How This Surgeon Out-Earns His Salary With A Real Estate Side Hustle

What's up everybody? Welcome to capitalism dot com. Hey man, this is a really good one. This is so good. It's, it's. Is epical a word? Is C. Money is shaking his head. He's saying, no, it is not a word. It is not a word. So it's not epical. Well, this is really good. You see, I think in today's fast paced entrepreneurial world, we're so demoralized when, when we have a punch in the mouth, meaning like someone doesn't like us on the Internet. That's how thin skinned we are. And today is such an amazing reframe. If success is your calling, if success is the thing you desire most.

This might be one of the most valuable hour ish of your life. And the reason for that is we are, we're spending an hour with a friend of mine in Austin. His name is Tom Burns. He's sitting right here, right now. And what we talk about in this podcast is.

Just such an important framing of success, of defining what it is that you want up front. Playing for the long term, doing the right things for a very long time and not looking at the scoreboard, which is such a difference from what we are fed in the media. And by media, I mean Facebook ads, YouTube, at anywhere where we are looking for short term results. Even I, the author of the book 12 months to 1 million. That's an audacious short term goal. I might even be guilty of this a little bit. So I was challenged to think longer term, to think bigger, to do the right things, not the expedient things. And this hour with Tom had an impact on my life and I know it's going to have an impact on yours as well. So when you get a tremendous amount of.

Value from this, please let me know. I'm Ryan Daniel Moran on Instagram. Instagram. All right, enjoy. Hey, Tom.

Howdy.

Welcome.

Thanks.

I've been looking forward to chatting with you.

The thing that is kind of amazing to me about you is you still practice medicine.

Yes, I do.

But that is not where you've made your wealth.

That's correct.

Where did you make. Actually let me start this off by just saying where did you make your money?

I made, I made my money in real estate.

And, and can you expound on that? I mean, like, how does a doctor who is practicing make out, earn his salary? Right. And what is essentially your side hustle?

Yeah. Yeah. Well, when I was in training, it was a long time ago, I was actually in training, saw what doctors were doing, they were making fairly Staggering amounts of money, at least compared to what I was used to. But they were complaining as much money as they were making. They were complaining about loss of time and loss of control and things like that. And these are the guys I was supposed to emulate once I got out of my training and went forward on my career. And I didn't want to be complaining like that. So I started looking for other things. I looked at a number of, a number of options, settled on real estate because it fit my, it fit my lifestyle perfect.

What other options did you consider?

You know, I looked at, I actually was back in the old, old days a long time ago, the HMO craze. There was where everything was going to come in and there was going to be, it was going to be run by health maintenance organizations. So I thought, well, if you can't beat them, join them. And I spent a few months deciding on that and realized I would just be a corporate guy and there was no, no upside on that. I looked at the stock market and decided that it was just way too much to have to learn. And I didn't like, I didn't like speculating and gambling. I liked kind of a more risk, more risk mitigated way to make money. So, you know, I got introduced to some money concepts because, you know, I had no training, no training in school at all about money. So I got some, got some concepts down, kind of started learning things and just explored and through books, reading and seminars I kind of found out about real estate. And you know, that's something that moves a little slower and you can do it when you're doing something else. So you can do it with partners, you can do it part time, full time and it moves a little slower. So that's why I settled on real estate.

So what I, what I know about you is, is you own half of Texas, but, but obviously it didn't start that way, right? So, so you're in training, then you go. I mean most Doctors are running 80, 100 hour work weeks. So what was the first deal that you did?

First deal was.

Actually not part of the investment. A couple of land deals. I bought some property, held it for a while and sold them. That's not my usual routine now, but that's kind of how I got into the game because there was, Austin was coming, I'm in Austin, Texas and Austin was coming out of foreclosure. So there were lots of great deals, Austin on the lake. So I bought some of those, sold one to a famous bicyclist and so, but when I started, I wanted, what I wanted was I wanted money coming in that I didn't have to go work for. You know, in order for us as physicians to make money, you've got to do surgery, you got to see a patient, you got to have your time involved in doing something to get paid. And I, I found out that, you know, the better I got, the busier I get and the busier I got, the less time I would have. So I didn't like that. So I wanted income, I wanted something coming in that wasn't correlated to medicine. So I was in, I was in Austin, Texas, kept it local and I started buying student property. And that was before it became, became exciting to the larger folks. So I quickly bought up a bunch of student property, cut my teeth a little bit. As, as things go, people start finding out you're in the industry, they start calling you with good deals and they start calling to partner. And so I had a few partners on some smaller deals. The deals got larger. And then partway through my training, my real estate training, partway through my real estate training, I had a friend who was a real estate developer and I really liked what he did. I said, I like what you do, you know, can I learn from you? He said, sure. So I worked for him for two years for free, doing land deals and build to suits, bank deals. And we, that morphed into a rather large real estate complex that we built together that we still own today.

So and today you're buying mostly apartment buildings, right?

We're actually correct, mostly. And we're mostly developing, so we develop larger apartment complexes now.

And so what is, what does a traditional deal or structure look like now?

It's typically, it's typically about a $40 million deal, about 240 units on average. These are class A apartments. And it can be, we, we are in, we're in three states, we're in New Mexico, Oklahoma and, and Texas and looking at some deals in Louisiana and Florida. But we pretty much are staying home because there's a lot of opportunity here, a lot of jobs coming to Texas. So you know, we'll usually, we'll either be the developer, often we'll joint venture partner with another developer. We'll bring the equity, the asset management, we'll bring the debt. So my partner and I are, are kind of well versed in a particular type of government backed debt. That's really nice and so makes us popular with some of the developers in the country.

So here's what I want to know right now. You're coming out of school today. Most doctors are covered in debt. Exactly right. I mean, they're just completely covered in it. And most people don't know that. They just know how much doctors make. So everybody thinks doctors are rich. You come out, probably have student debt. I'm assuming you're working 80 to 100 hours a week. How did you have the excess to start doing this?

I. Passion, I think.

Did you say passion?

Yeah. Had to be passion. Stupidity, one of the two. And so I really wanted this. Now I was actually building my practice, loving what I did. I'm a orthopedic surgeon. I'm in sports medicine. I was a frustrated athlete, so I'm perfect. I'm run with my people. But on the money side, I really enjoyed the real estate. I love. I love buildings, and I love the development and construction process, and I love every part about it. So my. The reason I started small was it was evenings and weekends, truly evenings and weekends. One time I was reading, if your listeners remember, this thing called a newspaper back in the day, on Sundays, there was a classified section. It had real estate in the back, and there was a little section, apartments and condos. That was down in Texas, down the University of Texas area. And I was zeroed in on student housing. And I read an ad, and I told my wife, I said, I'm buying this tomorrow. She said, how do you know? I said, look, I've been in this market. I know I like the back of my hand. Somebody's either underpriced this thing or there's something badly wrong with it. So I was seeing patients in my office, saw patient, said, I'll be right back, Slipped out the back door, drove down eight blocks quick, went through the place, made an offer, got it accepted, and came back and kept seeing patients. So that's how we did it. Mostly weekends, morning weekends, early mornings in the evenings. And then as my real estate income started getting more prolific, I was able to sort of cut back on days, and that scale just kind of changed like this.

And you're still practicing today, correct?

I. I did surgery this morning.

And spreadsheets this afternoon.

So where do you spend more time now on the real estate business or practice?

Yeah, I'm practicing two to five. I only work mornings, and it's two to five mornings a week, just depending on where I'm traveling, because I travel to a lot of seminars and masterminds and places to keep learning. So just depends on the week.

Okay, so here's what people who are watching or listening don't know about you.

You.

At least when I've interacted with you, you're present. Your stress levels seem remarkably low, and you have time. Like, you've got a full calendar. But.

When we get together, you're like, well, I'm free at this time. Like, you've got time to meet up for breakfast or have coffee or do a podcast interview. I mean, most people who are just one of the two things you are do not have time and are usually worried about something. They're thinking about the next surgery, they're thinking about the next deal, they're thinking about the next sale, they're thinking about the next bill. So what. What the heck are you doing different?

I think I'm just lucky, you know, I love what I do on both sides. I could have quit medicine 10 years ago. That's an honest statement, right? Literally. Right. Kind of.

Right.

Mid. Mid recession, I probably could have checked out. But I love what I do. I see people. I like people. So I see 15 to 20 people every morning when I'm in town, and I love it. You know, I see people that I haven't seen for weeks or months or years. And we hug sometimes we. We shake hands. I'm half so happy to see them. Some of them have become really close friends, and I literally met them walking through the door saying, hi, I'm Tom Burns, you know, your doctor, and asked them what their knee problem was. So I love that. And it's hard to get that experience, to be able to meet new people all the time in the real estate world. There's the excitement of putting the deal together, and, you know, it's. It's. I love it. So I think I enjoy what I do. And it's just focus, you know, you just. You just have to focus and prioritize. So I have certain priorities that I like to follow, and if they don't fit in those, I will. I will push them away until I've got extra time.

What things do you prioritize?

It's family. Family first, easy. Family first. Even as a physician, before I had much real estate money, I would take time off as a doctor to go read to the kids when they were in first and second grade. And I'd play with. I was. I was home when they got off the bus, which is a big deal. I would leave early in the morning. So my strategy was to work early. I would do things in the morning. I was there when I got off the bus, and I'd jump with them on the trampoline. So my, my 30 year old daughter's friends still call me the fun dad to this day. So I figure that's my success.

So this is really interesting to me because you've out earned.

Most people in your profession. You've out earned most people and you have time to jump on the trampoline with your kids even when they, even 20 years ago. Not just now. Not just. You killed it.

Right.

And now you can have time. You were having time while you were in the climb, while you were in the grind of it.

Right.

So could you, could you comment more on reserving that time for what you deserve, what you thought was most important? Most people don't do that.

You know, I just, I didn't want time to fly by and miss something I had seen. I always wanted to be with my kids and with my wife and friends. That's where I get, that's where my heart swells. I really enjoy being with people. So that was already a mindset. And I'll be honest with you. I sat in front of a doctor that was 10 years older than me and he sat down, he was one of the busiest guys in town, had a huge practice. And so business wise, you would be envious of him. He sat down with me and he said, you know, I spent 10 or 15 years building my doctorate practice. He said I didn't have much time for my kids. Now they're teenagers. I'm trying to establish a relationship and it's not going well. And he was, you know, he was half crying when he was saying that. So that just sort of put the dagger in the heart and just made sure that I would never, I would never take a business opportunity and prioritize it over family. So there's a lot of stuff I've missed just because of that, but it worked. You know, maybe the karma was right, but that worked for me.

How old were you when you started investing?

I was. I gotta think about this. So, you know, we're doctors, so we, we get out of. I got out of college at 22 and then it was 10 years of training, so I was 32 and then, so I was probably 34, 35.

Okay.

So too young.

So I'm, I just turned 32.

Yeah.

And I would like for you to give me advice for where I am right now because the market has changed just a little bit.

Yep.

In 30 some odd years. How, how, how long you been investing?

25, 20. 25 years plus 25 years. Yeah.

So obviously Austin is different, which is where we're both based but the whole industry has kind of come alive. So would you do anything differently? What, what advice would you give to a 32 year old who is in a high paying profession.

Yep.

But also wants to. The wealth that you've generated. Yeah.

So I would almost question back. Well, how do you define wealth? You know, so if you define wealth as time and relationships and family and peace along with money, I mean, money is an important part of all that. We need that. But, you know, you have to decide truly what you want. And so what I wanted was time, which meant time with my family and time to travel. Huge hot button for me. And so that drove me. And so I would say focus on what you want and why you want it first. Figure out why. If you want the money. If you want money, you want to be successful, figure out why. Because money's just paper or metal. It's what it buys for us and what it does for us. So for me, it bought me time. It didn't buy me trinket. I drive a truck. It's sitting down in your driveway. I don't drive fancy cars, but I'll travel at the drop of a hat. I still get excited getting on Southwest Airlines. So. So that drove me. And, and so I would, I would say figure out why you want to be wealthy. And then I would focus more than I did as a, as a young person. I bounced through a lot of stuff. So a lot of rabbit holes, a lot of diversions.

What do you mean? Different strategies that you followed?

No, I did, you know, I did different things. I was marketing director for a lighter company and I was selling lighters.

While you were practicing?

Yeah. Well, it's because I had real estate income that I could leave my practice. I was at the, I was at convenience store conventions hawking magnetic lighters to all the convenience, you know, to the seven elevens of the world.

So you were, you were a serial entrepreneur for, for a few years while you were kind of ramping up?

I think so. I think so. It's either unmedicated attention deficit or serial entrepreneur.

Well, there's plenty of research to say that they're the same thing.

Yeah. True, true.

So you wish that you hadn't followed all those rabbit holes and gone into the thing that was producing results.

I don't wish I had, but I would probably tell me to focus. I mean, I think each one of those has taken me down a path where I've learned another lesson or I've learned something that's made me who I am today. That's an honest truth. I've run into a lot of detours, made a lot of mistakes, and it's molded whoever sits in front of you right now. And so. But the people that I've seen have been successful, have focused on their time and their reason or their noble cause for why they're trying to get out and do something in the world and tried to create that income. So they focused on that, prioritized. And from the monetary standpoint, I just tell people, focus on passive income. That's different from my world as a doctor.

And do you equate passive income and real estate?

Absolutely. Absolutely.

So would you call it the best vehicle for that?

It's been the best vehicle for me. There's lots of ways to make money. A lot of the wealthiest people in the world harbor or made their money in real estate. 10% of the world's Fortune 500 made their money in real estate. Of course, a much larger portion harbors their money. It works for someone like me. You can set it up to where you are completely passive, where you can go be a doctor eight hours a day if you want, or be a podcaster or serial entrepreneur. Your real estate will just click along without you. If you want to be more and more active like I am, you can do so.

So would you help me unpack the, the actual putting together of the deals that you do?

Sure.

I mean, it seems to me that, I mean, now you're doing 240 unit, or is it $240 million? I don't even know. 240 units, roughly 240 unit apartment buildings. My guess is you have funding sources, which is probably a combination of private.

Private partners and also like more public sources or banking sources. And then you're putting together the, the developer and then, and you sit as the owner who is basically overseeing that. Like a business.

Right?

Do I have the nuts and bolts of it?

Yeah, it's, I mean, it's, it's really, it's, it's a structured business and in our, in our firm, we've got, there's, there's seven of us that are kind of running things. We've got, we've got most bases covered. But yeah, you'll get, you know, if you're, if you're going to build something, need something, somebody to build it. So you got to hire that person in the developers to get, to get the, you know, the approvals in the plat. You know, you got, they got to sit in front of city hall and listen to that stuff for a while. You need debt. So that's the public that you were talking about. And you can get debt from multiple sources all the way from private hard money lending to government backed debt. And they have varying, varying rates and benefits and risks, each one of them. So and then, but there's always, there's always the equity portion. Equity or down payment. If somebody's bought a house, they had to have a down payment of 10 or 20%. Well, we usually have to have anywhere from 18 to 35% equity depending on the type of project and the type of debt. So that's what we do as sort of the general of the project. We put all of that together, we put each of those pieces together. We have a, you know, going back 20 years, we have a rather long list of investors. What happened to me was I started doing projects that were too big for me, so I just needed more money. So I, I went to other people and said, will you invest in this? Well now it's, it's called syndication. I didn't know I was a syndicator back then. So you know, so we syndicate. So basically everybody buys a pro rata portion and we gather the money from other people through securities and Exchange Commission regulated manner. Um, it's called a 506 fee or 506B. And so you've got to do things by the book and you, you can only advertise on certain things. So you follow a lot of rules. Put the money together, put the debt together and then the project.

So you're, you are raising money for the down payment? Essentially.

Essentially, yes.

And then you're, you're financing the, the remaining 80% or so.

Right.

Does when you do a deal, does it cash flow from day one?

Depends on the deal. If you, if you acquire. And you said, you know, at the beginning, you said, hey, you buy apartments? Well, we certainly have bought stuff in the past. We're kind of at, you know, we're kind of in the ninth inning of a, of a nine inning game here.

And so meaning, meaning the economy's been.

Good for nine innings, maybe, maybe 13 innings.

It does feel like we're an extras. Yeah, extra innings and we don't know when the game's gonna end.

Exactly. And so, and so if, you know, if you're investing your personal money, it's, it's easy to go take a flyer. But when you're investing other people's money, you have to be kind of careful. So there are plenty of people out there acquiring things and that is, that is their niche. So we're in, we're just in a, we're in a smaller niche. There's less people that develop and there's less people that use the loan product that we use. So we're in a smaller sort of blue ocean as opposed to the shark infested red ocean. So we're in a small, smaller arena. Most of the people in Texas know who we are. And so we have ended up developing and so development still has, there's still a nice gap between cost and value once it's developed. So rather than buy something, improve it and improve the cash flow, we take a piece of dirt and completely improve it and create value. So that's. So sometimes, sometimes there won't be cash flow for two years. They're getting accrued payments, they're getting, they're getting accrued interest. Then at about two years we start.

Yeah. So. So tell me if I'm getting this right. So you are, because of where the economy is, you put most of your emphasis into creating value with, on the build side of things. And they don't always cash flow from day one. So your investors are getting a preferred rate of return that is held until it cash flows. Right. So you aren't bankrolling all of these payments, but your investors are still getting their return. And then the business starts to grow and you're in it for the long term. So if it doesn't cash flow for two years, that's just fine. Tom is going to be okay.

Right?

The business is going to make it.

Exactly. And our investors are, they're used to it, they're educated and you start laddering them up. Soon things start cash flowing and then you start adding stuff to others and it's just laddering formation.

Yeah. So at what point when you were, when you were diving into real estate did you start to out earn your, your, your salary as a doctor?

Gotcha. Yeah. You know, at first I was just doing it, you know, and my stuff did cash flow right away because I was buying existing student property and bought some mobile home parks and some other stuff. And so it was, it was cash flowing. All I did. I'm a big compartmentalizer, so I didn't use any of that money. So all I did was turn the money back in and either paid off debt, which maybe I wouldn't do now, depending on the economy, but.

Either paid off debt or saved up enough that I went and bought something else. And so eventually that little company that had its real estate started making enough money to buy other stuff. And so it was Good. For a while, I just didn't notice it. I was busy building a practice as a doctor, enjoying life, doing both. I kind of had this dual life. It was probably about 10 years, you know, I, because I kept putting it back in the business, didn't use it, put it back in the business. And after about 10 years it took a, you know, had this nice smooth low curve and then just took this logarithmic ramp at about 10 years. And that was about 10 years ago. It just did this. And I'm not 100% sure. Why haven't gone back to check it because I don't really need to know. I was just happy with the result.

Yeah.

So.

One of my heroes, Gary Vaynerchuk, will say, he's right there. He will say you have to be willing to punt the first 10 years. You have to be willing to just say, what am I happy doing for 10 years? Because I'm probably not going to see that big spike for a decade. Most people aren't willing to do that. And I know I've made this mistake myself trying to cash in the chips too early, trying to force something to happen. And you slow down the long term process because you're, you're taking chips off the table rather than just letting it kind of bankroll over and over and over again. In, in our world, the kind of. The next entrepreneurial generation is very impatient.

Yeah.

And we want results right now. If something doesn't take off right away, we think it's a failure. What advice would you give to the next generation of entrepreneurs?

I would tell them it's great. It's nice to have a big hit. It's great. It's great to hit a home run on the first swing, but using a baseball analogy, it's great to slam a home run on the first swing. But a lot of singles will win the game. It's that analogy of use of the rocket ship. Rocket ship burns up 50% or more of of its fuel in the first mile or two. Then the rest of it is burning very little fuel to take it all the way to Mars or wherever it wants to go. So if you're, if you're looking for excitement and a nice toy and, you know, quick hits, it can be done. But then you got to do it again. So building something that will create momentum and staying power is, I'm telling you, it's liberating and it's blissful. The day I realized that I was making more money than I spent to live was I was just kind of in my house, I just realized I don't have to do this anymore. It's a liberating feeling. So.

Just doing it fast and having to do it over and over again requires you to ramp up your energy, your intellect and your passion and your energy. I said energy twice to get it done. So be patient. A little bit of deferred gratification, if you can do it, is, it's, it's really, it works. Works well.

Yeah. And you can only really do that if you're enjoying the process. Right. You, it's so hard when you're getting into an industry or a sector that you don't genuinely like and the results don't come right away, you quit.

Sure.

Only 100% of the time.

Right.

And you genuinely enjoy real estate. I mean, you don't, you don't not only have to not purchase practice anymore, you don't have to do real estate.

I'd wither up and die if I didn't do something.

But you continue. But you continue to do so because you enjoy doing it.

Yeah.

Yeah. What, what else would you say to the, the next generation of entrepreneurs? And, and I really want your opinion on this because you have the lifestyle that a lot of people really desire. Even though what's flashy is, is like working yourself to death. That's, it's like popular to work yourself to death.

Right.

And you've been an extremely successful entrepreneur and a doctor, and you still do both, and you've got time.

Yeah.

And you live a great life.

It's crazy.

So I, I want to, I want to get as much out of what you would say to the, the next generation.

Sure. You know, I think lucky, blessed, however you want to put it. You know, I've worked at it, but, you know, I guess things have gone my way. But it's all, you know, it's persistence. You know, it's the, the persistent guy wins. Stick with it. And, you know, if you're in something that you don't like, as you mentioned, you might need to find something else because nothing's, nothing's more fun than doing something because you love it. You know, I mean, I've got 10 years of playing doctor because I enjoyed it. It's been a great run, and I plan on doing it for as long as I can. So try to find something you like. You know, passion doesn't always translate to profit, but passion, perseverance, and energy oftentimes can. So.

You have to decide if you want the excitement of quick wins or you want the Liberation and freedom of having choices in life. And that's when you, as you mentioned, when you say they want my life. Not every, you know, the grass is not as green as it looks across every fence, but I'm certainly quite happy with what I've got, and probably not as cool as you make me out to be, but, you know, be patient. Be patient. Find some. Something. Something will run across your path that you weren't expecting that might take you on for the next 25, 30 years. Be open, meet people, learn new things. That's why I went down all those rabbit holes. I didn't know if I wanted to be selling lighters or doing mobile homes or, you know, I did some nutty stuff. Um, so it just be open. Be willing to learn, be willing to make mistakes and be patient because it grows, you know, especially if they're a millennial now. If you're 32 years old, man, you could be 42 and blow away anything I've done.

Okay. So that's actually where I wanted to go next, because you were. You started when you were really 33, 34, 10 years to really start to see that exponential curve.

Yeah.

I just like to ask this question. Do you consider 32 young now?

I do. Yeah. I tell guys my age that they were old when I started practicing medicine, but now they're young because they're my age. So I do. And it's all perspective, of course. You know, 32 is just right. Right now to you. But, yeah, in 30 years, it'll seem younger, so. Because there's a lot of water going to go into the bridge, and you're gonna. You're gonna learn a lot over the next 30 years.

Can I. Can I ask how old you are now?

I'm 60 now.

You're 60?

Yes.

You're in great health. You're in great shape. You had two amazing careers. What. What is the secret to longevity?

Golly. You know, certainly. Certainly cutting out. Yeah. We can't all eliminate stress, but have something that you really like. I liked as you know, I like to go out and I have to be in the wilderness. I like to be hiking, hunting, doing things like that. I look forward to those sort of things. I exercise. I went to the gym today as well, so. Exercise, good family. I'm with the Same wife for 35 years. Two great kids. So it may either get lucky like I did and have great family.

And. I don't know, I guess a mission helped. A mission can sometimes either. Either make you. Make you really calm and enjoying what you're doing or it'll keep you on the edge of your seat all the time thinking you're not doing enough.

Yeah. So I would love to comment on that, because most people who follow my work know my. My mission or my. My dream is to own the Cleveland Indians.

Yes.

And when I was younger, that was very stressful for me because I didn't know how.

Yeah.

And now it is calming to me because it's such a big dream that I almost relax into where I am right now.

Right.

And it's. And it's totally okay for me to be where I am. So when I have one of these, like, little dips and by, like, I had. I had a business that. One of my business lost me quite a bit of money. Right. And it was a lot of stress and sleepless nights over that business not going well. But when I zoom out and I'm like, I'm sitting in the owner's chair, it's like, oh, that's no big deal. It's like, it's no big deal to have that. That one major loss.

Right.

Because there's going to be all these fun wins along the way.

Exactly. Exactly. You.

You said this. This is what I'm internalizing as you're talking when you say, what is the thing that you would. In. You would do just because you enjoy it. You talked about being in the wilderness and hiking. For me, it's writing. It's very recharging for me to write. And the thing that I'll do, even if I never get paid for it, is record podcasts and content on the Internet. And what I'm processing as you're talking about it is you didn't look at the result for 10 years. You said, I'm going to keep doing this. And then you kept practicing, but you kept the real estate going for 10 years. And I've been guilty of not doing that in my career, of I'm looking at the scoreboard as I've wondered, when does the payoff come? And one of the things I'm learning from you right now is to just stay in that zone of creating and giving and growing and enjoying the process.

Right.

And then look up in 10 years.

Exactly.

And see where you are in 10 years.

Yeah. And you could still look at little goals. I did little things like, hey, my utility bills. X. You know, hey, look at this. I covered my utility bill for the year. So that's paid for, you know, car payments. So you can little things. And I. That was once a year. I'd Kind of look at things and see where I am. I'm, yeah, it looks like I'm growing. And then just keep my head down and my knees high, you know, just keep moving.

You have two kids who are in.

Their 30s, I believe one's 27 and one's 30. Yes.

Okay.

So that ages me.

What do you, what do you try to pass on to them based on what you've learned?

You know, just a couple of short rules. You know, I just tell them both. I said, always give 100%, whether you're taking out the trash or you're taking the biggest test of your life or doing the biggest athletic event. Always if you give your best.

You know, whoever's around, they're going to get your best. So, you know, perfection is a myth, but striving for excellence is always something that everybody can do. So and just to be honest, it's just a lot easier. It's too hard to remember the lies and things like that. So, you know, so give your best, tell the truth, shake hands, say thank you and, you know, and, but keep growing and learning stuff. So that's, hopefully that's taken hold. Neither one of them is very entrepreneurial yet, but the student arrives eventually, so teacher will be there when they arrive.

So that, I'm sorry to keep hitting this point, but you have a 30 year old and you're like, oh, well, whenever it's time. And most people, like, I know, knowing my audience, most people who have not started by the time they're 30 think that they're too late to the game.

Oh, man.

And you, you're just like, if they want to be entrepreneurs, there's plenty of time. You started really at 34?

Yeah.

You didn't even count your, your chickens until you're 44.

I've, I've got it. I just need you to say something about that. It's, it's such a different mindset than what we are constantly bombarded with.

Sure, sure. And then that probably causes a lot of angst. You know, it's got to be done now. So now look at, you know, look at me and other, you know, Colonel Sanders, the 65 year old story, right? He started Kentucky Fried chicken at age 64. 65. I started at 34. 35. So there's, you're going to run across so many things in your path. So to think that between 25 and between 22 and 32 that you have to make your mark in life, you're going to find out that a lot of people have done it afterwards, a lot of people started second careers, found their passion later or found their way to make. Make their money or do whatever. Whatever their version of success is. So it's a long life. You know, stay healthy, stay present, you know, and just always look for it. But don't be nervous about the fact that you haven't found it yet. It hasn't found you yet. You just have to be.

That makes a ton of sense to me.

Yeah.

And I found Tom. Like, my next question was going to be, okay, what would you say to the person who hasn't found that yet? But then you said, stay present, stay healthy. And what I've discovered in my life is whenever I'm in transition, if I focus on money, it eludes me, but if I focus on my health, my relationships, my mental health, my happiness, then the next opportunity and the money shows up.

Right. And is part of that focus. Is it reading, being around other people, getting to different groups, things like that? You know, that. That can be part of your mental health, you know, associating with other people. And that sometimes triggers something.

Yeah. Do. Do deals and opportunities find you now?

They do now. I mean, we still look, but they find us. You know, my. My partner, my current partner of 10 years that. This company that's building all these apartments, he found me. I was speaking at a real estate conference in 2001 in Phoenix. You know, you never know what stars are going to cross. So literally that he said, this is Tom Burns. He's from Austin, Texas. I was speaking for Robert Kiyosaki. He came up with. My guy, came up at the break, said, we're moving to Austin. Can you be our contact? Well, he's my partner that's over there in the office working right now. So. You just never know who you're going to run across. Life has a lot of ways of touching you in different ways.

I can't tell you how much, like, liberation I felt in you describing that. Because I'm worthless without partners.

Yeah.

Like, I'm just horribly worthless without them. And what I internalized when you were saying that was, if you stay in your zone of genius, the right people show up.

Yeah.

You don't have to go figure it out. Just let it. Let it happen.

They will come and it will happen. Absolutely.

You know, tell me about your relationship with Robert Kiyosaki.

Oh, gosh. Robert and I have known each other for 22 years now, which is exactly the amount of time his public. His book's been published, and the story is. So I'm Famously or infamously, the guy who bought the very first book that Robert Kiyosaki published. Sold. Very first book, sold of rich dad, poor dad, unknowingly.

Right. Like you didn't know you were the first customer.

It was literally, it was here in Austin at a car wash. Bought the book, loved it, bought the other dozen that were there. And you know, we ended up calling the number on the publishing page just to find out about this author because we, me and a few other friends, I had given it to some friends, we thought it was one of the best books we'd ever read in our lives. Looks like we had good taste. So we called the publisher and when we, when somebody picked up the phone on the other end, it was Robert Kiyosaki, the author. He had self published the book. So we went out to meet him. We got, we formed a relationship and so we've been friends ever since.

You know, we call that today. Tom.

What's that?

We call that influencer marketing.

Yeah.

You're the influencer behind Robert Kiyosaki.

That's right. That's right. So. And he's done pretty well with that book. So.

Yeah. And you continue to have a relationship. What is that like now?

So I see him three or four times a year. We have a mastermind get together. There's about 35 people worldwide that come together with Robert and, and so it's his advisor, it's his advisors meeting. So I'm privileged to get to go to that, which is really great. So that's three and a half days of really deep learning. And often we don't talk about money. It's usually spirituality teams. You know, it's how to, how to teach. Robert's on a mission. Robert doesn't need any more money. He's on a mission to teach the world about financial education. He's on truly on a mission to elevate the financial well being of mankind.

So in Robert's last book, book, he made some interesting spirituality statements. I'm curious what your conversations have been with him about spirituality in the last few years.

He's always one to want to keep learning. He's always been a reader. He studies his books. If you look at his books, they are tabbed, multicolor coded and he truly studies them. So he has decided to study his own spirituality because he, he will just tell you he wants to better himself. And so he works on it. He meditates. Meditating for two or three years. He works out with a trainer that's actually sort of a physical Spiritual trainer at the same time.

Yeah, everybody's growing so he continues to grow himself and he'll tell you that.

Do you share in his spiritual beliefs?

I do. Well, I share an, a spiritual belief. I'm not sure if it matches Robert's.

Yeah, but would you be willing to share yours?

Yeah, I mean I, I mean true in spirituality. I mean I believe there's a force out there and, and something that's governing all of us. I just. Because I know and I'll just say that, you know, if I pray, I'm praying to something. It's usually not for me, but it's for somebody else. And so I know that I believe in something. I know it's out there. I'm not so sure. I'm not so sure. Man's interpretation of what's out there is always correct, but I know there's something out there. And so I think that if we're going to be good stewards of being here on the earth, we need to, you know, we need to try to embrace as much of that force as possible and either bring it to others or share it with others.

Well, we've talked money and religion, so I guess we got to go.

Sexy politics for sure.

Roberts pretty public about his political beliefs. I actually want to take a little bit of a different shift. You mentioned that we're in kind of the, the nine inning game or the 13 inning game.

Yeah.

I'd be curious on what you think happens over the next five years in terms of the economy. We're at record highs. Things feel great. I studied economics. I can't find any evidence of a reason for a slowdown.

Right.

And, and I thought there was six or seven years ago and we just blasted right through it it seems. So I've given up trying to make predictions because I've never seen a bull market like this before. So I'm would like to rent your prediction instead.

My crystal ball is pretty fuzzy too. And you know that old story, Harry Truman saying we need a one armed economist because the guy says on one hand it's going to go up and the other hand it's going to go down.

And you hear the same thing now it's going to be Armageddon. You know the, the, the, you know, the mortgage backed securities and derivatives are worse than they were 10 years ago and so it's going to be Armageddon. And others say it's just going to be a blip. I can't see any reason why it would, why it would crash bad. So I'M not smart enough to know. I've only been around 60 years. I think maybe I need to be around 500 to try to figure it out. Nobody can predict the future, so I don't know. And so, so our philosophy is to prepare for something that's going to be at least as significant or more than what we had 10 years ago. And so we will tell our investors that if we're right, at least we're as protected as we could as we could make it. Now if we're wrong, we're all going to make more money than we thought we were going to make. So that's the way I go at it.

How do you prepare when you're putting a deal together in case the economy.

Now there's a, there's multiple ways to hedge in our world we use really long debt, we use fixed 40 year debt. So I see, yeah. So long fixed debt, it's low, you know, we're still at historic lows. So you know, low cost of money fixed for 40 years. We try to, we try. You know, you always do a pro forma, you make predictions on what rent rates are going to be and occupancy and things like that. So we'll typically try to stress test our properties at, I mean our projects at negative at falling rent and falling occupancies. As long as we can make debt coverage, as long as we can cover our payments, then we know where our break point is and where we'll be safe. So we can't armor coat the thing but it's as much hedging as possible.

So when you go 40 years, is that to get the payment as low as possible so that in the event of a slowdown you're not, you're not hurting for short term cash flow.

So two reasons, if you, if you look back to 2008, 9, 10, you know the problem, the problem was credit, right? Credit and money. And so there were people that had kind of typical 10 year or 30 year notes on a 10 year balloon and their, their properties would come up for refinance right in the middle of the recession. So they could have had a well functioning property, cash flowing, doing well, they couldn't get debt, nobody was issuing debt back then unless it was a 50% loan to value. So even 10 years is sometimes not long. So that's considered kind of a long.

Fixed debt. Right now the 40 is as you said, lower. You know, if you amortize it over 40 years, your payments are lower, it increases cash flow and you know, we Just basically take, you know, debt. Debt and property taxes are your two main variables and we just wipe out one of them so that we only have to worry about property taxes and keeping the place full.

Yeah. So that is a very interesting spin on it. Whereas kind of your traditional mindset would be go for shorter term lending for the lower interest rate, so you pay less debt over time. And you're saying go as long as.

Possible for ours because our, you know, ours are designed to, they're designed to hold in cash flow and refinance. We get all our money back after a number of years and we own the property for free.

Is that, is that you're doing a kind of a fix and refi and then taking your principal off? Yeah, and then, and then writing that over the long term. I like that model.

Oh, it's wonderful. It's wonderful. So you've got your plan with house money for as long, as long as you want to keep the property. And sometimes you can refinance it again.

And so that model is basically you, when you buy it, you're doing value add work to raise the value of the property. And then when that matures after a few years, you're borrowing against the new value, paying yourselves back. So all of your principal is now paid back and you're in it kind of free and clear from the personal side. You still have the debt on it and then you're allowing the business to pay off the debt over time.

Right. So yeah, you just, you know, as your, as your no payment goes down, your equity goes up. That delta in between is the, is your equity gets big enough, you can, you can strip it back out safely within reasonable, you know, reasonable metrics, and you get that money back. And I'm not a tax expert, but it is a loan. It's not profit. So often it's tax deferred money. And if you don't sell the property, often don't pay tax on that. So it's a nice way to get your money back, use it for something else, and you still own 100% of the asset.

Yeah. Well, Tom, you're a doctor, you're very successful entrepreneur. You have time, perfect family. Would you please give me a flaw? Like one flaw that we can all be like, okay, great. At least there, at least we got something here.

I cannot sing.

And I wish I could. I played a guitar but I can't sing.

And I've tried.

Do you have any regrets?

Oh, gosh.

I probably do. None of them come to mind. You know, I always feel Things happen for a reason. But I know I'm not perfect, and I'm not that Zen that I can, you know, that I've put everything away. I just. Nothing really comes to mind. Good family and, you know, reasonable life? No.

So you're. You're 60 now.

Yes.

You show no signs of slowing down.

You're in great shape.

You did surgery this morning. You're still investing. What do you want out of the next 30 years or the next 60?

I. There's hundreds of countries I haven't seen yet, so I would like to visit every country in the world. And I've got another mission. I've got some teaching I want to do for other guys like me, other doctors. And so I would like to travel the world and hike, hunt, or tour every place I can in the world. And if I really was successful, I'd do it in my own plane.

Hmm.

What worries you, if anything, about the world today?

I think the polarization of the world. Yeah. I mean, we see it in our country. Our country's really, really polarized, you know, along political lines and idealistic lines. And, you know, I don't. I'm kind of. You know, this is Texas. You know, you take care of your problems, you shake hands, and you get up and dust yourself off again. Well, now people are. People are coming up with lots of ways just to. To chastise people for calling them the wrong pronoun or being in the wrong political group or whatever. So, you know, I wish we'd kind of grow up a little bit and just try to make it better for the rest of us.

What do you know for certain?

I know there's a God. First thing that came to my mind.

So.

What.

Do you hope people remember about you?

I hope they remember that I was always. That I was who I am privately, the same as I am publicly. You know, I hope they know that I was honest and had enough integrity that I didn't try to fool anybody.

And who alive do you admire most?

Oh, my. I admire you for being able to do four podcasts a week.

You know, some of the. I can't name them by name, but I've been around some young people that just. That excite me, that I would invest with, that are just out there making things happen. So I wish I could come up with somebody else, but I admire them.

See, money. I don't think I've ever done a rapid fire like that before. Yeah, it just came out of me. I feel honestly like I'm among greatness. Like, I mean, There is not a person on the planet who, like, doesn't want to be you when they grow up. Like, zero. People don't want to be Tom. Like, everyone wants to be healthy, wealthy, and wise.

You're kind and.

And you are. You're in great shape. You're happy as a clam. You got lots of time. You're incredibly successful. I feel like whatever you're. I feel like I need to change my whole life to be on the top. Tom Burns path.

We've all got our own path. You know, I still want to make a difference, so that's. That's. That's my mission.

Let me say. I should say tweak. Tweak my path. Like, here. Here's what I've learned today out of. Out of this. I've realized to not be in such a fricking rush that if we prioritize the right things, the right things show up.

Right.

And I'm. I'm experiencing just times in my life where I've broken that rule and seen what it cost me and that. You started with the. You had this really interesting reframing of, well, what is success? What is wealth? And to you, it was time.

Right.

And you never compromised that.

Right.

And if you. If you don't have that up front, I know for me, if I don't have that upfront, I compromise everything for what other people consider success or wealth.

Right?

And so for me, you say time. For me, it's creativity. And so I just made the decision in my mind when you said that never, ever sacrifice creative energy.

Right?

That's where all the juices. So thank you for that.

You bet. Use your yardstick. Your yardstick is not the same as the guy down the street. So you're not being successful for them. You're being successful for you and your version of success. A little different than mine, probably.

Thomas, is there. Is there anything that I didn't ask you that I should have?

I don't think so. Future. No, I think you got it all. You're a great. You're a great interviewer.

Well, thank you, sir.

Keep that talent going. Don't be nervous. It'll happen.

And you are. You have a book coming out?

I do.

It's not out yet.

That's correct.

And it's called why Doctors Don't Get Rich.

So far.

Book currently named. Maybe to be renamed.

Exactly.

Sometime in the next year.

I'm thinking. I'm thinking probably the second quarter of 2020.

Okay, cool. Well, we'll look forward to it.

Oh, thank you.

Well, I'm really excited about this new friendship we have and thank you for embarking your wisdom upon us.

Thanks for having me on your on your couch.

And that's a wrap, my friend.

Thanks.

That was fun.

Good job.

Thank you.

You too. Good job.

It's like you've done this before a few times. Hey, I hope you enjoyed that chat as much as I did. And I know it can be daunting when you are first starting out to think 10 years or even think, what am I going to do in those 10 years where I'm figuring out what the heck I'm doing? That's what we exist to do here@capitalism.com is to answer that question. Because, like, there's no fixed pie out there. We can all be ridiculously successful. Successful. We're all making this pie. We're all creating this reality. We are all making the world what it is. And we can make it as great as we want. And if you do the right things well, for long enough, you get yours. So if you go over to capitalism.com start, there's some resources for you to decide what business you should go into, what product you should sell, what path you should pursue. So go over to capitalism.com start and you'll get access to our free resources to help clarify the path forward. Hey, if you enjoyed this episode, please let me know and share this with another fellow aspiring entrepreneur. Thanks for watching.