#41: Blake Bozarth, Founder of the Net Worth Newsletter - The blueprint to freedom, creating optionality, and living on-mission

The term that I love is the appetite for smart risk. So there's a lot of risks that I'm trying to avoid. But if you're going to accomplish anything in your life, you have to have an appetite for risk. We just want to make sure that risk is smart. And I think that's what I realized over time is that this is kind of cliche, but it's simply true. And that is that the biggest regret that people have on their deathbeds is the thing that they didn't do.

On today's episode, we have the founder of the Net Worth newsletter, Blake Bozarth. Steve Like Donato Callahan, a former guest on the podcast, Blake is a super impressive young guy. And I'm not gonna lie, I'm a little envious that he figured out the blueprint to wealth and life at a much younger age than I ever did.

Jake When I was hearing Blake's story, I felt like a little, I was hearing a little bit about me when I was back in the 30s, but the difference was is that I didn't have anybody like Blake to be that coach and guide. I was trying to figure out, figure out business and life on my own. And it was, it's great hearing Blake's story and what he's doing.

Yeah, he really is acting as that mentor for 20 and 30 year olds who are, you know, they're high, high earners, but they don't have the wealth and they, they're looking for that optionality in life. Or maybe they stay in their corporate job and they're, and they're investing in real estate outside of their job. Or maybe they're looking to create that side hustle that creates more freedom in their life. And although he's in his, you know, mid-30s, he's acting as that mentor and guide for people who haven't quite gotten there yet. So super admirable. But let's not get anything away. Let's just head west. Stay tuned as we discuss the blueprint to freedom, Creating optionality and living on mission with our guest, Blake Bozarth. This episode is brought to you by Skyline Point Capital. If you're anything like me, you're always considering where to invest your money. Stocks, bonds, crypto, a rental home. The list is literally endless. As we've all seen over the past year. The stock market is unstable, the housing market is just weird, and inflation is on the rise. In times like these, the clear place to invest my money is in multifamily real estate, AKA apartment complexes. Here's why returns on real estate investments have little to no correlation with the stock market. There's lower volatility, stable income streams, and the tax benefits are insane. And let's not forget that the apartments will typically appreciate in value over time, which means you can walk away with a pretty nice return when the complex is sold in three to five years. Best of all, multifamily investing is passive, so you get all the benefits without the hassle and headache of your typical rental home investment. Getting started has never been easier. Head to skylinepointcapital.com to learn how you can start investing today. I first want to start by just reading your. Your, let's call your LinkedIn profile, because you've got a. You've got a slew of titles here, and I kind of want to unpack them. And I believe there's a story hidden in here somewhere of. Of how this kind of played out. But I'm gonna. I'm just gonna read for it and forgive me if this embarrasses you, but. So founding coach of Net Worth coach, founder of the Net Worth Newsletter, founder, CEO of Cothrive, host of the Leadership on Purpose show, and advisor to the global real estate services. That. That's impressive. Not only impressive, there's a lot there, but I feel like there's a story there. I feel like there's some connectivity that they. They sort of work together. So walk us through how all of these came to fruition. Is there a. Is there something behind it that kind of led you to where you are today?

I forgot about some of those things. Jake. That was a good one.

Are you neglecting jobs?

No. Things do tie together, believe it or not. But yeah. So quick story for me. I, right out of college, did something I never thought I'd do, and that is go work in corporate America. And I ended up being there for about a decade out of college. And the funny thing is I actually loved it. And so for the most part, I really enjoyed it. And there was plenty of stuff I didn't enjoy, but for the most part, I had a really great experience. I wasn't a leadership Pipeline program, so I would do different parts of different rotations in different parts of the company and just got to do a lot of exciting stuff and really grateful for it. Worked with some incredible people, learned a lot of stuff. But the entrepreneur inside of me, part of me, over time, like, was really, really dying by not being able to feel like I was exercising that as much as I wanted to inside a large organization. So. So then I discovered this little thing called REI and real estate investing. And my side hustle became getting involved with that. So actively hunting for deals, understanding that, doing some private money action. And it was kind of, I kind of honestly got into it by happen chance right out of college by getting my first home and having guys, some of my best friends from college live with me in my home. And house hacking, before I knew it was a term and it really like honestly I say, I say it was one of the best things because. Because now I'm really, I'm really focused on how do you help people gain financial freedom and grow their net worth. It was one of the best decisions I ever made for, for doing that and growing my net worth. But it was also one of my worst decisions was not replicating that over again early enough. So I've, I've learned a lot since then. But fast forward, thanks to that I was able to transition out of that corporate career and just felt a calling with my wife. I got married in late 20s, had had kids, had baby number two on the way and we just really felt like hey, we want to be able to do life differently and have more. Had just had more freedom to kind of run life on our own terms, do life on our own terms. And so building that small real estate portfolio is what allowed us to take that jump. And I launched Co Thrive. And Co Thrive is, is about leadership development for companies. So that's leadership on purpose. The show launched that five years ago as well too. And really passionate about seeing leaders get better. I think that's one of the best ways we can change the world is by helping leaders get better. And the more I was working with leaders inside of these companies, I was doing mastermind programs and group coaching programs inside of corporates and medium sized companies. I found myself working with more young professionals who were like hey, that story, like how did, how did, how did you, how did you exit the corporate life at 30 years old and how'd you build this real estate portfolio? And I just really started to develop a heart for like helping more young professionals create more freedom and optionality based on building outside of their day job. And so that's where the network newsletter came in. That's where the net worth coach comes in, is in, is in helping people do that. The things that I wish I knew sooner is what I'm passionate about sharing these days.

We had a. It's funny, you bring that up and you joke about you wish you had replicated the house hacking. And we had joked about that I think a couple of weeks ago when we, when we talked. Because I did the Same thing at 24. Bought a home and I moved all my buddies in. I think at one time. I hope I don't get in trouble for this. Hopefully we're past the, the limitations. But we had like seven guys living in my house at one time and we have a three bedroom house, like massive basement. So people, I mean everybody paid a very small amount. So everybody was very willing.

I was at six in a three bedroom.

So hey, I'm with you very democratically run. But I did, I joked with you. I did not have the foresight to replicate it either. Nor did I have any foresight to take what I was making from the house and roll it into another investment to do anything. I spent it. All right, So I say all that to ask you what, what do you see with people in their 20s or 30s today that like us doesn't give them the, the mindset to, to be proactive at a young age. Is this something that you're, you're coaching? Is this something that you have to sort of shake them out of their, out of their mindset? I mean, do you, do you still experience that for 20s and 30 year olds? Kind of like we were, man.

I think the biggest thing that I've realized is it's really hard to catch a vision for something, for something that you haven't seen lived out. I know that was true for me. Like I came from a really incredible family life and background. But in terms of like actually building assets outside of a career and day job, that wasn't, that wasn't a big part of my family life growing up. My grandparents actually were more that way. But my dad was the first to go to college and he just sacrificed his whole life for our family in terms of how hard he worked and super proud of him and the example that he has been for us. But for me like actually seeing like what does it look like to build assets outside of a, of a day job of career, I didn't want to see that modeled. And so I kind of, I had to learn that by experience and had some natural kind of entrepreneurial drive from a young age. So I think that helped me get into that. But to your point, I think that's the biggest thing that I, that I see is it's really hard to, to, to catch a vision for that when you haven't seen it lived out. And I think one of the things I get really passionate about is I think, I think young professionals grossly underestimate how possible it actually is not easy, but how possible it actually is to build meaningful wealth and reach financial freedom at a, at a fairly young age. And so that's part of what I message and I'm an evangelist for that is there's, there's some, there's some simple things you can do outside of just the traditional 401k, like make sure you're putting money in your employer match and stocking away in the stock market. There's some more strategic things you can do that aren't super risky. That's what, that's one reason why I love it. It's a low risk model for me that aren't super risky and that the average person can do. You don't have to be incredibly smart. You don't have to be mental level, iq, I'm evidence of that to actually follow through on some of those things. And so it just takes actually, I think seeing it and then realizing, oh, this is actually really realistic. And I can, it takes discipline, but you can do it.

Hey, Blake, you mentioned the word risk and at your young age of 30 and you've got the corporate job, can you tell us how you, you actually talk to yourself about, I'm going to take this risk, I'm going to step out from the norm of what everybody else is doing. And then what do you, how are you seeing the people you work with get past the risk level and that idea that in fact they actually can do this by just taking that next step. How do you do that?

Yeah, that's so good. I think everybody has different risk tolerances. I would say mine, like, I like, like the term that I love is the appetite for smart risk. So there's a lot of risks that I'm trying to avoid. But if you're going to accomplish anything in your life, you have to have an appetite for risk. But we just want to make sure that risk is smart. And I think that's what I realized over time is that this is kind of cliche, but it's simply true. And that is that the biggest regret that people have on their deathbeds is the things that they didn't do. And when you like, you can like, that's a guaranteed talk about risk. If you don't do the things that you feel called to do, that there's a 100% chance of regret. And so for me, that, that's a, that's a risk in and of itself that I wasn't one of, I did not want to live with. With that said, I think that not everyone is, is meant to, to leave their day job and to be a full time entrepreneur. I don't advocate for that at all. But I, but I do think that I want to see, I think number one, I think more people can do it that maybe think that they can't. I think more people can potentially do that. But I do want to see more people that are just willing to take the kind of smart risk that gives them more breathing room, that gives them more optionality. So maybe if they want to change career paths, maybe they're the boss that they have things changed and they want to be able to stand on their convictions and make a decision and give themselves some more breathing room. Maybe they want to be able to retire their wife. But in order to do those things, you need to be able to have an appetite for smart risk. And so for me that was the decision, like is this a smart risk? The wife said so I felt like it was and we went for it.

But I see is when you go to take that risk, it really helps out if you have a mentor or a guide walking along with you who's been there and is further along the path. And if you don't have that, you sometimes become paralyzed thinking about I can't do this, I need someone to help me, but I don't know who. And etc. When you're working with people, you're that guide with people, with your, your people and, and how to walk alongside of them. Can you talk about that? What really resonates with your clients and people you work with?

Analysis. Paralysis is such a real thing. And so like you can see people that get excited about, they catch the vision. So like I was talking about before, like, even, even if they hadn't really thought, oh, you can do those things, okay, they catch the vision, they can get excited about the potential. And then you're exactly right. Like then you start spinning wheels on analyzing it 10 Ways to Sunday and, and never actually taking action. And for me, I think there's two big factors that help with that. One is having community. So whether it's people coaching you or not having someone that is actually on the same journey as you who they're willing to take action. You can see that you're not surrounded by people who are the negative. Like this is why you shouldn't do that people all the time. But then I think you're spot on. Like the role that I get to play and somebody who's, who's taken smart risk and done some of the things that people are looking to do is that you do get to walk them through that. And it's one thing to like to take a course on something and to get great content about something, but it's a other thing. It's like when you're in the middle of trying to make that jump to actually say, hey, here's what I'm considering. Here's my particular situation. What would you do here? Like, help me troubleshoot this. And a lot of times it's trying to give insight, but more often than not, it's perspective and it's being able to share. Hey, let's walk through. Have we made this a smart risk? What are the ways you've limited your downside? What are the ways you've created unfair advantage? And I'm here for you. Let's go.

That's awesome.

So, Blake, you've talked about. So you're frequently meeting with 20 and 30 year olds and helping them sort of learn this blueprint. And I've heard use the word blueprint a couple times of. To help them gain freedom through finances. And that might look like an entrepreneurial venture. That might look like staying your corporate job and doing a couple things. But. And I'd love to hear what this blueprint. And don't give away the secret sauce, but what is roughly.

No, I give it away.

Like outside of the. The house hack.

Yeah. So honestly, as I reflected back on my journey, it's okay. How did I, how did I reach this point at a younger age and was able to make. Make this kind of jump with my family? What, what led to that? As I reflected back, there were a few things that contributed to this. Overall, here's a simple blueprint and there's a lot of. I'm the first to say, there are so many different ways that somebody can go about building wealth. The reason why I love and I'm partial to this blueprint is because I think that the average person can do it and it does not require a lot of risk. And so there's, there's some simple pieces, but if I had to boil it down, the, the biggest thing it starts with is this concept of, of widening the expense to income gap. And so one of my mantras is you can live well, comma, below your means. So a lot of people think that, hey, in order. In order to live well below your means, like it's going to be miserable, it's going to be tough.

Yeah.

It really doesn't have to be.

And it is.

And that is mindset. And there's some creative things you can do. And house hacking is one of those things. There's some creative things you can do to move the levers on some of your big rock expenses. That, yes, it is a sacrifice, but if you have the right mindset, it's actually an adventure. And it may be just for a season, right? It may just be for a season that you're, that you have roommates or that you buy a triplex and you, and you live, you know, in that. With your, with your, with your young wife, whatever that is. Right. But it's an adventure. And so when you, when you embrace it that way. So, so how can you widen that expense to income gap? So, so live well comma below your means? For me, like I was able to still travel to 25 plus countries during that time that I was, that I was kind of widening that expense to income gap. So it doesn't mean that you have to cut out fun. You can still have a ton of fun. You have to be creative about how you do it. And it's about your mindset, about your attitude. And then I don't put too much of an emphasis on the austerity stuff because I think that there's a dark side of that and there's a limit to that of like, hey, once you get to rice and beans, it's not fun anymore. If you're constantly on rice and beans, that's not fun anymore.

Right?

So we don't get to that level. You can still enjoy your, you're eating out, your coffee's out. You just want to be reasonable about that. But then what we focus on is we say, hey, let's move some of those big rock expenses. So housing, transportation, food and drink. Let's try to make a dent in those. Try to save creatively between 500 to 1500 dollars a month, which for the average unprofessional actually is. It's pretty doable. I know, like there's inflation, but if you get creative about some of this stuff, you can take out 500, 1500 dollars a month and some can take out even more than that. But then we focused all the energy to that other end of the equation, which is the more fun part, and that's growing that top line and that's where you create the margin. And so there's actually, it's Warren Buffett's partner, now deceased, Charlie Munger, famous for saying that your first 100k is a BIA. BIA. He used a different B word there. But the first 100k, it's so hard because it comes from it. It doesn't. It's before your money can start making you money in a significant way typically. Right?

Yeah.

So it's so hard because it comes from savings.

Yeah.

And so it comes from widening that expense to income gap, doing the things you need to do to lower those expenses. And then all your mental energy at that point, I don't want you thinking about couponing. I want you to be thinking about how am I growing, growing the top line. And that's the fun stuff. And so that's where I get to spend a lot of time with folks is hey, let's limit the silly spend. Let's get creative about some of the big rock expenses. But then we're going to spend the rest of our mental energy on how are we growing your top line. And that looks like getting more out.

Of your day job.

9, 90% plus of the, of the people that I've worked with have been leaving money on the table in their day job. That's the lowest hanging fruit. And it may look like positioning for a promotion or raise. It may look like, hey, you might need to switch jobs. But we work with them through that. And then my favorite thing to do is help them add in a, what we call a high yield side hustle. And so that's, that's a side hustle. That's part time entrepreneurship that actually makes sense for you the hysh. And that's a ton of fun to be able to do. So really a lot of that blueprint hinges on that concept of widening the expense to income gap. And once you have that, you guys know this, you guys are practitioners of this. But once you have that, that's where you can start actually exponentially growing wealth when you can take that capital and put it to use. And so we help them with that too. I get to walk them through like, hey, what does it look like to build assets? What does it look like to. To take that excess cash now that you have that and actually do something with it where your money can start working for you. And real estate's a big part of that.

It's, it's when I, when I hear Blake, when I hear you describe this, I was trying to go back when I was 30 and 40 and, and trying to grow the business. The income to expense gap would go wide and then go narrow it go. And then it'd go the opposite direction.

Yeah.

And.

Etc and as I tell people, and I had the opportunity to do some real estate investing with some excess cash. A lot Younger, I did a little bit. But you're talking about things you regret as a business owner, as an entrepreneur. When I had the extra cash, I, back then, I wish I would have put it into income producing real estate assets. I'm sitting here going, you know, like McFly, you know, from the back to the future.

Yeah.

And that's the biggest thing I hear and see from people. And so I, I, I, I applaud you for being that coach for people at that age to get them set up to do that, that's so critical. And, and they may get some slow points or ups and downs and et cetera, but don't give up, Just keep going. Take that excess cash and do something with it.

Yeah. Steve often calls it plan C. It's planned cash flow. It's having that outlet not only creates that exponential growth, but it also, in times of need or in times of tragedy, whatever, you have an extra amount of income coming in. So if you lose your job or whatnot, now you've got at least something coming in through the door that gives you optionality, like you said, so good. Or if, if there's no tragedy, it gives you the options to leave your job like you said, and, and start something else that might be more entrepreneurial in nature or whatnot. So correct me if I'm wrong, but when you're, when you're working with your clients and you're, you're expanding that gap of income to expenses and then they're doing their, their side hustle, what are the options that you're suggesting beyond, you know, starting a, another gig, if you will, for investing is this, does it look like it's going towards real estate? Does it look like it's going towards the stock market? Like what does that look like?

Yeah. So I have a, you might not surprise you guys, I have a big bias towards real estate. I, I, it's a lovely. So, so one of my things, I'm sure you guys, I, I'm sure you guys talk about this a lot too, but one of my mantras is when you're looking to build wealth, you have to concentrate to build wealth. And I think you diversify to maintain it. You can build wealth slowly with diversification. And that's the 30 year plus track record sometimes for folks. The traditional path. Right. But if you really want to reach financial freedom faster, you have to be willing to concentrate. And I'm a huge fan still of having a balanced portfolio, so making sure you have exposure to equities, bonds, some crypto. But I also I favor, and people know this coming into the program. I, I favor a, a healthy exposure to real estate and outsized in terms of the rest of my portfolio. But yeah, so that, that's kind of where our bias is. At the same time, if somebody really loves investing in stocks and they can research, they feel great about researching, like what companies they feel are most undervalued and, or if they just want to put it into index funds, I think that's a great strategy as well too. Like, as long as you're putting that capital to work, I think that's a great strategy. I like real estate for a few reasons. I can, I can, I can list off a few.

No, please do. I was going to ask you what's your. What's your.

Because it.

Every business owner is different depending on the type of business they have, why they invest in real estate differ. So I want to hear yours.

Yeah. So I think of it for four reasons. Let's hope that I can recall all these. So the first is that it really does appreciate over time. And so like historically you see that not only in terms of values but in terms of your cash flows. Right. So it's a great hedge for inflation. And I'm looking for inflation, inflation hedged assets, real assets. So I love that about it. Two, it can be acquired with smart debt. And so I make a big distinction. That's part of. One of the things we talk about, it's part of the blueprint too, is yes, we want to avoid dumb debt. We know that. Dave Ramsey told us that all about that too. But unlike Dave Ramsey, I do believe there is a such thing as smart debt. So dumb debt versus smart debt and smart debt for me looks, it's all in the asset. And the wealthy know this, but the wealthy look at assets. So the accounting definition of an asset is anything that you can turn into cash. So my water bottle here could be an asset. This computer that we're working on right now could be an asset. Right. And unfortunately there are so many people who borrow, run credit card debt for those type of assets to fund that type of assets. Right. That is dumb debt. What could be smart debt? I say could be because there's still a lot of qualifications around it. What could be smart debt is tied to the asset. But at the very least, that asset needs to, at minimum be able to hold its value. Ideally, it should be appreciating in value and then ideally it's able to throw off cash flows as well. Right. And so that's what we're Looking for. If you use debt to acquire that kind of asset, there's a good chance that could be a smart use of leverage. And so for somebody like me, who does not come from money, it's a big deal. We talk about this asset class. It's a big deal to be able to use smart leverage to acquire those type of assets. So that's my second reason around smart leverage and debt. The third is it's tax advantage. I won't spend a lot of time on that. We know that a lot of tax advantages with real estate, right? But the fourth, and this, this is probably the one I get most fired up about, is I have more control in real estate. And this is the biggest reason why I choose real estate to be overexposed in real estate compared to equities and things like that is I feel like I have more control. I cannot control the overall housing market. I cannot control the overall real estate market. But guess what? I can control my local market. I can. I can control my local market. I can choose my local market. I can. I can pick my local market. Right? I can choose my particular property that I want to invest in, and then I can actually negotiate the deal. I can actually, I have control over the type of deal that I'm getting. And so for me, that is. That's the biggest thing. I like to be able to stack the odds in my favor. And you guys know this, you do this all the time. I know in your commercial deals. But forced appreciation, that is stacking odds. Forced appreciation is stacking odds no matter what the market does. I can control the initial acquisition, and you make your money on the buy. I can control that initial acquisition that I get that deal on. And I should. If I'm doing it right, I should be forcing appreciation. Even if the market goes down, if I have enough healthy forced appreciation, I'm more than covered. That's why I like it.

That's a great answer. And you already talked about the diversification side of it too. Of you want. You want to have, you know, a balanced portfolio of stocks to real estate. Okay. I've got one other question, but I'm gonna. I'm gonna. As we're wrapping up, I'm actually gonna roll it into our. We have a. We have a speed round just for people to get to know you a little bit better. So I'm actually gonna roll it into that because I think it flows a little better. So speed round, quick questions, quick answers, just for people to get to know you a little better. What's one Daily ritual that you swear by?

My daily devotions with the family, actually.

That's good. Do you guys have, like. Do you have a devo book or with.

Yeah, I'm blanking on the name of it, but the. There's a. It's a daily devotion that goes through the Bible based on seasons. And so you have Advent season, and we just came through that, and now I can't remember what the name of the season is that we're in. But there's a. There's a psalm every day that we start out with, and then we do some, like, family worship. We just sing the doxology together and then we wrap with prayer, so.

Love that.

Yeah, it's awesome.

What's one piece of real estate advice that you give to others?

Make your money on the buy.

Good one. That's really good one. What does freedom mean to you specifically?

Oh, so many things. I'll try to rapid fire some of this. Freedom to live life on your own terms. Freedom to control more of your rhythms and, and your schedule. Freedom to bless your family, invest in your family. I mentioned, like, maybe your wife wants to be able to stay at home and invest in the household. That's a beautiful thing. Freedom to be able to do something like that. Freedom to bless others. Freedom to actually be more generous. That's. That's a huge thing. Freedom. This is more tactical, but freedom to take advantage of. Of opportunities. So having the flexibility to. To be judicious about when you jump in, to take advantage of particular deals. But ultimately, yeah, freedom to be able to. Freedom to be able to pursue the things that you want to pursue.

That's good. All right, last but not least, the podcast name is Heading West. Obviously this is. This is sort of a description of life in general or even as business owners. You start in one place, you end up in another place over time. A lot of ups, a lot of downs, a lot of, you know, broken, broke breakdowns or flat tires. But we often say about Heading west is that this is an entrepreneurial journey to freedom, to wealth, and to retirement. So with that sort of lead in, as you head west in life with you and your family, where do you hope it ends up?

So good, you know, I'll end it. I'll go to the very end of this, which is, I hope that it ends up with me around the dinner table with a bunch of grandkids and doing our. We have a Friday weekly dinner that we do, and we're all in the same area. They're coming back to Granddad's house. And that's where I hope it ends up and that we're still on mission together. And so that's been a thing that we've gotten really passionate about is like having clarity of mission for our family and for us. That is to lead and live like Jesus and to try to try to impact the world in advancing his kingdom here on earth. And the fact that we get to play a part in that is a big honor. So that's where I hope it ends up. That's the very end in terms of how we get there. Like you said, it's always, it's always circuitous.

You got options. That's all that matters.

Back to that mindset of adventure. Like, I think when you embrace it that way, I actually hate the terminology in this community of that I'm a part of that. I feel like, you know, kindred spirits with. In the fire community, you're familiar with the financial independence, retire early. That's what fire stands for. So fire community is financial independence, retire early. I hate some of the mindset, which is the retire early piece. A lot of people just want to be able to opt out and walk on the beach or play golf all day or if you're like me, play pickleball all day. And while you should enjoy yourself and you should, you should. I hate that concept of just of just retiring. And so for me, I hope that into my latter stages of life that I'm still vibrant enough to be doing work that I'm passionate about that supports that overall mission.

That's a great answer, Blake. If people want to get a hold of you or tune in to what you're doing, where can they find you?

Honestly, the best place is probably my name for the website. Blakebozarth.com I have a budding YouTube channel now going in on some short form video stuff. As you know, we've talked about. Jake and I have a newsletter, so the Net worth newsletter. That is a free resource that I treat like a product. And so that's a, that's a, that's a service that I try to democratize what I'm doing. And I think that if you're. If you're interested in this type of stuff, then hopefully you'll be able to find a lot of value just in that free resource.

Yeah, yeah, I'm a subscriber. I can vouch for it. Blake, appreciate you joining us. That was a real pleasure.

Blake has been a blast.

So fun, guys. Thank you for having me.