Nelson Nash: What Are Startup Costs? (7 of 30)

I'm telling you about the airline pilot.

Based on what he learned in this seminar, he and his wife added up a million debt benefit with high price stuff for banking purposes.

And then they write for the next couple of years to the agency sold this but they wish they had nothing. Well, last month he died.

Well, they already had 650, 000. And so the. The Sims delivered a million 650. And I don't think we're the little complain anymore to you. No.

Interesting. Just a little side light. I didn't charge for that.

All right. Now we don't have a couple year. So. Stephen, you're from the US and so I can pick on you. Now you said you're celebrating your 40th coming up. 40th? Yeah, lady back then I celebrate our 64th next month. Congratulations.

Anyway. What's her name? Your wife? What's your wife? My wife.

You have a new wife. Your wife's name is Mary. My wife's name is Sandy. Sandy. Okay. All right. So I'm gonna put Sandy and Steven in the grocery business. I want to put you in a business in which you are.

A consumer as well as a seller of a product.

This is going to be the Miniature Grocer. Okay.

In market's unlimited because everybody uses groceries. They're no exceptions.

Someone got to perform the function and distribution. So y' all decided to get that. Now do any of y' all have any background or understanding of what the grocery business is like?

Good. Now, every business has certain things in common.

So we're going to use this as a learning tool about how to create a business in which you are a consumer as well as a seller of product.

First thing you got to do is study the business. David. For two years.

Tell me our game name again. Don't. Don't you. Sandy. Sandy. Sandy. All right. I got it now. I got it now. Sandy. Okay, Nate. Don't forget.

You got to study the business for two years. Then you got to get a superior location. What are the three qualities of real estate? Class? Location, location, location. Y' all just as smart as all the other folks I've met. What do you pay for that? Low, medium or high? High. No, very high.

Top of the scale.

Now you got to put a attractive building on there, Steve.

Y' all got to stock it with high quality merchandise. You and Sandy can't run that thing by yourself. You got to have hired help. Now tell me.

Does that superior location magically appear class? No. No, it doesn't, does it? If you don't have the right location, you deep trouble. So that's serious business.

Is that attractive building going to magically appear?

Well, go ahead and tell me. From the time they start, decided to go study the business and get into it, the time they open the door, how many years have passed? Please, I need three people to answer. Get with me. Five, seven. I say at least five and seven. Probably more like it.

Anything you crank up has got a startup cost.

Now agents, please tell me how many people do you run in that are ticked off because they can't get to everything they put into policy immediately?

I was in Boulder, Colorado a few years ago and there's about a 28 year old there. He was all pushed out of shape. He says, if I do what you do and I put $10,000 in life insurance, I can't get to it all immediately. If I put it in a savings account, I could get it the next day. Well, God provides. There was a orthopedic surgeon in the room, a doctor. Can you help this young man adjust his perspective about business? How many years, doctor, did you go to college? 4. How many years did you go to medical school? 4. How many years did YOU do internship and residency? 8. Can you tell this young man how much money you made during those 16 years? He says, I accumulated debt of 4 and 15 $50,000.

It's amazing what people will think and how they behave. They'll swallow gnats and swallow cows. Now that's scriptural.

Unbelievable. They get their perspective all mixed up. It does take a cleanse out cost. But in life insurance it's minimal compared with everything else that you do out there.

But that thought process has totally consumed the general public's mind. Now Sandy and Steve have got to turn that inventory 15 times a year to break even. 17 times. They got a profit 20 times and they can retire early maybe eight, 10 years. They made a ton of money. They got a dazzling.

Financial statement.

Now what's a chain of groceries in your neck of the woods? And Safeway, yeah, Safeway sees how good you and Sandy are doing. They say, God, let's buy those guys out there. They've got a profitable business. They're going to give you a ton of money now. They're going to put money electronically in Yalls checking account. You take it to all these other agents, they'll sell you annuity. They'll put money electronically in Yalls checking account while you insanely down lift it up rest of your life. Now y' all might not like Acapulco. I don't like. I like mountains. But you know, if you got a lot of money, it doesn't matter. You can just live any way you want to. Thanks. And you can handle that? I think she can help. I think so too. Now.

Here'S the minutes. Grocery. Nice looking place, isn't it.

Curtis? Says the front door cash register, there's the gun owners with merchandise on the shelves. They bought a can of peas back here at the wholesaler. Higher tip, takes that big can of peas, puts it on the shelf. Somebody comes by, picks it up, takes it past the cash register, pays 60 cents for it. Now, y' all all read my book and know these numbers, right? But when I ask people that are not life insurance business who have not read my book, I get three people to tell me.

Wholesale price.

Retail price is 60 cents. What's the wholesale price? Do you know what the average number people give you? 30.

Down in.

Shucks, Oakland the other day. Oh, one guy said 5 cents. Really? That's how little they know about business in this world.

And so I told those three that answered they were all wrong big time. The highest one was 30o was 10. I believe I said, if you had a safety belt in that chair, I'd suggest you buckle it. Because the truth will knock you out of your chair. That the real answer is $0.58. But I use 57 to make the calculations easier, Jesse. Later on, you know. Right, Charlie? Yeah. I'm a simple guy now, Jesse. They bought a can of peas, 57, sold it for 60. They made 3 cents now, Jesse, out of that 60, they took 57 and bought another can and sold it for 60 out of Essex. They took 57. Bones of the can. Do you understand, love? It's not how much you make on each item, it's how many times you do it. It's called rate of turn.

Okay, now, if they do it 20 times, how they made 60 cents profit, 3 cents each. Got that? 23, 20. Got that. Real complicated, right? Okay.

Now what if the miniatures could raise the price to 62?

They've increased their profit margin 20, 40, haven't they? Well, when the guy on the street sees that in the usa, he says, here comes the irs. What's it up here, ct? What?

Cra. Cra. Yeah, here comes the cra. Wrong. No taxation at all on this sort of thing. In this example, none. If you're a prophet, Curtis.

That means they can mine more bees, can't they? That's more capital. And there's an unlimited demand for bees. Got that? All right, now can you tell me where Sandy is going to shop? Do you know Sandy? Do you know Sandy? No. All right, but can you tell me where she's gonna shop? Or grocery store? She's going to mini store, isn't she? Everybody knows that, right? Well, she loads up her cart with groceries. Can you tell me which door Sandy wants to go out? Front door, Back door?

Y' all. Don't. Y' all know Sandy, don't you? But. But you don't know her, right? But you know that's a fact, don't you? That's the good instinct of everybody who starts up a business. I don't care who it is.

Do y' all realize if she steal one can of peas, I gotta sell 20 to make that point?

Mark.

Can Sandy go out the back door of the garden groceries about to hire the upstairs to do it? I don't think so. And what are they going to do, Bar?

They're probably gonna help Ren keep a can for themselves, too. They gonna take a whole dang car for a case.

The rationale is that we work here.

We know how to steal things out of here better than she does. We're here all the time.

Did y' all have any idea what percentage of theft in retail is by employees?

85%. Yeah.

Who pays for all that? Actually, we do. Consumer consumers. All the regular folks pay for it. It's in the price of doing business. Every businessman knows that.

Theft is a devastating thing. Tell her that David, when you go home.

To him.

Okay. Years ago, there was a chiropractor in eastern Pennsylvania, put all this together on his own before my book ever came out. It took him two years of conversations over with a telephone, with life insurance companies and just reasoning things out. Now, it was rudimentary, Curtis, but it was. He had all the essentials there. When my book came out, he was elated. And so we had him on the program at a think tank session sometime shortly thereafter. Well.

I go to Lancaster, Pennsylvania, a good bit. That's the Pennsylvania Dutch area. And that's very close to where Dr. Lasko lived. And so here comes Dr. Lasko with eight year old daughter, Natalie.

Dr. Lasko introduces.

Natalie to me. And that eight year old kid looked me square in the eye and says, you can't steal the pen. She got on a whole lot quicker than all the adults that I run into.

That kid sat there all day long over the nickel pad, writing, making notes. Wow. A few days later, I got a letter from her with essay she'd written about this seminar she went to Learn how to be her own banker. And she had all the essentials down this purvey.

Signed off. Love, Natalie. P.S. can't steal the peas.

Now. Family members and friends are captive customers. There's folks out there that. You and Sandy are hung the moon, which may be true. Now, if you charge them wholesale prices, you defeated the purpose of business. If you charge them retail, you're going the right way.

These are captive customers, including you and Sandy. Why we charge him 62 cents? Even more. Yeah, there's no taxation on that. No, that's more capital.

Have you ever heard of a business statement because it was under capitalized? That's their favorite excuse. Well, any fool should know that the more capital you put into a business, the stronger it is. Good reason. But people think that paying premiums is a negative. That. Oh, I can't. I can't do that. They can't put too much money in life insurance. You ever heard anybody say you got too much money in the bank?

That's so.

Yeah. Do you realize that if you think this thing through, ultimately, Wayne, premiums and income should match.

Wayne, you get paid for what you do.

It comes to you in the form of electronics or check, Right? Well, tell me, where does it go first? Wayne wife. Oh, come on back. Where you go?

Who's bank, Wayne. Somebody else's. Somebody else's bank gets all Wayne's money. All of Wayne's money. Now, he and his wife write checks out the other side of the bank of the check they got. Right. Now, Wayne, if you owned a banking system, totally.

Wouldn't you do business with you? Totally.

Well, what would be wrong with all your income going to your bank in the form of premium? Probably should. Yeah. Now, do y' all know I'm a very patient fellow.

I'm a very patient fellow. Now, usually when Mary's close by, she's hard of hearing. She hears me say, same thing. I face it, she giggles.

First thing I did was look back there to see if she was listening.

I knew you were gonna say that. She's not that hard of hearing.

But, Will, I'm a very patient fellow. Would you believe I spent three years trying to teach this concept to a lawyer in Birmingham? Sure, yeah. He said you talking, smoke mirrors and so forth. All right. You know, after a while, a fellow gets so humiliated and so forth with being a guy like that, you quit talking to him about banking their life insurance. Well, I did finance his airplane.

I made your money on an airplane for four years. Five years. I'm done. That chain of payments. I take Bob and I go buy the same thing. I was going to sell him.

I made the same commission, didn't it? But when I do it that way, I don't have to put up with his nonsense.

Isn't there nothing like getting rid of a lawyer in your life?

I have two lawyers in my office. I get it. We got son laws.

All right, now, 80 year old woman was arrested for shoplifting and went before the judge. What'd you steal? She stole a can of peaches. Why'd you do that? She was hungry. How many peaches in the can? She said six. Ain't gonna give you six days in jail. Before the judge could actually pronounce judgment that the husband spoke up. Can I say something? Yeah. What is it? Y' all still stolen? Can't please.

Put her away for a while? Wayne and Justin said.

Mr. Lowe said it's quitting. Time for a break. Let's take a break.