The Tax-Free Wealth Hack Nobody Teaches | Greg Herlean

The number one expense is taxes. You and I can invest in the exact same things for the next 20 years, same exact returns. I would have somewhere between 20% and probably 35% more money than you, just by using a vehicle that the IRS has approved.

Most advisors, as all of us know, is open up this account, put a percentage of your paycheck in it, and then we're just going to buy this index fund, and you just leave it there until you're, you know, 65.

Your advisor probably isn't telling you this is another option.

How successful were you? How much did you lose? And how did you mentally deal with that?

I was probably worth on paper $10 to $15 million at 30.

What happened when you were in that situation in 2008?

I was a guarantor on $25 million of bank loans, and I had 3 kids that were, you know, $6 million and under, no forthcoming. I was not only at zero, I was at negative $25 million. I didn't tell my wife at the time what we were going through.

How did you get through that? Welcome back to the Hannah Hammond Show. I'm here today with Greg Herlien, founder and CEO of Horizon Trust Company. And I love what you do, and I can't wait to dive into it today because I just explored the amazingness of self-directed IRAs. And I always thought, you know, your traditional 401 was a scam and a fraud and, you know, Rich Dad, Poor Dad, Robert Kiyosaki principle type things. Yeah, but there's a lot of really cool things you can do with the self-directed IRA. But beyond that, you are just an amazing entrepreneur and leader and you've been through all of the testaments of time when it comes to starting companies, raising capital, going big, having massive success, losing it all, having a family, having amazing personal health and fitness and all of those things. And we all know as entrepreneurs how hard it is to balance every single one of those things and to actually execute and do it successfully and actually rebuild after losing everything. So excited for having you on the show today and thanks for coming on.

Yeah, thanks for having me.

I—

when you said all that, that's a mouthful. So yeah, I feel like I have lived all of that maybe twice. So yeah, thanks. Thanks a lot for having me.

Of course. And we know each other through one of the masterminds that we're in called Boardroom from Kent Clothier, which is an awesome group. And we actually shared in a breakout room together and I got to learn more about your business and you learned more about mine. But I've read a little bit about your background and it sounds like you, you were, you born in a military family. Like I wanna kind of dive in. I always like diving into the roots of an entrepreneur and what drives us to become these crazy incessant learners and growers and risk takers in our lives. So like, what was your childhood like and how did some of that instability and moving around all the time and then ultimately dropping outta college, like walk us through that story of how you ended up from there to now. Where you're at now running this company that manages $1.4 billion in people's self-directed IRA funds?

Sure, yeah. Look, I started in the mil— my dad was in the military, moved around a lot. And then after he left the military, I think I was around 10 or 12 years old and he still moved around. And so we were moving from state to state after 3 or 4 years. And there was like a common denominator. I really got to learn how to meet new people and new friendships and new schools all the time. And I, you know, as I met new friends, I got to meet also parents. And I don't know what it was. I don't know if it was the religion, if it was the family dynamic, but I would just take bits and pieces of what I would see and kind of what I wanted. I didn't know at the time what I was doing. Like, it's easy to reflect back now and look and say, okay, this is why I did it. But I can tell you, I'll never forget, my dad would make most of my games, but my dad was gone before I woke up and he worked until at least dinnertime every day, 6 or 7 o'clock. And so he worked like 12-hour days and I didn't see him very often. And so a good dad. So he wasn't a bad, he taught me how to work. And he was very militant. I mean, he called it Harleen exercises on the refrigerator. We'd rotate our chores every single week. And so I learned a lot from those kind of fundamental things. But I didn't learn a lot about money. And I also didn't really know what was possible until I went to friends' houses. So I'd go to friends' houses and they'd have the unlimited pantries. I never had a soda or an appetizer growing up. That was extra, ever, ever, until I was like, you know, married in my 20s. So I bought my first soda or appetizer. But that being said, I'd go to friends' houses and I would see, their dad's home. And I remember, I'll never forget coming home. This was right before I dropped out of college, actually. And it was a Wednesday at 2 o'clock. And I went by this friend's house, this new friend's house, and her dad was home on a 2 o'clock washing his boat. And I only see this on TV, but I was like in college studying business, couldn't really get into my degree 'cause I had a couple B's and C's. And apparently you can't get into the thing you wanna study with a B or C, which makes no sense to me still today. And I see this guy and he's washing his boat. And I was like, whatever the F he's doing, I'm gonna do it. And he was a nice guy. And I actually, after I met him, I called him the next day and I was like, hey, I met you at your house. Your daughter introduced me to you. I don't know what you do, but I would like to come work for you. And he said yes, which is crazy. Yeah.

That's crazy.

And I dropped outta college. And I wanted to have a boat on a Wednesday at 2 o'clock, washing it outside, and have a family. And that was my why. Thankfully, he wasn't selling drugs or doing anything illegal, but he was selling a terrible thing, which was life insurance. But I didn't know that at the time. And so, but that got me kind of into the whole estate planning and life insurance. I just got to start learning like the real world stuff. And at the age, I was 22 years old, And that's when I kind of began my career into actually real estate. Went from life insurance first, but into real estate. So anyways, that's the cliff notes as much as I can give you as far as how I got into it and why I got in it. It was really truly, I wanted to be home with my kids. And I wanted to live this life that I saw others live, that I wanted it as well.

Did your parents give you pushback when you wanted to drop out of college?

Not at all. Not at all, not for a second. Probably because they're the ones that introduced me to the guy washing the boat at 2 o'clock. But not for that reason. They introduced me to the guy's daughter. They wanted me, like, date the daughter. And so, I think, you know, that's how it kind of came together. But I never saw her, you know, I never dated her again. Not that there was anything wrong, it just didn't work out. But I just took interest in the lifestyle. And so, my parents never had any issues. My parents didn't know, like, they didn't— my mom, and this kind of goes part of my story too, is my mom was like the typical American, maybe I shouldn't say typical, but like most of America. My dad worked, my mom took care of the kids, and she would get the statements of all of the retirement accounts, all, like 2 of them, every month. And what she would do when she got those statements is she would look if the account went up or down, and then she would file it, paper file it, right? That's how it worked back then. She didn't know what it was invested in, She didn't know really how much my dad was putting into it, had no clear vision on how to truly retire, and no one really cared about her retirement account. And then she'd file it away. And she felt like she was doing good 'cause she kept it. And that's how most of America does. They do this HAP. HAP is the most probably invested stock in the universe, which is hope and pray. They just hope and pray that they put away their money, that everything would go as planned, and when they go to retire, It's there. That's what my mom's plan was. And it wasn't working. And I saw it. I saw their lifestyle. I saw where it was going as far as how much work was happening. And I just, I learned so much from them. So many good things from them. But there's only so much they could teach me.

Right. And so, 'cause life insurance is a pretty high income, you know, most people, a lot of people that are in life insurance, they make a lot of money. So what was your experience like when you were working in life insurance? And you just said it's, you think it's a bad thing. So clearly you're not a believer in it, but did you come to that fruition while you were experiencing working with that guy?

All right, well, let me preface, 'cause my son sells life insurance.

Oh, okay.

And he is top 10 in the nation and he's 23 years old. So I am not a hater of life insurance, but I did not like selling life insurance, in particular annuities, which is what this gentleman sold, was annuities. So he was going out and selling annuities to individuals, and those are investments, not as much in life insurance as far as like the actual death benefit life insurance, but more in annuities. And every time I would, I would go out in a meeting, I was taking the notes, I would do whatever he asked me to do, um, and they talk about investments. And every time I was sitting down listening to him, the guy was my mentor, talk to these investors, all of them had success in the portfolio because of real estate. That was the common denominator. I learned it within Before 12 months, within 8 to 12 months, I was like, this keeps coming up. The passion, the returns, the excitement, the understanding, always real estate. The guy I was with, you know, he sells some annuities. People put a portion of money in annuities, which is not necessarily a bad thing, but it was boring. It's not fun. It was like, to me, that did not get me excited. But I noticed that people talked about real estate and they wanted to invest in real estate. And so that's where I took note when I was 23 years old. I knew that I wanted to be in the real estate world somehow, some way. And that's, that's when I took hold of real estate.

And so you made a transition at that time from life insurance to real estate, and you started by flipping houses.

I started flipping houses after one year of being with this mentor. I thought I knew everything, so I left and I started my own company. And so I found my first deal and I flipped it. And how I found the money, which is really— I'll share that because that's how I got where I am today. But I had no money, like I said, my family had no money, banks wouldn't lend me money, but I was around for a year with this gentleman learning how IRAs worked. I was learning how banks worked, where money was at, and I was just a sponge taking it all in, like, okay. And I just thought because I was a sponge, I could do it on my own. And I did, and, you know, I definitely had some bumps and bruises, but my first deal ever in my life, when I left, was I bought a $60,000 condo in Las Vegas and flipped it in 90 days. And I found an individual that would lend me all of the money with their IRA. And so their IRA lent me all the money I needed. And after 90 days, they got back $12,000 return on their IRA and putting up like $60,000, $70,000. And I got back $4,000. It was a 75/25 split. That's what I negotiated at the time. But I was like, 4 grand in 3 months? I was 23. I mean, this was 24 years ago. Like, this is great.

Yeah.

And so I learned so much on just that one deal alone. And that's where I began. I flipped many homes, over 600 homes, which I know is not like earth-shattering. People do that, you know, often now. But, you know, 24 years ago, like, you know, with different, you know, internet, no social media really. And it was a lot of work, but I had a lot of success. Uh, and that's how I got into real estate is because it was, well, partly because I had to. I need to make money and I left this guy and I sold like a few term life insurance policies, you know, that pays the bills for a month.

So how'd you get somebody— because, you know, a lot of people who watch the show or want to get into real estate investing, you know, maybe they're always afraid of the down payment, right? And nowadays, depending on where you live, down payments can be a little bit more higher than they used to be back in the day. So you said that this person invested with his IRA funds, and so obviously that was a big advantage for him, but how did you get him to trust you as like a young person, it's your very first flip. Was this, you know, a family friend? I kind of want to dive into the importance of when we talk capital raising, which you became an expert at because you went on to raise over $1 billion of capital throughout your career. But like, what's that most important thing when somebody's just getting started in capital raising to build that trust and rapport? Like, how did you build that trust and rapport and show them when you didn't have a track record that you were going to be a good steward of their money and actually make a return for them? Because like Warren Buffett says, rule number one is don't lose money, right? And so that's what— where I I even struggle with this is when I'm looking to partner with certain funds, you know, operators and things like that. If it's their first fund and they don't have a track record, I'm like, well, how do I trust you? And how do I, how can I let other people know to trust you too if you don't yet have that track record? So how did you go about that?

Well, Hannah, that's, I think that that's such an important question. 'Cause I feel like now it's so easy. My answer today is so different than when it was 23 years ago. And I get really frustrated, frankly. I'm on all these panels, I'm with celebrities that get up before or after me, or we go to dinner and they're like, Oh, you know, you find the right deal, money comes. And I think that's bullshit, especially if you're just starting. I mean, you could have the best deal in the world and I don't believe money just comes unless you've been doing it for a minute. Now, now they've done it for, you know, 20, 25 years and you've got a track record. You know, when you have a track record, it's so much easier. But, but I wanted to say that because I feel like it's unfair to so many individuals when I see people thinking they're going to go out and just crush it in real estate but are brand new and they think they're going you want to find the best deal, that's great. But I, I always say lead with finding money, because I believe when you have money, you have opportunity to negotiate into deals and find deals, especially when you're new in the business. And so I don't have like a, uh, the probably like the, a textbook answer for you on what should an individual do. I can just tell you that at that time when I was 22, 23 years old, I did the things that I see people doing today. I just worked harder and met more people. I literally was going out face-to-face in events, in the audience, right? I was not speaking by any means, but I was out meeting people, finding what they were looking for, building relationships, and people just liked and trust me. And that's where it begins. Like it or not, you know, you could be fooled by someone that likes, you know, that, that, that you like and trust. But I was just going out and I just was pounding the pavement, building relationships, sharing what I was going to do. I was manifesting. We were talking about manifesting before this. I literally was manifesting. I didn't know I was doing that before, but that's what I was doing. And people believed in my energy and believed in me. And I would just share. And I was like, look, I mean, my first deal, I told you, I offered 75% of the profits. Today, most people are like, oh my gosh, that's too much. You gave them too much. If I had to go back and do it all over again, I'd give them 100% of the profits. Just to prove to them that I was the shit.

Yeah.

And that's what I did. I proved it. And then once I did, the next deal, he gave me it again. But this individual who I met, who funded my first deal and invested with me till the day he died, he had like $2 million and he lent me $60,000. So it wasn't like a ton. I wasn't asking for him to like fund an apartment complex. And I think that's where people go wrong too. They're like, oh, hey, I live in Scottsdale. And so I wanna like flip real estate in Scottsdale or in Orange County. Maybe not, that's probably not where you should start. My son who's 23, he lives in Orange County and he has not done one deal in real estate in Orange County. He's done 25 or 26 deals in the Midwest, South Carolina and Florida and Alabama. Why? Because that's where he's got now a team and he can afford a $15,000 down payment. Right? And so my long answer to you is, You need to outwork your competitors and find the money. It's in rooms all over the place, which is why I'm in the business I'm in today. I never knew that there was trillions, literally trillions of dollars in IRAs with people invested in the stock market who are frustrated with the market. So if you just start opening your mouth and sharing and finding out people, you'll start building relationships. You will find the money. Most people are lazy. They think they're gonna raise it on social media, that they're gonna go to one event and raise the money. Outwork it, hustle. I mean, you know this, this is what you've done. This is, I mean, you're— I did some research on you as well before, you know, before you were in our room and where we were in San Diego, wherever. You outworked everybody else and you built relationships. And I feel like that is the number one, or number— those are the two top things that I give advice to my kids and to people that ask me. There's no special recipe of you do a webinar and a podcast and go to a mastermind, you're gonna have— no, I mean, you've gotta do that times, 5 or 10, and you'll find the money. You will find the money if you want it.

Yeah, day after day after day, and you never, never burn a bridge. And just like you said, there's trillions of dollars out there that has to be working, right? If your money's not making babies and making more money, then it's dying and you're losing it, and it's just losing all of its value. And so people are out there with a need, and I had to get over that hurdle myself because I always like felt like I was asking for something, right? It's like, oh, I feel bad asking for an investment or something, but then it's No, I'm bringing them value. I'm out here working my butt off and taking on the risk of the loan and like all these different things in the operations and the blood, sweat, and tears.

That mind shift in you, you probably raise more money that way, right?

Yeah, because it's, hey, this is what I'm doing. I'd love to have you a part of it, a part of it if you're aligned and it's going to be win-win, all these things. But it's really we're doing you a service and we're helping each other. It's symbiotic relationship. But really, I mean, if you can, if somebody that has money to invest can find an amazing operator that is insanely trustworthy and that can produce returns and that's going to do whatever it takes to be successful. I mean, that's a gold mine for the investor, right? Because they don't have to go out and do that and they can trust it just like that one did with you. And I like that you said that you would have given them 100% because so many people want interest on their money before they put money in the bank and you have to put money in the bank to get interest on it. And so I think it's just that giver's mindset is when you're trying to build yourself and your reputation and be successful in anything that you do and scale and build these relationships, like you have to earn trust because people do business with who they like and who they trust. And if you're just what's in it for me, which is how most people are, like they go, you know, a lot of these rooms, it's a room full of takers and it's not a room full of givers. And that's why a lot of these fundraising, you know, masterminds like these family office groups or whatever, which are great in theory, but it's a bunch of people looking to take and it's not a bunch of people looking to give. And so they're not usually very successful. And usually the people with the money don't show up because they're like, this is just a bunch of takers that want something from me. And so, yeah, it's just so important to build that trust over time and show them like, like I actually met somebody at another mastermind that I'm a part of. I'm in quite a handful, but another one called Commercial Academy. I met him and he runs his own family office and he's in Newport Beach and all these things. And he called me, you know, we just had a 1-hour conversation while I was there. First time we'd ever met. And he called me a couple of days ago and he's like, hey, I want to invest with you. You know, what are you working on? Some of your deals, like all those. He's like, I want to bet on you. Like, you, you're the jockey that I want to bet on because I just, I could just tell, like, I can trust you. You're in it to win it. Like, you have utmost integrity and whatever's going on in the world, like, you're going to try to find a way to make sure that it gets done. And I just know that I can bet on you. And so that, and that was from a 1-hour conversation of him getting in. I'm sure he went off and did his own due diligence and research and things like that. But just showing people that, like, that you are not in it to just for your own selfish needs and that you just want to take all this money. And because it's happened so many times, like a lot of these, you know, um, I don't want to say men to sound bad, but most capital raisers have been men in general. And there's been a lot of Ponzi schemes that some people have done, which has tarnished the whole thing of capital raising. But yeah, that, that trust is so important and it takes time to build. You can't just do a webinar and have everybody trust you right away. And that's why content has been so good is because you build a relationship like day after day. You know, I spend thousands and thousands of dollars a month and hours and hours of my time and sharing all the things that I'm doing that I've paid, you know, hundreds of probably millions for at this point to learn this education knowledge and just giving that away for free. But that builds trust. Like that's putting in the giving bank account. And then when you put so many deposits into the giving bank account, the goodwill bank account, then when you do at some point ask for something or say, hey, I have this opportunity, then they're all like, oh my gosh, you're the first person I'd go to.

That's right. So you didn't lead with it. That's right.

Right. Yeah. So you shifted into flipping. You had a great, you know, first flip. And then how long did you do that? Because then you got into lending, right?

Yeah, I got into lending really quick. Within 12 months. Because what I had found out in flipping is, I mean, there's so many moving parts, as, as you know. And I didn't like— I, I did not like the oversight of the deals. I did not like the managing of vendors and contractors. And, uh, and I found out really quickly that I was able to build good relationships with trust, and I was also able to raise a lot of money. So I became the money partner. So then I found different people that were good. I found someone that was good at finding deals, found someone that was good at doing the rehab, and then I would bring in the money. And so that's what kind of got me initially into lending is after 12 months of flipping, I was, I was good, you know, I got my feet wet and I was like, and partly I thought I was again young and having success. Every, every deal was almost a winner, right? Because in the beginning, that's how it is. And so I was like, all right, now, you know, I want to do a fund and a Reg A fund, a Reg D fund. I want to— and so I started raising some substantial money. I was like, I'm just going to help lend, you know, raise money and lend to different developers and builders and flippers. And so I started that really young. I mean, a year after I started flipping. So I did some still a little bit of light flipping with some small partnership. But that's when I started raising a lot of money. And again, transitioning to raising and lending money, I did probably 75%, 80% of all the dollars of people that worked with me did it with their IRAs and their retirement accounts. And so I kind of had this boutique thing, this message of, hey, like, did you know you can use this? Because your advisor probably isn't telling you. And I wasn't hating on advisors, just saying this is another option. And so that's how I got into the lending world. I didn't like the fixing and flipping, but I liked the money and the finance side of it and I liked building the relationships out of it. And so that's all I focused on really from, from one year after doing deals to going on. Now, I still did deals and that was another lesson I learned as far as trying to manage too much. So I'm still doing some deals, flips, but then I thought, oh, I would do my— have my lending business and I'd also buy apartment complexes and hotels because of course I'm a genius at all these things. So, so I doubled down. All the money I was making, I was, I was putting into bigger projects myself with partners. And a couple— and then there's one Tucson I remember I did, a hotel there. Um, actually think one here in Phoenix, but mostly in Vegas and in Utah. And so I was doing bigger, some bigger projects because I thought, you know, I was the man, right? And I was— I could do bigger projects and also lending at the same time.

So how did you go about— we have the same story because I did the same thing, flipping, hated operations, hated having to deal with subcontractors and all this stuff and too impatient to go through this whole deal cycle and love the money side, the capital market side and the relationship side. So we're super aligned on that part. But when you started raising more money, I mean, you're super young, you're starting a debt fund essentially, and you had this skill set, this knowledge of like, wow, there is a golden opportunity here for people to be able to lend their money out of their IRA, make higher returns, not pay taxes on it. Like, ta-da! That sounds amazing. So what was your approach to actually go out and start raising large amounts of capital when you did decide to break ground? And again, brand new thing, no track record, didn't have a debt fund before, and then going on to raising, you know, hundreds of millions. Did you partner with somebody? Were you doing marketing? Were you going to events? Did you go build relationships with all these IRA companies? Like, what was your specific approach that led you to be so successful?

So I did all of those things, but specifically what I did is I found individuals that had followers, that had a following, that had a database. So I would go and find, you know, this was a long time ago, but I'd go find the Hannahs of the world, right? And be like, okay, you've got a following, you've got a list, and oh, Hannah, you want to raise money for this next deal? Obviously, it's an example, right? Let me show you if I can call your database and you introduce your database to me and my team, my 10 salespeople, we're going to call through, introduce ourselves because you've introduced them to us and explain to them how they can use their IRA to invest in Hannah's next deal. So you have the database, right? So I would go to you. And by the way, I did this on all levels. For someone who has a small, small database of a few hundred people, to people that had, you know, databases of 100,000 people. But they had this nest egg, these individuals, these, these CRMs and these databases, but they didn't realize how much money of their clients that wanted to invest with them but had their money locked up in IRAs. So I went, I went to them and I'd say, hey, look, let me access this. You introduce them to us, let's have the conversation, let's do all our disclosures and all the other things and have our salespeople call them and we'd raise dollars. We did events as well, that and events, that and live events were the two things we did. The live events, you know, I see different pictures and I know you've, some of the, not necessarily people you've recently, well, some of the people that you've also interviewed, I'd go to those events. I would negotiate with them and say, hey, look, let us talk, you know, at your event, whoever you, you know, celebrity are, you're good at this and, you know, the creative and the all, but you're not good at the IRA stuff at all. Let us come in, and teach your students or your audience something that they're not familiar with. They might have heard of it. Most people say they have, but they haven't. Let us go teach them. And so most people love that we are going to come in and fulfill without them paying me. They love that I was going to go teach their students how to have success, how to lend and use their IRAs and not pay taxes. And I would do it. I get on stages with thousands of people for, for years and years and years teaching them how to use their IRA. but they had the audiences. I was never good at filling a room with, you know, I tried that once with celebrities and I'm not good at filling a room, but I would go to people that were filling rooms and get the opportunity to either be on their stage or they'd pay me to be on their stage. And so those live events or their databases, those two things, the database worked just as good. And today now it's like webinars and podcasts. But that's how I literally, you know, again, in my early 20s, I went and found the influencers and that really moved the needle. And, and, and then if I had to start all over again, the same thing works. When you think influencer, I think too many people think they gotta get to Grant Cardone, right? Or Pace Morby, right? Or, or Hannah Hammond, or whoever it may be. You don't have to start there. Like I was starting with influencers who maybe nobody knows, but they still had 10,000 followers and 1,000 investors. Like, that's an influencer. That's someone that can help move the needle. 30 to 40% of American adults have a retirement account. That's a huge number. So almost everybody's audience, unless you're an influencer that only has 18-year-old followers, which there's those too, then maybe it's only 5%. But if they're older than that and they have some, you know, in their later 20s and 30s and have a following, That's where I began. And that's also why I've got— how I've gotten to learn and meet so many interesting celebrities, if you wanna call them, or influencers. And you get to see who's the real ones and who's not. I mean, I get to be on stage and hear, you know, I get, you know, they get to hear how great or not great they really are. And you and I were talking about that before the show for a minute. We were talking about like, who's real and who's not? I mean, that's a real conversation everyone should have. And so anyways, that's— I'm going on a different tangent there, but— But that's how I, that's how I began and how— and I had literally 10 salespeople raising dollars all day long from these different databases.

That's brilliant. Yeah. And that ties into my friend Ben Hardy. He's one of my favorite authors, Dan Sullivan and Ben Hardy. And I— his book 10X is Easier Than 2X and also The Science of Scaling. Have you read those books?

The first one? Yeah.

Okay. Yeah. One of my favorite books.

Yeah.

But I love that you said that because it's so key. Because if you think in terms of 10x-ing your goal, right? So instead of I'm going to raise, you know, $100 grand for this one property that needs a loan, you're thinking, okay, I'm going to create a whole fund and I'm going to go to all of these distribution channels who— and tap into their audience. So the 1 hour of time I could spend with the leader who has access to 10,000 people in their database is going to give me 10,000 business opportunities. Immediately.

Exactly.

Versus going and trying to make the relationship with each of the 10,000 individual people who's only going to give you one sale per person. And so when you think of those levels of scale, and that's what I'm working on right now in my company, right, is when I think of, okay, how do I 10x? I want to go to a billion, you know, year one. I want to do $10 billion year two. Like, if that were to happen, who would I have to bring into my world? Who would have to be my clients? Who would I be spending those hours with and building those relationships? And excuse me, and making it a win for them of that type of like you have an affiliate program and a referral program and like these different things that you could do where they're winning from partnering with you. They're serving their audience, they're providing value there. The audience is winning. They're making money and learning things that they didn't know about that their advisors aren't telling them. Right. And so I just think it's so important for everyone watching this to understand is like change your mindset to instead of thinking about just the next client you have to get. How do you get the next 10,000 clients with that same hour of time?

Yes, yes, because you can. They're out there.

Yeah, and now, I mean, you can find anybody. You could find anybody that you would want to work with, um, instantly. You just ask Claude, you go on, go type in a tag on Instagram. Like, it's so easy now, um, to get a hold of people. And, uh, yeah, it's that, that's super awesome that you were doing that. So I want to actually dive into IRAs because I think, you know, I worked in corporate America when I was 20 years old as an engineer and had a 401 automatically set up. And, you know, I put in my 3%, they matched it 3%, they put it into some, uh, moderately, you know, aggressive, uh, whatever thing. And that was, that was my 401. And I was like, okay, this is a total fraud. It barely makes any money and I have no control over it and all this stuff. And I'm just not a, huge fan of stocks in general. And so, but when I left the company and became an entrepreneur, I rolled it over into a Roth IRA because they told me I had to, and then I never touched it again. I actually just pulled up the account like a month ago, and there's $20,000 in it that I haven't looked at since I was 20. But, um, but I could have been using that and adding to it through a Roth IRA. So why is a Roth IRA so amazing? How can you use it to build wealth outside of a, you know, how is it different than a traditional IRA? Who can use it? Who can set it up? And why is it so amazing?

Well, the Roth IRA is absolutely the sexiest retirement account there is because it grows tax-free and comes out tax-free. The advantages of a young person starting a Roth is, I mean, you can play with the calculator all day long, but we're talking about millions of dollars of difference from an individual that uses a traditional IRA to a Roth. So let me explain. Most people that start retirement accounts have a traditional, uh, and they do it because there's a tax break today. So when you put X dollars in, let's say you put in $10,000 into a traditional account, uh, or $7,000, whatever the number is that you're allowed to do, uh, per year, that amount is deducted off of your income so you don't pay taxes on it, which is great. So now it's an account and it's growing and it's growing tax-free, but then when whatever that, call it $10,000, turns into $1 million over 30 years, when you pull out the million, you're paying taxes on the full million, $200,000, $300,000, to get the tax write-off here. An individual does a Roth doesn't get the tax write-off here. So they have to pay taxes on the $7,000, let's say, but you put the $7,000 into the Roth, So you still have to pay taxes on it, but now that $7,000 turns into a million. When you pull out the million, 100% of it comes out tax-free. That's the difference between a traditional and Roth. But what's more exciting, I mean, I wouldn't even say what's more exciting than that, but why I like it so much is there's so many incredible stories of individuals, especially creative entrepreneurs who are like, oh, I wanna invest in, XYZ new company. I don't want to manage it. I'm not going to operate it. But typically you and I might have our LLC be a partner in it, right? We're going to put $10,000 or $20,000 or $100,000 into this new company. Well, instead, have your Roth buy into that new company. And so now your Roth's the owner. And so now when this new company 10Xs, right? Because in the stock market you're going to do decent returns, 6% to 10% per year, depending upon what, depending on what period you look at. If you're a lender with your IRA, you're gonna make probably between 8% and 14%, maybe 18%. But the upside of potential startup businesses and businesses that may be these bigger marketing businesses where you can 10x, those are the ones you wanna invest in your Roth. So now your $10,000 or $100,000 Roth turns into $1 million in 1, 2, or 3 years. If you were to do that in your LLC, you'd probably pay $200,000 in taxes.

Mm-hmm.

Or zero. And, you know, when you talked about, you know, the number one rule of not losing money, well, the number one expense is taxes.

Mm-hmm.

So, if you cannot lose your money, but also not pay taxes or defer paying taxes, you and I can invest in the exact same things for the next 20 years. You could do it in your LLC or in a traditional IRA, and I could do mine in my Roth. And after 20 years, same exact returns, I would have somewhere between 20% and probably 35% more money than you, just by using a vehicle that the IRS has approved. And what's exciting about a self-directed account is you can invest in almost anything, in cryptocurrencies and start new startup businesses. I mean, there's a few rules that you can't, but that's what's exciting from my perspective is I get to, share and educate people about something that most of America has no idea they can do.

Right, and you say that you share what advisors don't, right? What most advisors don't. And so most advisors, as all of us know, is open up this account, put a percentage of your paycheck in it, and then we're just gonna buy this index fund and you just leave it there until you're, you know, 65. That's right. Right? But with the, those index funds aren't always the best rate of return or the lowest risk or the highest upside or any of these things. If you have a self-directed Roth IRA and you have that opportunity to invest in real estate deals, real estate flips where you could make massive, you know, 2, 3, 4x on your money very quickly, or private lending, which just like you said, anywhere from 8 to 18% on your money in first lien position on real estate, which is a fairly secure position for growth, or venture capital. If you're going for these big upsides, like I was talking to a friend of mine who's in a mastermind with this guy that put $100,000, uh, $100,000 into SpaceX. Mm-hmm. And it's where he's cashing out for $150 million.

Mm-hmm.

Like if that $100 grand came from the Roth IRA, zero taxes on the $150 million gain. And so it's so cool that you can actually be an entrepreneur investor within your, your own IRA and get the tax advantages. And just like you said, it doesn't make any sense to defer taxes now and then pay it on the whole compounded sum later. And what do taxes do over time? Yeah, they're not going down. They go up or down.

They're not going down.

Exactly. And so, and then if you compare it with, if you are an entrepreneur and you have tax write-offs and you could buy real estate and get depreciation and all these other tax advantages, you might not be paying taxes on it now or later.

That's right.

Right? Because you can get it done. And that's the strategy that I've started using with my newer Roth IRA that I am now, contributing to. So what is the process for somebody? Because obviously you can't just have an IRA and then take money out of it and go invest it somewhere. You have to have a custodian, which is what you do. So what's that process for somebody who maybe has a traditional IRA, they want to roll it over to a Roth IRA, or they just want to open a Roth IRA and they want to be able to invest it with, you know, my real estate projects. So yeah, real estate projects, lending, venture capital, all these things. What does that look like for them? What is the cost involved? Involved and how long does it take?

Yeah, sure. So, I mean, that's what we do. And so, and we'll go back to this, I'm sure, but it's, this is not what I thought I would be doing today in my life, owning a trust company. But to answer your question, we'll use you as an example. If an individual has, let's say they've got an IRA or an old 401k at Fidelity or Charles Schwab or wherever it might be. And they're like, oh, you know what? I'd like to put a portion of, or all of my money in this IRA into Hannah's deal or under her fund. It's a simple process. So it's basically a call with my team and we fill out the application really with you over the phone, which most companies don't do because it is a little daunting. It's a little bit, it's new. And so we fill it out for you. We move the money from, let's say that you've got $200,000 of Fidelity. You wanna put $100,000 in, and again, I'm just using your example and Hannah's fund. We'd say Fidelity, send over, per their request, $100,000 on their behalf to your account at Horizon Trust Company. So the money move over into your new self-directed IRA account with us. So half would stay at Fidelity, half would come here. And once it arrives there, which takes about 7 to 10 days, once Fidelity eventually has to let it go and send it to us, they're not in a hurry to send it to us. So once they send it to us, then after it arrives within 1 to 3 days, business days, we then send that money per the request to the investment of their choice. Now we help them make sure that they don't do anything prohibited. Like you can't invest in your own business that you're working in where you're paying yourself a salary. There's a few different rules. You can't— there's a few different deals you can't do, but it's more like arm's length kind of deals. You can invest in other people's deals and lend other people's deals. But when it comes to your own deals, you can do it. But there's certain rules. And so the process, the whole process takes from beginning to end about 20 days, 15 to 20 days to get the money transferred over. Our first-year fees are $595, which is your setup and your annual. So it doesn't matter if it's a million-dollar account or a $50,000 account, it's $595 in year one. Every year thereafter, it's an all-inclusive fee, which is an asset base. And so we're somewhere between 25 basis points and 100 basis points. The larger the account, the smaller basis points. So like if you got a $40,000 account, it's going to be $400. But, but if you got like a $100,000 account, it's like $600, if that makes sense. So the larger it is, the smaller. And so it's less than my— where my point is, it is less than 1%.

Right.

So wherever you're at, most likely you're paying 1 to 3%. The average account fee with us is 65 basis points.

Okay. And so is that for the whole self-directed Roth IRA account?

Every year you pay an annual fee.

Yeah.

and that's for the whole account. And so you can do as many wires or transfers or asset purchases you want for the Roth. And just to be clear, some people get confused by this. Oh, I've heard, you know, I heard you on the show and I want to do the self-directed Roth account. Well, that's correct language. But just to be clear, self-directing is just a descriptive word, really. It's not a type of IRA. So if you have a traditional or simple or SEP, you can move that over, but it's still a simple traditional or SEP. It's just self-directed. So it means same rules apply as far as how much you can put in and take out. The only difference is what you can invest in when you self-direct with our company. This has been around since the '70s. It's almost 50 years this has been around. Only 5% of Americans do this.

It's crazy.

And I think that probably only 15% of Americans should. This is not for all of America. This is for people that are going to actually read their contracts, do their due diligence, know who they're investing with. But, you know, there's over 100 million IRAs that have over $22 trillion.

Yeah.

And so it's, it's, there's a large marketplace for people that should be self-directing, right?

Yeah. Not everybody should be an investor, right? Like they should just go in the index fund and don't look at it and contribute to it. And yeah, because that's better than losing everything. Yeah. Hope and pray. But okay, so for my own understanding, there are, it's $7,500 a year now, I think is the limit that you could put per year into your IRA.

Into your Roth, yeah.

Into your Roth. Can somebody who is employed, W-2 employed, create a self-directed Roth IRA?

Yes. Now there's certain rules and we won't go into all those today 'cause there's lots of them, but that's why I just encourage, if you're interested in this, definitely reach out, send me a message, meet my team, because there's a few different, you know, I'm not a CPA, I gotta say that, right? And I'm not a financial advisor, but we can give you the ins and outs of what types of accounts. What I will share with you is an individual who is employed can open up a Roth. There is a rule, if you make too much money, you can't contribute to a Roth. But if you start a business, a marketing business, let's say, and have an LLC, you can open up a self-directed 401 and create a Roth account. Strangely enough, you can actually get up to almost $75,000 a year contributed into a Roth if you have a 401. It's a little bit, there's some moving parts to that and steps. We help individuals do this every single month. But it's not for you, I wanna be real clear, you should not try to figure it all out on your own. A quick, simple phone call like, hey, look, I'd like to, here's my situation, here's how I'm employed, "Here, I own a business. This is what I'm contributing in." And then we can kind of give you some recommendations to talk to your CPA about. But one of the number one things I'll say that I did and that I implore and ask everyone to do is start your Roth, like now. Don't wait another year or two. Start your Roth. Invest it in someone or something that you understand. You will not be sorry.

And that's even if you do a Roth and you just put it in, you know, the S&P, right? That's right. You don't have to get all creative and fancy with fund managers and—

Compounding is incredible. It is. I mean, that is the most wonderful thing if you understand it, you do it, and it will be life-changing. And that's why, you know, when I run into these farmers, literally these farmers that used to invest with me, I remember back in the day I was raising money, I was like, you know, like the most rednecky people, most beautiful people, and all of a sudden they're like, "Yeah, here's my whatever, it's $6.4 million." I'm like, "What?" Yeah, because they understand it and they put away the money and they save it. So it's pretty cool.

Yeah. Farming money is a whole different level of wealth. Yeah, but it's true. It's anything above zero compounded over time. David Bach, he's the author of Automatic Millionaire. Yeah, it's a good book. Yeah. And I met him. He says $27 a day compounded over, you know, whatever he did, 40 years or something. Was $4.6 million or something like that. He basically calls it like a cup of coffee a day will make you a millionaire if you just automate the habit. And that's the thing, people think you need all this money to invest and to build wealth, and you really don't. You just need above zero and you need it consistently every single day or week or month, like automate it to where it's easy and you don't even think about it.

But I have to say, this is the part that people, think they've heard it before or it's boring. 'Cause we're not, 'cause I'm not showing this photo of this badass house that we fix and flip for $2 million. Like that's what people want to hear. And that, I think it's a confusing message. That is so hard to do. You know, flip this property on your own and go make $100,000 or $200,000 or $500,000. What everyone can do is just start putting away a little bit of money. Me, even if it isn't the index, right? That is something you can easily do. And before you know it, 5, 10 years later— and it's just not sexy. People just— you gotta do it. Yeah, it's, it's really fucking sexy 10 years later.

I know, I know. That was me with my first property. I was like, oh, I'm gonna make, you know, $200 a month off my rental income or whatever. And but, uh, what was it, 10 years later I had made $250,000 on a $25,000 investment just in appreciation gain, not to mention all the cash flow. And then the rent went up super fast. So that $200 a month became $2,000 a month in profit pretty quickly. And so it was nice to look back like, oh wow, this asset's actually like worth some money now. And I almost didn't buy it because I thought that it wasn't worth it.

Right. It's only $200 a month.

Yeah, that's right. Yeah. So it's amazing. So what is the mega backdoor? Because the Roth IRA, you, it's $7,500 a year that you can invest, which is, is nice. But it's, you know, if you compound it and you make good interest, it does grow and it can turn into many, many millions. But for somebody who has more than that, like let's say you want to invest $75,000 a year in your Roth IRA and be able to put that into assets and different investments and get those tax advantages. Is there a strategy to be able to do that? And who can tap into that strategy?

So look, anyone that has, like in your example, you've got an old I think you said you had a 401 as well, I think maybe.

I had a 401, but it converted into a Roth. Yeah.

Okay, so most individuals that we work with have a prior retirement account like you, an old 401 or an old IRA, and they move all or a portion of it to us at Horizon Trust. So once it arrives there, it's not Roth. And so it's sitting there and they're about to invest it. What you can do is you can convert your IRA or old 401 into a Roth like you did. So the mega backdoor, you know, you're able to put in more money or transfer over money that's traditional and then pay the taxes, which we'll talk about in a second, convert it now. Like for example, you're telling me about this deal that's gonna 10x in the next 2 to 5 years, right? Well, if I know that's gonna happen and I'm gonna put my Roth or my IRA in it, before I put my IRA in it, I'm gonna convert my Roth or contribute more money into my SEP, $20,000, $30,000 into my account. And after I contribute into it, then you convert it. It's a loophole for those that have accounts to convert into their Roth. Now, once it's in their Roth, you can convert a million-dollar traditional into a Roth. So once you convert it, you gotta pay the taxes on the whole million dollars. So what people are doing are doing a cost seg, bonus depreciation on a real estate deal or two, right? So let's say you're gonna have a $300,000 tax bill. Well, that year you wanna do a big bonus depreciation on a deal. So you offset the taxes completely. So now you convert your traditional to a Roth. You do a bonus depreciation on a real estate deal, wipes out all the taxes. You don't pay anything and now it's a Roth. Now you invest that full million dollars that's now a Roth into that deal, it's gonna 5 or 10 times. Does that make sense?

Right.

So that's what a lot of people are doing. They're doing a backdoor Roth.

But can you contribute? 'Cause I was reading something on Claude, my best advisor these days, that said you could put up to $69,000 or $72,000 or something like that per year.

That's right. You can do that per year. If it's your 401, you can have a Roth account and put up $72,000. That's with your employer-employee match. You can do that.

So you can be, do you have to be an entrepreneur or you could be an employee?

You have to own an LLC.

Yeah.

Then you'd be an employee of your LLC. Okay. But this, so it's totally different. You can have your 9 to 5 job at a business.

And an LLC.

And then have an LLC and have an employer and employee. You are the employee and the employer of that LLC.

Right.

And you can do that contribution.

Yeah, like my PLLC, I pay myself a salary.

That's right.

To me personally. And then I have the LLC and I run a business in there, right?

So to get that full max, there's things you got to pay yourself a bigger salary. There's some, there's some rules. And that's why we usually talk to our clients with their CPAs to make sure we do it the right way because we don't know all your moving parts and pieces to your plan and what you're paying yourself. But yes, if you're looking to put away a lot of money into a Roth, there's a couple of ways of doing it.

Okay.

Yeah.

Cool.

And you absolutely want to do it, especially on your next deal. Like if someone's like, if you know it's going to be a home run, You gotta put in your Roth.

Yeah.

Or create a Roth.

Yeah, 'cause taxes, it's not fun. And it ruins your compound wealth when you're paying tax. I mean, if you do a compound calculator on 20 to 50% taxes each year on your returns, talk about shocking.

Yeah, discouraging.

Yeah, yeah. So, okay, so we really deep-dived into, do we miss anything on Roths, on anything that anybody should know?

No, I just, I always like, when it goes into these kind of questions, I feel like sometimes the audience struggles with it because it's just not as fun as the sexy picture or deal we're gonna 10 times. But if you understand it or don't, the takeaway should be that you do it. It doesn't matter who you do it with, it doesn't have to be with me, but that you do it. That's the most important thing. Is taking action and creating this account. You won't be sorry.

Yeah, yeah, yeah. Whether you're an employee or an entrepreneur or both, it just makes sense to have it as an extra vehicle that you don't have to pay taxes on when you take it out and you combine your wealth. So I love it. I'm a believer now. And we need to connect about the whole Mega thing too, because that would be nice. Yeah, but I dove into that and nerded out on it. But I want to go back to your kind of founder's journey and when you lost everything in 2008, because this has always been my biggest fear is you work and you build and you build these relationships and you build this trust and you grind and grind and grind and you like pour everything. You know, I just did a video on this the other day. To be a successful entrepreneur, you have to pour every part of you into your business, you know, every ounce of energy, every dollar to your name, every waking minute of your time. Like there's periods of time where you have to pour everything. and hopefully you get to the period of time where you can start to hire yourself out eventually. But that's just not reality for a startup founder when you're in this massive building phase. And so you were super young, you were having all this success, you're raising all this money, you're collaborating with all these people that are influencers and, and celebrities to be able to build your distribution, uh, channels to grow fast. But then, you know, this was all up to the rise of 2008.

Yeah.

And no, not many people escaped the fall of 2008. And, you know, now we're in another different type of recession, volatility, risk, definitely different. But there's definitely some blood in the water, some people that are in a lot of pain and going through losses right now and probably will continue to, you know, here as we progress. We're here early in 2026. So what was that like? What happened? When you were in that situation in 2008? How successful were you? How much did you lose and how did you mentally deal with that? Because I'm sure you've heard the story of the guy that, you know, committed suicide in Arizona who had the big lending company in the 2008 crash. And he was very well known and had whatever, hundreds of millions or billions. I don't remember how big his fund was, but that is such a devastating thing, right? When you go out there and you build all this trust in these relationships and then something happens that you can't really control, an economic black swan type of event, and then people take their life and it destroys everything in their life. So like, how did you get through that? What was that story and how'd you overcome it?

So in 2000, you know, I lived in Vegas at the time. And so just like it was Vegas and Phoenix were like the same then. I mean, you bought a piece of real estate, you'd wait overnight when a, release happened, you'd buy a piece of real estate and then 3 months later you could sell it for $100,000 more. It was crazy. Well, my first— that was the first 10 years of my career. I just, I thought anything I did was gold, and I didn't realize at the time that anyone, that anyone did was gold in real estate. It didn't matter. I just— but I thought, you know, so I was making a lot of money. I had 3 kids, uh, my wife at the time was pregnant with the 4th. And I mean, I was already living a life I couldn't have dreamed of. And I was 30 years old. And then when it came to a screeching halt, on paper, and I learned a lot of lessons from this, but I remember on paper, I was probably worth on paper $10 to $15 million at 30.

And I was like this, my parents were like, Yeah, and that back then too was like, what, with inflation over the past 5 years, it's been probably like $50 billion now.

Right, I mean, I was feeling really, I mean, I was doubling down on everything. Not in like aggressive way, but nothing failed. So I didn't know loss really. And so any money I had, I'd put into apartment complexes and hotels and I'd lend out. Well, in 2008, Uh, not only did every single loan— every loan went to default that we did. Uh, and so imagine the communication that you've got to do with investors, right? So every loan's in default, no, nothing's paying. Uh, I was a guarantor on $25 million of bank loans, and I had 3 kids that were, you know, 6 and under and a 4th coming. And I remember, you know, people serving me at the house. And that was really, really heavy. When I say people, the banks. And so I had, and my partners on those deals that were guarantors filed bankruptcy. I probably should have, looking back on it. Glad I didn't. But I just thought that was like almost, like, it just seemed like it was like a bad, like a really negative bad thing to do. And so I didn't file bankruptcy, and I had to negotiate. So I was not only at zero, I was at negative $25 million, and at 30 with the kid on the way. And I didn't— you know, that's one thing I learned too, like, I didn't tell my, um, uh, my wife at the time, what we were going through. I mean, sure, she saw, she knew a little bit, but she had no idea how bad it really was. And it was— and I just, I couldn't bear to tell her and didn't want her to stress out about it, right? Like, we got all these kids here at home. So I just was like, I gotta effing figure this out. Like, this is— and so I was at zero, and the market crashed, and banks were calling, and I went and negotiated with all of the banks and created terms with all the banks and got a new office. And in this office, because the company went to like basically zero— I was a partner at that time, I partnered with a large firm, and, and it— all the books went to zero. And so, um, I went and started my own company, if you want to call it that. Two offices. I remember the first thing I did is I got like 6 or 8 phone lines. I had no staff. I was like, someday this will be back.

Oh, manifestation.

Yeah, we were just talking about, right? So, um, so sure enough, I mean, I start— that's actually how I knew that I was actually decent at what I did, because I then made money, you know, coming out of that, and I started buying homes again. Right, what I hated doing, uh, at the courthouse footsteps, right? Went and got some people that believed in me, got some cashier's checks, and started buying properties. And, um, and rinse and repeat what I just did the prior 10 years. I just did, but I did it 3 times bigger in the next 10 years, but started from zero. And I negotiated with all the banks. I didn't pay them all in full, but I went and negotiated them and, you know, bought 'em down. And that's a whole nother incredible story of how I did that.

How'd you do that?

Oh, the Cliff Notes. I prepared my bankruptcy documents and literally did. I hired a bankruptcy attorney and then I went to each of the 3 banks. It was me and the bank. And when the bank means like 4 people. And I had my bankruptcy docs in this manila folder, as well as their notes, like what I owed them. And I would talk to 'em, and I wasn't lying at all. But I also wanted them to be clear, like, if they push me too hard, I'm filing bankruptcy and you'll get zero. Or very, very little. And so, I would just talk to them and tell 'em my situation. But as I talked to 'em, I slowly, methodically, thumbed through my bankruptcy docs. I saw them looking at my docs. So they knew I was ready to file till I got to their note. And I'd say, "All right, well, I just want you to know," this is me, I didn't bring counsel with me.

And you didn't tell them that you brought bankruptcy docs? You just had the note and all your documents in there?

And my bankruptcy docs right there, yeah. And just said, "Hey, look, I wanna work with you." And so anyways, long story short, I negotiated the $25 million down to, $1.6 million that I had to pay.

Wow.

But that's still like, when you're at zero.

Yeah, that's a lot. That's still a lot.

So I negotiated that to be paid out over 3 years, and I figured out how to handle all of it. And so, and none of them, you know, I didn't have to file bankruptcy, started from scratch. Meanwhile, I was still trying to pay the bills and pay off my, these, it was, that was still like $25 million if you think about it.

That's so incredible.

So it was, it was, it was the things I did. But it was all like, I didn't lie at all. I just— but I also knew that I couldn't be too fragile or too strong. And I mean, I made sure I wore the right everything to it, you know, no fancy watch. I was like, "Okay, this is where I'm at." And again, I wasn't lying at all. I just wanted— I didn't wanna file bankruptcy. And I made it through and I started over and I learned so much from that. So, I call that really my— my, that was really kind of like my degree, my master's degree. I learned a lot. And so I'm thankful for it. And I've lived my life so much differently because of it.

What was the main thing you learned from going through that? Like, what did you, how do you live your life differently after doing that? And how do you approach investing and everything that you do differently? Because I know some people, they go through something like that and they're like, I don't ever want to go through that again. And so they stop raising money, they stop going for the big lease and all that. And then other people, they're just like, screw it. Now I learned, I know what to do. I'm not afraid of it anymore. And let's just keep building. So like, how did it affect you? And what are the key lessons you learned from losing it all and rebuilding?

There's a handful. And thanks for asking, 'cause I think it's the most important thing that people should be asking. So thank you for asking. For me, it's absolutely a few things. It's, it's all about how you sleep at night. And I didn't realize that until you get— till you don't sleep at night. And what does that mean? Well, when you sleep good at night, you can make way better decisions and you can make way more money and you're just happier. And so what is it for you? And in that case, for me, makes me sleep better at night— cash in the bank. And so when people talk about their balance sheets, or they want to be billionaires. Cool, whatever that is for you. I just want to sleep good at night, and I've— and that— and for me, it was cash in the bank. I don't— you know, people like, oh, take out your equity and blah blah blah. No debt, cash in the bank is peace. Gives me peace of mind to go out and kick ass because I'm still a— I'm a go-getter. Don't I'm not camouflaging like that I'm like passive. No, I'm a fucking killer. But if I sleep good at night, I can be a killer. And when you're living a life where you have to make a deal happen or get a deal done or raise the money for it, that is so stressful. And then you end up doing deals that aren't so good because you gotta do a deal. So having money in the bank is more valuable. So I'd rather have $1 million of cash in the bank than $10 million and no cash in the bank on my balance sheet. When you're 25 years old, maybe that's not the answer because it doesn't really matter anyways because you can make it all over 10 times again. But when you start getting in your 40s, in my opinion, and I'd even give this advice to in your 30s because I wish I would have done it then, money in the, in the bank is very important. And then I learned the valuable lesson of no is not final and yes is. And so instead of saying yes to everything, it was relieving to say no to almost everything. Everyone thinks that this is the next best deal. I mean, you, Hannah Hammond Hammond, probably know this better than all. Like, there's a good deal that comes across your desk probably every day, if not at least every week. And if you say no to this incredible deal today, it's okay, because next week or next month, another great deal is coming. So sleeping well at night and saying— learning how to say no, I think, is very, very critical. And so that's, I think those are probably two big takeaways is, and you know, and when I say sleeping good at night is having cash and having those kind of reserves. I didn't need to have all that I had in assets and deals. When you have cash, you can live through the storm and prepare for some crazy fun stuff that's about to come.

Yeah.

And then the last thing I'll say that has been a constant, but I learned it the hard way, really hard way in 2008 as well, is relationships. The importance of good relationships, business and family. I mean, I missed the ball with, I was always, I've been always a present father, but I wasn't a good open partner. I was trying to protect and I could have done better there. And I have that now with Jessica, where I just, she probably wants me to say less. Like, I just want her to, I wanna share. 'Cause I don't think it's fair to the one that you love not to share what you're going through. And I don't give her every detail, right, of course, but I share all the hard stuff. And I think that's something I didn't do. I was young, I didn't know. And I try to share and implore with my young, aggressive, creative 23-year-old son who's married now. And, you know, 'cause he hasn't lost money yet. So I'm trying to share those kinds of things with him. But those are probably the takeaways for me is relationships are, very, like I said, I just said family, but also business, the business, knowing who you're gonna be a partner with is really, really important.

Yeah, thank you for sharing that. Those are incredible lessons and so true. And I was just on the phone with a friend of mine a couple days ago talking about that financial peace is like, you know, growing up, I grew up in an environment that was very scarcity. There was never financial peace. That was not a, a thing. And I was like, you know what, I don't think I've ever really felt it like real financial peace. And I felt it enough to where I've had enough money and I have enough cash in the bank where I feel good. I'm like, okay, I can make it a couple of years and I'm going to be fine and I'll find a way to— right? So I have a close level of peace, but it's paired with so much growth and reinvesting all the time. And so I actually take pretty low risks because, you know, I had Ishmael on my podcast who just exited his company for $100-something million. In 6 years and he was homeless like 6 years ago and he just, you know, he's got $100 million in the bank and he's like, you, you don't take big enough risks. Like, you, you know, you need to borrow money or go do this or go do that and like you need to hire this executive and all this stuff. And I'm like, but the peace, like just the level of peace that I have to have cash in the bank and I still would like more peace. I would like $100 million in the bank. I don't have $100 million in the bank, but I have enough where I have enough peace to sleep well at night is worth not growing as fast as— of course I want to grow like the visionary and the entrepreneur and all that stuff.

And you still can. You can do that without—

right.

Have to have— yeah.

And so that's the thing. The goal for me is how, how much can you grow? How much impact can you have? How many people can you serve? How many goals can you accomplish while at the same time maintaining your level of peace and happiness and energy of being in the green zone to be able to make clear decisions and actually sleep well at night?

That's right.

Because I— yeah, it's everything. It is. And I think that there's a lot of incongruency between— there's the group of people that are capitalist hustlers, grinders, suffer pain, take risk, you know, full leverage. And then there's like the Zen Buddhist, like anti-capitalism, let's all just have peace and relax and have the same lives. But I like to blend both of them. It's like, let's grow like crazy and create amazing things and take risks and maintain the peace in the process. And that's the game that I'm committed to mastering. That's my goal is committing to mastering both.

I love it. And you can and you will and you are probably, it sounds like.

Well, thank you.

You just got to keep it. That's the thing. Sometimes you get out of whack. So I love that. I resonate with that. Yeah.

Thank you. Yeah. So I love that tactic. I hope I never have to use it, but it's a really good one. And then you just knew you were gonna be successful. You got your office, you were manifesting what you were gonna create, and you rebuilt. And when you rebuilt, were you doing the exact same thing? So, I mean, you started buying the properties.

Started buying the properties that just paid the bills. And so what happened then after that was I had raised so much money from individuals with IRAs and referred it to other trust companies. And the trust company's service was so slow and, just dysfunctional. Like when I would say, Hannah Hammond Hammond, hey, invest in my deal with your IRA, you'd say, yes, I'll do it. Okay, to do that you need to open up an account with XYZ company. And so we would fill out the paperwork, their paperwork, for you to get it there. And then we give them the paperwork and it would take them forever. They dropped the ball. Well, then my investors thought trust companies— thought the trust company or my investment sucked because they sucked. So I lost dollars. So I was like, I'm gonna start a trust company.

And this was like in 2011 at the bottom of the market.

2010, yeah, I mean, 2011 is official, but yeah, 2010 is when I started the trust company. And purely because the service sucked. I wanted to do real estate, keep doing my funds, keep raising monies, but I'm gonna own the trust company just to speed it up to make sure it goes smooth. And that's why I got in the trust company business. And then it took off. And now it's, I mean, it's really all that I really do. It's, I love it. I didn't think I'd love it, but I love it. That's what I do.

Yeah. And over $1 billion. And how did you grow to over $1 billion in assets? Do you have any partners in the company?

I have. Yep. I got a couple partners.

And how did you guys, were they in from the beginning? Did you bring them in?

No, I had two. I just bought out one of them. And bought some of the interest. I couldn't afford all of it, so I had a partner come in who you met, Alex, bought the other half.

Oh yeah.

And then I have another partner. So yeah, we, they were my, my other partner, family member.

Yeah.

And so when I started, they started with me.

Okay.

So, so I'm the majority owner. I run it, uh, soon not to be running it, uh, but, uh, yeah, I started about 15 years ago and I just kept my head down and it's worked out. And we're about to acquire another small trust company. We'll be over $2 billion probably in the next 45 days. And we're still, you know, we're kind of small still in the industry. There's not a lot of us, but we'll have about 10. We have almost 9,000 clients. We'll go to about 11,000 clients. And we're boutique. We're all about service. And so I'm not out to—

Boutique with $1.4 billion?

Yeah, I mean, yeah, yeah.

Was that, was a big, like, is that considered a small trust company, $1.4 billion? It seems like a big one.

No, I mean, it's probably average size, but like a big one would be like $10 billion. OK. So— but that's never been my goal. I've tried to keep what you said. I mean, I'm really focused on balance, fulfilling that need of kicking ass and growing, but also of being home to wash the boat at 2 o'clock on a Wednesday.

Yeah.

It's OK if you— I'm not trying to— I'm realistic. I want to keep a lifestyle, but also I want to give a lifestyle to my family and my staff. And so it's keeping that balance. So it's been good.

So are you, uh, you know, cause I'm always thinking of scaling and I wanna scale big company, but also keep that balance too. Like we, we talk about, but what do you think the biggest mistake is that entrepreneurs make when they're trying to scale?

Uh, easy. I doubled my business the second I got rid of all the other companies. Easy. Entrepreneurs were so bad at starting new stuff, partnering with other people and little deals. Even if it's a minority partnership, it takes away from your core thing. The second that I went from 5 companies to 2, I went from 5 to 2, and I went up 10-fold. And that is the serial problem. Almost every mastermind I go to, they leave and they're like, oh, I should be doing that too. And because I— it's congruent, it works with what my business line that I already have, and I can sell this.

And I'm telling you, vertically integrated, right?

That's the mad— those are the magic words. I'm telling you, the people that can scale and that want to make— if you want to make more money, take your thing that works and double down on it and get rid of all the other noise. I'm not a big proponent. There's a few people that can do it. You've interviewed some of them, and there's a few of them out there that can have multiple different companies. It all— it's all about, obviously, your team, but also that takes away a lot of times from your time. And so stick with the one or two things. And just do it so good, better than anybody else, you'll scale it. Yeah, easily.

Yeah. Did you scale primarily from doing roll-ups and buying out other companies and things like that, or mostly just—

This is my first roll-up that's happening right now.

Okay. I was going to ask, never done it before. Do you wish you would have done it sooner or— Yeah, I guess you don't know yet because you haven't transitioned.

Yeah. Well, the easy answer is yes, because I'm going to almost double in assets with only 2,000 clients. But it's all I know. And that's, you know, I'm, I'm still like I'm not the smartest guy. I don't have all the experience, but one thing's always worked for me: being good to people and working my ass off. And then you find good people. And so that's, that's what we do. Our clients like us, and if they don't, I care. I mean, we got a 1-star review once in the last year, and we all get— we have all 5s. But that 1-star review, I'm like, well, I want to talk to them. I want to know what's going on. And they're like, well, I'm not going to change it because you're just trying to get yours. Well, I said, well, I still want to know. Like, if you're not going to change, I still want to— I still care about those things. And maybe that's too much in the weeds, but that's— it's who we are. So that's what Horizon's based on, is service. That's why I started the company.

Yeah. It matters. It matters to me, too. It's like, what would keep me up at night is like unhappy clients.

The one unhappy— not all the 5 stars you got, but the one you're like, what? You really had that experience?

Yeah.

And so then, yeah, yeah, yeah, it happens.

So people say to go find a job or career and do something you love. So is that what you did or did you do something better? Or I'm sorry, is that what you did or did you do something different and why or why not?

I truly don't believe, I think people, young people especially, it's almost like a diagnosis. It is a cancer, I believe, to teach and train people they should go and do what they love. And I don't mean that in a bad way. Like, look, for those people that are— there is the, like, top couple percent that you wanna be an NBA athlete and you got the talent, like, and you love it, go do it, right? But for the rest of us who— look, I wanted to be in the NBA, right? I love it. I wanted to play basketball. I thought I was. I lived in Chicago. I did my free throws in the winter like Michael Jordan did. Didn't work out. And most of people, most people either read on social media, believe it from social media, or people tell them, go out and do what you love. I know more people in my life today that are successful entrepreneurs that are making so much money doing the strangest things that they did not think they were gonna do. Case in point, I talk about self-directed IRAs. Pretty boring. IRAs, taxes. I mean, never in my life did I think I was gonna realize I fell in love with the thing that lets me live my lifestyle. And I think it's a shame that people aren't willing to put in the work to fall in love with the thing that's potentially gonna give them the lifestyle that they're looking for. It's not, that's how this world is. And my friend who owns a pallet company, he owns a pallet company. Who thinks they're gonna have a pallet company? Living his best life. And, but it's 'cause business is still business. It's numbers, it's leadership, it's working with people, it's scaling. So fill in the blank, whatever it is, if it's tables or waters, whatever, fall, you can fall in love with what you do. You don't have to go out and do what you love.

Yep. I couldn't agree more. Yeah. Yeah. I was just talking to somebody I was hiring. I was like, you know, I don't wake up every day like super excited to talk about capital stacks and construction and development and zoning and like all, you know, DSCR ratios and debt, like all these things, right? Um, but it's the lifestyle that it can provide. It's the freedom that it could bring me. It's the peace that real estate has been able to create for me and that I know it can create for other people and that impact that I can help make in other people's lives. Because I had nothing and I didn't just follow my passion of riding horses every day because I knew that that wasn't going to lead to the lifestyle. I would've had to be a trainer making minimum wage and then I would've hated horses. Because I could no longer enjoy my hobby.

That's right.

Right? And I had to grind doing mucking stalls and riding all day for a little bit of pay. And so I couldn't agree more. It's falling in, and you have to be able to fall in love with that journey and that process of creation and not get so, like my friend is a billionaire at 43 years old, 44 maybe, and he's garage doors. You know, like did he wake up one day and be like, I'm so passionate about garage doors.

right?

But leading a company, just like you said, sales, marketing, and operations. And you can become very passionate about something when you start to see what it can create in your life and in other people's lives and the impact that you can make regardless of what it is.

Yeah.

Yeah. Like Ishmael, I just told you about him who just sold his company. He's like, I'm just a plumber, bro. You know?

And like, okay.

Yeah, exactly. I love when people ask him what he is. He's like, I'm just a plumber, bro. But, you know, he loves plumbing now. Yeah. So he was able to find passion.

That's right.

And that's so— All right. So what are you most excited— what asset class are you most excited about right now? Are you still like gung-ho on real estate? You see lots of opportunity there. Are you dabbling in anything else? Is there anything that you're excited about with the world of AI and all the changes going on?

I'm really sticking to my guns because of 2008. To how I diversify and what I invest in. So I'm investing in whole life insurance policies. I'm investing 'cause they're fixed and guaranteed and they're protected. I'm investing in real estate. I lend. I like to be the lender. I like fixed-rate returns and first lien positions. I like double-digit returns. And then, so I'm answering your question in a really boring way. But then the last 15 to 20% of monies that I have, I am at the AI and at, you know, a little bit of crypto. Not at the moment, thankfully. I got out at the right time. But anything, you know, new business ideas, people bring me different opportunities. But I used to be like reverse of all that. It was like 10 or 20%. Well, besides when I lost everything, reverse of all that. But, you know, partly it's with age and also seeing that You know, deals go bad often. When I say bad, they don't go as planned often, uh, in these new, you know, these new businesses. And so when I see new businesses, I get excited. I'm still like a junkie at heart where I love to like still be on the next, you know, Tesla and this, all this AI movement and all this automation's happening. Um, but I'm keeping it very minimal. So yeah, that's my question, that's my answer for you, is stay with what you know, invest in what you know, whatever that is. If it is plumbing and the plumbing industry or whatever it might be, invest in what you know and don't put too much in these other deals.

Yeah. If you can't understand it, you shouldn't really probably be investing in it.

Yeah. So, but no, I know I don't— I haven't spent enough time and energy yet on all the AI stuff. I mean, I'm around the coffee tables talking about it, but I'm not invested in it.

Yeah. Yeah, I do the same thing. I mean, especially in times of volatility like this, it's even a better time to double down on what you know and believe. Like, I'm super excited about real estate. You know, real estate's been hard to generate returns over the past few years. But due to the distress that we're starting to see in the markets, there's now opportunity again. There's opportunity to buy distressed debt, there's opportunity to buy distressed deals. And that's where you, you clean up the time.

It's coming like this. It's on the brink. We've been talking about it being on the brink for like a year now. But yeah, I agree with you. I love real estate. It's definitely the place to be for a portion of portfolio. And there's opportunity coming.

Yeah. Yeah. And I had asked you one question that I should ask you, and I want to know the answer. We may have covered it earlier, but what's a major life lesson that you learned early on that still serves you well?

I would say one that I haven't covered that I did think about earlier was the importance. You and I were talking about balance of being a billionaire or whatever that means to you, whatever the number is. Being at peace. And, and I think that one of the last things that really helped me scale my business but also give me all the things we're talking about here— money and peace— was me understanding about 10 years ago that it's our job as an owner or founder to own your schedule, not the other way around. Almost all entrepreneurs are owned by their schedule. If there's an appointment, a big affiliate, a big whatever it is, big contact, you're all of a sudden, your schedule opens up. I'm really good about my times that I work, my days that I work, the hours that I work. My team knows it. So if you want to be truly focused and zone in and, and make more money but have more peace own your schedule. Specifically put on your calendar when you're working, when you're taking meetings, and tell anyone that puts stuff on your calendar what that is. And once I did that, that was another game changer. It was awesome. And all of a sudden, I'm home more and I'm also making more money. And I think most people forget that, that you're the boss. You can do that. So—

It's so good. I needed to hear that right now because I'm definitely working way too many hours at the moment. But everything's on the schedule, you know, and I put in the work blocks of focused work when I could have meetings. You know, now I started implementing Mondays and Fridays, no meetings, so I could just be dialed in and focus because it's too easy to be busy.

Yeah.

And I get 1,000 meeting requests a day and they all seem like great opportunities. And I'm just— that's been my hardest challenge is figuring out who to prioritize and say yes to or say no to. But I'm like, right now I'm booking into June. So I don't want that. Like, I want to be able to have some freedom in my life where I can't take a trip this summer because I'm booking out into June and—

Right. Cross it off now.

Yeah, exactly. And I'm like, I don't have time to plan for the trip because I'm in meetings all day. So yeah, it's so important to own your schedule and not let your schedule own you. All right, so I always like to end with rapid-fire, School of Hard Knocks style.

All right.

How old were you when you became a millionaire?

24.

Beat me, I was 25. What type of business are you in?

Business that I'm in?

Yeah.

I'm in the finance, from the financial space, self-directed space.

What's the worst financial decision you've ever made?

Putting it all in, investing every dollar and leveraging every dollar I owned.

And what's the best financial decision you've ever made?

Putting every dollar on me, my deal, I mean my business. Betting on me and not someone else.

Yeah, invest in yourself. Yeah, bet on you. What do you think is the best book that every entrepreneur or aspiring entrepreneur should read?

I'm just gonna say something different recently. I used to be a very religious person. I'm not anymore. Still very Christian, but I, for the first time in the last 6 months, and this is not to be all religious, just so you know, I am reading the Bible from a business perspective.

Me too.

Really?

I literally started— Yeah, I started reading.

It totally changed the whole theme of the Bible for me.

Oh my gosh. I actually have Claude, this is supposed to be your time to shine. Go ahead and share it. I have Claude breaking down, 'cause I'm reading the Bible and I've been getting closer with God. This isn't just a business thing. I have a relationship with the Lord and I really value my faith.

Me too, me too.

Yeah. So I'm sure we're gonna get hate on this of like, oh, you're manipulating the Bible. But no, so I have Claude, I read a scripture. And so Claude's taking me through scripture by scripture from page 1 of the Bible, every single scripture. And I say, please tell me how this scripture can relate to my personal life and my business and my faith. And—

Oh, I have not done that. That's exciting.

Yeah, and so it goes like personal relationships, personal life to yourself and to others. Your business, how this shows up in leadership and execution and your faith in God and in your impact in the world. And it's amazing.

Love it.

Because I love reading the Bible now. Because if I just open the Bible, I'm like, I don't understand what any of this stuff means and how does this relate to me? And it's just complicated. And the daily devotion is nice because it breaks it down in normal terms, but it's more of just more personal stuff. But yeah, AI is amazing to really help you break it down and translate it into business.

I have not used AI with the scriptures yet. Yeah, I'm gonna do that. But this is the first time, because I'm reading it from a different headspace, not because I felt like I was fulfilling a goal, right? Like, "Oh, I'm gonna read the scriptures every day," right? And so it's like, you know, but now I'm like reading it from a business perspective because there's so many good stories and leaders and things they did. The leadership qualities are incredible and why they failed and didn't. That's my answer, the Bible.

I love it. Yeah, there's so many amazing lessons in the Bible and it's been here for us all along. I'm like, how come I never opened it and read it? It's like a manuscript for life and business and love and all these things. And I'm trying to go pay another coach over here. Yeah.

That's funny. Good for you. Thanks for giving that share to me. I'm gonna use AI with it. It's weird, I use AI everywhere else, but not there.

That's good. Yeah, and every day it just has the next scripture and the next lessons. And I just pop it up and it just sends me right at 8 AM every morning.

Well, thank you for that share. I needed that.

Of course. I love it. Okay, what's one thing you think every American should do with their retirement account?

Invest in real estate.

Traditional 401 or self-directed IRA?

Self-directed, of course.

Why?

Because you're investing in what you understand and what you know, unlike investing in other people's deals that you have no idea. Only if you are an entrepreneur or someone who's going to read what they're investing in.

Yeah. Biggest money myth that needs to die?

It's not about how much money you have on your balance sheet, and it's not about being a billionaire. It's about living like a billionaire, living the life you want to live.

And what does success mean to you in one sentence?

Easy. We've been saying it the whole time. Peace.

Yeah. Peace. If you could send one text to your 25-year-old self, what would it say?

Love harder and let those around you know how you feel.

And if you could leave one message to the younger generation, what would it be?

Work harder than those around you, which is not very hard, but if you just do more, and build honest, true relationships, you will become a millionaire within years. Relationships and hard work, that is the recipe for success every time.

Yep, I love it. Well, thank you so much, Greg. You're awesome. How can people get a hold of you, set up their self-directed IRAs, and to follow you on Instagram, all the things?

Just, just, there's only one Greg Herleen. There's, there's no, my name is not, or you'll find my son, maybe Carson But just, just follow me or Instagram. Get with you. Yeah, Instagram is great.

@gregherleen.

@gregherleen. Yep, that's it.

Cool. Horizon Trust Company. Thanks so much for coming out to Arizona and coming on the show, and it was awesome.

Thanks for having me.