"I Got RICH When I Started DOING THIS!" (Copy These Habits)

If you're stuck and you want to become unstuck and make progress, go master a new skill set to the point where you can write a book on it, the point where you can provide that service or skill set to other people as a service provider. At that point, you can open so many doors, but as long as you keep reading about that and not doing it, you're going to stay where you're at. Second piece of advice would be to really master your emotions when it comes to money. Once you can do that, the world's your oyster. You can do anything. 'Cause you can apply that skill set to absolutely anything in any industry that inspires you. And that's really the key to success these days.

The moment you take your eye off the product and the end-use customer and how much they're enjoying it, get out of the business 'cause it's gonna kick you out.

I believe that the fast lane to financial freedom is to build a business and invest the profits. And if I were to say the faster-ish lane would be to build a business, build a business and sell it and automatically placing that into some sort of a long-term investment. So for me, that's just, I have E-Trade deduct a certain amount from my checking account every month and I go and I put that in a dividend-paying stock. Money Revealed is an exclusive video series where self-made millionaires share their secrets on how they got rich. In this episode, you'll learn how to make investing easy, the key skills for success in any industry, and why you need to serve first If you want to get rich, these are the lessons that they don't teach you in school about making money, and we've partnered with the series creator Jeff Hays to bring it to you on my YouTube channel. Enjoy.

I'm a great admirer of Mike Dillard. I've read his newsletters for a long time, and he's someone who is greatly admired in the entrepreneurial world. We were excited to go to Austin to sit down with him and gain insight and wisdom from him, and he's just got a style and a delivery in a way way of communication that is extremely powerful and compelling, but also it's just no hype. What you see is what you get. There's great insight here, and it's something that I'm very excited to bring to you. Enjoy my interview with Mike Dillingham. Mike, you have such a great reputation. I've really been looking forward to this conversation, so thanks for making the time.

Yeah, absolutely, looking forward to it.

So let's talk about maybe just your entrepreneurial journey and background. How'd you get started in being an entrepreneur?

Oh gosh, that goes back to my days in high school and waiting tables at the original Macaroni Grill in Burleson, Texas. Yeah, just the same building as the original Rudy's Bar-B-Que. And I used to mountain bike race competitively, and I needed money to fund that, so I'd bus tables at night during school. And I really earned an appreciation for the lack of freedom that comes with having a job. Yeah, and the fact that I'd miss out on a lot of good times with with friends on the weekends. And I'd come home at, you know, 11, 12, 1 o'clock in the morning exhausted, smelling like food, and would head back home to my parents' house, turn on television that late at night. There's really only one thing on at 1 AM back in those days, which was infomercials. So watching Tony Robbins and Carlton Sheets and all of those guys, and that really just exposed me to the fact that there was other options available. And options without limitations, which really appealed to me. So it was a natural fit, but that was the inspiration. And started playing with, you know, starting little businesses way back in high school and college, and that's where I got my start.

What'd you study in college?

First semester was biology. I was going to be a dentist because at the time my uncle was the most successful, wealthiest person in our family tree. And I was like, okay, if I have no other interests, that seems like the smartest thing to do. Immediately found out what beer was when I showed up to the dorm, because I never drank in high school since I was cycling. And my first semester I got a 1.3. So immediately changed plans and went to summer school on probation, switched over to marketing. And did well there, but I honestly never went to class. I went to Barnes Noble, and I'd sit in the business section reading books on the floor. Skipped all of my classes, and then I would go pay $50, $60 to go to the cram sessions, you know, 3 days before. You get all the old tests. And that's what I did for 5 years until I passed with a 2.0. And my theory on that was that I went to class as much as I need to and not a minute more. I already knew I wanted to be an entrepreneur, so the degree for me was kind of pointless.

So what did you do when you got out? So what was your first business venture?

First business venture was in the network marketing industry, and this is Web 1.0 days. This is early 2000s, 2000, 2001. And at the time, this is pre-social media, no YouTube, Facebook, pre-MySpace. But I had a mentor that had been working with me over the phone for about a year, named Stu out in California. And I said, Stu, I'm packing up my truck after I graduate a week later and I'm coming to learn from you until I figure this out.

How did you find Stu? I mean, how did he come into your life?

Probably through the network marketing business I was in at the time. And so that's what I did. I packed up my old Chevy truck with everything I owned from my dorm, said goodbye to the folks, drove to California, got to San Diego where he was. And realized I could not afford anywhere in San Diego, so I kept going to Temecula. Found a $300 a month apartment. I had my bed, my desk, and a chair, and that was it. And the living room was full of boxes from my memorabilia and college stuff. And that was September 10th, 2001. So the next morning, I got a phone call from mom freaking out, and that was a big change in plans because At the time, if you're selling opportunity, if you're selling hope, if you're selling a brighter, better future, and all of a sudden the world changes overnight, that's not really something that people are in the mood to talk about at the moment. And so our plans at that time really took a dive. Got a job at Best Buy selling computers there in Temecula for probably 3 or 4 months. Couldn't pay the bills at $7 an hour, $8 an hour, whatever I was making. And eventually headed back home to Texas. And it was a tough lesson learned, but interesting timing. And yeah, so that was the first venture.

So maybe just as a— now with the reflective wisdom after being through this— the role of a mentor in the development of being an entrepreneur and the role of timing where things happen. Because you're also on the heels of the dot-com bubble burst, right? So that kind of process, then 9/11 happened. So how timing might influence your plans.

Timing is interesting because it can throw a wrench in a certain set of plans, and it can create opportunities in different ways if you have the skill sets to capitalize on that. And at the time, I didn't have any skills. I was still trying to figure it out. So I don't think at the end of the day it would have made a difference either way. 'cause I just didn't know what I was doing. But it was, I think the determination was the biggest piece of the puzzle. And I really made up my mind at that point that I was gonna become an entrepreneur. I was basically gonna die trying. You know, I had planned when I couldn't make rent or pay my cell phone bill one month, I was like, okay, I can get a gym membership. I can take a shower there. Maybe I can find an air-conditioned rental unit and I'll sleep there and then I'll figure it out. And that's where my thinking was going. There wasn't any plan B or idea of quitting.

So what's interesting is that a lot of people might have reacted in that circumstance by saying, "Well, I guess I'm not meant to do this, the way things unfolded," which the "meant to be" thing is— I always find that to be a confusing premise. But in your case, it was like you weren't dissuaded by the circumstances. You were still going to work to go through them. What do you think the compulsion was? I mean, because this is really the heart of an entrepreneur, isn't it?

The idea of having a job and giving up on everything I wanted to do in life was infinitely more painful than living in a storage unit. Yeah, that was it.

That was it. Just that simple.

Yeah.

So then what unfolded from there?

Gosh, moved back to San Antonio, got a job briefly in Dallas recruiting surgeons.

This—

the biggest piece of advice I ever got was a mentor in that industry at the time, and I'd gone on for 5 years and failed. Didn't make a dime for 5 years in a row. And it got to a point where I was like, "Okay, something's got to change here." And he finally gave me a really good piece of honest advice. And he said, "Mike, the reason you're not hitting your financial goals in this industry is because you're not capable of getting the result that you want. You're not that person right now. And you've been chasing these opportunities, if you will." And I put all the responsibility for success on something outside of myself. Either it was the business or the product or the marketing materials, but I thought success was going to come as a result of those things. And it finally dawned on me when he said that. He said, "If you want to go make, let's say, $50,000 a month," because that was my big lifelong dream at the time, he's like, "You have to become a person who's capable of achieving that." And he's like, "You're not right now. You're not. You don't have any mastery of any skill sets whatsoever." And I was like, "Ah, okay." And it was a big lightbulb moment for me. So from that point forward, I dove in headfirst into every book I could find on sales, marketing, lead generation, and copywriting specifically. I was very shy at the time. I hated talking to people in person, and selling was just the scariest thing in the world for me to do, even over the phone. I learned how to sell via writing, via copywriting. And it took me about a year, year and a half of just going into every course I could. And I'd sit down at night and print out successful sales presentations and letters from some of the greats like Dan Kennedy or David Ogilvy and guys like that. And I would just rewrite them out by hand. And I did that every night for a year, about a year. And I learned that skill set. And all of a sudden, I was like, man, I can really sell something here. And then I taught myself how to use Google AdWords. And now how do I get eyeballs in front of what I've written? And that really changed everything. I applied that skill to my network marketing business at the time, started recruiting people for the first time ever, built a team pretty quickly of about 300 or 400 people, and realized I absolutely hated it. This was like 5, 6 years of pursuing this dream and I finally have it. And I figured it out and it was miserable. It just wasn't a part of my personality being a really introverted person. So that was another big chapter where it's a decision point. Do I give up on this dream of building a business in that industry for 6, 7 years now or do I stick with it? And the solution or the answer that I came up with was what if I could build this business in a way that I really enjoyed? And for me, the answer was that— to that was just, how do I get people to call me instead? How do I stop chasing people and how do I get them to come after me? And there was just a little twist, you know, at the time to doing that, which is providing value. If you put out value into the world, surprise, surprise, you help other people, they want to work with you. And essentially, there's this whole attraction marketing philosophy that I happened to introduce to that industry at the time. So this was This was 2004, 2005. And no one in that world had ever heard of that. They had never heard of online lead generation. They had never heard of building a business online. They had never heard of attraction marketing. And I ended up writing this little 50-page training manual for my team at the time that kind of talked about those philosophies and strategies. And all of a sudden I had phone calls from people all over the world saying, "Hey, can I sell this manual to my team? Can you make one for our team?" So I ended up selling it for $40 a copy online. I'd go down to Kinko's, I'd have 300 printed at a time, little cheap spiral binding for $2, $3 apiece. Put up a sales letter for it, put it on Google, and within I think 3 or 4 months I was selling around $50,000 a month worth of that book. And that was an even bigger shift because now I really felt like I was pursuing my talent and what I was good at, which was teaching. And I'd really discovered that. And so that really turned into an education company where we took the skills which were brand new of online marketing and taught it to that industry. And that turned into an 8-figure business. So—

Wow. So it's interesting because it seems like— and maybe this is an important foundation for an entrepreneur— is they have to know themselves really well to be able to kind of keep moving forward where you said, geez, I got what I wanted and I ended up hating it. So you said you had to learn things about yourself.

Well, in the beginning you're just like, tell me what to do. You know, put me in, coach, and I'll do whatever you say. And that's what I did, you know, for those 5 years. And I was like, okay, this isn't working and I'm miserable. What's got to change? And, you know, interestingly enough, that industry is built for people who love networking. They are extroverts, they love meeting people, talking to people, and you stick someone like me in there who shrinks in that environment and then expect to see success? Yeah, it's an uphill battle for sure.

So yeah, so if someone were to ask you, so what do you do for a living, how would you describe it?

You know, previously I've, I've really just considered myself an educator in the fact that I tend to build companies based on my own personal challenges. So whatever my biggest challenge is in life, I'll go work on the solution and figuring that out for many years until I do, and then I'll teach other people who have that exact same problem what I learned. And that's really been the heart of what I've done for the last 12 years in 2 different companies. Now we're, you know, with that, and I've been challenging myself in new ways to, you know, push myself as an entrepreneur in general outside of that realm. Which has been an interesting learning experience as well.

So, well, recently you've been writing a lot of great copy because I've been reading it around cryptocurrency. What got you attracted to that?

You know, I don't remember exactly what caught my eye, but I found Bitcoin in 2012. I bought my first Bitcoin in 2013 on Mt. Gox. 2012 was a little too sketchy. You'd get on these forums or blogs and it would be, send this anonymous person your credit card info and money and they'll send you this Bitcoin back. And at that time, it was probably pennies, fractions of a penny. So unfortunately, my radar went off a little too late, or a little too soon, I should say. But 2013, I set up an account on Mt. Gox and bought 500 Bitcoin and just was like, hey, if nothing happens, great, Vegas money. Something does happen, great. And unfortunately, a year later, Mt. Gox got hacked and I lost all my Bitcoin.

Oh my goodness. So wow, that's really unfortunate.

Yes. Yeah. Yeah. So I paid attention to the industry a little bit. I think I bought back in when Bitcoin was about $700 in 2015, 2016. I don't remember the exact date and started to noticed what was going on with Ethereum as well when it was about $5, $6. And at that point, I really started to dive into that industry in a pretty big way. And I saw what was going to come from that in the next 10, 15 years pretty quickly.

Was there something about it sort of either spiritually or philosophically that you said, wow, the idea of a non-government-controlled currency intrigues me? Is that one of the things that brought you there?

Yeah, for sure. I was buying gold in 2006, 2007, buying silver when it was $7. Saw the writing on the wall with the financial collapse. And for anyone who was studying economics and finance at that time, we should have seen the entire thing collapse. And it took trillions of dollars in money printing to prop it up and keep it alive. So I've always had a bit of distrust around people in power who have control over an unlimited bank account and credit card, and we're the ones who end up paying the bill. So yeah.

Yeah, so now that you've seen all the things unfold and things continue to unfold, it's a fascinating world, the whole cryptocurrency and blockchain world. What do you see moving forward? What do you think is going to happen?

You know, it's really interesting. There's two sides of it. There's the truly decentralized currencies like Bitcoin that basically cannot be controlled, and the real evangelists, the maximalists if you will, of that world think that that's going to take over the world and become the de facto global currency. Maybe it will, maybe it won't. That'll require mass adoption. So what I've been most interested in following is how our government, specifically the US, going to react. Because you're not going to see mass adoption if they come out like China did and say crypto and Bitcoin's illegal. You'll get pirates and rebels who will use it, but if you can't buy Starbucks with it, it's not going to reach that point. So following what the SEC's done and the policies that they've put out over the last year specifically, They're looking to blend the two, and I don't know exactly how that's going to work out, but the genie's out of the bottle at this point. What really excites me the most, I guess, is the tokenization of securities and real physical assets. I think that's where the real revolution is going to take place here in the coming years, when anyone can take their business or house and tokenize the value and pull out the equity. That's going to be game-changing.

Walk through what that means. So you have a house, you got equity in it, what would it mean to tokenize it?

Well, at this point, if you want to essentially raise money for your business, let's say, your biggest option outside of taking private funding is to take it public, which is basically impossible these days unless you're a billion-dollar company, right? That door has been closed, and now essentially you're going to be able to take any real asset you have— again, your business, your gas station, your home, your bed and breakfast, whatever it may be— divide it up into shares, assign those to a token, and then share those on an exchange or let people buy them, invest in them. You could take quarterly profits and automatically distribute those based on a per-token basis to everybody's wallet who owns it, and it can be as fast and as simple as that.

So basically, the token becomes your stock or your equity that you're selling into a public marketplace that people can invest in. And now you're starting to cite the whole, well, how's the SEC going to look at this? Because there's regulation around securities and who can offer them and how they're offered, etc. So what's the current status of that as far as the SEC is concerned?

You know, I think it's going to be treated the same way as stock. Anybody can jump on E-Trade and buy stock right now. The difference is what assets can you turn into stock, basically, and how easily can you do that. And that's really where the big change is going to take place. So lots to figure out yet, but I think that's going to be game-changing.

Is there an emerging business of people that would say, hey, I'm going to do the picks and shovels of this thing, where I'm going to create the platforms for people to tokenize, because the chance person who says, hey, I want to raise some funds and I want to use this vehicle. I mean, you know, how do they do it? So obviously, you know, the trading platforms need to be built. Is there a movement underfoot to do that?

One of your guests of this movie, Patrick Byrne. Yeah. Yeah, and tZERO. Absolutely. So I've been following tZERO since he's announced that, and obviously Patrick and I have a lot in common philosophy-wise when it comes to money. So I'm very excited about what they're doing.

And what role do you want to play moving forward in all this?

You know, the role I've taken right now is to help introduce people to what cryptocurrency is about and how to participate safely. At this point, it's still the Wild West. I still see friends on Facebook, oh my God, my phone was hacked and my wallet was hacked and my Bitcoin's gone. And these are smart people, these are entrepreneurs. This is not mom and dad, 70-year-olds. Years old trying to figure this out. And that's just a huge issue right now. So the role I've taken is, here's what cryptocurrency is, here's what cryptoassets are, here's how they work from a layman's perspective, and most importantly, here's how you store them safely and transact safely. You know, even you, you look at the infrastructure we're dealing with right now, and outside of Coinbase, you're dealing with MyEtherWallet and, and all of these other tools that unless you're an engineer, software engineer, programmer, you, you're gonna have a tough time trying to figure out just how to use it. And so right now I'm trying to serve as the guide around that stuff and get people involved while the timing's right.

So it's still education in essence, right? Yes, absolutely. So you're just pointing your educational prowess toward this as compared to some of the other things that you've done before.

Yeah.

You know, it's interesting as you mention that is that I got very excited about Bitcoin and crypto when it first came out because of my own philosophy towards money. And I just wanted to morally support it and hoped it had a future. But what you say— and this is why it's a real need. I mean, I come from— my last business was a technology business. So I'm not tech adverse. I'm really tech-oriented. And when I looked at what it meant to try to purchase Bitcoin— this is back probably when it was trading around $600 or so. And I said, I'm going to go get some of this, just to morally support it. And also, I think it's a cool thing. And I think it might actually do something. We'll see. But by the time I really started to look at what does it take to purchase it, what does it take to have a wallet, what are the risks, how do you have to secure it— for me, it seemed so complex and difficult that I said, I can't imagine adoption at this point. Because I'm somebody who's kind of tech-oriented. And the average Joe is just not going to be able to weather this.

As long as you're expecting people to scan QR codes and copy and paste public keys, you're not gonna see it. And one of the projects that I follow is all about putting the visual layer, if you will, on top of the blockchain so everything is in the form of a graphical asset basically and you don't see the code anymore. If you wanna send someone an asset, you just swipe it or text them this little digital icon, and that's it. And it's a digital asset at that point. It can't be copied, duplicated, and you own it. We're going to see an entirely new world of assets represented with these. It might be a can of Coke at the store downstairs. I have one on my phone. It represents a real can of Coke. I can go up to the machine. I can make that transfer, and out comes a real can of Coke. And the digital version's gone. It's gonna be a really neat feature here, but we're just now going through the ideation phase of what it could be.

And I think that's gonna be the tipping point when it gets kind of consumer-friendly in that respect. The adoption, I think, will be exponential at that point.

Yeah, once you're using blockchain without knowing that you're using blockchain is when, frankly, the opportunity is over. So right now, the more complicated it is for people, which is what I tell them, The fact that this is difficult and hard means that there's an opportunity here.

Well, were you surprised— like when I first was seeing this— that the government stayed passive? Because as you said, the genie's out of the bottle now. I thought the government would try to clamp down on this so quickly because government control of currency is a major foundation of why the government thinks it exists.

Right.

And then suddenly it was out and they were doing nothing. Surprising to you?

Yes and no. And I've had a lot of conversations with some really smart friends about this, because I still don't understand why either. And so the global crypto market cap, the entire asset ecosystem around the world is less than $300 billion today. That's around the market cap of Walmart. So I don't think they're paying attention to it, or at least they weren't initially, because it was just small and a fringe application. But I also don't think that they could get anything accomplished quick enough anyway. Does anything move fast in Washington? It takes years. And this is moving faster than any other technologies developed. The adoption is moving faster than anything else. And so even if they wanted to, I don't think that they would practically be able to make it happen. And so there have been a lot of smart entrepreneurs like Patrick who've been out essentially lobbying and educating Washington and saying, look, this is here. It's not going away. So now we have two options. Do we become this center hub of development and innovation as we were for essentially the first internet applications? Or do we let that go somewhere else, to Singapore or South Korea or somewhere else? And I think they're smart enough to know we want the brain power and we want the assets here in the US. So I think that's the way that it's going to go.

Certainly a compelling argument, saying, hey, this is out there, and now who's going to take the lead?

Right.

Now, what about the wider application of blockchain beyond a currency, but what else it can do in the world? What are you seeing?

Well, beyond a currency and around the tokenization of securities, it really is just, it just comes down to people. And there's going to be two different types of applications. There's a truly decentralized application. Which takes people out of the process. And it's, you know, it's funny, I have a very smart entrepreneur friend here in town who is not a fan of Bitcoin or blockchain. And he's like, I just, I know it's gonna get hacked. I know people, someone's gonna come in and corrupt it. And it just told me that he doesn't really get it because you buy Bitcoin and use crypto because you don't trust people and you don't want people involved in the process. So You know, I think the big, big piece around this is, is Bitcoin is creating a trust-based economy. It's taking inefficiencies that are created in any market by fraud, theft, you know, obfuscation and deceit, and it's going to get rid of that. And that's, I think, the big transformational piece of this. You look at, from myself as a business owner and using merchant services, and I'm paying 3%, 4% merchant fees to Amex and Visa and MasterCard and Stripe and everybody else. And now I can take payments via crypto for a fraction of a penny. Yeah, I'm in. So it's really going to be interesting to see how those companies start to adopt as well. I know many of them— Visa specifically has been filing dozens and dozens of patents around cryptocurrency. And while at the same time talking it down and and all of that stuff as well.

Well, smart people, what do they do? Exactly that. They're going to hedge their bets on the threat, saying, hey, this is nonsense and inappropriate. But at the same time, they've got patents. I know a lot of companies— well, you mentioned Walmart. I think Walmart's got a bunch of patents on crypto, if I'm not mistaken. So it's been interesting to see how people are scrambling right now to try to position themselves for this, because it is, it's on a tear that I think it's almost dizzying as far as how fast things are unfolding.

Yeah, you know, luckily right now this is the calm before the storm post-bubble in 2017, and it's a huge opportunity. We're still really, really, really early in this. I think we're gonna— it's gonna take another 5 to 10 years before, you know, 80% of the population is using it like their Visa card. So yeah, we're super early still.

And so do you think we're in another bubble now? And if there was an economic bubble that was going to burst, what do you think is going to happen to cryptocurrency with that?

I think the US stock market is entering a bubble for sure. When you're hitting all new highs every month, every week, you're in a bubble. And so it's going to be really interesting to see how crypto reacts when that pops. Is that money going to go in Bitcoin or is it just going to go into cash and stay there? And I don't know the answer to that. I view Bitcoin as digital gold, as a lot of people do right now. And so yeah, it's going to be very interesting. I don't have the answer, but I know what I'm betting on.

And with that, do you think— because you mentioned Bitcoin— what about all— I mean, there's I guess over 1,000 or thousands of cryptocurrencies now. Do you think the market's overflooded with them and it's going to be a washout? Or what's going to happen there?

95% of them will be gone in a couple of years. And that's great. I think all of the ideas and innovation are necessary. It's going to find its value in an open marketplace, and the winners will stick. But 95% of them will end up just like the dot-com days. The question is now, which do you invest in? And unfortunately, just like in the dot-com days, you don't know. So at least my philosophy has been over the last couple of years to put a little bit, a little bit of money in all of them, at least the top 50 to 100 that, that are out there. And the big piece for me is, is this going to replace an existing market or business or function that exists right now that has a really large user base, is this gonna allow that to be done faster, easier, and more efficiently? There's a lot of applications out there that are brand new ideas. Let's tokenize the dental records industry. Maybe. Yeah, maybe. Put a couple hundred bucks in it, maybe $1,000 in it. Vegas money.

Yeah.

But for the most part, I think all of those are going to go away. At the end of the day, A blockchain is a database and the real value of a blockchain is a distributed one, but most of them are not. They're centralized. And at that point you just need a database. Use Google, use Microsoft, you know, SQL, whatever you want. You don't need a blockchain for this distributed and being used around the world for that functionality.

Well, what's interesting is that typically if you're like looking to to invest in equities or even to speculate into markets. There's some fundamentals, you know, well, like if you're going to the dot-com, you know, pre-bubble, you'd say, okay, well, who are the— who's the team, right, that, you know, that's doing this? You know, oh, Jeff Bezos, you know, he's running Amazon. I kind of think he's got his act together. You know, you have certain things to grab onto to say, I'm gonna do this research to make my investment here. It's a little bit more abstract, right? As far as, you know, how do I pick which coins?

You know, 90% of the websites I've seen for these applications, and I'm somewhat educated around this space, you know, on a scale of 1 to 10, I give myself a solid 4 or 5, but I'm not on the engineering side. But you go to the website and it's just all of this tech jargon. That tells me that they're not in touch with solving a mass consumer problem. They're in touch with building something that they think is really cool.

Right.

And that's not really an asset that I want to invest in.

So now if people are out there saying, okay, I'm not a sophisticated investor, but, you know, I kind of do the traditional stuff, but this is interesting to me, what's the path they would take to try to, you know, say, okay, I need to get up to speed need to be able to properly invest here?

Yeah, you know, buying it today is easier than ever. There's the Cash App, there's Coinbase, which is super easy. And so I think that's becoming more and more accessible. At this point, it's how do you use it safely. So there are just, you know, a lot of sophisticated scams out there where even if you take some really good security steps and you set up two-factor authentication on your phone, But if you do it via SMS text, let's say, where you get a text back and you have to enter in your code, right, to verify your login, there are employees at these phone companies that are paid for and bought by the crooks. And they'll switch out your SIM card, give your number, you know, control of your phone number to the crook for 5, 10 minutes in order for them to get that authentication number, switch it back, and you wake up and your crypto's gone.

And there's no way to recover it at that point, is there? No. It's gone.

Yeah. Yeah. So there are just pieces around like that that people need to get educated on. We're seeing the big next wave here is going to be with the introduction of essentially Wall Street institutions into this industry. We're seeing Bakkt launch this year. We're seeing the—

What is that?

Bakkt is a joint venture, I believe, between Microsoft and a couple of other really large Fortune 500 companies to bring institutional-level infrastructure to crypto. And a part of that is insurance, right? So nobody's going to put in pension fund money into anywhere if it's not going to be insured against theft. Right. And so all of those pieces of infrastructure are being put in place right now this year. And I think once those come online and they get approval from the SEC, that's when you see this turn into dot-com.

Yeah.

You know, dot-com days in a really big way. And for me, this industry— and I just tell people straight up— it's speculation. We are speculating, we're gambling, and our odds are really, really good. But at the same time, more than anything else, you have to have an exit plan on what you're going to do with potential gains. If we see another 100x move, what are you going to do with that money? I think that's a really important question to ask as well. And it's just also really important for people to understand that this is unbelievably risky right now. It is super early. And so making sure that you don't invest money that you can't afford to lose is a huge, huge part of this. And I think a lot of people unfortunately learned that lesson in 2017.

Yeah, you know, so, so for you, do you see yourself focusing mostly in this area for the foreseeable future? As far as your business activities?

No. You know, the focus for me really remains around entrepreneurship. I think that's my biggest point of value and what I can offer people because that's where I've learned the most lessons during my career. I think making people aware of crypto and the basics is a role that I can play, but it's not my field. I think I have a talent for taking complex subjects and communicating them to other people in a simple manner. Which is helpful to a large group of people. But that's my role.

So, well, let's go back to that for a moment because you almost became a dentist, or at least had an interest early on because, as you said, the most wealthy person in your family tree was a dentist. Let's say somebody actually went and did that, and now they've practiced for 25, 30 years, and they said, I can't do another decade or two of this. I want to become an entrepreneur. You know, I've saved some money, so I'm not like, you know, starving and going to live in a locker, but, you know, but I now want to make a move. What do you think in today's world the best move is for somebody like that?

You know, it comes back to skill sets. It comes back to— it's not about your idea. It's not about how much money you can plow into it. It's about your skill set. And for me, the primary skill set is on the sales side. You can have a phenomenal product, you can be a world-class engineer, if you can't sell either your backers from an investment standpoint or your team from a hiring standpoint or at the end of the day your customers, it doesn't matter. So my biggest piece of advice around that is understand what your skill set is and how that can be applied in a way that will help grow a business and generate revenue. Revenue is the lifeblood of a business. Business gets unbelievably stressful if money is not coming in the door, especially if you start to build a team and, you know, your expenses get up there. So that to me is skill set number one. Until you have that, don't worry about it. Go learn how to sell, how to market, how to generate leads, how to generate traffic. Once you can do that, the world is your oyster. You can do anything because you can apply that skill set to absolutely anything in any industry that inspires you. Inspires you. And that's really the key to success these days. And I don't know of a single entrepreneur who has had success without learning that and acquiring that skill set either at one point or another. It really has served as the foundation for all of us.

Do you have dispositions toward real estate versus buying a franchise versus trading the market?

You know, one of the biggest Lessons that I've learned is when I was young, I always remember asking myself, where's the greatest point of leverage?

And what would that mean when you say greatest point of leverage?

Yeah, where's the greatest point of leverage? Where's my goal? And so back in the network marketing industry, this is what I was thinking about. Like, okay, I'm a distributor and I'm building maybe a network of people who might consume the products or might sell them as well, but my point of leverage is their activity and their consumption. So I might have a group of 300 or 400 or 500 people below me who are buying products, or maybe they're building a business as well, but that's my point of leverage off of their activity. What's the next level up of leverage? It's the company owner, right? They're getting paid on everybody's activity and consumption. Where's the next What's the next point of leverage from there? Well, maybe it's as a software company that is serving all of the network marketing companies. Maybe it's providing merchant services to them. Maybe it's providing, you know, customer management software, accounting software, whatever it may be. Where's the next point of leverage up from that software company? Well, it's probably the bank who's providing them liquidity and funding, right? So, same with real estate. So if you were going to get into real estate today, if you're starting out, maybe you're going to be an agent and you're going to go sell homes. And at that point, you're a really hardworking salesperson, but there's no leverage. So what's the next level up? Well, maybe you own the brokerage that has 10 agents. Fantastic. You look at Keller Williams and, you know, what they're doing, multibillion-dollar real estate company, I think top 3 in the world. And I've had lunch with Gary a couple of times. And Gary's in a great point of leverage. He's got 150,000, 200,000 agents underneath him basically making him money every day. And so after that, where's the greatest point of leverage? Again, it's the banking system. It's providing the mortgages and the loans for all of these homes that are being sold. So the question that I would ask yourself whenever you're thinking about starting a business, you're not going to be able to start at that top, at that greatest point of leverage, but what is it? And at least think about it. And to me, that would be my goal, is to one day end up there at that point, because that's the difference between making, you know, $250,000 a year and $250 million a year. But at least be aware of it and look for it.

So leverage basically would be defined as getting things done through other people.

Sure.

Yeah, so, and I think that, that was a great stair-stepping example, saying, hey, if you're the salesperson, you're hustling all the time, and you're just you eat what you kill, as compared to saying, now I got other people hunting for me, right? And they all feed a piece up to upstream.

And those are two different skill sets. Making that transition has been the hardest one for me to make, and it typically is for most entrepreneurs. The skills that'll allow you to make your first million dollars, essentially sales, it's completely different when all of a sudden you can no longer sell and you've got a team of 10, 12 people that now have to take over that role and responsibility. Because you developed a lot of skill and talent and nuance when it came to producing the results that you did. And all of a sudden you've got to say, okay, I can't do that anymore. I've got to teach these other group of people how to take that over. That's a huge transition. And it's starting over in many ways for an entrepreneur.

Books or any kind of media have influenced you most, that you think you found most beneficial to your life?

You know, the traditional Think and Grow Rich, How to Win Friends and Influence People, way back in the day. That's what I was reading in college on the floor of Barnes Noble. And, you know, out of— after that, there's a lot of great books from Dan Kennedy on direct response marketing. I think Dan's a great teacher, and his principles are applicable to any industry. After that, it really has just transitioned into leveraging and scaling. From a philosophical standpoint, obviously Atlas Shrugged. You know, that's been a huge inspiration in my life. And it was really interesting specifically in 2007, 2008, having read that book and watching what was happening around the world, it was almost as if it was sprayed out of the pages. And it's still happening. Yeah. You know, Rocket Fuel is, from a scaling standpoint, a phenomenal little book to help you as an entrepreneur make that transition and get to a point of essentially working on your business instead of in it. The E-Myth is where that line came from. So my home is filled with hundreds of books. I'd say I've probably read half of them. The others, the others are still on the to-do list.

And are you finding, you know, that there's a lot of blogs that maybe are beneficial too as compared to just books, but there's other forms of content out there that you can go get?

You know, interestingly enough, I think that's the biggest challenge young entrepreneurs have today, is they're growing up with Instagram and 15-second story videos and 5-minute videos on YouTube YouTube and Twitter and blog posts. And it's more information than ever with less value than ever. And for me, I found that success is in the details. I found that if I will focus on acquiring a piece of knowledge or a skill that I spend a year on and maybe read 5 books on or 3-ring binders on or go to conferences on, and I get down to a level where I'm debating which word I should use out of a document that has 10,000 words because I know that word is going to make a difference, that's the difference between success and not. And I don't think specifically young entrepreneurs these days really understand that. And so they wonder why they're watching hours of content a day and still not accomplishing anything. So for me, I view it as a, as a negative in many ways, especially if you're just starting out. You're much better served reading a book that's 200, 300 pages long from end to end. You're going to come out of that with a real set of understanding and skills rather than a 10-page blog post.

Yeah, that's what I've noticed is that depth is important and it's that extra little few percent of knowledge that is the tipping point as to success versus failure. That's what separates you as an expert as compared to somebody who's kind of an amateur.

Success is in the details.

Yeah, really is. So I'm an admirer of Self Made Man for a lot of reasons. I think we share some of the common roots in our philosophies and what's influenced us. And so just the title caught me when I saw Self Made Man. I actually own that sculpture. Tell me about it and where you're going with it.

You know, Self Made Man was Inspired at a Tony Robbins event. I went to Date with Destiny in 2014, and I was at a transition point in my career, in my life, where I'd built two successful companies and I needed a new challenge. And I wasn't sure exactly what to do yet, but I knew of two problems that I was aware of that I thought I could solve. One was in the food production industry, and this is a bit of a rabbit hole, but I live right across the street from the headquarters of Whole Foods here in Austin, Texas, and shopped in the produce section every day. I do a lot of juicing. If you do some juicing at Whole Foods, you're walking out with $60, $70 worth of produce. It's not cheap. It really bothered me that you have to be fairly wealthy in the United States just to buy food that is not covered in poison. I thought that was really screwed up. So I had an idea to essentially solve that problem, and I wanted to put clean organic food in everybody's home at a price they could afford. So I actually went out and bought a bunch of books on hydroponics on Amazon and started to make notes and come up with ideas on how to solve this. And fairly simply put, it had to produce enough food for you and your family on a monthly basis that would replace your run to the grocery store. It had to be easy so that everybody could use it. You don't have to have any knowledge of plants. And it had to be pretty because it's going to be in your house. So I've never developed a physical product, never really grown anything, definitely not dove into tech or hydroponics. So it started on Amazon with a few books and a few phone calls to some industrial design firms. And I had a little mock-up made on Photoshop on oDesk. We paid a guy $200 to take this idea and make a little photo of it. And a couple of months later, we signed on with a phenomenal firm in Silicon Valley. And we're going to make the first automated farm for your house that'll grow all of your food. And the idea is, how do we decentralize the ag industry? Because if you get rid of the farm, and the farmer, and the tractor, and the 18-wheelers, and the 1,000 miles of highway, or the massive tankers that float from continent to continent. And if you get rid of the pesticides and the distribution centers and finally the retail center, guess what? Your food goes down 90%. You get rid of 100% of the pesticides and the pollution. And everything starts and ends in your kitchen. But no one had really ever done that before on a consumer-level space. You can find little countertop systems you can use to grow some basil or mint, but that was about it. So we built it. We built it about 2.5 years. We built this system that would grow about $4,000 a year worth of food and for $400. And fully automated, you just drop in the seed and the lights take care of everything else and the nutrients and the dosing and the pH balancing and all of that. And it was phenomenal, but it almost bankrupted me. So that was a big lesson learned because I funded all of it. Right as we were getting to a point where, okay, we've got a prototype working, what do we do next? This was my lesson learned in lack of skill set in this industry. How much longer is this going to take? Well, probably through safety testing, development, package design, service centers, another 2 years, another $2 or $3 million. I was like, oh crap, because when we first started this, the budget was $500,000, at least that was the estimate. We were way beyond that at that point. And so I hit a point where I essentially had to go raise money or pull the plug on it. And I ended up talking to a mentor of mine, asking him for advice, and he said, look for a win or a way to win in this, even though it might not look like the initial road that you had intended. Can you do anything with your competitors? And so I called up a competing company who had just launched a phenomenal line of products that were like ours. They were at a Y Combinator, had a ton of money, big team, and I ended up investing in them. And I pulled the plug on Evergrow, which was the company at the time. And the backup plan after that was Self Made Man. And the other problem that I took away from Tony's event was The fact that I've seen at least a huge decay in the value system here in the United States from Washington and Wall Street on down. Now it's get the result you want at any cost, whether you have to lie, cheat, or steal. And there was not a lot of pride being taken in craftsmanship and quality and work ethic. It was just, where's my money? And I thought that that was gonna lead to a really nasty place here in the US a generation from now. You look at how many young men specifically are growing up without dads and role models. Really bad situation. Straight out of Atlas Shrugged again. So the backup plan was how can we elicit change on a society level paradigm essentially over a generation or two. And looking back in history, I really only found that there's two ways to do that. Is through the barrel of a gun, as many dictators have done, or it's by indoctrinating the kids and the next generation with a different value set. So obviously for me, I went that route. And the goal for Self Made Man is to really provide young men with mentors and leadership and an education set and a philosophy of life that will, you know, lead them to become really productive, honest members of society. And that was the goal, and it really took on a life of its own.

How long has it been out there now?

We launched the podcast in the end of 2014, beginning of 2015, and that's really all it was at the time. I'm going to do a weekly show with amazing people. And then this year, 2018, we launched the education platform that we've been building, and essentially it's an online school for, for young men with ambition. It's basically the audience that we we are targeting, or if you're 18, frankly, to 40, and you have ambition and you want to achieve something more in life, we want to provide you with the mentorship and the knowledge you need to accomplish that.

So is the way, just go to SelfMadeMan.com and people can find the podcast and other materials there?

Yeah.

How rewarding has this been for you?

Yeah, I mean, it's hard to beat getting just a little message from someone who is like, man, 'Just listening to the podcast sent me down a new direction in life, and here's where I was before and here's where I am today.' And that's really my goal is, you know, I had a pretty vivid dream recently where there was a bunch of pictures of families on the wall that I was looking at, and they were all super happy and stoked and feeling just like they're where they were meant to be. And those were all of the families whose lives essentially had changed direction because they were exposed to what we're building. And so for me, that, that's, you know, what I'm after.

So after all these years now that you put into your entrepreneurial career, are you finding growth in your fulfillment? Are you finding that's waning, or there's burnout? How are you feeling about it all now?

You know, the longer I pursue my career as an entrepreneur, the more I realize I don't know. And Evergrow is a perfect lesson for that where I like to call I paid a really high stupid tax. You pay the tax and you're going to pay the tax in one form or another. You're either going to pay it because you're going to go out and buy courses and education and acquire the knowledge you need to pursue what you're building, or you're going to pay it in the form of mistakes, time, and money lost. There's no avoiding it, but one choice is better than the other. And so, you know, the more I challenge myself, the the more lessons I learn, and I've still got a hell of a long way to go.

One of my premises or sayings around this is that the great thing about entrepreneurs is that they fall in love with their ideas, but the problem with entrepreneurs is that they fall in love with their ideas.

Yeah, that was a big part of Evergrow, was learning that and getting a lot of pieces of wisdom around that from others who'd gone through that. And thankfully I was willing to listen to him.

So we've covered a lot of ground. It's been really, really stimulating. Any final thoughts?

You know, the biggest lessons I've learned again are if you're stuck and you want to become unstuck and make progress, go master a new skill set to the point where you can write a book on it, the point where you can provide that service or skill set to other people, you know, as a as a service provider, at that point you can open so many doors. But as long as you keep reading about that and not doing it, you're going to stay where you're at. Second piece of advice would be to really master your emotions when it comes to money, because making money and keeping money are two very different skill sets. And that's another, another lesson I've had to learn through my career as well. So start to study that now. Start to assume that you've got $1 million in the bank and start to make a plan for it and to decide how you're going to use it. And then finally, when you have an idea for a solution that can help a lot of people, once again, look for that greatest point of leverage. And know from day one that in order to ascend to that point, it's going to be all about people. It's going to have to— your skill set is going to have to change from creating or selling your product to building a team and, and really growing a great group of people and becoming a leader. And just keep that in mind as well.

Great advice, great wisdom. Thanks so much for taking the time to sit and share it with us.

Yeah, absolutely.

Thanks for having me.

I'm sure you enjoyed part 1 of my interview with economist Paul Zienpilzer. Riveting information. Now Paul is going to share some strategies with you about where he puts his own money, what his thoughts are about how to take existing wealth and grow it and create cash flow from it. He's done it, so it's not abstract. It's something he's actually put on the ground and made work in his own life, and I think it's very compelling. So enjoy my part 2 interview with Paul Zienpilzer. Paul, thanks for sitting down with us again. I'm really looking Looking forward to continuing our conversation.

Thank you. It's always great to be here with you, Patrick.

So you're the only person in the world who's ever made economics completely fascinating to me. So, you know, just whenever you were giving presentations, giving your lectures, you know, you really have these very stimulating thoughts about the economy and you kind of talk about varying aspects of economics that when you read them in professional papers, they seem very boring. But when you talk about them, they seem very— how can I applicable to my life. So now what I want to talk about, and it's something that I've been watching you do, you know, over the past years, is saying, hmm, if I've got some money to invest and I need to create cash flow in my life, like, what are some ways to do that? You yourself, I guess we talk about it, the fact that you own some Planet Fitness franchises, for example. What was it that caused you to say, you know what, I'm gonna, I'm gonna go invest in some of these franchises and create cash flow from that?

Well, frankly, I— like most things, it was happenstance, or am I calling it a happy accident, that got me to Planet Fitness. So let me tell you how I got into Planet Fitness, and then we'll come back to your main question, which is why Planet Fitness versus other businesses. In 1991, I didn't know this, I was on Larry King Live TV show, that I knew, and watching was the founder of Planet Fitness. But he wasn't yet the founder of Planet Fitness. He was a person with a frankly dying gym. And he watched me, went out and bought my book Unlimited Wealth, and used that book as a Bible. His friends joke it's the only book he ever read. And he used that book as his Bible and built Planet Fitness into a then 200-store chain of fitness gyms. And it was a fascinating model how he built Planet. At the time, every gym had an average of about 1,500 members. Gold's Gym, 24 Hour Fitness, you remember the gyms that were around Bally's. At 1,500 members, you barely break even. If you can get to 1,600, 1,700, 1,800, it's all profit because it's a heavy fixed cost business. That was the gym business. He figured out, not mathematically like I did later on, but he figured out that the right business was to build a gym for 8,000 members. Don't fight with every other gym going $1,500, $1,600. Retool the whole engineering process of the gym from signing on the customers using modern technology and iPads. Make it paperless. Make all the money collection paperless called electronic funds transfer from your checking account. And he built Planet Fitness in a very successful business. In 2010, he had his first convention in Las Vegas, and he was very excited to be bringing together the 200 franchises he had gone around the country and recruited. He said, you know, I want for my keynote speaker, I want Paul Pilzer. So he hired me as the speaker, and I got very involved with the company. I thought it was a terrific model. People could join a gym for $10 a month and do something about their wellness. Very exciting model. But then once I became known for Planet Fitness as the speaker at their convention, and all that goes viral, and I'm all over the web as someone speaking about Planet Fitness, People start coming up to me and my family members and saying, "Wow, Paul owns Planet Fitness." And my wife would say, "No, we don't own Planet Fitness. Paul's just a paid speaker." But that didn't matter. For everyone she told that to, there were thousands of people who thought Paul owns Planet Fitness because he's all over the web speaking about Planet Fitness. I said to my wife, "Lisa, you got me nervous here. They're using my name. They're using my likeness. I like the company." I don't know anything about it. They've been inviting me for a year now to come visit them at their headquarters in New Hampshire. Why don't you take off, fly to New Hampshire, meet the management team, meet more important some of the franchisees and make sure this is legitimate? She goes, great. Takes off for New Hampshire. She comes back, she bought a 5-store area development agreement for Salt Lake City.

Without consulting you first?

Well, she made the deal and signed it. But she saw an opportunity and said, this is a great business. People want to lose weight, and they need an affordable gym that's honest and lets them quit anytime. No commitment, $10 a month, what could be simpler? That's how I got into the Planet Fitness gyms. So Planet Fitness is exciting to me as a mathematician and economist, because of the way in which the business works. If you remember back in high school, when you studied quadratic equations, there were two and one was considered a ridiculous solution and one was the right solution, and you had to look at which one was practical and throw out the wrong solution. I've always looked at the wrong solution, which is mathematically correct, solves the problem, as maybe that's the answer. And a good example of a wrong solution would be Galileo, who looked up at the heavens. Back in the time of Galileo, what could you possibly believe if you looked outside except that the Earth is the center of the universe? And the sun comes up over here and revolves this way around the Earth, right? And the moon and all the planets revolve around the stationary Earth. It's wrong, but it's so obvious, right? It became our calendar for 5,000 years till Galileo invented the telescope and proved that wrong. Similarly, in a lot of businesses in mathematics, everybody's trying to linearly grow. And in Planet Fitness, in the gym business, people trying to grow from 1,500 members of club to 1,550 to 1,600. And the right answer is throw everything you know out about running a 1,500-member club, retool the whole organization for 8,000 to 10,000 members, then go out and get 8,000 to 10,000 members in your gym by low price, honest dealing, and all the good things that go with Planet Fitness. So as an economist and a speaker, I was interested in Planet Fitness and became much more interested when my wife started to say, we're going to open gyms in our business here in Utah where we live. And we're going to use this as a model, she said, to teach our children that retail stores and businesses don't just exist. Somebody takes a piece of land, builds a building, rents to the people, and really works very hard to give someone a great experience. But personally, as a head of household, which is actually what economist means— economics literally means a household, and economics is the study of a head of household or a householder back in biblical times.

I had no idea. It's the first time I ever heard that.

The word Greek economics means householder, manager of a household. Of a household.

Wow. Okay.

I'm also, in addition to being an economist and a speaker, I'm a householder. I have to pay bills like everybody else. I have to worry that I'm going to make enough money going forward for 4 children who are now in high school to go off to college. I have to worry about where I might live when I retire and make investments. As a head of household, or as a businessperson, I like Planet Fitness very much because it's primarily a cash flow business. You open a business like Planet Fitness, you invest roughly about $2.5 million to $3 million in a store. And if everything goes well and it works, which most of them obviously do, you're going to make about $1 million cash flow a year. Something they say in their offering last I saw, $600,000 to $800,000. But a good successful operator I know can make about $1 million a year profit per store. And I had never had businesses like that. Being a tech entrepreneur and an economist, I had always built businesses that serve the customer with a product. Along came somebody who wanted it more than I did, or I wanted to play with some other toys, and they said, we'll buy this from you. My life financially, since I left Citibank in 1981, that was my last salary. The last time I got a monthly check to live on was 1981 when I left Citibank and went out on my own as an entrepreneur. And for better or worse, all of my businesses as an entrepreneur were about initially real estate, buying some land, building something, getting it leased up. And before I could enjoy it, somebody would offer me more money than I thought it was worth. And I would take the money and go off and do something else. So my career from 1981 till 2010 was all about building businesses, not owning businesses. Planet was very different. Planet was a successful franchise. Then with 200 stores, today about 1,500 stores. Planet was a business that you primarily invested for good cash flow. Very taxable, but cash flow. You put in $2.5 million and you could earn roughly a 35% to 45% return in monthly cash flow. That was exciting to me and something that fit the time of my life, because I started entering my 60s, I'm 64 years old today. And I look at businesses as not what will this business do for the future 10, 20 years from now, what will this business do next year, next year, next year? Because I like having cash flow coming in. And Planet was really the first business I ever did that brought me current cash. And that opened up a whole new world of investing, because investing to me was always about growth and multiplying 2, 3, 4x your capital.

And this is what's interesting. So you make a distinction between phases of life and type of investment that would kind of match with where you are.

Absolutely. That's what we in economics call the utility curve.

Utility curve.

Let's assume you and I are identical. We certainly have the same hairstyle. We certainly have kids who love each other. We have lots of things in common. But how would two smart people do business together if we have so much in common? What are we going to bring to the table? Well, you might have 10 apples. And I have 10 oranges, you see right away how even though we're identical in thinking, we value everything the same, you don't value oranges the same as I value apples because we can do a switch. A utility curve is in utils, literally, we use the word util, how much you value each additional apple. If you've got 10, not many, you want an orange. Once you got 10 oranges, you want more apples. Utility curves are the reason the economy works. Is the reason very smart people from the same background with the same money will all do business together and want to trade and one do labor work for the other. You might want to clean the kitchen, I might want to clean the den. We might want to own this car, I might want a convertible, and we swap. And all of that works into the economy because people who are similarly situated have different utility curves.

And so with age or phases of life, those utility curves change.

Absolutely. When I'm younger, all I want to think about is how do I grow and make money, right? Some people in the younger ages say, I just want to make money and spend it, right? And they have a very good life when they're young, but often not a very good life when they're 40, 50, 60 years old and they haven't saved up money.

Now, and so what I find interesting is what you're saying, and I think this is— I'm witnessing this myself because it's like, you know, the idea of putting money in investing, letting it accumulate and cash out, you know, at a multiple some years down the road. Now you're saying, "Hmm, if I put up this type of a thing, in this case a franchise, and I'm going to take cash that I have accumulated over years, put it into a franchise, and then every month I'm getting money that literally if I'm not working, I still have income coming in every month from that investment I made." And then you multiply that investment with multiple franchises and actually it turns into maybe more money you made than when you were working.

The key in to investing once you're an adult, or even say over 30 or 40, is the term harvesting. When are you going to harvest your crop?

Yeah.

So if you're gonna start a business and you're younger, I'm willing to wait 10, 20 years because I fully expect— young people think they're invincible. I'll be around at 64. Today, the first thing I look at when I look at investment is what's the likely time horizon for when this investment will return me either current cash flow, or residual cash flow after it's sold, or cash flow from growing the business and selling it to someone else. And harvesting time has become an all-important criteria for me. I invest in funds where other people pool my money with other money and do great things. But the first thing I want to know is this fund got a 10-year horizon or a 20-year horizon. If it's a long-term land development project, I'm investing in, it might have 3, 4 decade horizon. Horizon. Now, I also have 4 kids who right now I'm not too focused on their residual. I got to get them through high school and get them to college. But at some point, if they were my business partners and they're 30 years old, I might think, "Oh, I'll go back to taking a long-term horizon because I don't need the money, but my children might want it." But that's for the future. But you start to see that you should be driven by your family situation. What do you need to live on? What do you need today? What does your spouse need? What does your partner need? What do your children need? Do you have any special needs children? And then project that forward over likely lifespan. And do you see how that's going to be the most important criteria, the time return for harvesting and making investment as you age?

You're the first person I heard say that because I think that's a critical consideration because a lot of people say, you know, they have different models of investing. Here's my investing advice. Here's how I think you should do it. And certainly people talk about, you know, levels of risk and, you know, harvest time as far as, you know, what age are you and here's what I'd recommend, etc. But you're almost starting from the value standpoint of saying, wait a minute, I'm a human being with a family. And if I've got kids in their 30s and we want to create some kind of a family business with the money that I've accumulated, that's a strong consideration as to decisions I would make as compared to my kids are off doing their own thing and successful, right? And I've got a separate thing where I have no kids kids. All those are really considerations. So there's not like who has the best investment advice, it's starting by saying what are my circumstances and what's applicable to me based on those circumstances.

We really learned that as a civilization in the post-baby boom years. Prior to the baby boom, or including most of the baby boom, it's about making money. What do you do when you make a lot of money, Dad?

I make more money.

And what do you do? I make more money. It sounds crazy. And the baby boom was the first generation which between rock music and all the things that we love doing that said, maybe I don't want to make just more money. Maybe I want to do something environmentally sound and make a little less money. Maybe I want to make money now, more cash flow. Maybe I want to save for the future. Even though I'm not spending it, I sleep real well at night. And the baby boomer really started applying utility curves to them and their children, all the way to the millennials that we might argue completely apply utility curves without thinking of how they're going to pay bills, because they got a rich baby boomer dad or mom to take care of. So, we really need to identify first, who are we and our stage in life when you're about to do an investment? Most important before you worry about how much or how are you going to make money, when are you going to make money? The most important thing, if you invest money now, and I'm talking anyone over 30, when does harvest time come around? Remember, the sooner it harvests, the less risk, right? But guess what? The sooner it harvests, probably the less return, right? And you need to quantify that and figure out your time horizon of investing before you figure out how you're going to invest, how you're going to manage your money and bring happiness. Because ultimately, money is really not about gross domestic product and increasing. It's about gross national happiness. And gross national happiness is a defined term by the United Nations. They spend $180 million a year collecting the data that goes into a database each year to determine which countries are happy. But as we look around, it's which people are happy, which children of ours are happy, which of our friends and relatives are, and how do we get them more happier. And you start to see how utility curves, time horizon to invest, all enter into a new formula we're entering into called I want more gross national happiness or gross domestic happiness. To be more accurate, versus I just want to make money.

Right. So now, and that's another interesting thing, saying, okay, it's the what do I invest in, but of course the when, you know, when do I harvest is another question. And then the why means like, what are my values? Like, as you're saying, maybe I also care about the environment. So, you know, let's call it the legacy side of it. You know, there's some maybe legacy issues that are important to you. So, so it's not as simple as just saying, oh, follow this guru and do what they say because because they know the right thing. It's different for everybody.

Right. And what we also see is a reemergence of the franchise business. And once I got into Planet Fitness, I started looking around at other franchises. And I found that Planet was not unique. There were many other franchise businesses that had developed a formula, had continual R&D, and that were attractive. In the past, I've always been the entrepreneur who started a business. Business. I literally took a blank slate building, I invented it, I drew it out on paper, I had a lot of fun doing it, and I built a business. Some of them worked, some of them didn't. This stage in my life, I don't have time for that. I need a business that tells— show me the thousands of people who have done it, show me the thousands of people who have made it work for them, and then take their situation. And I'm not going to copy them, I'm not going to reinvent the wheel, I'm going to license it. And that's really where the franchise business comes in. Our world changes so fast today, and the product you make and the customer you have changes so fast with the internet. You used to open a store and it was on a certain street, and your loyalty was your customers coming by. And if your product wasn't so great after a while, they still came by, they told you, and you had time to fix it. Today with the internet, if there's a better product for your customer, you're lucky if you last a nanosecond before somebody clicks on that product versus your product. You've got to have a huge R&D department in almost every business to stay on top of your customer, not just serve your existing customer. That's where I've come to really enjoy franchises like Planet Fitness, who today, I think the stock price is about $4.8 billion. We had an IPO of about roughly $1.5 billion 2 years ago. It's now trading at about $4.8 billion. More important, the company spends on new products new services and always brings them in. So our Planet Fitness operators can just run their gym and know at convention time when they come together once a year or just daily because they get an email from corporate, it's going to talk about new things we're exploring that might work in your gym, new things on trial you might want to be. The whole company is really a big R&D department to make sure we stay ahead with the latest technology. And that you see behind the scenes in any business you go into. Go into any fast food outlet, any item. It's not just the items changing, it's the technology of delivering it. It's their sources. My son just took a job, he's 16 years old, at Starbucks. I am overwhelmed by the technology at Starbucks that goes into training him, monitoring him, the values they're teaching him. They've got whole programs and videos for every possible situation. He had to learn how to serve deaf people, and he says, "Next week I'm going to learn how to serve deaf and blind people." These are amazing life experiences. Experience is I should pay Starbucks for what they're delivering to my 16-year-old son. But the learning experience is amazing. And there's no way if I own my own coffee place, I could add that much to environment, hire a bright 16-year-old kid, and teach them how to serve people.

Yeah. And with the whole franchise approach, the franchises you own are sellable, right? I mean, it's not like you just get cash flow and then it burns out. It's like somebody can come in and say, I still want to buy that business.

Yes and no. They're absolutely saleable, but I noticed so far, my observation, I haven't studied this as an economist, I've studied this as a businessperson looking for good business opportunities for myself and hopefully one day my children. What I see is that my high-tech business, which is always built on growth, when I go to sell, my typical exits are 20 to 40 times cash flow. If I'm earning a nickel, they'll pay me a dollar for that business. Not that they want to earn a nickel, the new owner. Well, let's get real specific here. I build a business for $1 million. It's making $50,000 a year, 5%. Somebody buys it for $2 million. It's earning them 2.5%, but they think it's growing very fast. With franchise businesses and retail businesses, for some reason, I don't have any defined reason why, the multiples are not 0.05 cap rate, which means you sell it 20 times your cash flow. They're more like 3, 4, 5 times. You sell a business for 5 times cash flow. I think that's because retail businesses require an intense amount of effort on behalf of the owner. They require amazing diligence. And you take your eye off the ball, it drops fast. The customer doesn't tell you he had a bad meal. My father taught me when I had a bad meal to politely ask the person, is the manager here? Better yet, come by during the day when they're not crowded and tell the manager, I've enjoyed this place for years, we had a bad meal, I'm not here to complain, I want you to fix it before something happens. And I was brought up that that's what a businessman does for another businessman. Today nobody cares. You have a bad meal, just think of the last deal that didn't meet expectations or a product.

Yeah, they're getting one-star reviews on Google and—

Or no reviews.

Or no reviews, yeah.

Till the customers all go away. What we start to see is retail business is something that you've got to focus on. Most franchises, maybe because someone's done a lot of the intellectual property work, you're lucky if you can get out at 5 times. Now, the good news, during the 10 years you might own and run it, you're earning 20% on your money. You can borrow money at 10% or 11%, pay off interest on the money you borrowed, and still earn 20% on the total amount of money or 30%. So the franchise businesses let you get the cash flow earlier but don't have the amazing residuals when you go to sell.

Yeah, not the big exit. But at the same time, like, if I were to consider— somebody said, well, maybe I'll buy real estate. I'll buy an apartment building and I'll collect rent every month. But the cash flow on that rent relative to the investment you put in, I don't think it's anything close to what you're describing in a franchise. And maybe the real estate would go up in value a lot, maybe it wouldn't, who knows. But if you're still still saying, hey, I'm going to sell this thing for much more than what it cost me to put it up, and I collected all this cash along the way. That seems like a pretty attractive way to go for people who are looking, who've worked hard for some period of years, or has maybe— and maybe it's an inheritance, you know, parents die, they left you some money, saying, what do I do with this? Seems like an attractive way to generate what some people like to refer to as passive income. I never think it's I don't know if it's totally passive, but it's not you having to go to work every day for a paycheck type of thing.

Well, franchises really are. Most franchise businesses, which generally means most retail businesses or businesses that serve things like cleaning houses or cleaning office buildings or some type of franchise business where someone developed a model, they require an intense amount of focus by the entrepreneur individual franchise owner. If they didn't, the parent company would never sell you one. If Planet Fitness could have built 1,600 corporate stores all owned by that wonderful guy Mike back in New Hampshire, he would have done it. But he found the most important criteria to making a successful gym was the owner, the manager who sits there and hires the best people, makes his employees learn everyone's name, and builds a family business around an individual gym. And he found the only way he could grow that was making everyone his partner in a franchise environment. And that's why you rarely see a franchise that doesn't require, despite what people tell you, a lot of hands-on work.

How many hours a week do you spend right now on, you know, in your two franchises?

Well, I don't, but my wife goes there virtually every day.

Oh really?

But she enjoys going there every day. She walks around the gym, she talks to people. How are you? And they say, great. And how do you like Planet Fitness? Oh, I love it. And who are you? Oh well, my family, she says, owns this particular franchise. Wow, I love it. And she loves the karma she gets, right? She makes a lot of money at it because that's the byproduct of serving society. If you serve a product to someone very well and make them very happy, trust me, you'll make a lot of money. The moment you take your eye off the product and the end-use customer and how much they're enjoying it, the moment you don't get really upset when someone has a bad experience in your business, get out of the business because it's going to kick you it's an interesting term, it's going to kick you out. You brought up one of my other areas I think is ripe for huge investment opportunity, and that's real estate, but not necessarily the real estate you think of. Most people think of real estate like you buy an apartment building, you buy some type of commercial space, tenant shows up, and you just sit there for collecting coupons for the next 20 years. No longer. The reason is that the real estate needs of people are changing. Changing. I recently became a significant investor in funds that invest in senior housing. A typical senior housing project is about 110 apartments, 120 apartments that seniors who are moving out of the town, might be Allentown, Pennsylvania, or some area in California, where they are moving to Florida, but they no longer need the big house. They want to get an apartment that they can still see the grandkids from, but they also think because they're 67 years old, How will I age in this apartment? What's the floor plan like? How will I stay here if I'm ever disabled or my spouse is and I want to stay together? So, we start to see a whole new need arising, which no one is filling today for senior housing, because it's changing so fast. Seniors might say, I could live at home till I die if only I had someone just 8 minutes a day to help me get dressed in the morning. We call that senior assisted living. And all of that is up for grabs right now. So the funds I invest in are buying thousands, tens of thousands of senior housing units, and I work with them on a technology committee to how can we improve senior housing. What kind of products and services would a senior want? The first thing I notice when I go into a senior housing project is at the end of the night they have a piece of paper and they walk down the hall going, Mr. Gintempo, did you take your medicine tonight? Great, click. I look at that piece of paper. That should be an iPad because somewhere there's a grandchild or a child who would love to know dad took his medicines at 11:02 PM. You and I don't want to know that, but we wouldn't want to know it around our own kids, especially if they don't live with us, to know they took their medicine, to know they had breakfast, to know they went bowling today. We start to see just opening up with transparency the activities of senior living to the people below them, meaning to their children and grandchildren, is a huge business ripe for the taking. That's one of the things I'm working on now as a board member and consultant. And I see wide open as we move to housing that really doesn't exist, senior assisted housing that really adds value for seniors, because then you can up the rent in a good way and people will be thrilled to pay it because they're getting real value for it, not just a place to put grandma.

So I know from prior conversations we've had that you put a lot of money into that. What's, what's your time horizon on that?

On that one, though. Very good point. I disagree with the funds I invested. They invest in a 3- to 6-year horizon. They spend 3 years, they raise typically $50 or $100 million per fund. They spend 3 years buying apartment, senior projects, or whatever our projects are. Then they spend, turn them around, fix them up, add value, then spend 3 years selling. They're very into adding value and selling. I think that's crazy because we're selling deals at an 8% or 9% rate of return. I'm earning 2% or 3% on T-bills at the bank. I don't want more money to earn 2% and 3% that was earning 8% or 9%. And I tell them, hold on to it longer. They go, not so fast, Paul. Our business of funds and how we're known on Wall Street is we give you back your money every 6 years. There are other funds that run by different companies that have a 10- or 20-year horizon. Fortunately or unfortunately, I'm not in them. So, we keep making our money every 3 to 6 years. 6 years, getting it back, and I keep investing with the same.

I was going to say, but at that point, it's kind of nice to get it back because you can decide, do I want to reinvest, or I'd like cash now, so I don't have to reinvest. At least you have some options relative to that. So real estate in the ways that you're putting in real estate funds that are doing things that are seemingly a market match.

Or real estate yourself, where you develop a niche in a neighborhood and start adding value, which might be converting a small apartment project to senior housing. It might be buying yourself a house on a particular neighborhood that fits where people all go to a church nearby or a synagogue that people, you know who your customer is. The real value coming in real estate I see is value-add investing. You buy real estate, any type of real estate, you improve it for a specific purpose or type of customer, and then you sell it versus the old days of I'm in real estate, I'll buy anything in real estate. Those days are gone. You've got to know a market before you go into it. And try to develop some specialty niche for your customer.

So outside of real estate and franchises, any other considerations that you think are good investments for people to consider?

I would say all ones, all investments that you yourself are the person working at hard. Generally, if it's a business that uses technology, which virtually everyone does today, I like franchises because I don't think you're going to be able to invest the time and money. And I'd rather buy— I call it buy retail. I'd rather pay top dollar for a really high-quality franchise that I know is going to work if I play it out than take the risk on the new startup franchise that someone like Paul Pilzer might start, because they don't always work out and that you get a higher return, but they're very risky at the very beginning stages.

So let's give this scenario. Somebody's coming up on retirement. They're not there yet, but it's coming up pretty quickly.

How old?

Let's say 50s. Yeah, mid-50s. They're going to— they've got some work life left, but they also say, oh, your retirement's coming up, and I'm looking and I really don't have the resources just to say I'm going to retire. I don't want to live on Social Security. What should they be thinking about?

Well, it's a great time to be asking that question, and the reason is underlying everything we do today is the sharing economy. In the past, I would say this is a person who likes theater, likes things he wants to do, and wants to have money for the enjoyable things of life. Life. This is a person who has certain kind of housing needs, but doesn't have the money to buy the housing. Everything changes in a sharing economy mode, because all of a sudden, we can share our real estate, we can share our dinners, share our areas with people of like personality, of like interests, and add huge value. You don't want money to just go to restaurants, you want to have great restaurant experiences. My wife is a real foodie, but when I go to restaurant, you know what makes the real experience? You. It's the person I'm dining with and telling me about the wine and we share and we figure it out. That's much more important to adding value. I'm amazed when I look around a restaurant, particularly when I see someone sitting alone who might be traveling. Can't we figure that out yet with a cell phone? That there's a person here who's interested in model trains, 7 other boring hobbies that I think boring, he thinks are great, has 3 kids at this school and wow. I've got so much in common that if we only could know those things about each other, we'd have fun in a restaurant. Now the kids do this well for dating and sex, but it goes beyond just dating and sex, particularly when you get older. You want to have real meaningful relationships or great dinner conversations. And so the sharing economy first helps us find people of like interests, then it finds the restaurant, the place we want to go of like interests, and before it even reveals who's who, I know this person went to my college, I press the button to verify that so we're both sharing the right info. And what does he want out of me? Companionship on one meal. So, the sharing economy has the ability with technology to deliver so much value add at much lower prices because by definition, it's sharing to individuals. But what we see with retired people is we all have the same needs. So, once we focus on it, I would tell your friend who's about to retire to start chronicling their life hour by hour. Start, get up in the morning and say, what did you do at 4:00 PM? What did you think of at 5:00 PM? What did you think of at 6:00 PM? What did you need on the way home from work at 7:00 PM? And then try to think, are there other similarly situated individuals at my age with my interests in my locale who also might want to share with me in producing these items for others or just consuming them for ourselves? Because your individual needs in the sharing economy are the needs of others simply situated people. And as you tune into them, you should look at them as a business opportunity for a franchise you may want to buy to serve people in your neighborhood, or just meeting up with people who have common interests and common goals.

So for example, you're saying, you know, there could be more shared real estate, like saying maybe two people who are getting ready to retire, two couples getting ready to retire.

Crazy. My wife and I love Singapore, and there are many things we like about it. But 30 years ago, 50 years ago, When I was just dreaming of going to work at Citibank, I knew about Singapore. Singapore is 12 hours off Eastern Standard Time zone. So, Singapore has all these buildings owned by Citibank, Deutsche Bank that run 24 hours a day. All the buildings and retail runs 24 hours a day. The streets are so lit up at night, you leave work at midnight or 2:00 in the morning and you go to dinner and you're going on a beautiful river, you don't even know it's nighttime. And what's exciting about Singapore is they use the real estate. Real estate 168 hours a week. We use our real estate 40 hours a week. Think about just the real estate that you use and how you could share it. You only sleep in it 60 hours a week and you've got 168 hours. We got to figure out beds and situations where somebody— like a hotel room that rents by the 12-hour cycle, not a 24-hour cycle. You start to see so many opportunities of using just the real estate we have in multiple ways. Here in Utah, we have a center for American Express. It has 10,000 desks. You've probably spoken to people there if you have an American Express card and wanted help. But it doesn't have in the 10,000 desks 10,000 employees. It has 35,000 employees who come in and work 8 hours and then move off. They get off at midnight, but midnight is 8 in the morning or 8 PM in Madagascar where they happen to work with their customers. What's exciting when you see this American Express Center, you see someone taking a piece of real estate that was meant to serve 10,000 desks, used very productively by 35,000 people, so that as the Earth turns and someone needs help with their American Express card or a merchant needs to know why this charge didn't go through, they pick up the phone and a person right here in Utah with their local dialect, local language, answers in— the guy in Madagascar or South Korea or Japan and helps them. And we start to see the opportunities to use what we have multiple, multiple hours, not just for ourselves, but great business opportunities to apply that to people who are similarly situated. And what we really see is we all want companionship, we want fun, we want friends, and the technology world has yet to really deliver. Each time I go to a party somewhere, and what makes a great party for me at my age, it's when I meet someone really interesting, and I want to follow up. And once in a while I'm lucky. I go to a party, we talk small talk, we talk business, and I meet one or two new people, sometimes a friend of yours, and we go, wow, let's have lunch or dinner. But that only happens when you go over and introduce me to somebody new and give me some background on them and probably told them there's this economist I want you to meet. You put some work into it. And I look at my phone and go, somewhere in the rest of the phones in this room, there's 50 people here that I could have something in common with. And would like to meet. I don't want to sell them anything or buy anything from them. I just want to talk about our latest hobby or something in politics, or I love economics, talk about economics. But no one's walking around reading my mind and their mind. And that's some of the future things coming with technology that will greatly improve the quality hour by hour of our personal relationships.

So Paul, as usual, extraordinarily stimulating conversation. Very much appreciate your time. Any final thoughts before we close.

You should always remember that value in life comes from serving another human being. When you can bring a smile to a child, your spouse, your friend, or yourself, you're happy. And what we want to do is bring more happiness. And business at its root is serving another human being. It's making them happy by delivering something they want for less money or time than they could do it themselves. And when you deliver it and make them happy, that's when you get your reward. Reward. And that's what's so exciting to me about economics. I see this wonderful world out there of 7.5 billion people trying to find an edge to how to serve another human being better. That's what makes economics. That's what drives them to success.

That's great. And I think, in the end, that's the moral virtue of capitalism, right, is people serving other people and being rewarded for doing so. So terrific. Well, thanks so much for being with us.

Thank you, Patrick. It's always a pleasure.

Capitalism.com, what a great URL for the Money Revealed docuseries. Next up, I have one of the two interviews I did with Ryan Moran, who is the founder and owner of Capitalism.com. In this particular interview, he gets tactical on how to grow successful businesses. So if you don't have a pen and pad handy right now, you might want to pause and get one. There's gonna be a lot of notes that you can take away from this interview that will be helpful to you. Enjoy it. So Ryan, great to have this conversation. We want to get more practical now. Strategies, how, what you see is working for people in entrepreneurial careers or seeking entrepreneurial careers or even side hustle saying, "Hey, you know, I have my normal job but here's something that, you know, I'm trying to look for something on the side to expand my income, etc." And you said you've got a lot of passion around this. So tell me some of your thoughts regarding those issues.

Yeah, this is my jam, you would say. So In my work, I basically help people create a plan to get them their first million-dollar business and have helped been a part of several hundred successful businesses that have either resulted in people selling their business or making it their full-time thing or a side thing. And the first thing that we have to identify here is, what we spoke about previously of disconnecting the idea of time worked versus money earned. Because ultimately, as Jim Rohn would have said or did say, we're compensated for the value we bring to the marketplace. It takes time to produce value, but we're not paid for the time. We're paid for the value that we bring to the marketplace. And we can— we do that by doing things that create a scalable impact. Throughout the rest of the world or our world. So one of the, one of the ways that we've done this at capitalism.com is through physical products brands. The kind of aha formula that a lot of our students say is when the light bulb came on is if we have 3 to 5 products selling 20 to 35 units per day at an average price point of $25 to $35, that's a million-dollar business. And we could run those numbers a couple different ways, but 3 to 5 products selling about 30 sales a day is about 100 sales a day at an average price point of about $30 is a million-dollar business. And that million-dollar business is usually when we have something we can either scale or something that we can sell. And I believe that the fast lane to financial freedom is to build a business and invest the profits. And if I were to say the faster-ish lane would be to build a business and sell it and then invest that for passive income so that you can define life on your own terms. And for some people, that means you then double down on another business. And for other people say, I'm done. I'm gonna now do what I would like for a few years. And either one is totally cool because you're responsible for the results that you get and the way that you pursue happiness.

So I want to talk about the blueprint that you have for this. But before I do, I'm going to fast forward to one of the things you just said and then we'll go back. When you say that, okay, because let's say I'm a dentist, I'm 50 years old, I've accumulated a good amount of money, but I want side money or I want to be able to create passive income. Maybe I'm starting to look toward retirement and I I don't want to just retire my capital and burn it. I want to figure out a way to use that in a way that works in today's world where it can provide me passive income. What are some of your suggestions around that?

I think every single person should be taking 10% of their take-home income and automatically placing that into some sort of a long-term investment. So for me, that's just— I have E-Trade deduct a certain amount from my checking account every month, and I go and I put that in a dividend and paying stock. Now I would say I am like in step 3 of the process because I've built a business, I've sold businesses, I've invested for enough passive income to where my life is taken care of, and now I'm investing for really long-term wealth. For some people, if you don't have that side business that is producing some sort of exponential return, that's the first investment that I would make to someone who is entrepreneurial. So if somebody was set on staying in their job and just doubling down on their career, I would say, okay, that's gonna be your source of income. Let's go to step 2 and invest for passive income. But for the person who doesn't want that life, or they want something on the side, or they want the thing to replace their job, I'd say that 10% of your take-home pay needs to be being set aside for that side business that is going to ultimately hopefully create the income that's gonna replace the job that you're working. And the number one thing that you can be doing with that 10% is to be in education and learning as much about business and advertising as possible. So I think that the, the hack, if you will, to creating income on demand is by having an audience, is by having people who pay attention when you distribute information to them, and that can come in the form of a YouTube channel, it can come from a podcast, it can come from a blog, it can come from people reading your Facebook posts, it can come from an email list, it can come from Facebook Messenger, it can come from Twitter, it can come from Pinterest, it can come from Instagram. We can go on and on and on forever. So if there are people, even if it's a few hundred people, who actively digest whatever you put into the world, we can turn that into enough money to do damage. And to get to that first few hundred, it'll take a few dollars. And by a few dollars, it could be as simple as $500 or $1,000 for us to put something onto a channel, advertise it to people who would benefit from it, until we have a few hundred or a few thousand people following our work on Facebook, Instagram, our blog, blog, on and on forever, wherever you're putting your content. That audience is your hack to creating income on demand. And we can go into how to do that, but that is, that is like absolute foundation step 1 of how you create a predictable income stream that is not tied to anything except the value you're bringing to the world.

Let's go ahead and dig deeper then since we're on it. So, go ahead and talk about that a little bit more as far as saying, okay, Maybe like kind of give a scenario. So you got this person, here's the amount of money they have to invest, and here's the process.

Yeah, so I mean, if somebody has, I was asked once, if I have an extra $500 a month, what should I do with it? I'd say I'd put it all on advertising whatever content you're producing in the world. So if you are a dentist and your passion is dentistry, and you want to have a business that serves other dentists, then you need to be putting out content for other dentists and advertising that on whatever platform you are most comfortable distributing that content. And a lot of people will debate over the best place is Pinterest, the best place is Facebook, no, it's Instagram, now it's Snapchat. Some people say do all of them. I say do whichever one you naturally do. Because you're gonna continue doing that. So for me, I, will sometimes write blog posts when I feel inspired. That usually happens on planes or when I'm super relaxed on vacation. But give me a microphone or a camera, I'll talk all day.

Proof.

So, if there's a camera or a microphone, I can produce content all day long. So, that's why I have a full-time videographer. Now, I didn't always have a full-time videographer, but I did always have a $30 microphone that I plug into my laptop. And I start communicating ideas about business and investing to the world, and I spend a few hundred dollars a month to boost that content, right? That would be step 1 at its foundation, how we're gonna get this ball rolling.

And to be clear, the content you're giving, it's a giveaway, it's free content. What you're paying for, or investing in I should say, is to build an audience, right?

Okay, that's exactly it. Yeah, because there's, there's a a deposit into a relationship bucket, right? Every interaction that you have on the internet or in person is ultimately a value exchange. And your job at the beginning is to start depositing checks into that relationship bucket from the people who are following you. And if your content is halfway decent and you're targeting the right people, the people who would benefit the most, a few hundred or a thousand people is enough to get the ball rolling in terms in terms of monetization. And I would say you wanna make the deposits in the relationship account as long as possible before you ask for a withdrawal. But for most people at about 1,000 followers, that's when we could start to monetize it.

Yeah, and what's interesting is that if somebody said, well, if I were to take that $500 a month and put it into, you know, a stock or put it into something else, first of all, it's then out of your control. In the sense that it's now you're investing in somebody else's dream, not your own. But then secondly, the return on this investment is likely much higher if you build that audience and get to that 1,000+ mark.

My first successful physical products brand was a sports nutrition company called Sheer Strength. I started, I ordered my first line of product for $600, and I sold that for more than $10 million, a majority stake for more than $10 million. Still hold a minority stake, which will probably be another 8-figure payday at some point. That's a pretty good ROI, right? That is better than Bitcoin. That is better than any index fund, right? I mean, that only happens because you are now investing sweat and education and intelligence and time into something that is going to create an exponential return.

Now there's a dimension of this. Did you have personally a passion in fitness products?

Absolutely, yeah.

And how key is it that you're passionate about whatever it is that you're looking to promote as compared to saying, I think, oh, that's a good idea, even though I'm not that emotionally invested in what it is?

Passion is an asset. It's not a necessity. Passion is an asset in a field of assets. Time is an asset. Money's an asset. Connections are an asset. An audience is an asset. Passion is an asset. And all of these things make results happen faster, or they open up opportunities, or they give you the grit to keep going. So talking about this with you is energizing for me. It's a passion of mine. Which means at the end, I'll probably be sad it's over, right?

If this—

since this is my workday, but at the end I'll be sad that it's over. I'll want to keep going, which means if another interview showed up, I would want to participate in it. So that's an asset because it means that I can contribute more. It means that I can do more work because I've got more energy to do it. Now for some people, all they have is money, but they have no time, or they have no specific specific interests or passions. So their best route is probably to be an investor. Great. It's your job to analyze the opportunities and deploy your best asset into however is going to best serve you. For some people, all they have is time. So for a while, they're just going to be trading that time for dollars until they find the thing that they want to focus on. And for some people, it's passion. All they want to do is get up in the morning and golf. Or play video games or whatever they're interested in. All of those opportunities can be monetized. I don't have that one passion, that one thing that I want to do all day. And I think part of the confusion that people get about passion is that they think it has to be found. They think that there's one thing outside of themselves that they have to discover. And if they don't discover that one thing, then they're never gonna be happy or successful. I am one of those people that doesn't have that. I love baseball. My dream is to own the Cleveland Indians. But after, you know, a 162-game season, I'm ready for a break. Now come December, I'm ready for the season to start again. But I think that even I, who am passionate about what I'm doing, don't have the one thing that I could do forever. And so I have more of a feeling that I pursue, or I have interests that I cultivate. I think passions and interests are cultivated, not discovered. They are— we, we invest in them, we grow them over time, and it becomes an asset. But it is certainly not the only asset that leads to success.

So would you say though that you're, uh, that capitalism is an an overarching passion for all these things that you're doing, that that's kind of like the driving thing that is constant fuel for all these, your respective activities?

I'd say that capitalism is a great word that represents my collective interests. And I studied economics during the 2008 political election while I was building my first business. And the economy was tanking. So my interests just happened to be business, politics, economics, and talking. And so capitalism and leading a message of capitalism happens to well represent what I'm doing in the world.

And now, I guess, in your own story as an example, so then you, you have a liquidation event. You you know, you from this business that you created in the way that you just described how you do it and how you recommend other people do it. And then you pivoted toward investor. So because now investment's a part of what you do. And I think again, going back to that scenario of somebody like a dentist or somebody in that realm that says, you know, I've been working for a lot of years, I've got really some capital now. And I really don't know how to think like an investor or how to approach, you making investments. Do you have anything to say about that?

Yeah, so just to complete the point, I think that if you don't have a side thing or a business that is not connected to your time, the first thing you should be investing in is that, right? And if you don't know what that thing is, then the thing you need to be investing in is a skill set that you can take to clients or customers and sell in the marketplace. So whether that is running advertising, or it is— I know, I know somebody who charges $20,000 to set up a podcast, right? Because he's one of the best in the world at submitting your podcast to iTunes or whatever, whatever it is, right? So the first thing is, do you have a skill set that you can take to the marketplace? And for a lot of people, and I've seen this work really well for people, they take their job and they go take a couple side clients and say, this is the result that I get for people. People, these are the connections that I have from my 20 years of experience working in the corporate world, I can bring this to your organization and I'm gonna charge you $4,000 a month. And since now that is your side hustle, and that's your first skin in the game to have your first business. And if you're building an audience while doing that, getting clients is really easy, or selling product is really easy. I know, for example, I have a friend who's a medical doctor, and this medical doctor puts puts a lot of content out just on his own personal Facebook page. And on that Facebook page, he talks about inflammation and reducing inflammation and his opinion on inflammation and why it's a problem. I don't know anything about this, but he talks about it at length. One day, just on a whim, he posted on his Facebook page, look, I'm thinking about developing a supplement that would meet my criteria for something I think think someone should take or something. And he had about 100 people respond to that. And he started taking deposits for this first product and delivering it in bags, like Ziploc bags, which looks super sketchy, by the way. And he pre-sold 100 units at, you know, I think he sold like a a 3-month or 6-month supply for $1,000, which funded the build-out of the entire business, which he'll now get feedback, blood work from these patients, and asterisk, I hope I'm not violating any medical claims by—

I think you're okay so far, and you haven't mentioned any names, so you're good.

So he'll document their results, share them, And now he's off to the races in terms of having a business that he can scale. In the same way, I have a student, her name is Sophie. She lives in Australia and she has a little company called Seed and Sprout. And Seed and Sprout sells environmentally friendly kitchenware. So that would be, she has reusable containers that are made of aluminum and Or she has reusable bags that she sells. And she developed her first prototype, she ran a Kickstarter, posted it on her personal Facebook page, said, here's what I'm up to in the world, this is my prototype, I wanna take this bigger, can you help? And her first product was this lunchbox that she sold. And she did $25,000 in pre-orders. She did 3 things well. She posted about it on her personal Facebook page, personal Facebook page, she went to 10 personal friends who are passionate about the topic and said, can you please talk about this on my behalf? And she went to a couple Facebook groups, so like influential type of Facebook groups that were like 10,000 people, right? And I said, this is what I'm up to, I'm running a Kickstarter, can you help? And one of them said yes, and that cumulative effect from all of those different touchpoints created $25,000 in pre-orders. For a lunchbox. That's enough, that's enough to get the ball rolling. So that's, that's the first thing that you should be investing in if you want to have a side thing. From there, I think you should be investing 10% of your take-home pay into long-term wealth-building assets that you never touch.

What's an example of that?

Yeah, so for me, my favorite is dividend-paying stocks. Stock, which is super unsexy and boring, right? But I love dividend-paying stocks because they have a double compounding effect. A double compounding effect is some stocks, we call them dividend aristocrats. Give that a Google. That is a term that refers to companies that raise their dividend every year for at least 25 years. A dividend aristocrat. And so if we look at a company that has raised their dividend every year consistently and predictably, there's a compounding effect that happens to that because year 1 you're getting $1, year 2 you're getting $1.20, year 3 you're getting $1.40, $1.60, $1.80, $2 forever and ever, amen, hopefully. And so we have a compounding effect that's happening from the raise of the dividend, but I reinvest my dividends into more stock. So that creates a second compounding effect. So we're buying more stock, which is giving us more dividends, which is buying more stock, which is buying more dividends. And so we have a snowball that starts to roll. Compounded over 30 years, I'm yet to see any investment on the stock market outpull those numbers, right? Because you get two compounding effects compounding against one another. So if someone can show me a better strategy, I would love to see it. I've had this debate with a bunch of financial planners. And my numbers always check out, right, of dividend— long-term dividend-paying stock outperforming just about anything else in the stock market specifically. Now with that 10% going to that, the next thing that I do— and again, I'm not recommending any financial advice— but what I do is I take my profits at the end of the quarter or the end of the year, and I'm buying cash-flowing assets. A cash-flowing asset to me is real estate or real estate syndications or real estate investment trusts. It is, I buy web businesses. My favorite is websites because a website that profits $1,000 a month almost passively with a few hours a month of maintenance can be sold for $20,000 to $25,000. That's a pretty good deal for somebody who's just looking for an extra $1,000 a month. And there are some interesting tax suggestions that some CPAs will look at and analyze. CPAs, I've talked to several that disagree with one another, but I've heard some very interesting proposals on how you could classify websites an asset to be more tax efficient, similar to real estate. Real estate, you get certain write-offs, right? Web properties and web businesses have some similar types of classification, so it could be very tax-efficient income. This would be investing in someone else's business, right? We're looking for a way to passively be involved in something that is producing cash flow for us. So I like real estate investment trusts, which are publicly traded real estate companies companies because they pay really high dividends. I like websites because the ROI is just absolutely absurd and they're a sellable asset, and I like investing in businesses. So the first thing is that long-term thing I'm never going to touch. The second thing is I've now got savings, and I'm going to take that savings and I'm going to try and buy more income with that. But I'm only doing that every quarter or at the end of every year when I have my profits left over from my business, right?

Is there certain, um, investments that you look at that maybe you'd say, if I were to look at somebody who was a millennial versus someone who's, you know, Gen X, or versus someone who's a baby boomer, like, uh, yeah, depending on the phase of life that you're in, are there certain, um, buckets that they, that they would fit into relative to the type of investments they should be looking at?

Yeah, I think when we're looking looking at investing, we would prefer that whatever we're investing in, we have some sort of a strategic advantage in, and that could be knowledge, it could be skill set, it could be people that we know. And millennials, stereotypically, are pretty good with social media, so they're going to have insight into what emerging platforms we should pay attention to. So it might be as practical as, There's a social media site right now called Twitch, which is emerging and capturing a lot of market share.

Yeah, my son's on it.

Okay, there you go. So if you have a young person who is on the cutting edge of that trend, have them double down on that, 'cause they have a strategic advantage over someone who is in an older generation. So it's gonna take you and me a little bit longer to figure out a brand new social platform than either of our children, right? And they're going to have a little bit of a strategic advantage there. Have them go all in on that. Whereas somebody who is older has the benefit of time and experience. We've seen market cycles, we've seen ups and downs, whereas right now millennials have lived through only boom times in the last 15 years. So what is going to happen when the market has its next pullback? They're probably going freak out. They're going to overcorrect, oversell. They're going to run for security because they've never had to see it before. But if you're an older person and you've seen ups and downs and you've got some in the bank and you're good, that's a good time to have dry powder to be able to buy up assets that are going to be incredibly undervalued when we have the next pullback. So where do you have a strategic advantage? Do you have relationships that you can bring to a new investment. So for example, I privately only invest in physical products brands, and the reason for that is because I've made all of my money in physical products brands. I have connections to people in retail. I have connections to influencers who can help incubate a company. I have access to investors who know that that's my skill set, and they're throwing money at me. It would be really silly for me to try and pick the next cryptocurrency, right? Because I have no strategic advantage there. Now, I have invested in cryptocurrency, as we've discussed, partially to keep myself sharp, even though I don't believe in it as an asset sector, except for one exception. I did invest in one emerging ICO, one cryptocurrency that was brought to me by by a personal friend of mine, who as far as I know, is the most connected person in the cryptocurrency space, and he specializes in ICOs and raising money for ones that he personally backs, that he personally invests in, that he personally vets the team, and says, these are guys that I believe in. Now, I am not betting on that cryptocurrency. I'm betting on a relationship. In the same way, I have investors who invest invest in me because they're investing in my knowledge and my strategic advantage. So we've all got some sort of strategic advantage, either with people we know, with assets we have, with connections or experience or time. And I would say depending on what those are, and that's going to largely be determined by your age and experience, that's where you should start looking at where you should invest.

To that point When you're doing capital raises, I mean, when I was out raising money for one of our ventures and I'd get in front of the private equity guys, I asked them all the same question, which was, what's the number one thing you look for in an investment? And 100% of the time they said, the team. It's the who. Not, is this a great idea? Of course they have to like the idea, but it's who the person is or who the team is that's gonna bring this into reality. I think you're making a really, really good point here.

I like to say that the answer to almost everything is who.

Yeah.

I mean, even if we think about experiences that made us happy, usually we're thinking about who it was with.

Right.

You can be in the most beautiful place in the world and be around people you don't like, and it's not a good experience.

Right.

Whereas you could be in a small, tiny, rundown dorm room and have the best time ever, because you're with your best friends. And almost everything comes down to who. Success comes down to who. Investments come down to who. Happiness, love, they all come down to who, not what, not how. Those things can be helpful. When can be helpful, but who is ultimately the determining factor.

[Speaker] Yeah, and you talk about the arc of experiencing cycles, et cetera. I could tell you when I look back and say, okay, what mistakes did I make over the years, more to the point of the who, was taking opportunity over values. I'd look at, you know, certain people I want to put money into or create a partnership with, and it was such a great opportunity, but there wasn't a values match between us. And even the product is a values match. In other words, are you investing in something that's contradictory to your own values? That also can lead to some kind of a problem for for you. So that, I think that's really wise investing advice for people that are out there.

And I have almost the exact same experience.

Yeah, yeah, it's, it's, it's not fun. And you want to learn after a while so you don't repeat that one. So in your experience, what is the timeline expectation or range of timelines to go from I'm starting to getting 1,000 people?

90 days. You said that so quickly that there's, there's more of a formula here than, than I might I would understand it's just experience based on if you're really in it and going for it, it'll probably take you 30 days to have a message hit, one piece of content that impacts enough people, assuming that you are then gonna ride that and interact with all of the feedback that comes from that. So if you put out a different message, a different tip, a different strategy, a different piece of advice, a different video. One of them usually stands out and creates 80% of that audience. It's then your job to spend the next 60 days to take that message to as many people as possible. So if I look at all the videos that I've created, I could point to less than 10 that have probably attracted 80% of the business, 80% of the eyeballs, 80% of the attention, 80% of the PR that I've received over the last 10 years. Years as an entrepreneur. I could also pick out 5 podcasts, 5 blog posts, 5 Facebook posts. And what I'll do is when I see something hit, when I know I've got something, if something gets more shares, more likes, more emails, or even better people responding, my ideal people to work with responding to it, I then take that post and I turn it into a video. I then turn that video and we turn it into a blog post. We then turn that blog post, we turn it into a podcast. That same message is gonna be distributed to as many people as possible, and what will happen at that point is then we can take that message and roll it out to other podcasts, other YouTube channels, other blogs. So just today, this morning, one of my mentors who has a huge audience noticed that I had tipped my cap to him in one of my videos and I shared on video a lesson that he had taught me and he shared that with his audience, right? And so someone else saw that and they clicked the share button and someone saw that and they clicked the share button or one time I had a Facebook post go semi-viral, probably got 100 shares on Facebook or so and the people who were sharing it were not —people who would usually share my content. They were much higher-level individuals, so I was connecting with a really, really good market. So we turned that into a video. It's the most viral video I've ever done. We then took that and we turned it into a podcast, released it on a podcast. And what I noticed was that several other podcasts bigger than mine who had started tuning into my podcast based on one of the other pieces of content I had put out, they took the podcast episode, sent me a message, said, could we share this on our podcast. And so that one message, which was a 6-minute message, started building my audience, doing it one time to many, many people. So a lot of, a lot of new entrepreneurs will assume that building an audience comes down to putting out as much as possible, and that's true until you find your points that are connecting. Then you go scale those with more media, you go scale those with more more relationships. You scale that by distributing it as much as possible. 1,000 people happens as a result in 90 days.

So if you're somebody that says, "Well, geez, I, you know, don't know how to put up all this stuff and to, you know, get it implemented. I have something to say but I don't know how to set up a blog. I'm not sure how to go and market it." So if you can't do it yourself, what should you do?

Either figure it out or choose something that you do understand. Okay. And if, like, if you're not willing to figure it out, just don't do it. Like, seriously, just don't do it. Your message isn't important enough for you. You should pursue another route. You should go be an investor, or you should start a business that you do understand. So you have to understand enough to be able to evaluate those results. Otherwise, you're just wasting money, and you probably— whatever you're thinking about doing probably isn't that important to you.

And so now we're talking about content. You know, my other question was I have content, but I don't know how to program a page, I don't know how to set up opt-ins, I don't know how to, you know, what list management do I use, etc. You know, these are a lot of just the fundamentals that people really need to understand. Your advice is go to work and study it and figure it out and then go once you do, or don't bother. Now you're saying, okay, well, I'm trying to figure out content. You said just open up your phone. So where were you going with that particular idea?

So once again, we're talking about building audiences, right? And I think building audiences I think this is a superpower to have that first side thing that produces thousands of dollars a month or your first million dollars or gives you the acceleration point to sell a product. And so that's the context with her talking. I don't think it's 100% necessary that everybody is producing videos on the internet. I don't even think it's necessary per se to do this in order to build a business. I do think it's necessary for there to be some sort of audience in order to make any product hit. Now, it doesn't have to be you being the face of it. It could be videos that someone else makes and you're testing different messages. It could even be just sponsoring other people's audiences. For example, if you didn't want your company or you as a person to do any content distribution at all, just go pay the people who are doing it to adjust their message to talk about you. You, right? And that's called influencer marketing, and the ROI on that is absurd when done well and very poor when done poorly. But if you have people who are aligned with your values, your mission, and your products, it can be very, very lucrative in a way to put a business or a message or product on the map. Now, if you are gonna be that person that is distributing a message, it's your job to experiment with what messages hit And everybody hates it at the beginning. Everybody. I'll tell you a quick story. I was on a plane preparing to give a keynote, and I opened up my laptop to work on the keynote, and my internal noise said, man, who wants to listen to me talk about business and entrepreneurship? And I was talking about what we're talking about right now, and I felt like I had nothing to add to this crowd. And all of a sudden, my internal noise started to come in. And so I said, okay, well, that's interesting. I guess I'll start with that. And so I went on stage and I said, I opened up my laptop to share this with you and I felt like I had nothing to share. Because we are all battling this internal voice in our head that says we're not good enough, that says we have nothing to share. And I just want you to know that it's easy for you to sit in the crowd and look at the people on stage like they have some sort of special ability and I don't. I'm just a normal guy who figured out a few habits that created some success for me. And at no point do I want you to put me on a pedestal just because I'm a few feet above you and I'm delivering this because I feel like I'm one of you and I've been sitting in this— in the crowd many times idolizing the people on stage not knowing that they had their insecurities too. So you're gonna feel that come up when I'm sharing what worked for me and I want you to know that you're just as good as me. I'm just maybe a year ahead in terms of my skill set. With that, let's start going. And it was the most, it was the best part, the most well-received part of the entire keynote. It was because all of a sudden, it was a feeling that we gave them of a freedom and an ease around permission of feeling inadequate. And when I just connected in that way and shared what was exactly on my mind, that connected with the rest of the audience. So it's not your job to figure out what to say. It's your job to share what is true for you and what you've learned over your years of being in whatever field you're in and seeing what connects. And every time I try to figure it out here, it sucks. And every time I just deeply connect and share something that's meaningful, there are other people for whom it's meaningful too.

Yeah, well, I think there's a lot of people that have this sort of secret identity, especially people who are on the platforms, right? And that's what you basically took the mask off and let them see, you know, what's real. But when I'm advising entrepreneurs, I basically tell them, you know, that the characterization I use based on the presentation I do is called, you got to find your Miles Davis. In other words, it's what's most purely you inside and let that out and be vulnerable in that process because, you know, the people who are the right people to be attracted to you are gonna bond with you for the right reasons.

Right. Yeah, I think a lot of individuals are being something that they're not in order to impress people that they don't want to hang out with anyway. Right, right. And I've played that game before, and I did not find it enjoyable. And at some point you say, what do I really want my life to be like? Because it does come down to who. Who do I really want to spend I want to spend my time with? And if I got $10 million or I got $100 million, would I want to spend time with these people? And if the answer is no, we might need to make some adjustments on our life decisions.

No question. And you are who you hang out with, you know? So who are you around? And that's, that's really what you're aspiring to. I remember some years ago I'd done some programs with Deepak Chopra, and one of the things he said to me that I just thought was kind of profound in the realm of what you're saying is that he said, we buy things we don't want with money we don't have to impress people we don't like. And it's funny because of how true it really, really was. So that's a— I love that you got up on a platform and basically just had no mask on and just said, here's who I am and here's what we're going to talk about.

I think often We're looking for where the strategy of the formula is that'll create a certain result. And so we become a reflection of what we think will produce a certain result. And what I've discovered is that I've got a monopoly on one thing, and it's being Ryan Daniel Moran. Mm-hmm. And I'm the best in the world at being Ryan Ryan Daniel Moran. I suck at a lot of things, but I'm really good, the best in the world, at being Ryan Daniel Moran. It also happens to be when I'm happiest. Yeah. And so the more that I can be myself, and apologetically so, the happier I am, and the more I attract people that I want to work with, which allows me to charge higher prices, and which allows me to be more in my zone of genius, which allows me to give better results for my clients and my customers, which allows me to spread a message deeper and wider and allows me to charge higher speaking fees. And all of a sudden, I make more money the more true I am and the more honest I am to myself and to other people. So if nothing else, I got a monopoly on being myself, and we all do. You're the best in the world at it. So the more you can be that, the more money you end up making.

So you were earlier talking about a blueprint and saying, you know, there was kind of like, I think, kind of the stage 1 of the blueprint. Is there some additional dimensions to that you can share? Yeah.

So when we've got some sort of a distribution method, and that would be 1,000 people following us, it might be the ability to put a product on Amazon.com, because now with Amazon's distribution centers, literally anybody can have a seller account on Amazon. You can Google Amazon FBA account. You can set one up for like $40, and you can sell products on Amazon.com. You could have an email list that is responsive, which means you can sell physical products or webinars or consulting. If once you have the distribution mechanism, it takes 3 to 5 products selling 30 units a day at a $30 price point to have about a million-dollar business. So that's the first stage of it, is having the one product that you release to enough customers where you say, I think I might have something here. And that just requires you asking your audience, would you want something? Just like my doctor friend who said, I'm thinking about doing this, I need 100 people to fund the whole thing, would anybody want it? And he had 100 people say yes. And so he didn't go to a manufacturer and develop this whole big wonky wonk system. He said, would anybody want it? All right, are you willing to pay for it? And they paid for it. And as a result, he was able to fund the development of that business.

And that's win then play, rather than spend a bunch of money and find out if you got something.

Right, and you can get your mistakes out of the way with people who wanted to be first in line. So that's step one, that is like stage one. 1A, and then when you have something, it's regularly distributing it to the rest of the audience. You had 100 people go through it, now can we release it to more people? And when that snowball starts to roll, we can roll out product number 2, product number 3, and on and on until we have a million-dollar business or more. When we have a few products working, it's our job to start going out to other audiences. And that's when people know you enough for you to be able to have some sort of authority to get on other people's podcasts, for you to be communicating to other blogs and on other YouTube channels. That's when influencers start to pick you up. It's when you bring on other team members who have other skill sets. And that's when you can really start to scale something beyond a million if that's what you wanna do.

Really interesting. For me, the way that you've organized this in your thinking and presentation is demystifying a lot of it and also putting it into bite-sized chews, right? So that it's like, this is the chunk, you get to this level, then this is the next one. And you're also, I think, mitigating risk because you're not spending a ton of time and money until there's certain milestones that are checked off. So it looks like Farsight Simplicity, and it seems simple now, but there had to be a complexity arc and a lot of learning to get you there, I'm assuming.

Well, what I think this does is it gives people permission to get started. Yeah, because it removes all of the heaviness and the risk around trying to eat the whole elephant in one bite, right? And if we realize that we can test things before we get too involved, that gives us permission to say, all right, I'll experiment. And we realize that the downside when we're just playing for a while is very low, whereas most people— and I'd say 80% of my work with entrepreneurs is getting them to stop overthinking it. And that is that they're here, they wanna go here, and they say, how do I get here? And what I tell them is, we gotta get to the first step. That's what we have. That's the only thing we need. We cannot get here without getting here first. And so all I need to do is get them to take that first step, and then the second step, and the third step. Whereas most people think about the marathon, the whole time. And we can run a marathon, sure, but we can't run a marathon without taking the first step. And so when we distill down what it would take to get some skin in the game, all of a sudden it doesn't seem so scary.

Any other considerations for people who are looking to create side hustle? You know, they basically say, I've got a decent career, I want to create more, I'm willing to give time, money, energy to be able to create something more. Any other cases about people who've done this that you think might be valuable, or other ideas beyond what you've already stated that might—

Well, one, one thing that I'll say is I would not recommend getting into anything unless you are willing to commit to it for a year. Mm-hmm. I take a rule that I don't evaluate any result until I've been into something for a year, and sometimes it's simply putting out enough videos knowing I want to see what will hit, but I won't know for a year. And I might test doing 30 videos over 30 days and decide I don't enjoy it, right? But I still won't evaluate the result until I've had a year to see if one of them caught on. And I have had that happen where a video was a dud and then 6 months later someone picked it up and it became a viral sensation. I have had that happen, and, and we won't know that for a year. I've had that happen I've had it happen with products where you were too early on a product and then a year later all these customers flooded in. So I'm not saying you have to work at something for a year, but we have to wait at least a year to be able to evaluate any result as possible, at all. So if you're not willing to wait a year for the result, you probably don't wanna be in that thing. And that allows us to say no to a lot of things that we probably won't enjoy doing. And so, if you're willing to wait a year, then we can backtrack. Okay, what are we going to enjoy doing for the next year? Or how can we orchestrate our lives so that we're in a position to enjoy it for the next year while we evaluate the result?

Well, there's a ton of wisdom in that because I think that's another thing when you're coming to this new— what expectations should I have? You know, so many of the A lot of things that are sold out there to teach you how to do this, it's like, you know, lack of a better phrase, you know, get rich quick or, you know, overnight results, etc., testimonials. But really there has to be some sort of a timeline. And one of the things to talk about, you know, a lot of experience, perseverance used to be one of my core values. So on the other side of that equation, now I say perseverance is a virtue until it isn't. You know, I have sunk millions of dollars into ventures over a period of protracted time pushing a rock up the hill because I don't give up, etc., etc., etc. I'm like, after I've done that a couple of times, I'm realizing, how do— now my value is how do I fail fast? How do I find out as compared to torture myself for a long period of time? So on the one side, you're saying you can't really measure results for a year, which I think is really good wisdom. And then the other side, at what point do you find out maybe, you know, this is not the right message or the right message-to-market match? When you stop enjoying it.

I have a mentor named Travis who reminds me to ask myself the question, what would I be doing even if I was failing my ass off? I heard the story once of Jerry Seinfeld, who is either a billionaire or close to being a billionaire. A comedian that's a billionaire, that doesn't happen. He says that when he first started, if he could just pay for dinner based on what he made from comedy, that was like amazing to him. And it made me think, what's that thing that I'd be stoked if I just got enough to pay for dinner? And again, I don't have that thing. I don't have that passion. I'm more of a feeling I pursue. I have a way of life that I like to pursue. I pursue excitement, so how do I get paid I'm getting paid to live in that place. And so what that requires me to do is anything that doesn't move me closer to that, I say no to. And I went to my team recently and I said, all right, the one thing in our business, if it's built around me, if it requires me, then I've gotta be pursuing excitement. So from now forward, the primary question if we're gonna pursue anything new is does this make me excited or does this not make me excited? And if it does, we'll say yes to it, If we go, well, I may make a lot of money and money's exciting. No, because I know I'm gonna burn out on that. It doesn't mean it's not a good financial move in the short run. It just means that I'm gonna end up burning out, which means I'm probably not gonna create what I wanna create to get the result that I want evaluating a year back. There's two things that I learned early in life from my Uncle Tom that he shared with me that became very good business and investing advice. The first was spend your money on things that people can't take away from you. At the time, I was learning guitar, and he said, they can take your guitar, but they can't take away your knowledge of how to play guitar. And experiences, connections, relationships, these are all things that no one can take away from you. And when you're starting as an entrepreneur, when you're starting a new business, when you're going a new direction in life, spend your time and your money on things people can't take away from you. We have to have some sort of a skill set. We have to have some sort of value that we're creating in the world. So when you're a new entrepreneur, when you're, when you're, when you're new to the game, when you're pursuing a new life, the first thing is to invest in things that people can't take away from you. That's skill sets, it's education, it's relationships. And those are the things that are gonna have the highest ROI in your business. Miss when you are first starting out. And then the other thing that Uncle Tom taught me was, as an investor, the thing that I look for, and he was looking for and passed on to me, was 1% per month. That's our target range for a profitable investment. We're not looking for home runs, we're looking for lots and lots of singles and doubles. 1% per month. If that's a $100,000 investment, it means I want to be making at least $1,000 a month from that $100,000. And if I can't get that at some point in the future, I'm going to wait for the right opportunity where I will be able to get that. If what I'm looking for is cash flow, then 1% per month is my target. That's where I evaluate my deals.

So all great wisdom, and I think very actionable, you know, as far as what you're communicating communicating here. It's not just abstract, it's really actionable stuff. So I really appreciate you sharing this with me. Any final thoughts in these realms before we tie up?

Ultimately, we don't get rich trading our, our hours for dollars. We get rich producing value in the marketplace. It's why capitalism is the most beautiful system in the world. It's the only system through which we're actually compensated for the value that we bring. And I'm so saddened by the mindset of waiting for somebody else to tell us what we're worth in the form of minimum wage, or hoping that somebody else does something in order to help us get ahead. If you want to get ahead, you bring new value to the marketplace. You learn new skills, you develop new relationships, and you bring those to the company that you work in or to customers and clients who are willing to pay you more than what you're getting at your job. It is always about what other people are willing to pay. And something that has really helped me recently is shifting from thinking about what can I get out of this to how can I create and how can I give. And not only how can I give, but who can I give to. Because sometimes the problem and the thing that's holding us back is not you, and it's not your product, it's just the person that you're marketing it to. So an idea or a service, the same one can be worthless to one person and worth $10,000 a month to somebody else, same person. So sometimes just changing the person that you are speaking to is enough to go from failure to millionaire, just because of who values it. Value is subjective. Value is person to person. And when we're not getting the results that we want, it just means that we need to adjust our positioning in the marketplace, either what we're providing or who we're providing it to. And these things are always changeable. They're always hackable. None of it is stagnant. It's constantly changing. It forces us to be on our edge, be on our best to be always moving forward and growing. And so this free society that we all want literally forces us to be better every day.

Great stuff. Thanks for being such a great champion of capitalism. My pleasure. And sharing all this passion with this audience. I really believe you delivered a lot of value to me, so thank you so much. Thanks for having me.

To see the next episode in the Money Revealed series, check the video right there next to me. I think you'll love it. Continue to believe, and I'll see you there.

Let me just declare my bias right up front. I am a capitalist.

I believe in capitalism. I think capitalism is collectively the greatest thing humanity's ever created. It has completely changed the world.