Transitioning from Entrepreneur to Wealth Creator with Bronson Hill | Ep 74

Welcome back to the show. I'm your host, Phil Risher. And on today's episode we're going to discuss strategies to transform home service business owners from entrepreneur to wealth creators. We're going to be diving into how millionaires think, invest and grow their wealth with Bronson Hill. Thanks so much for joining us today. Bronson.

Hey Phil, I'm super excited to be here man. Passionate about the topic and some people make money and they can't figure out how do I make my money work for me, how to make money while I sleep as Warren Buffett would say.

Yes, something I'm passionate about as well. So it's going to be a great conversation. So a little bit about Bronson. He's a seven figure entrepreneur author who has interviewed over 2,500 millionaires and the founder and CEO of Bronson Equity. He's raised over $50 million for real estate investments. He transitioned from a medical sales career to becoming an investor and business coach, focusing on helping professionals understand wealth creation and alternative investments. His books include Fire Yourself and the upcoming Rich Brain which which explore strategies for developing a wealth oriented mindset and passive income generation. So Bronson, can you tell us how did you get into this whole making money millionaires equity thing?

Everything's when you look back sometimes, I'm sure for a lot of the listeners, like oh my gosh, I didn't think I'd have a multi million dollar thing, but you know, it starts as one thing after another, one kind of one foot in front of the other. But I, I, I was a well paid medical sales professional. Um, you know, like a lot of maybe business owners before they started their business, it was like they were doing something making good money for someone else. And they said man, I, I wish I was doing this on my own. And the thing that I didn't really have, I didn't have freedom over my, over my time. And so you know, I thought I, I, I knew I should do real estate. You know, I was making a couple hundred K a year but I was like, I wanted to just be able to travel. I worked with a couple physicians that were making over $2 million a year each, but they just were working 60, 80, 60 to 80 hours a week every week and they couldn't take vacations. I know a lot of business owners can do, right? It's just the business, like you own the business but the business actually owns you, right? So it's the same thing. And so I started to learn about, you know, real estate and I bought some single family Houses. But then I realized, like, I was actually just kind of creating another job for myself. And that's, I think a lot of us that are business owners, we just think like, oh, I can go do this, or can I rent a house? And, and it's like the things we want to do, like, oh, I'm going to do online trading of stocks, or I'm going to do an online business, or I'm going to do buy houses. It's like it really just becomes another job. Even if you have a property manager, you have somebody running things for you. And so I started to try to really learn about passive investing, learned about raising capital. And so there's been a series of events that happened, but just over time I started raising money for multifamily deals and other things. So now we've raised close to $50 million. We do projects really that help individuals that are wealthy to generate cash flow without taking it more of their time. So really to their work is to vet a deal, vet a group like ours or other groups, and then they, then they invest and then they get tax benefits or they get appreciation. So it's just trying to help solve those problems for people of, hey, I have money now. How do I actually have my money make more money so that I don't have to work for it? My money actually works for me.

Okay, that makes complete sense from a sense of. You're a technician. Like most of the people listening to this are home service business owners. So they're technician. They're out in the field doing work and trading their time for money. But then you get to the point where it's like, well, how do I make my money work for me? Rich dad, poor dad, he says difference between poor middle class and the rich. Poor middle class, work for money, rich make money work for them. How are we going to make our money work for ourselves? Can you explain in your book, the Fire Yourself book, you just made mention of it. But how did you come like, what's in that book and how did you fire yourself? Because I think a lot of people, specifically 1 to 10 million Home Service business owners, they get stuck and they need to fire themselves. But what do you talk about in that book and how you coach people or talk to them about firing themselves?

Yeah, so this basically I've had just so many calls. I mean, commonly I'll get somebody on, on the, you know, phone who's. Or on a zoom call, you know, I'm worth, you know, three, four, five million dollars. I've got, you know, My business or my practice. And, you know, I've only done stocks. Right. I have a money guy or a money person that does my stuff. And you know, it's nothing sexy, but it kind of works. I guess there's volatility there, but they're like, well, what should I do? And how do I learn about doing real estate or doing these other things? So there's this whole world of we call it the alternative asset space. It's funny because in the past, if you were to go back in history, when the stock market crashed between 1929, it didn't recover from where it was in 1929 until 1954. So there was a time there where people would be like, oh my gosh, why in the world would you ever invest in stocks? It seems inherently crazy risky. And so it's kind of flipped. And the reason it's flipped is because Wall street has really educated us that stocks and bonds are safe and they're traditional. Right. But. But it's just. It's not true. That's why they call it real estate. It's a real property. It's real assets. It's not actually alternative. It's actually real assets. So we like buying real assets. We like doing this. So again, it's just, this is really a guide, a how to guide fire yourself. The book is how do I get started? Why is what I'm doing not working? And what are some things? Like, how is this even work? Right. Warren Buffett says the best investment you make is in your own education. So great shows like yours and just really, how do I start growing my wealth? And so the bookship basically talks people through different asset classes, what somebody's goals are, what you're trying to create. How do you analyze any deal of any different asset? What's a good place to start? And just really kind of gets people on the track to like looking at. And there's a big conversation to it. One chapter on reducing taxes potentially to zero. I reduce my taxable rate from 25% to about 1% just by using some tax strategies. I'm not giving anybody any specific tax advice, but there are ways. There are tax strategists that can help reduce taxes as well.

Yeah. So if I'm hearing you right, it's like you got to figure out what your monthly nut is, how much expenses that you have, and then build passive income streams that will essentially fire you from your day to day grind of working that you have money coming in to cover your basic expenses, and then grow from there.

Yeah, exactly. There's three forms of financial freedom. So the first one is basically it's not covering necessarily how much you're making right now, but it's what are your living expenses? Right. Robert Kiyosaki in his book Rich Dad, Poor dad, which a lot of people have read, if you haven't read it, that's book number one to read, if you're listening. But basically it's covering your current living expenses. So for me, that was only. I live pretty simply price 6k a month. I feel like when I, you know, five, six years ago, it was, it was enough for me to be able to, to cover that. Second one is covering your current income. Right. If you can get to where you scale up your passive income to actually replaces your active income, then you can kind of look and say, okay, on the third level, what's the life of my dreams? What's the thing that I really want in my life to be able to create?

Yeah, makes complete sense. And I think for a lot of people, they get to this point in their business where, you know, that 1 to 10 million range, when you start getting to a million dollars and you have 10, 20% profit, you have 100, 200,000 extra dollars and you're like, what do I do with this money? How do you coach people or talk to them about balancing investing back into their business versus taking some chips off the table and investing in other passive income options?

Yeah. So I think, you know, the biggest thing is a lot of people are like, well, you know, everything sounds weird until we've done it or we know somebody who's done it. So when people are saying, I'm like, you know, invest money with somebody I've never met. I have people that, you know, invest a million dollars or hundreds of thousands of dollars. They've. We've never met in person. Right. We've done. Or things like how does somebody get comfortable to that level? Right. And so I think the biggest thing is to, to start educating yourself. Just trying to try to find, you know, read books and listen to podcasts, great ones like this and, and start going to networking events. A lot of us are very busy and so we're like, I don't want to go to a networking event. I mean, it just sounds boring or it sounds like I gotta go shake hands. It feels a little uncomfortable. But go to, you know, if you're in a, in a, in a major metro area, there are local real estate meetups that if you go, you're going to meet some amazing people. You Meet other business owners, Meet people that have been doing it for five, 10 years. And then it'll start to kind of like make it a little more like, oh, there are people out there like me. Because in finance, one of the challenges and you probably encounter this is that even, like myself, you know, like, they're. Everybody that's in finance has a dog in the fight. Right? We all want to like everybody. You know, I want everybody to do my deals. We have deals, we help investors. But, you know, I'm biased, right? I have a bias versus somebody else who also has a business or sold a business, and they're just investor full time, that's a great relationship. For other people that are interested in getting involved because they'll say, hey, I've worked with these guys for 10 years, they're awesome. Avoid these people over here. Here's the, like, they'll kind of share that information. There's no real bias. So I think getting in the room and really networking, that's. And the best way, I think, is conferences. If you get to, like, some real estate or investing conferences, you'll meet even more amazing people because those people are very serious. But even local meetups, even local people around that are in investing, it's super powerful.

Yeah. I think for a lot of people, it's the unknown. Like, you know, you see this YouTube video or this TikTok of this person that cut their tax burden. But it's like, who is this? And to your point, you have to get immersed into it to get comfortable and to get knowledgeable, because then you'll feel confident in the decisions that you're making. Is that kind of what your Rich Brain book sounds like it's coming out? Is that what it's about is like, how can you reprogram your brain to more of a rich mindset?

Yeah, yeah, Rich brain. I'm really excited for this one, actually. So this is my second book, and it comes from all these interviews of just, you know, how the wealthy change their brain to change their bank account. But I wrote it and I wrote basically almost the whole book, and then I realized I was kind of doing too much. I did kind of the rich mindset. You know, what are the things that wealthy people do? And then I was kind of writing about habits and networks and networking, all this stuff, and I thought, well, let me just focus on the mindset, because I think that's the thing, like, for, you know, most people, I'll just share this idea of wealth worthiness where, you know, it's something that I discovered where people, typically, most people don't really feel worthy of wealth. So they'll self sabotage themselves in business deals or in investing or wherever. They'll. They'll kind of not put themselves out there in a certain way. There's certain ways that shows up. It also shows up in relationships, right? If I am a single guy and I go to a party, I see a beautiful woman, you know, if I want to go talk to her. But my self talk has been well, she wouldn't like me, I'm not good looking, I have nothing to offer, you know, that conversation is probably never going to happen. And if it does, it's probably not going to be good, right. Versus if I have this positive self talk. There's a way you can kind of change that. So a lot of times people have this thing, we call it like a wealth thermostat, right? Where it's like somebody makes $100,000 a year, they'll just kind of find a way to make 100,000 a year. If somebody's making a millionaire, they'll find a way to make a millionaire. Now a lot of people regress or they kind of stay the same. Kind of gradual. You know, some people kind of increase a little bit over time. I got 100,000 job, now it's 150. I started a business, I'm making 200 or 300. It kind of goes up gradually. There's people that make huge jumps in a very short amount of time. So for me I had a 25x of my net worth in about four years, right? So I went from, you know, hundreds of thousands of dollars to like worth about 4 million in four years. And how did I do that is through these mindset practices and these things that you do to really create. You're basically creating the person that you intend to become. Napoleon Hill in his book Think and Grow Rich, which is a classic book on wealth and it's no relation. He's not my cousin, even though we have the same last name. I wish he was, but he would say spend 30 minutes thinking about the person, 30 minutes a day thinking about the person that you intend to become. And as you do that, you begin to create different options, different things open up. And so I give examples of this. But I've seen just business deals, all sorts of things open up in my life as I've created in this way and I've seen in other people as well where they have these big jumps. So I think whether you're a business owner, wherever you're at it's just these are some things that, especially when it comes to having, receiving, passing along, really helping with wealth, it's very fast. It was a little surprising and shocking to me to discover it, but pretty excited for that book.

Yeah. This is something, to be honest, that I struggle with because I hear people like you or people in books talk about this and it's like I know that once I get there, I'll see it all, this vision that comes clear to me. But it's like the 25X in four years and there's, you know, a couple mindset shifts. Can you share like what, what that is or what, what is the common ones that people fall into or, or. Because most people, you know, they're running day to day, trying to run their business and make some money and then they have a little bit extra money and then how am I going to invest this and grow that, grow my wealth? How can they reprogram their mind? What are some ideas?

Well, there's a couple of things there. Yeah. How can you reprogram? So, uh, I'll give you an example of this. So for me, there's a book called 10x is easier than 2x. And it's the idea of is it easier to double the size of your business or to 10x the size of your business? He says, the author says it's actually easier to 10x the size because if it's 2x, you gotta work twice as hard. You're working 40 hours now, you gotta work 80 hours in the future. 10x just feels like, well, it's impossible unless you become a different person and you let go of 80% of what you were doing. So when you think of 10x or these exponential moves, like it's a different person, like you're a different person. So for me, I've been telling myself I'm a 10x person. Where at my current revenue, my current net worth, whatever, like I want to be here. Okay, so if I'm going to be there, what type of person is. I've been thinking about that, I've been visualizing that and something happened. This was about eight months ago. Seven, eight months ago, there was a deal that came around and it's in, it's not really in our wheelhouse, our space. It's an E commerce business. It does great sales, but it's so high cash flow that I had a partner in the space. And because I'd been doing this and I'd been looking at, I said, hey, you know, this is the person I Intend to become. It actually was an opportunity that I would not have identified. Right. I would not have identified it had I would have just said it's not for me. And I almost, I kind of did almost as well. But it basically we're planning to close. This is coming at a good time, but either tomorrow or next week and it's going to about 4 or 5x the revenue on our business almost overnight. Wow. Right. But how did that happen? It didn't happen because an opportunity came out. It happened because I created it first. That I'm this type of person. Right. And I can talk about how I did that and there's some methods and strategies to do that. But I increased my wealth worthiness. I increased the, basically the ability for me to receive this. And when this came around, my brain was like, oh, this is it. Right. Yeah. And so I think that there are practices and mindset things that you do to do that. And one of them I'll share briefly. Unless you want to respond. I can share briefly on that.

Yeah, please, please share because I'm very curious.

Yeah. So one of these things that I've discovered and I've created, it's called, we call it like whisperings. We call it whisperings instead of like affirmations are kind of what you say to yourself in a mirror. And it sounds a little chees but. And all these like personal development things, they can sound a little woo woo if somebody's not used to them. But of the people I've interviewed, people that are Net Worth over 10 million, almost all of them had some sort of mindset practice. Right. So people have written goals, they have things they're doing, they're saying things themselves. Like it's, it's stuff that they acknowledge. Right. Versus the normal population, only 3% have written goals. Like it's, it's just, this is very different. But if the outlier that's doing this is widely successful, we should pay attention. Right. So, so affirmations are one thing. Whisperings are really, it's your self talk what you say to yourself as you go through something, you know, and we'll say something, oh, I'm so stupid or this happened, whatever. And this comes from our past. When we're kids. We have a very negative bias. Just in general, humans have a negative bias. This is a survival thing that we do, but we need to do is create things around us that we want to be true. We want to create things like I'm a powerful person, I walk in the room and I own the room. And I'll give you a personal example of this. I went through a divorce, unfortunately, eight years ago. It was very challenging. I came through. I felt just no sense of personal confidence. I felt really challenges. So what I did is I started creating with my words. I started creating things with my words that I walk into the room and I own the room, right? I'm. I'm a powerful and confident person, whatever. And in the beginning, it kind of felt a little bit like not genuine. I'm looking in there, I'm saying, you know, but over time, it took six to 12 months, but I started to really feel this. And then now I walk in and people tell me like, wow, you just walk in and you have a presence. And now you're hosting Grant Cardone. You're doing stuff. And it wasn't like it was. You may not have noticed and seen it, but like I've seen this just exponential improvement in my life in that area and other areas where I've created. So I feel like we create things in our mind, then we start speaking them with our words and then they actually start to happen. And so it's not a magical process because it takes work, but as people do this and there's different things you can do to create that, it actually does lead to tangible changes in your life.

Yeah. So much good stuff in that. The book 10x is greater than 2x by Dan Sullivan, you said one thing in particular about the 10x. They do 80% less of what they're currently doing. And a lot of people, they, they can't see that far. There's the gap and the gain kind of what he talks about in there, that they're stuck in that gap of like all these things. But really it's when you remove the things that allows you to then free yourself to go to the next level. And the affirmations piece, I do this myself. I just started journaling this year. And the affirmations piece is so huge because it's like you're saying you're telling yourself this. And there's another good book, Atomic Habits.

Yeah, yeah.

He talks about like, if you say, okay, I'm a 20 million dollar business owner, what does that person do? Because then your actions are going to correlate to what you're envisioning yourself as. Which I think is another mindset piece as well.

Yeah, 100%. Yeah, it is. It's, it's, it's all. I mean, it's just amazing. How do people like Elon Musk and Warren Buffett and All these people accomplish these great things. It's because they created the person themselves. They created what they wanted, they created their intention and the universe, no matter what. I'm a Christian. But no matter what you create in your life, if you speak it out and you believe it and you show up this way, the universe responds to you in that way. So if you show up as, like, you believe that you're Elon Musk and you've got. And there was a time Elon Musk was Elon Musk before he was the Elon Musk. Now he believed these things. And so I just think for any of us, and it can be maybe not so lofty. It's like, hey, I want to have financial freedom. I want to have. Be able to take my kids camping four times a year. I want to be able to do this and that and have a legacy and have generational wealth. Like, that's huge. Right. You can create that for yourself. So it doesn't have to be this huge pie in the sky thing or maybe somebody's already there financially, but, you know, it's just figuring out what you want, visualizing it, and continue to move forward towards it. And a lot of us, you know, with our business, we've done that. Right. A lot of people successfully have done that, or they're in the process of doing that. And I think it's just this stuff. It's, you know, Tony Robbins said. I'll stop with this. Tony Robbins says 80. 80% of success in life is psychology. Right. 80% of success is just getting the right minds. That's why there's this huge link between personal development mindset and having a breakthrough. If you believe it, if you see it in your heart, you can actually, you can get it.

Yeah, I can't agree more. As a Christian myself as well, there's a great book called Thou Shall Prosper.

Okay, I've heard of it.

Okay. Highly recommend it. It's basically that it is biblical and it's God's will for you to prosper and be wealthy. And it's not a bad thing to have money. It's actually you're living out and multiplying your talents and. And the way that you're building value out in the world is by them giving you money. And it really changes your mind that you are actually built to prosper. It's not a bad thing to make money, which a lot of times Christians or people are programmed in that. That way.

Yeah, I'll say something about that too. And I don't know how many people you know, whether somebody's a person of faith or not. I think it's just think it's interesting because we live in a, a Christian culture. I would say whether you're a Christian or not, there's kind of this culture here. But I think, you know, I'll get these figures slightly wrong, but it's around 50% of the world's billionaires are Jewish. Right. And of course Christianity is based on Judaism.

So Thou Shalt Prosper is written by a rabbi.

Yeah, I love it.

Talks exactly about this. Yeah.

Yes. Yeah. So there's a hang up. So, you know, in the Old Testament there's things like Proverbs that are like, God gives you the ability to have wealth and he has no trouble to it. Right. These kind of things. In the New Testament it's like there are some warnings there. You know, you can let money become a God and all this stuff, but like we just kind of like, oh, let's just shy away from it. But I do think that like even when God created, he spoke and he said, let there be light. And there was light. Right. So when you create for your whatever you want to create, if you're able to visualize it, speak it and, and put it out there, it becomes like words become real things. So I don't be too woo woo. But it's like, no, it's true. See this pattern just in, in history and you know, even in the Bible that's true.

And you were made to multiply your talents, not hide them under a rock. So you need to go out and do that. And that's what the parable tells us. So I truly believe that one thing that you hit on here was about you're buying these businesses or buying businesses, it sounds like.

Yeah, well, this is the first business we're buying. We've done oil and gas, we've done some stuff. This is where actually my partner are buying. Then I operate this business. Correct. Yeah.

Okay. So based off what I'm understanding about your company Bronson Equity, and what you do is people that have money, they don't know what to do with it. They maybe join your mastermind of some sort and get educated and then you maybe curate some opportunities that you can bring people in on and then help them buy real estate if passive income. Does that sound accurate or maybe you could elaborate?

Yeah, yeah, I mean, that's pretty much it. Yeah, we do a couple things. You know, one is we in the education space, like with you, we have a podcast called the Mailbox Money Show. So we help people to get educated on finance of the book. I've written a new book as well. We do a mastermind for high net worth investors that people pay to be a part of. And we have amazing people come in the room and they just share kind of those peer. We kind of create that for people and then yeah, our business, we're basically helping people to, you know, invest in, you know, things that give them cash flow appreciation or tax benefits. And they're different. You know, we're doing a lot of oil and gas and private business. We're doing a little bit of real estate. So different things that are in that space that we like, you know, that I'm invested in as well. So.

Okay, so we were talking pre show and you dropped Grant Cardone's name. He spoke at your recent thing. The only thing I know about Grant Cardone is that you give money to his fund, he sources these deals and then you get money in your, in your mailbox when he gets you to, you know, a thousand doors or something like that. Can you elaborate and explain if that's something similar to what you do or what does that all mean?

Yeah, yeah, that's a great question. Yeah. So yeah, this. Basically there's something called syndication. Now when I first heard the word syndication, I thought of like a crime syndicate or like a TV syndicate or something. What is this syndication thing? But syndication is just, it's a legal structure that basically, basically we go and buy, for example, an apartment building and let's say it's got 100 units and we need to raise $5 million and we get a loan and we go buy it. So we'll raise $5 million from maybe a handful of investors. We'll go buy this thing. People put in fifty thousand, a hundred thousand, five hundred, whatever. They put a certain amount in and then basically we operate the deal for them and they get the passive cash flow. So there's nothing. There's a term out there called passive investing. I talk about passive investing, right. There's no such thing as passive investing. It's really kind of a myth, right. There are investments though, Phil, that are more passive. Right? So a more passive investment is syndication, typically because the work as an investor, a passive investor on the front end is to vet the deal, vet the operator. Look, is this similar to what they've done? What's their track record? What are their values? Maybe do a background check, just kind of looking, maybe talk to other investors, kind of figure out like who are these people? What are they doing? And then once you've done it, then you invest, then you're hands off. Right? You're not actually invest, you're invested, but you're not doing the work. So that would be myself, my team, maybe my partners. They're the ones that are actually operating the asset and they're. So their job then is to simply make the asset perform, provide the cash flow or the returns or tax benefits, whatever the thing is. And then the, the investors do get that mailbox money. Now it really is direct deposit money these days. We don't send tax anymore. But it just. The name is so much better. So, yeah, podcast is the mailbox money show.

So why would someone like you, you find a deal for $5 million? Why would you not go and get a loan for $5 million and then tie it up that way? Why would you want to use all these other people's money and.

Right, so, so yeah, so let's just say it's a hundred unit. Let's say, you know, I was kind of giving the example. Let's say it's a, it's a $10 million, $12 million deal. So we'll get a loan for five or $7 million or whatever, and then we'll go raise four or $5 million from investors and you know, maybe we'll put some of that down on the loan itself. Maybe 3 million goes, you know, as a down payment. You have to have a down payment. Nobody really. 100% loan. And then you've got to have some for reserve. So we'll come in and say, hey, we're going to do certain renovations on the property so that we can, as people move out, you're not going to kick people out, but as people move out, you know, the people do spend five or ten grand per unit and you can raise rents by a few hundred dollars when the new person moves in. So that dramatically increases the value of the property. So one example of this, we had a deal in Florida a number of years ago where we bought a property and, you know, did some renovations and in a short period, it was about a year, we'd done some renovations, the property was worth. We bought it for 27 million and we sold it. We actually ended up selling it about a year later for 37 million. Right. So there's quite a big spread. It was quite a big return for investors. Again, that's a home run type of deal. That's not every deal, of course, but that kind of thing does happen. And so, and we found lately real estate has been more challenging to get cash flow in. It's been more challenging on just about every type of asset, unless it's like a short term rental kind of thing. But for passive investments. That's why we like oil and gas, because it cash flows. Well, sometimes it's not necessarily drilling, it's owning the land where they are on, which is a little more stable. Or we do private businesses or we're doing a debt fund in real estate that's basically just providing, you know, really low leverage loans to some of these, which does high cash flow as well.

Okay, so if I'm hearing you right, let's say it's a $5 million deal, you're like, okay, I'll give you $50,000 to contribute to this fund. Then there's a couple ways you can make money, obviously on the monthly rent that's coming through if you were to go and sell it for an appreciation, but then also the tax advantage and stuff. Can you explain how that all passes through to someone that just is giving you $50,000? Do they get a share of this thing? And how does that.

Yeah, yeah, yeah. So how it works, typically there's a spread. I talk about this much more in detail in the book Fire yourself so you can check that out. But basically, yeah, so somebody invests. Let's just say we're raising $5 million for a deal, right? And it's a multifamily deal or some type of deal. So they'll invest, they'll get a whatever percentage of the amount they put in. Let's say they put $100,000 in, then they own that percentage, which I can't remember my math is right, maybe that's 2% or whatever that is of the total deal. Then they'll get a certain amount of tax benefits. So for owning real estate, there'll be some depreciation they'll get. Sometimes it's very substantial. The other investments you get a lot, like the oil and gas, you get a lot. So you get that percentage of those tax breaks and then you receive cash flow when there's quarterly or monthly distributions that come out. So there's usually a split. So like for example, in a real estate deal to be common, It'll be like 80, 20, which just means like maybe there's a split between how the profits are shared, so we pay for all the expenses. And then 80% of the profits, for example, could go to the investor and then 20% to the operators. Right. Or it could be there's a preferred return which just Means the investors get paid first. So let's say it's, you know, 6, 7, 8%, and that's kind of the first amount, like all that gets paid to the investor first, then there's a split after that of, you know, 70, 30 or, or 80, 20 or something after that.

Okay, that makes complete sense. So basically it will flow through based off the amount that you contribute and you get paid first. Depending on how it's all structured as far as people, I think you have to be like an accredited investor or something. Like, is that, is that a term that applies to being able to participate in this or what is that?

Yeah, the term accredited investor. A lot of people think it's like I need a gold star, I need somebody to stamp me, I take a test or something. It's really not that. It's just basically if you have a certain level of income, which is either it's 200,000 if you're an individual and it's 300,000 per year if you're married or so that's one way. Or if you have a net worth of over $1 million, not including your primary residence. So for a lot of listeners, they'll have it. I have it in my business, I've got it here, I've got it there, I've got. So, but basically there's again, that's just, it's just if somebody has the income of the net worth. And so certain deals, especially non real estate deals, so if we're doing a deal that's a private business, we're doing oil and gas, those are typically only for accredited investors. And there's a way to certify it. It's really easy to get your CPA to sign a letter or there's a third party group that does it. It's super simple. But yeah, so again, but some people, you know, if you're not accredited, there's a lot of real estate deals available, but not as many of these other kind of creative deals that are available.

Okay, so would you recommend that people have some money in the stock market and also do this or how should they think about their wealth creation and preservation strategy?

Yeah, it's a good question. So for a few years I was, I was a, what's called a Registered Investment Advisor or an ria. I'm still an ria, but it's, I call myself a Recovering Investment Advisor. So I'm not registered anymore. I've been at recovery, but. But yeah, I mean that's kind of the challenge of when it comes to And I think the biggest question is how do I allocate my wealth, right? And for many of us, if you're a business owner like you described, that it's a lot of people that have multimillion dollar businesses, you're very overweighted in your business, right. Come a point that either you sell your business or you start pulling cash out of your business. You start to diversify and put things in different things. And I know people that put in all kinds of different things. Some people are in precious metals and they put half their net worth in precious metals, right. And I don't, I'm a big precious metals guy, but I don't have half. I probably have like 10% or 5%. I have a certain amount. So there's a. How do you actually allocate? And again, I can't really tell you how you should, or any listener how they should allocate. This is something that an advisor or somebody made a one off call to say, hey, here's something how people sometimes will do it. The traditional method is like you put a mix of stocks and bonds. If you're older, you put more in bonds and you know, some in stocks. I'm one that believes, I think personally there's enough alternative assets out there that provide enough stability and other things that I'm very almost not invested in Wall street type assets. Right. Because I think that there's so many. There's a chapter in this why Wall street is not your friend. And they'll say gets Tony Robbins in one of his books, Money Master the Game, he said that the average mutual fund or one of these time dated funds that are like Fidelity Fund 2035, but they'll say that they're, their fees are like 1.2%. But then there's all these hidden fees, Phil, that they, they're legally, it sounds shady. They legally do not have to disclose. So it'll be like it's like 3.2%, right. And so, and then on top of that, if you have a money person like you go to one of these big groups or you know, Wall street, you know, they'll have a somebody, they'll, they'll charge another 2% on top of that. So they're typically taking like 5.2% of your money. You don't even know it. And typically the stock market typically only returns usually around 6 to 8% per year if you're lucky. And so that's most of your money. So basically becomes a savings account, right? So for me it's not That I do a couple of things there, but I'm mostly in real assets because. Yeah, first of all, like, you get way higher cash flow. There's more flexibility. There's also a lot of counterparty risk in Wall street, which is. I can talk about that as well, but in the book, talks a little more in detail.

Yeah. And I think also the tax benefits of not, you know, no capital gains tax or whatever, and structuring all that to mitigate your exposure, I think is good. All this sounds great. I want to. I want to talk about maybe the downside of it is like, you know, yeah, you buy this $5 million place and you can't get a renter in there, and it's floating for a little bit, and then maybe you have to sell it for less. Like, what does all that look like on the other side?

Yeah, well. And I want to paint this as a bed of roses. I mean, there's definitely risks involved. The last few years, you know, we've. We've had deals that have gone phenomenally well. Home runs, I mean, just unbelievable deals. And we've had a few deals that have really struggled. I mean, things were, you know, did not go as planned. And one of the things has been an issue in. Especially in real estate deals is interest rates rose very sharply. And we thought. What I thought was. And I'm just going to be transparent because I think it's, you know, nobody fully understands about finance. I learned some things through this, but I thought, hey, because we're doing all these renovations, we're going to increase the value so much. Right. Because commercial real estate is based on how much income is coming in, depends on how much it's worth. But the problem is there's also evaluation metrics in there. So if interest rates go from, you know, people are getting 4% debt or lower on a building, and all of a sudden now they have. They're getting 9 or 10%. That's kind of what happened. It went very quickly, double, triple that. People can't afford to buy the building. Right. It's just because all the cash flow now is going that would have been in somebody's pocket is now going toward the debt. So what that did is it dramatically lowered the cost of some of these properties as much as 20 to 40%. Right. And so no matter what, you. If you put 20% down a deal and your property is down 30%, even if you've done the renovations, it's. It's a very fine line of, you know, making sure things are going to work. So I think that, you know, there are challenges there. The nice thing I would say over, like, with doing larger apartments that have more than 60 units is, you know, your vacancy, unless you have bad management, is not typically going to go very high. If you have a single family or a couple of single families, you have one vacancy, you're in trouble. You have, you know, you got to figure out how you're going to make that work. Right. Versus if you have 100 units, you're generally going to expect to have 5, 10% vacant at all times. And when you're renovating, you're gonna be more often like 15 or 20. So you can actually renovate those units, but you plan for that. Right. So I think it's, again, it comes down to the experience of the team, the experience of the property manager, and that's where no matter what asset, you know, again, I talk about this in the book. When you're vetting deals, it's like, is this a rinse and repeat type deal for this group or is this like, hey, this is our, this is all of our first time. We've never done this before. Nobody's ever done this. It's like, well, that's kind of a challenge. Somebody. But if somebody's done it for 20 years, they can show track record how they've encountered challenges, how they've addressed them. That's a big deal. Right. And it's not just in real estate, but it's in other types of deals as well. Yeah.

I think if as I'm talking to you and I'm listening and I'm learning from what you're saying that, okay, you have a great business and like, oh, real estate sounds cool. Let me go buy a single family home. But now you basically have like a whole nother business of like, managing this home and property management and all this stuff where it's like, instead of paying $50,000 for a down payment and trying to manage all this stuff, you. There's other opportunities where maybe you could just be a participant in this situation where you get a bigger slice of the pie and a bigger deal that you don't have to actively manage and you just get more passive income.

But it sounds. Yeah. And this is the challenge, though, too, as I, I call it the passive test. Right. That, like, if you have, I'm sure a lot of listeners have a rental house or they've got two or three, or they've got a vacation home or something, and they rent it out. And I just, you know, it's a Fair amount of work. Even if you have a property manager, they're asking, hey, what do we do about this repair? Or what, the tenant had this issue, or, hey, you got insurance. And I mean, it's still work to manage that stuff. So my, my test is if you can't 10x, I guess it's, the theme is 10x today. If you can't 10x the size of what you're doing. So if you have three rental houses, you couldn't immediately go to 30, then you're not actually in a passive investment and you're actually undervaluing your time. Right, sorry, there's a little pause here on the connection. So you're actually undervaluing your time. And so, so anyway, so. So I think that's the big thing is, is looking at, you know, am I valuing my time? And if you are, then, you know, is it actually scalable that it can take you where you want to go? And most people, they're like, oh, my gosh, my. There's no way I could do 10. I don't want it. To even, to even acquire that many would be so much work. Right, right.

Yeah. No, I, I completely agree. Well, yeah, man, this has been great. You, I, I really appreciate you because you haven't held anything back and you haven't, you know, try to dodge anything. You've been very transparent and honest, which it's hard to find people that are open and honest about had. So I really appreciate that. If someone wants to learn more, I know you have this mastermind, but these books, what should be the first step and what they should, they should do.

Sure. Well, I have, I really appreciate it, Phil. It's been great talking with you. And I just think and find it like we should all be as honest as we can because we're all learning. We're all along this way. And, you know, I just want to help people get where they want to go. So I have a free guide for your. For your audience. We have this guide of inflation, how to use inflation to your advantage. So anybody who's got a business buying stuff, you know, things cost 50% more pretty much across the board than they were four or five years ago. So no matter what they say, inflation is probably higher than what they think. But I have this guide. It's. It's 40 pages. It's how to use inflation to your advantage. And it has some strategies using real estate, using debt, kind of some of the things we talked about, as well as some really creative things people haven't heard if you text the number, you text the word inflation to the number 33777. So you just text the word inflation to 33777. It'll ask for your email, and then you'll get that free guide. And we'll also kind of update you on our deals and stuff, and we can start a relationship with you and stuff like that about hearing about deals, but that's the best way to connect.

Yeah. Awesome. Well, thanks, Ronson. It's been great to get to know you, man, and I look forward to keeping in touch. And thanks again.

Thanks, fellas. It looks great. Thanks. Yeah.