Justin Donald - Investing For Cashflow And Covering Your Monthly Expenses

Lifestyle investing is living life on your terms. So it's investing in a way that provides an income based on assets that you own or based on unique investments so that you don't have to work. You get to work. You have the privilege or the opportunity of working. You don't have to wear the golden handcuffs that tie you to a job or to the security of knowing where your income is going to come from, or the ego that maybe you have established or the lifestyle that you've established or the identity in your business that you've established. And I think every entrepreneur can relate to most, if not all of those scenarios.

Boom, boom, boom, boom, boom, boom.

What's up, everybody? You're listening to the Hustle and Flowchart podcast with your boys, Matt Wolf and Joe Fear.

We are back. We're back with the Warren Buffett of lifestyle investing.

Yes, we are.

You like that?

I do.

Because this guy is doing some pretty wicked awesome stuff. I am not from Boston, so I don't know why I said wicked awesome.

But sue, she's from Boston.

She is, and she's gonna appreciate this. Today our guest is Justin Donald, and he is the author of a new book called the Lifestyle Investor. And literally is like, that explains it all. He's all about lifestyle styling. He's all about lifestyle, his lifestyle, living his best life. And also he's an investor and he's using invest investments to pay for his lifestyle. He has a complete different perspective on how to look at both of those things. That's what we're diving deep into on this one.

Yeah. I mean, most entrepreneurs and digital marketers, they've figured out how to make some of the money online, but most of them are pretty bad at keeping and growing the money. So we like to have guests like this on from time to time and talk about, okay, once we're making the money, what do we do with the damn money? And he's going to give you some ideas to turn that money into passive income and repeatedly turn your money into more and more passive income. So eventually your most of your earnings are coming from passive income and you don't have to stress about the business as much. So we're going to dive into a lot of that stuff in this episode and a good conversation.

Yeah. I mean, if you're feeling like you're in your business and you want to get ahead, but you just feel like your time is limited and you're like, man, he's going to give you some perspective changes, I think you're going to really dig it. So grab his book. It's lifestyleinvestor.com. you can go get that. And also grab the action guides of this episode because. Cause we're taking those notes for you. You don't want to miss anything. If you go to flowchartgroup.com and enter your email address within two weeks of this episode going live, you will get the notes for free@flowchartgroup.com go do that.

And one last thing before we jump over. We've got our new Pod Hacker course. It's either got an open waiting list right now or it's live, depending on when you're listening to this episode. But you can go to podhacker.com and learn the new way of using a podcast to build a tribe, grow your business, and create multiple streams of income by simply copying our plug and play Pod Hacker system.

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By us, by our website. Yeah. Check out Pod Hacker. That is everything that we do in podcasting and business has explained in a very easy to follow way.

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Very lot of content. But we make it very simple to follow along, don't we?

Yes, sir. All right, let's go chat with Justin's do it.

All right, Justin, we're rolling. Thanks for hopping on the show with us.

Yeah, thanks for having me. I'm excited to be here.

Yeah, well, I've nerded out on what you put out there. You've put out an amazing book, the Lifestyle Investor. But also, I mean, you have a podcast of your own, and I like the way you think. It's different than. I mean, we were just doing this right before we hit record, but a lot of people are really good at making money, but it's. What do you do with the money? Do you invest it back into your business or do you just spend it on making a cool life, cool cars, eating out or whatever it is to the purpose of being an entrepreneur? So you have this cool paradigm shift. I hope that people will get from the way that we, I don't know, we just chat about how you go about things with money and your time as well. I know your lifestyle first all the way through the board.

Yeah, without a doubt. And it's interesting because a lot of people, they.

They start a business because they want freedom and they want autonomy and they don't want to work for someone. But at a certain point, that business, if you don't apply the proper boundaries, it begins to Own you in a way that your previous employer didn't. You end up working more hours, you end up being.

More, let's call it a bottleneck to more items. And it's hard to sometimes let go of some of those responsibilities and trust other people. And so I find it very common for entrepreneurs, A, to wrap most of their time into their business and B, to wrap most of their finances into their business. So you either see kind of two extremes. You either see the entrepreneur that spends all their extra money on lifestyle to look a certain way and to feel a certain way.

And at some point in time, people realize that that just doesn't work or it's not fulfilling, or it's not sustainable and that money can be doing something better. And then you have the other tier of people that typically just invest all their profits back into their business to grow their business. And I get the concept. It's, you know this better than anywhere else. This is your highest return on those dollars. But if you take a macro look at it, most entrepreneurs don't own their business and don't stay in business for even 10 years. So it might be all money going back into your business, kind of presenting good things for a period of time. But what if that ends and you have no other assets to show for it? So that's one of the things I love to talk about, is buying assets that produce income and taking a portion of your profits and putting it there. Put enough into the business to make sure that you're at least maintaining it if it's a lifestyle business and growing it for most people is what they want to do. But it typically doesn't take all your profits. And when you start allocating only a certain amount, then you get creative in how you grow your business, which is almost better in 99% of the instances.

It's just so difficult when you're so close to your business and you're thinking. Yeah. Of those two options that you just said. Well, take us back a little bit with your own story, because I know you were working within a company and you were doing some rock star entrepreneurial type moves in there. And then the transition, what that looked like for you with that switch in the mindset.

Yeah, it's interesting, Joe. I feel like I've had the experience where I've worked for someone else, but to a certain degree it was myself. It was my own company, but under the umbrella of someone else's. And that was great because I had a little more autonomy than maybe if I truly worked for someone else. But at the same point in time, I didn't own it. I didn't own it all. So when it came time to exit, there wasn't a whole lot at the end of the story there. And so there were some great learning lessons of, you know, it's nice to fully own your business so that you own the equity, you know, and you can make decisions, but it's also nice to learn on someone else's dollar as well, to a certain degree. So, you know, there are pros and cons to everything. And when I transitioned more into like the entrepreneur's role, I did start a company with some friends and it's a single family home maintenance company called IFM Ren Restoration. And we do a lot of basically maintenance for your largest institutional owners of single family homes. And this is kind of your Blackstone's, your American Homes for Rent, just your really big groups that own 10,000 to 82,000 single family homes. That's the largest portfolio. And so I had the experience of building that, helping scale it, transitioning more into an equity partner and more of a capital type of partner role, but also being part of a company that was lean and bootstrapped and then bringing in a VC and the whole nine yards. So I've experienced all that and I think that it's fantastic experience. There are pros and cons to that strategy. There are pros and cons of bootstrapping, there are pros and cons to VC world. But at the end of the day, being on the other side as an investor, that really to me is where I have seen a lot more of the pros outweigh the cons. Sure, there's a con of like, you could lose money, but if you are really diligent in your vetting and if you de risk the deal, you can mitigate a lot of those situations and it can turn into a really good thing. And so I just learned early on that I love the world of business. I don't necessarily love the world of operations. I'm glad I did it so I understand it, but it's not where I want to live. My whole mission has been to buy my time back so I can spend it as I want with the people that I want. And it's not so that I don't have to work. I'd go crazy if I didn't work. But it's so I could work on my timetable as much as I want in busy seasons on something that's inspiring and little to nothing for other seasons where I don't feel like it, or I want to travel the world, or I want to spend time homeschooling my daughter. You know, so there's just. It's an interesting thing when you buy your time back and you actually get to choose how you spend it. You get to be purposeful and using your gifts and pursuing passions and spending time with people that you are most excited about spending time with. I mean, that is just a cool world to experience. And I challenge every entrepreneur to aspire to and eventually get to the point that they can do that.

Yeah, well, let's dive deep into because there's a couple things I want to talk about, the challenges. I think that would be an interesting thing because you mentioned, oh, if I didn't work, I go crazy. And I think that's for all of us. Any entrepreneur, builder type that wants to create something amazing in the world, and you are through investing in the style that you invest, you don't necessarily have to be doing the creation, but you know that you're, you know, you're creating value through your investments, but you're also giving or getting a lot of value back in terms of cash flow. So I want to start by your way of lifestyle investing. I know that's a term that you've coined, and the way that you describe it I think is very impactful. I want to, I want to have you define that, though, for the listeners here, if you can.

Sure. Yeah. Thanks, Joe. You know, to me, it's lifestyle investing is living life on your terms. So it's investing in a way that provides. Provides an income based on assets that you own or based on unique investments so that you don't have to work. You get to work, you have the privilege or the opportunity of working. You don't have to wear the golden handcuffs that tie you to a job or to the security of knowing where your income is going to come from, or the ego that maybe you have established, or the lifestyle that you've established, or the identity in your business that you've established. And I think every entrepreneur can relate to most, if not all of those scenarios. So I just wanted to create a way where I was able to live life by design, with intentionality, not just by default, not just on autopilot, responding to people putting out fires, just being on other people's demands. I wanted to proactively create a life that was inspiring to me and spent with people that I'm most excited about. So, yeah, it's owning assets and making unique investments that provide cash flow in a way that covers all your costs. It might start as covering just your bare minimum costs to survive. Right? Rent, food, utilities, car payment, just the bare minimums. And then eventually you graduate to what it costs you to live your life. And then the next stage can be the ideal life that you want to have. What's the life that you would be inspired to live? And I like to break it down on a monthly basis so you can see the way that it cash flows rather than thinking about it on an annual basis, which just isn't as practical in my opinion.

Right, yeah. So what kind of investments are we talking about? What sort of investments are out there that people could get into that will provide, you know, cash flow at a sort of equal or greater level to, you know, their minimum needs?

Well, that's the million dollar question, Matt. And there's, the answer is there's a lot of them. The, you know, a subcategory of answer would be what do you know best? Do you have an expertise, do you want to spend your time in that area or do you want to spend no time in that area? So in other words, are you willing to own, for example, real estate where you either manage it yourself or you outsource it to a management company to get a higher return than if you invest in someone else's deal as a limited partner, it doesn't cost you any time, but you don't earn as much. So for a lot of entrepreneurs, they tend to default into something that costs less time. And I think that that's probably a good move, especially if you're in growth mode. If you're not in growth mode or you have a lifestyle business or you've got everything, you know, sustainable, you might make some different decisions, but that's really where it starts. And so could it be real estate? Sure. I think real estate's a great way to start. It's how I started. So it's what I know well. But it's not the only way. But it most certainly is a great way. And there are more millionaires made through real estate than anything else. So I think to start in something that is a cash flowing investment like real estate rentals is powerful. You could do it in warehouse and distribution centers, you could do it in mobile home parks like I did to start, you could do it in single family homes, you could do it in self storage. I mean there's just a lot of different. You could do it in apartments, lots of ways that you can do it. But you also might want to consider just debt investing. There are ways that you can invest where you don't own the asset, but you have the asset pledged as collateral in a way where it's twice or three times or five times the value of the loan or the investment. And now you're in a situation where you get a good interest rate, you have cash flow, and if they default, then you take that asset, which is a better deal than if they had just honored the agreement. So I always tell people when you get in the world of debt investing or hard money lending or anything like that, it's good to have the proper protections in place. And your second best scenario should be that they honor the contract. And by the way, no one wants someone to default. It takes more time.

It's a messier situation. So it's not like I want that, but I want the leverage of that so that things work out the way that the contract says.

Go ahead. Did you have more you want to add to that?

And I'll add one more just since your listeners and your viewers are entrepreneurial based, another one could be operating companies where you might have an expertise in a niche market because of your business. Maybe it's digital marketing or maybe it's something, I don't know exactly where everyone's business is, but let's just say you know something really well. Well, you might be able to diversify your portfolio by buying another company or being an equity holder in another company. And you can start, you can create some pretty strategic investments where you don't have to just go into straight equity and hope that it works out. You can negotiate to get some revenue share, you can negotiate to get like a profits interest or maybe you can negotiate into equity but with an accelerated repayment schedule so you get your money out quickly. There are lots of ways to do it, but if you have expertise in an industry, that could be another great move to not have all your eggs in one basket.

Totally makes sense. Yeah. I mean, I think what you just said actually kind of sort of answered my next question a little bit. But I was going to ask if there was any sort of like toe in the water, basic entry point for people because I think for a lot of people the concept of investing is scary because they think they need to do it with big sums of money, right? So like the real estate example, the first thing that pops into my mind is like, cool, I need to have six figures in the bank so I can get a down payment on a real estate property and then cash flow off that. So are there any sort of lower barrier to Entry sort of ways that people could start getting in these habits of investing.

Yeah, that's a great question, Matt. I have had many investments that have been less than six figures where I owned it outright. But at the same time you can invest in syndications and these are deals that other professional real estate practitioners do. They have a professional in house or third party management company that manages it. You can check their track record. So you could literally just invest whatever their minimum is. In some cases it might be as little as 25,000 or 50,000. There are the crowdfunded opportunities where you could invest in even a debt offering or an equity offering at like $1,000 or $10,000. So there are a lot of different options that exist.

It's not as.

Kind of big and scary as you might think or as much as, I mean, could you find a deal that cost $100,000? Sure. But there are plenty of them out there that don't cost that.

Right. And I know there's lots of ways, I think you've talked about leveraging other people's money to cover your investment or at least your entry into an investment. So do you have any strategies for an entrepreneurial minded person that knows how to use leverage or at least uses it in their business, but how they can apply that thinking over here into investing?

Sure, yeah. So one of the ways that I like to do it, I mean, there are a number of different ways other people's money.

Right.

It's opm. People love that term. Well, I love using leverage when it makes sense. You know, if I have an asset that I can pledge, it's really easy to get debt financing from a bank or from, you know, one of your Wall street firms, you know, a CMBS loan or maybe government agency debt like Fannie Mae or Freddie Mac. I mean they love when you have real estate and it's a good type of real estate that they can be, you know, in the first position, first lean position on. So I love raising money that way because I can put 20% down. I've got a deal right now that I'm doing where the bank. I've got a relationship with them and they said, hey, we just are going to ask you to put 15% down this time. So that's really nice. And then there's always a seller finance option in a lot of real estate and in a lot of business acquisitions, there's a business that we bought with a seller finance.

Type of structure. And then the first real estate properties I ever bought, both of my first two were Done via seller finance, where the seller carries the note, kind of like the bank. And I just pay them the interest. You know, an interest and principal payment for a period of time. And that to me is my favorite because it doesn't go on any credit reports. There's no record of it. It doesn't hurt you if you want to get a loan for something else and then you get into the conversation of is it recourse or non recourse. So a recourse type of loan means if something goes wrong, the institution can come after you and your other assets to be made whole. Whereas non recourse, they can't do that. Their only.

Solution is to take the asset that they have the lien on. And I love that type of, of debt the most.

Yeah, yeah.

Anything goes wrong. Yeah, it protects you. It doesn't hurt your credit score if you default. I mean, it's, it's good. There's very little risk, you know, are you going to lose your down payment and you know, the payments you've made? Yes, but it doesn't ding you. You're not on the hook for anything else. The rest of your assets are safe. Yeah, but generally most people aren't going to structure stuff. Like the way I think about it is if you're a seller and you're willing to sell or finance, to me that means you have a lot of belief in the asset, like it's really worked for you and you know what it can produce if you're willing to do it that way. If you weren't, you wouldn't, you know, if this was a risky business, if you thought the business was going to crash, if you thought the real estate was at an all time high, you know, you're not going to do a seller note, right?

Yeah, yeah. They believe in their own product, whatever that product is the investment vehicle. It makes sense. Now, going back to listeners of the show and even us as entrepreneurs, what kind of challenges have you found in that transition? Is there, I don't want to say an easy path, but a smoother path to transition from business owner to investor mindset and do that with the least friction possible?

Sure, yeah. I mean, you could easily pull the plug and go cold turkey and see what happens. A lot of people, that's the way that they do it. Maybe they're too impatient to think out a plan B and work towards that. It's interesting, I go back and forth on this because when I transitioned away from one of my businesses into being a professional investor, I was very methodical I was thought out. I figured out what it cost me to live, and I knew on a monthly basis, at a minimum, what it cost me and what I needed to produce. And so I wasn't going to leave until I at least hit that. And then when I hit it, it was like, okay, well, why don't I just get a few more investments in so that I can cover my lifestyle? So there's no transition. Like, I can just go from the way I live today with a job or a business to that same lifestyle with no job or no business. And that is a really good feeling. I mean, it's an empowering place to be when you make that decision. So that would be the seamless way. Now, conversely, knowing what I know today, I don't know that I would have waited as long as I did because the moment I bought my time back, I was able to have a space to think and create and I was able to increase my income pretty quickly just because I had that time to think and to make decisions that I otherwise wouldn't have had the time to make or I wouldn't have. Whether I had it or not, I was too much in the routine and the habit of being inundated with everything going on that I wasn't creating that space. That's probably a better way of saying it.

I think it's a great way to say it because that's something I know I can relate to. I mean, I'm sure you can too. And most of our listeners is whatever time we give ourselves, we're going to fill up.

And the more you do stuff, the more momentum you're going to get and more input and the more or the lack of time you're going to be able to use. So creating that, that thinking time or that white space is huge. And I mean, I could just see. So it's kind of transition as a business owner, if you're not just going to shut the doors, then, yeah, it's. How do we trickle that time into more investor mindset? And like, are there, would you say, and I know this is different for everyone, but are there some benchmarks or ways that people can be like, okay, I'm kind of ready to do this, put my foot in the investor space over here where they're not going to, I don't know, maybe freak out or at least they're going to have enough time to do it wisely and think through their moves?

Sure. I mean, I think the first thing is if you don't have the assets, you should probably have some sort of.

You know, emergency fund that covers you for three, at least three months, ideally six months. If you can get to nine or 12 months, even better. But, you know, something to hold you over. But if you just look at what your mortgage is or your rent is and you figure out a way to get that in cash flow on a monthly basis, it might look like a lot. On an annual basis. I'm telling you, on a monthly basis, it's not as hard as you think. And everyone's always surprised at how little it costs per month when you break down just the bare necessities. And there's a feeling of true liberation that happens when you hit these numbers. I just had someone in my mastermind literally just hit their number. They said it, they knew what they needed to get to. It was $10,000 a month, and they were working really hard to get there. And in this last year, less than a year, in this last six or seven months, they were able to accomplish it, and that's it. So they had a target, they knew what they had to get to, and it started small. So the 10,000 was like, I'm going to be really excited when I'm there, but I'm going to start with just a couple thousand. And I'm telling you, when you cover your expenses, it's like taking this load of bricks that you've been carrying around in your backpack off and you can breathe. It's like you're floating. It just feels so good. And you make different decisions. And I'm going to take it one step further and say, when you've covered your lifestyle and you're not reliant upon your business or your job to produce an income, you make different decisions and much better decisions from the standpoint of work professionally, you're in a better place. You don't make decisions out of fear. You make decisions out of strength. You don't have to keep doing things the way that you did them, that you know that they work because you don't have to have that income anymore and you're willing to try something new. You're willing to hire someone different. You're willing to transition roles, you're willing to take some chances. And often that's where the magic happens on the entrepreneurial side of things.

I love that. Yeah. And it's the clarity of thinking. It's not a have to kind of thing anymore. Now you're empowered to make the right decisions and probably a lot less decisions and just be a lot more thought through with everything.

Well, you can do what's best for your customers and not necessarily what's best for your own bank account.

That's right. That's right.

Very cool.

Yeah. You make decisions from a place of strength, and that place of strength is going to be different.

Based on.

The space you're in, what you're carrying, the stresses of life in that moment. I'm telling you, when you take care of financial problems, life gets a lot better. And money doesn't solve all your problems, but it will take care of all your financial problems.

Definitely takes the boys down. Yeah, the alarm bells go down.

Yes. It is like the level of flow you can get into and the place that you can operate from when you just know everything is taken care of is just a whole nother world. And that, to me, I think, is where your genius comes out.

Yeah. And there's, I mean, just that concept of thinking time. Just the fact that if you just cleared some space out. Was it Keith Cunningham's book?

Keith Cunningham, that's right.

Yeah. Talked about thinking time, the road Less stupid, the book. Yeah. Thank you. Yeah. It's just that concept alone, you could apply that all over the place. But I think here it just shows you how much of a breath of fresh air you can have. You just make kind of these micro moves. And to your point about the whole monthly, knowing your numbers monthly, when you're investing in something, you might be thinking that just seems far off, it seems unattainable, but you bring it a little closer into perspective. It seems like with monthly expenses, of course, they don't seem as much of a hurdle, but then you have the investment side of things. You're like, oh, okay, well, I can easily cover that with what I'm going to invest into it or some deal I can arrange. I like that perspective a lot.

And it's interesting because one of the greatest takeaways I ever had from listening to Keith and meeting him in person at a Tony Robbins event and having several follow up conversations with, with him is that whole idea of Think Time. And I entered that into my calendar and I just blocked it off. I made it Sacred Time. And this is probably back in 2009 that I did that. It may have been 08, I think it was 09, but it's been in my calendar since. In fact, I could go back through my calendar and figure out when it actually started. But I do it on Fridays and I love it. I just, I carve that off. No, like technology is turned off, so I'm not distracted. I'll often get out in nature, and some of the best thoughts that I've ever had happened there. So it's like when I bought my time back, it's two different things. Number one is when I bought my time back and all my expenses were covered, that's where I found.

I was making the best decisions and having the best ideas that I ever had.

And I've made some poor decisions, and I've made some really good decisions. I'm just telling you tenfold. The best decisions and the best clarity of thinking came once everything was covered. But to have had the habit and the discipline to be practicing this sacred time that no one else could get into, that really was a strong muscle that served me well. And it helped me to get to the point that I am today and I still practice it. I've got it in my. So tomorrow it's in my schedule.

Yeah, why wouldn't you? After getting the successes from it, for sure. Cool.

Yeah. So the next thing I wanted to do is I want to kind of sort of break down your. You've got these, like, ten commandments for investing, and I thought it'd be cool to kind of talk through each one and maybe spend, like, a minute or two on each of the points. And I think that'd be really, really valuable to the audience if you're up for it.

Sure, you bet. Yeah, that'd be a lot of fun.

Yeah. Well, you want to kick it off, Matt?

Yeah, sure. So the first one, Lifestyle first. Each investment must truly represent passive income. So can you speak into that one for a minute?

Yeah, and I touched on this one a little bit earlier where it's like, what do you value more right now in this time of your life? Is it your return? Is it the money you make? Or is it the time that you have? And I think that that just fluctuates. I don't think there's a right or a wrong. I just think in certain seasons, you will put more time into something to earn a better return. And then in other seasons, that time is too precious to you. And so you don't care about the extra return. You just want a good return. But the goal is to just be in alignment with what you want. So in this chapter of the book, I have a really cool Freedom Vision section where people kind of write out what they want their life to look like. And I have this chart that you can kind of check off. Like, do you want this in your life? Do you want freedom of time? And here's some cool things that you can get from freedom of time and do you want freedom of relationship and freedom of impact? And it's just kind of a walkthrough of all the different things that you could have, what's important to you. And I think it's getting clear on what you want, not what someone else wants, because what they want may be partially what you want, but not completely, or maybe it's totally not what you want. So I just think that getting clear on the lifestyle you want to have and creating a game plan to get there, or at least first steps, you don't have to know how to get there, but if you move towards it, you're going to start getting there and it's going to become easier and you're going to strengthen that muscle to be able to get there over time.

Yeah, no, I like that a lot. I think from my experience, I know that's been the hardest step, is just, what do you want? What do I want? You know, and really getting clear. Because for a lot of folks, or just myself and I know even us, sometimes it's been fuzzy unless you actually shine a light on that thing. And if you have some structure of where you kind of want to go, then everything else falls into place.

So.

I know, I agree.

Number two, is all about reducing risk, which makes sense with investments. But I know you have some strategies on how to do that when you get into investments as well.

So reducing the risk is important. This is one of the things that you hear Warren Buffett talk a lot about. Rule number one, don't lose money. And that's just because there's such a negative drag on that you forever lose the opportunity cost of what that money could produce you when you lose it. And then you have to work twice as hard or more than twice as hard to earn that money back. If you lose half of it, you got to work twice as hard to make it back. If you lose all of it, you got to work four times as hard. And so that is just one thing that I'm very cognizant of. I'm not trying to hit a home run. I just want singles and doubles. And if I can not lose money and get a decent return, that's a lot better to me than if I can lose money, but the return is massive. If I don't, that profile doesn't work. There are ways. I still believe. And you'll hear a lot of people say, well, if you want a big return, you have to have risk. And I don't believe in that. Once I started Thinking for myself, I never, I mean, when I let other people influence my opinion, maybe like financial planners, that's kind of like their catchphrase, well, what's your risk tolerance? But the reality is you can structure stuff that's super low risk with really high returns. Ask anyone that is in the investment world that does deals, we do it all the time. And especially in the alternative investment world, which would be, you know, kind of things I do. Companies and debt and real estate, just not kind of like your public equities, your stocks, your bonds. I don't do as much of that because I like a little more control of my investments. And by the way, I believe long term, in the economy, short term, I think there's a lot of fluctuation and you got to be careful. And I don't like to put all my eggs in any single basket, including the stock market. But I think from a long term standpoint, to have a portion of your portfolio in an index which is your lowest cost vehicle, I think that that is good. But what if you could structure a deal where you invested in it, you had collateral that was five times the amount of your investment, so if anything goes wrong, you'll get your money back, and you may even get a lot more than your money back. And then you have some sort of cash flow on it on a monthly basis, and then you have some sort of multiple when they exit, when this deal gets done, when it gets acquired, or maybe it's held on long term and you just get the cash flow. And then on top of it, you can negotiate a put option, which just basically means you can get your money back at any time that you want, period. And the last one I negotiated is a put option plus 20%, meaning I can get my money back anytime I want, plus I get 20% the whole time you have my money. That is really incredible. So now I've de risked the deal, why might I take my money back? Well, maybe the deal isn't as good as I thought. Maybe it's slower, maybe the deal is going amazing and I'm just in a cash crunch and I need some cash. You know, it's a me issue, not an investment issue. Well, I just want that protection in place. So in that scenario, the odds of me losing money are so slim. And if I do lose money, it's just going to be a small amount versus if I went into some stocks that went to zero. I would lose everything.

Hey, what's the hot buy right now? You can lose everything. What's the hot Crypto play, you could lose everything.

I just don't like to lose money.

So you wouldn't suggest people go take their life savings and put it in GameStop right now?

I would not. I would not.

I will say to a certain degree, I like.

I like what that created in the world. See, the unfortunate part that a lot of people don't realize is a lot of people got hurt in that a lot of people lost money. And not just the big institutions. A lot of retail investors lost money, a lot of retail investors made money but weren't able to exit. So I don't like that a lot of them still got out with money. But what I do like about it is the. You've got these hedge funds that manipulate the markets day in and day out and they just got bested with their own thing that they do. They're putting out their information to say, here's what we're going to do, we're going to short this. So they're saying that to manipulate the market. Well, so I love that they're kind of being put in their own place.

But that's a dangerous game because you don't know what's really gonna happen. Like the people that made money there. It more than likely is luck and timing than skill.

Yeah. And the whole thing is you can't time the market, you know, and yeah, you might get lucky, but what's the long term play there?

And I guess that's. I don't know if that goes into number three, invisible deals, because that is kind of an interesting thing. But you know, like emerging markets or things outside of the stock market. What are some interesting plays? I know you talk about alternative investments, things like funds and syndicates and stuff like that. What do you mean by invisible deals?

Yeah, I love invisible deals because you can kind of break it down into a few categories. Invisible deals could be an off market deal, meaning there's no competition, you're the only buyer, or there are very few buyers and therefore the price isn't bid up. So you're getting a good price. You buy directly from a seller, maybe without a broker. So there are no fees there. There's just so much. You can get something that's below market because someone is maybe in a liquidity pinch and they need to sell an asset because they totally got screwed on their gamestop or whatever it is and they need cash. So I love that. But it goes beyond just that. It goes into emerging markets. What is new, what's about to come that we don't know or what is really emerging today that we, you know, maybe first movers can see? And I like being in those types of investments. And what's the technology of the future? You know, I'd say blockchain is a really good investment for the future. We see a little bit today. I don't think we see anywhere close to what we're going to see in the future today. What do we see? A lot of E commerce. I want anything that supports E commerce because right now, you know, E commerce sales on a retail company are only about 15% for the most part, pre Covid, 20% post Covid, or right now, if we want to call it post Covid.

So I mean, that's going to keep going up. It eventually is going to become the majority. So anything that supports that, like the warehouses and the distribution centers and companies that you can buy that maybe they went bankrupt, but you can scale them online. You know, I love that you've got cannabis. That is a huge play. I mean, this is an industry that's growing 25% quarter over quarter. You've got a market cap in the United states that's likely 80 billion to 100 billion, something similar to beer, wine, spirits, tobacco. And.

You'Re at the beginning stages of it. So there's just so much opportunity there. And it's such a, you know, you've got Canada who's legalized there, and they've got, you know, maybe a 20 billion, maybe a little bit less market cap. And you've got canopy that has gobbled up most of that market cap, you know.

Yeah, we know some folks, big things in that state.

Think about how much larger the US Is, even if you only have a handful of the states and we just had a few more approve it. So, you know, what are we at, like 15 recreational states, something like that?

It's up there. Yeah. Then there's medical, so there's a market growing all over the place.

Sure.

So there's huge opportunities there because these companies can't get lending from a bank because it's not federally legal. So they need money from.

Somewhere in the private sector and there's just rampant opportunity. And I just love that space. So I mean, I think crypto, you know, I talked about not putting all your money on some altcoin, but at the same point in time, it's probably good to have some exposure to Bitcoin and some of the other leading coins, maybe like Ethereum and a lot of people like uni and maybe Monero, if you're a big privacy person. There's definitely opportunities for massive growth there. To put all your eggs in one basket, I don't like it, but to put a small percentage of your portfolio into it, maybe you're putting half a percent or 1% into something that maybe is speculative, maybe you don't. I mean, I don't consider it speculative, but if it was speculative, that's not a bad thing to do.

You know, it's just kind of what your comfort is. Your comfort level. You've got music royalties that you can now invest in in their platforms to be able to become owner or part owner of these rights. And original content, the same thing. What you're seeing on Netflix and Amazon prime and any of the hul of these other companies that are producing content, of course, HBO probably harder to get into that market, but I mean, it's unbelievable what is available today and the way that trends are moving and the opportunities that we have. So there's just so many of them. In a lot of these deals, you just won't get on your own. You're never going to see them, you're never going to have the opportunity. Because a lot of them, it's. Who do you know? So that's part of the invisible deals. Who do you know that can give you access to when typically this company only gets institutional money? How do you find someone that can let retail or just an investor like you and I in the deal? And those are the things I like to work on and provide for my mastermind and my private clients is access that they would never get. And then on top of that terms, even if they got access, which is highly unlikely, terms that they for sure would never get because I can negotiate those to be very favorable for our group.

Yeah, no, that's. I was going to say it's really getting in the room, I would imagine is like the big thing because then your eyes open to so many other opportunities. So I mean, that's worked for us. The power of masterminds. We've been presented by many deals. Rev Share deals, you know, equity style deals. Having a podcast is another great way to, you know, have that networking machine. So, yeah, I love that. The invisible deals, I think is. That was like my favorite of all the commandments here personally.

Well, I personally really like getting your principal back quickly. So let's talk about that. What are some ways that people can sort of hedge and get their principal back as quickly as possible with some of these investment strategies?

So this is one that I feel like most people don't think about in the conversations that I have with people, this one is generally a very big aha. And this is the section where I talk about the velocity of money as well, where you can take the same dollars and invest them in multiple deals. And so this is really the start of that. So let's think about it this way. Let's say that you invest $100,000 into a real estate deal. And in this real estate deal, let's say you don't do any of it. This is a syndication. This syndication does all the work. They've got a great track record that you've checked, you've talked to some investors to know that what they're doing is the real deal.

And.

You'Ve got a lot of happy people that have invested for a long time. You've done your due diligence on them. So let's say that you invest and they buy a value add project. They add a bunch of value. They increase rents, so they buy it below market. They increase rents by improving all the units. And then they refinance that property, well, they can refinance all of your money out of it. So if you put in 100,000, you're often getting 100,000 back. And that 100,000, since it's just a return of principal, is not taxed.

You didn't make that return, that's just a return of what you invested. So not taxed. Then you can take that same $100,000. And let's say you move into a debt deal and you do a deal with a company on a one year note and they pay you interest, 15%, 20%, you know, something nice. But you negotiate some sort of an equity kicker so you get equity for free. I'm going to loan you this money. You're going to pay it all back at one year. I'm going to get interest only payments for those 12 months on the month. But I'm going to get equity in your company so I can participate in the upside. So that's what I love to negotiate. I do tons of those deals. So then in a year I got that same $100,000 back out. So now I've got equity in two deals, one in debt. Well, technically it was a debt deal, but I have equity and then one in real estate. And I take that same money and I invest it into an operating company. And maybe in this operating company I'm able to get 20% interest or 20% equity and I negotiate a fast repayment. Maybe they have to pay me out at a, you know, maybe I'm. If I'm 20%, I own 20% of it. So I get 20% of the distributions. But maybe until I'm paid back, I negotiate that I get 80% of the distribution, so it's a flip flop. And then once all my money is out, I get my $100,000 back, then it goes back and I only get 20%. So that's one way to. It's called an accelerated distribution. And I'm able to get all my money out of a deal de risking that deal. So Now I've got $100,000 back to invest in a fourth deal. So I've got equity now in three deals. I've got all my money back. It's taken me one year on each of them. And that's the story of many of my investments taking that same $100,000 and examples. Exactly like I told you in real companies in the same scenario I'm giving you.

And all the while, each one of these investments is still actually spitting you back cash flow, even though you have your principal back in your own pocket.

That's right.

That's brilliant. Yeah. Let that money work for you. Right. And all you're doing is just negotiating the deals and putting them in the right spots. And obviously I'm just kind of going down the list. But I mean, that's immediate cash flow, really on your investments. It seems like that's the sixth point there. Yeah.

So, yeah. So number five is commandment. Five is to create cash flow immediately.

That's right.

And that to me is like the bread and butter of what I do. It's how I was able to build my lifestyle. So until someone has the lifestyle that they want, I really encourage them to buy assets that are recession proof, that are highly collateralized, that produce cash flow. And that cash flow you can then live your life on. And then once you get to a point that you have overage, then maybe you can do a riskier bet for a straight equity type of play. Or you can invest in other things. Maybe that's when you start investing in operating companies as opposed to earlier on. I just want to get the cash flow there first because that's safe. So I look to cash flow and exclusively cash flow until I'm comfortable with the expenses I have with my money covering it. And then, and only then do I look at something that I would consider a little more risky. Even though it doesn't have to be risky, if it's not going to produce cash flow, I want to invest in it from an asset that produces cash flow, right?

Yeah. So you're always taking those profits and taking them back into. It's this machine that's closed loop system, it seems like that always feeds itself.

Yeah, that's right.

Well, I don't think we have enough time to get through all of the ten commandments. We gotta wrap up here in a minute. But I do want to touch on one more which is cutting out the fat and minimizing exposure to banks. How does somebody minimize the exposure to banks with some of these strategies?

Well, and this would be, you know, I talked about it a little bit earlier with the seller finance deal, but you can get real creative. I mean, you can raise money with people that you know that you want to do a deal with. So that's one way to get capital from not going to a bank where other people can get a chance to participate in a deal. You know, that's something that we do a lot. You can really just structure it as a seller note so that way you don't need anyone else's money. So I like to use banks when they are in my best interest and I don't like to use them if I can avoid them. So it's a love hate relationship. I mean, when it works for me, I'm in. And anytime I can cut them out, I do.

It makes sense. But yeah, there's strategic ways to use them or leverage them. I want to make sure you're good on time here. Lifestyle Investor is your book and you also have a podcast as well that I want to shine some light on. Where can folks find both of those?

Yeah, so the book, the Lifestyle Investor.

Number one, you could go on Amazon and check it out there. However, if you go to lifestyleinvestor.com, you can get it for free. You just have to pay for the shipping and so a lot of people like that. I do want to let all of your listeners and viewers know that all the proceeds of the Lifestyle Investor all go to charity. I'm supporting a group called Love Justice International. And Love Justice International is they stop human trafficking. They're in 17 countries around the world. And they just do incredible things. And so I want to support them and I want to bring attention to them because most people don't know how bad it is that we have human trafficking in all 50 states in the United States. And most people don't realize that. And so that is, you know, that's an organization that I just, I want to shine and do great things in the world. So being on your podcast I wanted to give something, you know, like a perk where they can get it for free and just pay the shipping. And still with the margin that's there, it's still gonna go to charity. But at the same point in time, you can support it via any other direction as well. And then you can find my podcast@justin donald.com podcast or you can check it out on Apple or Spotify. But I interview some pretty awesome guests and I just have a lot of fun with the people I bring on. These are people that have an unbelievable lifestyle. They've done some great things in the business world, and it's just really fun.

Well, hey, Justin, thanks for sharing your perspective because I know it's very unique and it's impacted me. I mean, going through the book was amazing. And that was where I was like, okay, I get it. I really love the mind shift here. So I hope that it was passed on here to the listeners as well. Thanks for being so awesome.

I hope so, too. And if you check out my website, you can join my email list. I always give my ten commandments out there. And there's a bunch of other stuff. You know, if you get the book, you'll see that there's a.

Gift resource where I got a bunch of other free stuff that I give. So I've got an online course. I've got a masterclass, a mastermind, a private coaching that's kind of wait list only. But, you know, the goal is to really just help educate people. How do you buy your time back? And how do you live a life that is really inspiring to you?

I think now's the time, so go get the book, Justin. Thank you very much, my man.

Thank you both. Great to spend time with you today.

Yo.

Hey there.

Oh, man, I feel richer and smarter already.

You do? You don't look richer or smarter.

Well, just more on the inside. Wow. No, thank you, sir.

I don't compliment Joe. That's not a thing I do.

That's not what he does ever. It's the first. I gotta pluck that out of the air and frame it, put it on my wall, if that's possible. I would.

Jody's got a testimonial for his Tinder profile.

Yeah. All Fans.

All fans. OnlyFans.

OnlyFans. See? Shows you how much I'm on there.

Like how Joe pretends he doesn't know the domain name.

You like that? No, that's Joe Kearns. That's his fault. I'm just kidding. Love you.

So passive income and investing.

Good transition you did it.

Yeah. No, Justin. Donald. I mean, I said it on here. I felt like it was just a great perspective change, you know, and it's something that a lot of us entrepreneurs don't like. I don't think most of us really think about because we're so wrapped up in our own stuff. And I know our default for the longest time has always been like, oh, okay, if we're gonna do investing primarily invested in our own business, because that's something we trust and we control and we can scale and blah, blah, blah, you know?

Yeah. The problem with our business is it's not passive enough.

Well, yeah, I think that's the point of most businesses. It's like, well, that is not passive. Income aspects could be, for sure.

Well, it's interesting because on this episode, we sort of had similar discussions to what we talked about on our Pod Hacker Therapy session a few weeks back, where we were saying it'd be nice to just kind of do a launch and sort of get the money from the launch in our bank account. And then the rest of the year we can just focus on creating good value. So the idea is the same of take the need of money out of the equation and then you make much better business decisions. And so it's kind of interesting to see that parallel there. He's just taking the money out of the equation so that we can focus on the business. Because with the vehicle of investing, we talked back then about taking money out of the equation so we can make better decisions with the vehicle of doing a launch. But it's like the end goal is the same, and that is what created Pod Hacker. So it's just kind of interesting to see some of these overlaps. That's true from some of these other discussions.

Yeah. And for us, another part of the intention was to free up the rest of the year to focus on businesses that we are invested in.

It's true.

Like equity deals, Rev share deals, and things like that. But that's still all in our business. So. Yeah, I mean, it's the same thing of clearing the slate a little bit, the thinking time, engineering that into how we're working. And I mean, you can engineer it on your calendar every week or every day, like little bits. I know Shacker Hussein also, you know, he said every single day, I think it was like an hour or two of thinking time. And he was like, that's the best, you know, best time I could possibly put into my day. Yeah, that's where all the gold comes from.

Oh, man. It's so huge when you're doing it consistently. I know for us. Well, I'll speak for myself. We've been really heads down on this pod hacker launch out. By the time this episode's out now, you should be able to, you know, get details on how to become a member. Maybe, I don't know, we might have closed it down by now, but who knows?

Pothacker.com tells you the details.

Yeah, exactly.

So I've been sort of heads down, focused on building out that membership for the last two weeks. And the thing that disappeared. Well, there's. The two things that disappeared were the sort of thinking time and getting my workouts in as consistently. And so.

Yeah, well, it's a sprint.

Now it's time to get back on track.

It's a sprint. That's all that was for us. So we knew that going into it. Same thing on my part too though. And then you add in just life in general and yeah, it's all that. But that's, I think, a perfect window into most people's entrepreneurs lives if you think about it. Because like I said on there, it's like you have a span of time that you allow yourself to work in and you're gonna fill it. It's like Parkinson's law. Right. It's like you fill everything you give yourself. So that's why you engineer these things and investing. I would feel like that's the biggest challenge, to transition from doing all your time here in the business as opposed to adding some investments into your thing.

Yeah, I was telling you this, I think privately on a phone call, I don't know, maybe a week ago or so.

Tell everybody. Geez, it's private.

It is kind of private. But I'll share it anyway because our life is an open book on this damn podcast. I don't think there's much people don't know about us if they've listened to a lot of episodes. This is true. But I was telling you, remember, it's an old joke. I don't remember who said it. It's a very misogynistic joke. But there was like in your significant other, when it comes to girls.

There'S hot, there's smart, and there's sane. Pick two. Right. So somebody who's hot and sane is probably going to be dumb. Dumb.

I feel like this goes on both sides of the gender spectrum as well.

This could go on both sides of the gender spectrum. You're right.

Right.

But I pre qualify that it was a very misogynistic joke.

Yes, yes.

Giving you an out, Matt?

Yeah, it's awesome. Somebody might be smart and sane, but they're probably not the most attractive. So you have hot, smart, sane. Pick two. Well, in my sort of personal life, between business making sure I'm spending a lot of time with the family and focusing on health, it's like those three things, it's always pick two. I always seem to be really good at two at a time, but one of them is always sort of slipping a little bit. So I might be really hardcore going good with the business and with the family and we're doing a lot of cool, fun family stuff. But then my health slips. I stop working out as much and I stop eating as well. Right. Or maybe I'm spending a lot of time with the family and I'm working out a lot. Well, when I'm doing that, maybe I'm on vacations for a couple weeks and at those points my focus on the business seems to slide away a little bit. Or there's the times where maybe I'm real focused on my health and I'm real focused on the business, but when I'm really focused on those two, then the time with the family starts to slip away. And I seem to always struggle with all three of them being a great focus in my life. So I kind of default towards, okay, I'm going to make sure the business and the family are taken care of. And then if I have time, then the health kind of slips into it. I don't even remember how I got off on this rant or where it came from, but just kind of coming back to it is like. Like when it comes to getting our sort of financial foundation in order and creating that cash flow to cover all of our base expenses, that makes the business aspect a little less important, allowing me to focus on the family and the health, which should be the two biggest priorities of the three. Right? For sure.

Oh, yeah. It's whatever you want. Really? Actually, yeah. For you? Yeah. I mean, for Ask a Billionaire, they're not going to probably weight those as much. Yeah. You know, because what, there's that whole common thing if you want to be a billionaire. Well, you're probably not going to be at home with your kids all day then.

It's true.

You know, and that's, you know, I don't think either of us are cracked out for that. No, I have no desire, so. But you're right. I mean, the way we got on this, we were talking about Pod Hacker and how we're going heads down and then some other Stuff dropped off, which is true. Happened to me, too. I think it happens to every entrepreneur. And I think the key thing is just to let yourself off the hook a little bit.

Yeah.

And. But it's also to. To Justin's point is what his first. His lifestyle first. I think that was chapter one of his book. The first commandment of investment vesting was all about figuring out what you want and working through the frameworks in his book, which is solid. So go use those frameworks. Because I think that's the hardest part is like, well, what is important to you? And then once you actually work this through and then you can come up with a plan to essentially allow yourself to always get that. So I don't think it has to be one of those are two of those three things in this example. Yeah, but.

Well, that's why I want to get the passive income flow and totally investment so that the business is less of a factor of the 300%.

Yeah, no, it's. And that's where I think this perspective change is super good. And yeah, we've heard similar things before, but I really love. I mean, everything from. I don't think Justin even talked about a lot, but he is like super lifestyle first, like family focused. All that stuff will come before business stuff. And I mean.

And that's the machine he built.

That's his machine. I mean, I get that and I feel that. I mean, we all have this pull to put great value into the world, and that's why we love these podcasts and just like love connecting with other people that change our perspectives. But yeah, it's. I know for us and for me, it's very. You know, I was feeling it when I was like nodding a lot when Justin was like, yeah, well, you're quickly almost at the whim of other people when you're. When you're in so much momentum in business and then it can consume all of your time and then you're not actively taking deliberate choices and decisions because you're just in the mix of it. And it's like you don't want to be in the mix of it. You want to separate yourself from the mix and actually, okay, pick and choose stuff. But I think it starts. That's where I think this lifestyle first commandment was a good one. It's like the mindset behind it all.

Yeah, I just actually think it might be kind of cool to just kind of quickly rattle off these 10amendments. So they're all in here. Not amendments. The commandments Amendments. Amendments to the commandments I'll just kind of rattle them off and then we'll wrap it up. And there should be more details about this kind of stuff in the notes as well. So the Ten Commandments. Lifestyle first. Each investment must truly represent passive income. Are those notes that you added to it or that.

These are ones I put. So you don't probably need to read all of this stuff, but just the commandments.

All right, so the commandments, Lifestyle first, reduce risk, invisible deals, get principal back quickly, immediate cash flow, have an income amplifier. So basically negotiate more better terms with the deals. You got cut out the fat. We talked about that one a little bit. Plus the deal.

Negotiate better terms and all that.

Yeah, exactly. Use leverage and every dollar gets a return.

Yeah, I would say get the book and the lifestyle investor book. Those are. Yeah, the Ten Commandments. That's like the core of the book. But definitely going through the book, you get like the. The personal side of how he did this as well. Justin. And so lifestyleinvestor.com is a place to get that. And yeah, it's all free, plus shipping. And all that's going to charity. Little proceeds from there, which is just. It's not that much for you out of pocket. So get the book. It's a great one. And other than that, what do we got? Matt, Anything else?

No, I think everybody should go grab the notes for this one. They're going to be good notes. You can get the notes@flowchartgroup.com that is actually our Facebook group. But one of the questions is asking for your email address. If you give us your email address when signing up for that group, we'll send you the notes. You got to do it within two weeks of this episode going live. And we'll hook you up there. And Easy Webinar is Easy Webinar.

There are boys and gals. Yeah. So they're sponsor of the show. Easy Webinar. That's our go to webinar. All in one system that's going to allow you to easily set up a webinar online. Multiple styles. There's so many styles of webinars. Not going to rattle them off here, but they take care of them all. And they also handle all the tech that happens behind the scenes and gives you cool dashboards of how effective this stuff's going. And there's all these streaming things you can kind of like, I wouldn't say maybe replace Zoom, but you definitely have a Zoom alternative. So if you want to test that out, I mean, your kids have used it for school even, which is pretty cool. So they're hooking you up with a good discount over there for the Hustle and Flowchart listeners like you. Easywebinar.com hustle is where you got to go. That's easywebinar.com hustle and you'll get hooked up by our boys and gals at Easy Webinar. Do it cool. Well, that is it. If you think someone, one of your entrepreneur friends are looking for some investment advice, something new, new perspective, share this episode with them. Leave a rating and a review if you have not at all. And subscribe. And all this fun stuff. I'm going to keep talking until Matt is stretched out with the record button. Keep stretching, Matt. All right. He's going to cut me off. All right. See you later.

Thanks, everybody for listening to this episode of the Hustle and Flowchart podcast, for taking the time to listen. We want to give you something a little bit special. Every single episode that we do, we actually have somebody on our team take notes. We basically have a Cliff's Notes version of every episode where you can go and find all of the tips and tactics that they laid out, all of the resources that they laid out, all the good stuff from this episode. We actually have a nice simple notes version that you can find on our website. So go to evergreenprofits.com find this episode that you just listened to and give us your email address and we'll send you the notes. Thanks for listening.

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