doing good with what you're doing, you know, you're You're generating the returns that you need to generate. So what would— I mean, what would be the purpose of getting it?

Yeah, I don't, I don't need one right now. I thought I did 6 months ago, so I started to study and get all the— and it's a very nitpicky test, the Series 65 test.

I started it.

Did you start it?

Yeah. Yeah.

So I actually, I might take the test here in a minute just to— and I might actually— my brother, he got— he passed the test and hasn't done anything with it. He hasn't like officially— what, I forgot the name of it, but you like have to certify it. You file your— I think it's called a U-4, and you actually get it. He hasn't done it because there's actually more liability now on you. Okay, and so there's just a lot more red tape and stuff.

Oh yeah, like if— so I started studying the 65 a little while ago, and I decided, well, and then the Series 7 is like a whole nother level of like different rules and regulations, a little bit different even for our accounting company. So I was like, because I've always just been intrigued by finance, I'm like, man, I love You know, money, how it works, like funds work. Like I want to learn more of this stuff, right? And so I started studying, and then I started learning about some of these regulations and how much they regulate your other businesses. And sometimes you can't even have other businesses if they fall in different realms. And I was like, "No, never mind. I'm out." Yeah. So I didn't want to pursue that no more. Yeah. That was after we got our life licenses just so we could receive commissions. So I was like, "Oh, maybe I wanted the next one." Yeah. Yeah.

Yeah. We both went got our life insurance. producer's license so we could sell life insurance at one point. We never really did anything with it, but still good information, you know, forces you to study and, you know, just to learn.

Yeah, that's— I've actually— I've loved learning more, but yeah, it's a little bit nippy. I hate the regulation. Yeah, I think it's good.

There's a place for it, obviously, because if there's no regulation, then people would be raping and pillaging out here in the world, right? So regulation is good to a certain extent, but Not overregulated.

It's just always backwards, you know?

So it's just like almost disincentivizing to go get licensed because then you got all these new regulations.

Why not just do this type of fund and not need a license and then not have to jump through all the red tape and, you know, deal with all the crap that comes along with it, right?

What license do you guys have to—

other ones you have to have for your stuff? Oh, for us, we don't, we don't have to have a license, right? Like, you can be an accounting company Yeah, yeah, like we have CPAs that work here, we have accountants, we, you know, we— and they have licenses and they work for us. We don't have to have a license to own an accounting firm. We do if we market ourselves as a CPA firm, um, but at the end of the day—

Accounting firm, not a CPA firm.

Yeah, but at the end of the day, like a Series 7, like then you have to— you have to expose all the stuff even as your accounting firm, right? And there's all these new regulations, so it just wasn't even worth it.

Yep, I gotcha.

We just didn't want to bring in our businesses into the situation, you know, and, and if it If he got a Series 7, wanted to do something with it, like, oh, you can't be in the accounting industry or something like that.

Yeah.

You know, who knows what, what red tape we'd come across with something like that. Um, let's talk real quick about maybe some of the, you know, I know people that, uh, are successful or seeing success or climbing the ladder of success have their weird routines or their habits, you know, things like that. What's maybe one or two of some of the non-negotiable habits that you do on a day-to-day basis? One, to maybe keep your mind fresh, body, whatever it is, right?

Working out. I'm huge into working out.

Okay.

Just to get out. I do something every day, whether it's— it could be 5 minutes, 10 minutes. I just get—

You've got to move your body.

You got to move. You got to get out.

You got to do something.

I do like a little ab workout, even if it's a busy day. Like, I'll do something like that. But I love that. I'm not in— I've tried a ton because I love listening to those You know, like, I wake up at 5 and I meditate and then I sleep for 20 minutes and then I do this and I eat like kale and I have chia seeds and whatever crap. And I actually, I really like experimenting with all that stuff. The couple ones that have stuck, I love intermittent fasting.

That's what I do.

You do that as well? That one just, I feel like it keeps my energy high.

The first meal I eat every day is at 1 to 1:30, you know, and then I won't eat anything after about 8:30, something like that. So mine's like a 7-hour window, not an 8-hour window.

Yeah, I'm just the average. 12. I eat from 12 noon to 8.

To 8.

So I think it keeps you sharp and it keeps your energy high and, you know, going there. But I love— actually, probably every 3 to 6 months, yeah, I will test out a new something.

You'll throw something in the mix just to see if you like it, see if you vibe with it.

Yeah, the Wim Hof breathing. Yeah, love that. I've been doing that for a while. Cold showers, I did that for like 6 months, and then I switch over and I'll do like— I'll sleep in those days and stay up late. Like, I love just experimenting.

Yeah, yeah, you hear something, you're like, I'll try that. Yeah, see if it'll enhance my life. Some do, some don't, right? Everybody's got to kind of find their thing, their habits, their routines that really work for them, that they feel like that they're getting value out of, right?

Well, it never seems like they're forever. Yeah, you know, like I've had routines that some things will stick around forever, but that routine changes. It evolves as you evolve. It changes. Like, dude, I used to love going out in the morning and doing my visualizations with my coffee and stuff on my front porch.

You were talking about—

but now It's too cold, bro, so I do that shit in the shower. Yeah.

I do that for 6 months out of the year. The other 6 months, I'm in a warm shower.

I love Dan Young, my partner. He's got a good following and stuff, and you guys I think met him.

Yeah, yeah, Dan's cool.

We were on a thing, and he goes he seeks 2 hours of discomfort a day. Things that he doesn't want to do at all, and that could be answering a certain email or talking to a certain employee or—

Dealing with an issue that he just doesn't want to deal with at the moment or whatever.

Different type of workout that he just doesn't like, but it'll push him. And that was his— actually, I, I've started, I'm starting that now. So 2 hours discomfort a day, I'm gonna try that. So I'm in the experimental stage. I'm just trying out all this stuff, and I think it's fun.

I think we're a forever experiment.

Yeah.

You know what I mean? Like, you can't ever just settle. I mean, of course you can have your core habits or whatever, but you're always going to try to introduce new ones. And that's what we talk about all the time. You just start with one new habit, then Make that a habit, then introduce a new one, and just try, try different stuff. Because intermittent fasting might not be for everybody.

Mm-hmm.

You know, I started doing it on accident, because I was like, in the morning, it's like 8:50, I'm running out the door, I don't got time to stop and get something to eat, I'm coming into the office, right? And so I did that for like 2 or 3 days straight, because I was just, you know, busy, running behind, or whatever, not being able to eat. And then I started noticing You know, that I was a little bit more alert in the mornings when I wasn't eating because my body's not sitting there taking energy to digest the food, right? And then, and then you have a little bit more flexibility also with your eating, right? Because you're really only eating, meaning eating 2 meals a day. So I can eat my Chick-fil-A, you know, at lunch, and, and I'm not freaking blooning up, you know?

Yeah.

And then at dinner, I try to eat something a little bit healthy. So 50% of the time it's healthy and You know, maybe lunch I indulge a little bit.

But yeah, I've done, I've done intermittent fasting for probably 3 years, 3 and a half years.

Really?

Pretty, pretty consistently.

Yeah.

So what turned you on to that? Just a friend or you just heard about it?

I just said, yeah, I'll try it. Yeah, I'm always down to try new stuff and just shake it up. So I, and I, that one stuck.

I love it.

So why did you join the Investors Mastermind that we're both in?

Was that just kind of the network and just to get around other people for building funds and stuff like that?

I've always wanted to join a high-ticket program like that.

Just to see what it's about.

We might start one next year too. Well, I gotta join one first before I ever do one myself.

See how they go down.

And then secondly, I, I am, I'm a believer in paying for education and buying your way in. And because you'll value it way more, you'll value connections, relationships.

Definitely.

And I was looking at it and I said, well, if I can go to this event and find a number of partners, let's call them 3 partners that I end up doing deals with over the next 25 years, it'll pay for itself. That'll pay for itself. And so I thought I was in the group that was going. I said, yeah, I'm going to— it's an experiment. I'm going to experiment. I'll throw down— it's like $30,000, something like that. Yeah, I'll throw down $30,000. Let's go. And so anyways, kind of gulped a little bit, you know?

Yeah. Oh shoot.

Now I got to make this worth it, right?

Yeah.

Now I got to make it count.

Yeah.

But yeah, I think it's been pretty good.

But dude, yeah, I mean, that's— I mean, that's the thing. You're sitting here on our podcast, dude. Who knows? Maybe we'll get in your fund one of these days. And, you know, that's just how these things work. That is—

that is how it works. Right? We— just so that you guys know and have a little bit of, uh, background, you know, we did meet Bridger, uh, what was it, a month ago? Was it about a month, 3 weeks ago, something like that, in Arizona when me and Kel joined the Avengers Mastermind? Guys, we talk to you a lot about coaching and mentoring and network groups, and it's not just the coaching and mentoring, it's the people that are in the group that you're going to get a lot of value from.

The most value.

The most value is in the group of people that you're surrounding yourself with. Usually the people that are putting on the group Yes, they'll give you good information while they're there, but you're not able to get in, in, in it next, sit next to them for 3 days straight, and just kind of milk them of information outside of what they talk about on stage. So, when you're talking about joining a group that costs $30,000 to join, we like that because we know that the people that can afford to spend $30,000 are the people that we want to surround ourselves with, right?

Right.

That— those are the players that we want to do business with at one point or another, right? It's just good to have a network of individuals that are, one, willing to pay to play. They're about self-improvement, growth. And when you get a group of people that are all with that same mindset and you start networking in that group, that's when magical things really start happening. You know, that's— we, we met Aaron in the Arete Syndicate, right? And then Aaron did the Avengers Mastermind thing, and then we joined that, and then we met you, right? And you knew probably— did you know Aaron prior to that? My guess, right? So, you see how it all just starts kind of coming together that we knew Aaron, we invested because we knew Aaron, and we invested in the Everbowl and the parent company and all that. And then you did also, and then now we're sitting here in a room doing a podcast.

Right.

You know, so that's how full circle stuff can come when you put yourself in rooms with individuals that are exactly like you, willing to pay to play, willing to pay for information. And again, as Kel said, the power is in the group of the people that are there. The, the people putting it on, yes, they're very powerful, you know, financially stable individuals that are doing amazing things, but it's networking with the people on the ground.

I'll add on to that. Yeah, because it's— I mean, when I first heard that people spent money on MASH, I was like, that is the dumbest crap. They must need to.

That's everybody's first thought.

They're just like, that's ridiculous.

You're just throwing your money away at some guy that that's how he makes his money, and you know, like, he's milking you, right? That's like your first thought, like, red flag, red flag, this guy want— he only wants my money, he's not trying to help me.

And I, I, I've spent the last 2 years about $55,000 on just courses. Online courses. Because I remember when I bought my first course, it was $1,000. It was this design funnel course thingy, and I bought it and I gulped. I go, oh shoot, you know? Do I really want to part with this money?

Is it gonna be valuable?

And I bought it and I look at 6 months later, I was like, man, I landed my— this is back in my 6 businesses try, and we land a client that paid us like 3 grand to design their funnels and stuff. I was like, wow, that's pretty cool. Like that, and all the stuff direct, and I was like, wow, that course paid for itself right there. And then I went and bought another course, and like on Facebook ads or YouTube, and like, I love courses. I buy them all the time. I drop my— I just drop credit cards because I know 9 times out of 10, that's gonna—

it's gonna be a positive ROI. Well, you have the experience now. You have the data to know that anytime that you've spent money, you've been better off for it. Yeah, I've been so good. So every single time there's an opportunity to spend money, it gets that much easier to spend it. You don't even think twice about it. You're like, I've already done this here, here, here, and here. I see all the value that I got when I actually parted with money with the right intention of trying to learn and grow. So therefore, if I continue to do that, I'm just going to continue to learn, continue to grow, and continue to be more financially free, right?

Exactly.

And that's really what it comes down to.

Well, you kind of learn how to work these masterminds too. Like when we go there, we, we set different, you know, like we weren't going there to invest in any of those guys' funds. We're going there to meet people like you who maybe have a fund without fees or actually have referrals that they could send to our business or You know, just connections of other people that could be referrals. And so anyway, we go there with different intentions.

Walk me through your guys'. Do you guys have a strategy when you go to those events?

I do.

Yeah.

Yeah. What's like, walk me through the game plan?

So, I mean, some of these guys are their own educators and creators, you know, courses, mastermind developers, like they are their own and they're working with business owners. Sometimes they're just starting out and they need some of our startup accounting packages. Sometimes they're more established and they need better attention in their accounting. So we go there to get to know these people so that we can either You know, build a direct referral back and forth type of relationship, or maybe sponsor a future event for them and become part of their ecosystem. So we've we've got some of our most value affiliates doing it that way.

That's cool.

Yeah.

Yeah.

Yeah. That's really what it comes down to, man. It's but at the same time, even though we've gone into it with kind of that mindset, you know, it's not like we went into it saying into Rata Syndicate said let's invest into a franchise. You know, that, that was never the intent. But then we met Aaron, and we like Aaron, and he's got a proven track record. And so it's like, sure, let's do that. You know, sure, let's invest into the parent company as well. And then we met another individual that we ended up building an entire credit repair company off of, you know, that's only, you know, a year old or less, a little less than a year old. And, you know, we're gonna do $200,000 this month in revenue in less than a year, right, of starting that business. Did we know that going in and parting with $6,000 a month to join the group each? So, it was 12 grand a month.

Yeah.

Nope. There's no guarantees. I think the problem is people want more certainty prior to parting with money. Now, are you certain in yourself that you're willing to do what it takes with the information? You're really betting on you. You're really investing into you. Don't look at it, I'm giving you my money. Like, oh my gosh, you just want all my money, you're gonna make so much. Why are— why would I be counting your money? I should be focused on the value that I'm going to try to get in the group, right? And, and, and the network of individuals. And so, we built one company off of it, we invested into the parent company, invested into the franchise, all because we joined a group, right? And we were able to network. Now, that might not have been the initial intention, but that's what happens when you get into groups, is you get presented different opportunities. to do things maybe outside your norm, right? And that's something that we really enjoy at this point, is getting outside of our normal businesses and seeing what else we can create. Because at the end of the day, you want to build a badass life resume through a bunch of different investments, a bunch of different businesses, and just really see how far you can take this thing, right? And so, it's fun.

I think that's 100%. I love what you said. Like, yeah, that's exactly right. You're betting on yourself when you get in that course. Can I take this and generate a positive ROI on my 6 grand a month?

Yeah.

That's all.

That's not up to the individual.

No, it's up to you.

That's running the mastermind. They can't do anything for you besides giving you the information. It's really up to you on what you do with it. So, if you're— if you invest, you're investing into yourself and you're betting on yourself that you have enough confidence provided that you're given a game plan or given a path that you're willing to do what it takes in order to see that through. You're an action taker. If you're not an action taker, Just don't invest into groups. It just, it just won't work. Yeah, we've seen how many people we've seen in whether it's Apex or this, that kind of come—

A million.

And then, and then they leave, right? And they're like, I just didn't really didn't get a whole lot of value because they, all they were trying to do was just the business aspect. Like, I'm measuring my ROI on my company. I invested $2,000 a month to join this group, but my business isn't growing more than, you know, $2,000 a month right now, right? But again, they're just investing into something to take something rather than investing into something with an open mind. Yeah, you can have an agenda and a goal of what you want to accomplish going into a group, but you also have to go into it being open-minded to maybe be presented different opportunities as well. Not just think about yourself because then somebody invests for 6 months like, that group's stupid. No, it's not.

You know, there's plenty to take advantage of it. You just said this, you guys And I love for people that are action takers, that are open for opportunity, you guys launched a whole credit repair company.

Yeah.

It sounds like, right? Off of a relationship you met.

Kind of.

Kind of like that, right?

Maybe.

Maybe there's more to that story.

Well, we ran a company and part of it was credit repair already, and we were already wanting to kind of go more that way.

Yeah.

But the connection was like, oh, like this whole marketing piece that we were missing to be able to, you know, go full-time with it.

To blow it up. Yeah. And so he brought in and said, I know how to generate credit repair leads.

He needed some information from us too.

And so he says, I don't know how to do fulfillment, but I know how to get leads. And we're like, we know fulfillment.

Perfect.

Yeah. You know, we just don't know how to do the lead side of it. So we came and we swapped information and he has everything that we have. We have everything he has and now we can scale it as big as we want.

Yeah.

Right.

But I think, yeah, what I was saying was just being in the game. You guys were in the game and ready to swing a bat. Most, I think most people—

Take the bat off your shoulder.

They sit on the sidelines, they're on Twitter and they, are in the peanut gallery and they make fun and they joke and whatever, and they're not actually in the game. They're not actually at the plate swinging the bat. And that's— that was my mentality getting into— I started 6 businesses my first years of college, right? Just swing the bat. At least I'm in the game. And maybe I'll hit a single, maybe I'll hit a double. I'm gonna strike out a few times, but at least I'm in the game swinging the bat.

At least you have an opportunity to hit the home run or a base hit.

Exactly.

If you're not swinging, there's zero opportunity.

And I have plenty of friends that And this is how I used to be, was the— have you guys ever felt like the noise in your head as an entrepreneur?

Yeah.

You have all this noise. Before I started my first business, I had all this noise. Like, okay, I've listened to podcasts, I've watched the GaryVee or the crap on YouTube, and I'm like all hyped up on Tony Robbins, and I'm like, I can do it, but I'm— and you sit up at night and you're thinking around, and it's just this— I call it the noise in your head. And the only way for me to get the noise out of my head was just start doing stuff.

Yep.

And it didn't even matter if it was the right path, but if I just started—

Stay busy.

Just was busy and started working.

Put your mind on a task.

Yeah, and just started moving, what happened is you start swinging the bat a little bit and friends and family start to notice you're a bat swinging type of person. And they go, oh, if I have a friend who's a business person or whatever, I'm gonna send that person to Kale or Bridger or Trevor, right? And that's it, 'cause they're the type of people that swing the bat. And what it does, you build momentum. They call it law of attraction, whatever, but it's really just you're the type of person that's in the game and people wanna partner with people that are in the game.

Funny analogy because My son's batting coach in baseball just knows that like I have businesses and I do stuff, but he doesn't. He's just a batting coach. That's literally what he does full time. He's like, "Hey man, I gotta be talking to this guy, right? Because he keeps talking all this business stuff, and I don't want to talk that, but I know you talk that, so I gotta have him talk to you." He brought him into our office, and that was literally our credit repair process. We bought it from that guy. Bought the fulfillment, and then a couple months, and then six months later, we literally. Meet this other guy out on our table, and it's like, I know the marketing piece. I'm like, okay, we've got the fulfillment piece. We're doing the funding piece before that anyway. So it was funny how it all came together with your bat, your batting analogy with actually what happened. I love it.

Yeah, he took his kid at bat and he got it all done. His kid was swinging the bat. Yeah, and Kel's swinging the metaphorical business bat, right?

But I've known that guy for a long time. He just knows I'm a business guy.

Yeah, he knows Kel was always At-bat, swinging, taking his chance on different opportunities.

Cool analogy.

You know, very relevant in Kel's life, and then it brought it into my life as well. So dude, if somebody wants to connect with you, how do they connect with you? Like, where would they go? Is it just Instagram, Facebook, website?

Yeah, so we— my name is Bridger Pennington, so Bridger_Pennington Instagram is a Easy way to find me, just DM me on there. But also all of our stuff is called Investment Fund Secrets.

investmentfundsecrets.com.

Yeah, investmentfundsecrets.com or the Investment Fund Secrets podcast or show on YouTube and stuff. And we've got a ton of— we try to put out a lot of free content and really get into the weeds of building up funds.

Just educating to where people feel comfortable a little bit more about maybe joining a fund or starting a fund.

Yeah, exactly. So private equities, hedge funds, venture capital, that's what we focus on and do real estate funds. And we just try to teach. It's just crazy that—

Try to give good content, good information.

Wall Street just has this secret world, and it's not that hard. It's not that crazy if you understand it. And so that's what we try to do.

So anyway, so you're the, you're the bridge between Wall Street and the common person. You're trying to say, I understand what's going on here, and I'm gonna break it down to you so that you— we can, we can bring it together so that you realize that it's really not that difficult to do. Provided that you're again an action taker. Yeah, right, exactly. So no, that's awesome, bro. You've been a badass guest and you know brought a lot of valuable information today in terms of funds, which is something.

Yeah, I was learning. Yeah, yeah. This is one everyone should have their note and papers out and learning some of the preps, preps, this, why, you know, dude, that stuff's new to us. That's actually one of the reasons we did join that. Specific investors masterminds because I'm like, dude, I keep wanting to get my money in funds. I tried real estate years ago, got my ass kicked right before '08. And then it's like, so you're a little gun-shy. You're like, I need to know a little more before I jump back in. I'm doing these other investments, but you know, so learning that terminology is actually still pretty new to me. Yeah.

So, so if any of this went over your head, don't worry. Some of it went over our head too. That's why he has a, that's why he has a podcast. where he can drop more information to where he can, you know, dive deep in some of these concepts and how they work even more so than what we did on the podcast. But no, dude, we appreciate you coming into the office. I know we changed the time from 2:30, pushed it back on you, and you were good about it.

That's perfect.

You missed the tee time at the golf course.

Well, I was gonna miss it anyways unless something crazy happened, but it's probably a good thing because, man, it's—

You've been golfing too much lately.

Bridger's like us, bro. He's gonna choose Business over golf.

Yeah, you know, 18 holes is long.

So yeah, this, this was only about, what, 4 holes worth? So you can probably go meet with them. Yeah, in the back 9, and then you can get your 9, they get their 18, and you get the podcast done, and everybody, everybody wins. So, uh, man, we appreciate you coming on. Um, it was a badass episode, guys. If you got value in it, make sure you drop a review, um, share it with somebody that you care about. Other than that, have a kick-ass day.

Bye.