EP 486 – Mistakes New Entrepreneurs & Business Owners Make with Aaron Young

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This is the no Closer show where you get the latest developments in distressed note investing and learn the secrets of how you can control millions of dollars worth of property for pennies on the dollar. Get educated and entertained by someone who has closed thousands of deals and lives to support you in achieving the same. Now here's your host, CEO of We Close notes, Scott Carson. Good morning, good afternoon, good evening everybody. Welcome to this episode of the Nook Closure Show. As always, Scott Carson, excited to be here with you today. As always, excited to have our brother from another mother, our good friend Aaron Young joining us today. And Aaron is joining us from the coast of Oregon on the beach there at his beach house and just enjoyed the fourth of July with the family and the grandkids. And now it's you and Michelle. They actually get to have some vacation now, huh, Aaron?

Now it's a little going to be a little quieter now here at the beach house. Well, my two married kids and their combined four children, three of them two years and younger. So it was a lot of baby time. But yeah, it's great. It's not with the fourth of July, you know, we think about our independence, the blessings that come from living in this great country and one of those is to be able to celebrate with your family and be together. So it was great and we love to be with the kids and we also love to just have be the two of us. And so yep, we're gonna have a great week. Thanks.

Awesome. Good stuff there. But one of the things that we were talking about before we went live here this afternoon is kind of what to discuss. And I've been getting a lot of phone calls and emails from new investors that are looking to get into the note business, looking to leave their full time job. You and I were talking about what might be some great things to share today or some of the biggest mistakes or things that you're seeing entrepreneurs make. Cause you're dealing with so many different entrepreneurs, business owners, whether they're brand new in the business or they've been around for 10, 15, 20 years. And then what I love is that, I mean you're a very active business owner. You've bought and sold business your whole life. So I thought we'd share today some of the biggest mistakes you're seeing entrepreneurs make when they go out on their own. What do you say about that?

I think that sounds like a great topic because Scott, one of the goals, and I know you and I are like minded on this, one of my biggest goals at this phase of My career is to help people avoid a lot of the pitfalls and which is the whole reason behind what you teach. Because you're in a complex industry. It's a niche industry, but complex. Lots of pitfalls. I work on a broader level, a lot more industries. But you know what? People fall into the same freaking traps over and over and over again. So my goal at this point is to teach people from all of my clawing my way out of the pit, teaching them how to, how to avoid those things. So it's a great topic. That's right. Exactly in line with what I love to talk about. Yeah.

So let's talk about the big things. I think everybody gets excited. They've got a passion, they got something they want to chase. Let's. Before we dive into some of the basic. I think one of the biggest mistakes people make is they start chasing a passion versus really seeing if it makes sense as a business opportunity. Right, Aaron?

Yeah, the past. It's great. I mean not even great. It's almost needful that you be passionate about what you're doing. However, that's different. It's different to feel passionate about something than to chase your passion. And I know a lot of gurus out there in an, I believe in an effort to sell books and sell courses and make everybody feel like whatever you're passionate about is a great business. Somebody wants what you want to sell. And I say I won't swear. Bs bs. That is not true. There are people who I don't know that go do things all the time that are just stupid things to do. I mean, sorry for anybody that this gets close to home, but there are so many people out there that I run into regularly who, who really just know I can't pay my rent today. But I know that two years from now I'm going to have $100 million company. Have you met these people? And I don't fault them. They've been sold a bill of goods. They've been told that there's some kind of pixie dust that if they go to enough conferences and if they buy enough courses and if they write their own book and if they. There's nothing wrong with writing your own book except for dozens or hundreds of people that I know who have boxes and boxes of books in the garage that are never going to sell. And so yeah, be passionate about what you're doing. Think about how you're solving a world class problem with your solution. That's fantastic. But to say my passion is starfish and so I'm going to start a blog about starfish and I'm going to do a starfish conference. Not scientific, just because I love starfish. I think you're going to continue to struggle to eat if you do that. So become passionate about what you're doing. But chasing a passion most of the time and is a fool's errand. Find something the world actually wants from you. Do they really want that? You know the old saying, Scott, build a better mousetrap. Right. How pedestrian. Build a better mousetrap and the world will beat a path to your door, you know, or will wear a path. It will wear a path to your door. And so, yeah, there's my feeling about passion. I don't know if I was clear.

Well, but there's. You mentioned something in there, too. Well, two things. One, and we've dealt with this a lot recently. We've had different people that we've talked to that have, you know, they wrote a book. And I'm like, congratulations. Great. Like, oh, yeah, it's 39.95. And I'm like, great. I'm not buying your book.

It's 1995. I'm still not buying your book.

Book writing is a legion these days. It's not going to. You're not the Jack Canfield. You're not the RJ Howlings or KJ how, whatever. You know, I'm going to talk J.K. rowling. J.K. rowling is Harry Potter.

We love her.

Yeah, exactly. She's great. Harry Potter. Exactly. You're not going to be that. You've got to. If you're going to be using that to book at the lead gen for business, trying to find. See if there's people that are interested in the book, whether you're giving away or a buck or minimal cost to provide that. But it's different. Businesses change and a lot of people that get into leaving their job or want to pursue their passions aren't thinking in the 21st century. You know, the whole market and marketing is totally different than it was decade ago or even five years ago for the most part.

Yeah. Can I go back to J.K. rowling for a second?

Sure.

I just watched a documentary about her. It was called J.K. rowling and Harry Potter. And you know what I learned? People know this little bit of her story. She was the single mom on welfare and she wrote this book and became a billionaire. Okay. What you learn in the documentaries first during those years of writing the first two books. First of all, before she wrote the books, she wrote all this Other source material. She wrote Fantastic Beasts and Where to Find Them, which is now a new series. Right. But she wrote an actual book describing parts of this world that she was creating. She created Hogwarts, a history. She created all these things that are referred to in the books and in the movies, but that are not part of the canon. Right. So she wasn't just like, oh, I wrote this magical book. It took me a few months sitting in a coffee shop at Starbucks. You know, it was awesome, and now I'm rich. She did all this work, and then she wrote the book not knowing what it would do. It did really well. And then she felt all this tremendous pressure, and she got less happy. She said, when I was writing that first book, I was really happy. Nobody knew me. Nobody expected anything from me. I was just doing my thing. It was a very pure time of life. And as that thing hit and it started to take off, she said, it became a very difficult and dark time for me because I am trying to do what everybody else wants me to do, not just what I want to do. So sometimes. And then to try to put a weird connection on that one. But this is right on your point. A guy called me yesterday. He's been trying to get a hold of me for weeks. And I kind of recognized his name, but I wasn't exactly sure. And we got on the phone, we started talking, and he's at. He just left his job at JPMorgan Chase to go to another company, Ameriprise, to do stuff. And he had all these clients at JP Morgan he thought would follow him. They didn't, which is another big mistake. Guys, if you think all your customers from this successful company you work at now are going to come with you on your entrepreneurial journey, they're not. Okay? They're not. They're going to stay at JPMorgan Chase. They're not coming with you to Bob's Financial Services. Okay? But the point is, he said, do you remember how we met? And I thought. I said, are you the guy that I told to close down your company and go get a job outside those food trucks at some conference that I spoke at? And he said, yes, that's me. I said, it's all coming back now. I said, so you quit and went to work at JP Morgan Chase? He said, yeah. And I said, how'd that work out? He said, saved my marriage. I spend more time with my kids. I was making a ton more money than I was as an entrepreneur. But now he's going to leave and he's struggling. And because he's down to 1000 bucks a month to live on, plus some money they loaned him, and he's going into debt to the company store, so to speak. So here's the point I'm trying to make. Sometimes when you just do what you're great at and you do it in a company or in some situation where everything's kind of stable, sometimes you're going to be happier. It's going to be a more pure existence. It's going to be more pleasant. So don't just go into entrepreneurship thinking, oh, I'm going to stick it to the man. I'm going to follow my passion, I'm going to write my book, and then everybody's going to want my, you know, going to give me money. Because that is almost never how it happens. It's almost always much harder than you think. And so on. Now, now that I've said all the negative, I feel like I'm representing a public stock going, you're going to lose all your money. This is going to be the stupidest thing you ever do. Why? Why the hell would you ever invest in this stock? Then they buy the stock, and now I'm going to say, okay, now you're in the family. So let me say this. If you can get it right, there's nothing better than being an entrepreneur. If you can make it work, the wealth that you can create, the freedom that's possible, you'll probably work your butt off for a number of years. But if you organize yourself right, you can become, in my parlance, unshackled. This isn't about unshackled today. This is about doing things right. And so all I want to say is, when you have something that people actually want, you have the skills to deliver it and you have the intestinal fortitude to do the work, because you're going to work longer than all of your friends and your family's going to go, where are you, Mommy? Where are you, Daddy? Why don't you come to my play?

And you.

And you're going to go, sorry, I have to be at this thing across the country. If you're willing to do that for a while, then you can be like I've just done for the last week. I can entertain everybody. The whole group can come because we don't have one house, we don't have two houses. We have three houses. We can go where we want. But that's after lots of stories sitting around the campfire over 4th of July talking about, remember that camping trip oh no, dad, you weren't there. Mom took us. Oh no, dad, you weren't there at the museum that day. You didn't go to the zoo when the giraffe was born. You weren't there. You were working. If you can tolerate that, you can create something that for a gigantic part of your life will be a giant benefit. But you got to put the work in and it's going to be challenging at the beginning. So just know that going in, otherwise you're going to be really sad.

Well, that's the thing is too, one of the biggest mistakes I made early on as a young kid was thinking, oh, I'll go out my own and leave the good paying six figure job to go out on my own originally. And I struggled. I definitely struggled, you know, financial wise, struggling not being able to go do things as busy doing other things, traveling to conferences and events.

Friends are saying, hey, let's do this thing. You're like, sorry, I got to be at the meetup. I got to be at the ria. I can't go see the new movie tonight because I'm going to be at the RIA till 10:30 hearing about somebody that's whatever, doing whatever they're doing well.

But that's the thing is a lot of people don't realize that they treat it as a hobby, they don't treat it as a business. That's another big mistake. I think a lot of things. You mentioned something too. This is something that I've seen from a lot of people when I've been out coaching, traveling, when I've gone to seminars, people sign up for these big educational programs and there's nothing wrong with coaching. I've got coaches, there's nothing wrong with that, masterminds, things like that. But they sign up for a package of classes so that every weekend they're traveling to a new conference, new seminar. And this is one of the most frustrating things. When I've talked with real estate entrepreneurs, like, oh, I've got to go to this seminar on college room, you know, rentals and then subject to deals. Or I got to go to this thing on land trust, or I got to go to this thing on owner financing a wraparound mortgage. They're constantly going to events and they're not taking what they've learned at whatever their biggest they're focused on to put it to work.

That's the other thing. When you're going only to conferences in your space, you may be getting educated, which is fine. First of all, you got to slow the Education down. Because it's one thing to listen to it while you're driving around. It's another. It's a thing, you know, you can kind of talk about it at a party, but you've not actually done it yet. So until you get the first piece figured out where you know how to do it yourself, now you can kind of click on another piece and click on another piece. But most entrepreneurs are idea people. They're talkers. They love talking about something and dreaming about getting their calculator out and adding up. If I get 87 of these at 1995 and my okay, and then my cost is, I've only got a 15% costs, that's 85% margin. Oh, my Lord, I could be making $86,000 a month. Hooray. You know, they get all hung up on this stuff, but they've never sold one widget yet. They've never closed one deal. And so a huge mistake they make is they bury themselves, as you say, in education. But it's education that's in one ear, out the other because they've never applied it. Until we apply it and even teach it to other people, we are not a master of that concept. So you've got it. You've got to do it. You got to get your hands dirty. It's the old example about you can read all the books, watch all the YouTube videos you want about riding a bicycle, but until you get on the bike and try to balance and try to pedal and try to brake and you fall down and you skin your elbow until you start riding the bike, you don't know anything. You know about it. You don't know it.

Yeah, that's one of the things we tell people all the time. Listen, you're going to learn more from buying your first note and working through that, Getting the servicing set up, getting all the paperwork filed, reaching out to the borrower, working with your vendors more than you will from any workshop, any seminar, any online coaching program out there. I mean, great. Yeah, you have a good knowledge base, but until you've actually pulled the trigger, then you're not really doing anything.

Yeah, I meet people all the time who've spent. And a lot of times they, you know, a lot of times if they trust you, you get this from them, you know, later, later on in their journey, and they go, oh, my gosh, I've spent $80,000 on coaches and on programs, and I've never done one deal and I've used up all of my savings or, you know, I inherited that money when my parents died and it wasn't very much, $100,000 and it's almost all gone now, hoping some guru will hold my hand in a way, like do the work for me. And I'm telling you, and I teach and you teach and we can help you jump the line, but we can't do the work for you. You've got to get your fingers and your hands dirty. You got to get in there and figure it out and become an expert. People pay for experts. So you're paying to hire Scott Carson or come to his workshop or Aaron Young or whomever else and we can tell you everything. But until you do it, you won't understand it. And it's a huge mistake that these seminar junkies and I speak at a lot of seminars. So I mean, I'm glad they're there. But I do see people who spend all their time attending and never actually doing the work. And it's a shame because they're proceeding from a false truth, a false belief that if I get the information, then I'll be able to do it. And the fact is, the first part is get the information and know it's even possible to do that it exists. You didn't know about notes all of your career. You found out. You know, you or anybody listening to me, they found out about it. Then they said, well, tell me more. So they go to a Scott Carson conference and they go, oh, at that point you start to pull the trigger and buy your first note and play with it and maybe get killed on it, maybe lose your shirt on it. Who cares? I mean, in the note business, losing your shirt is a relative. You're just losing like a Costco T shirt. You don't have to lose your custom made three piece suit. That was tens of thousands of dollars. If you go in easy, it's not that much money on the first one. Isn't that true, Scott? You, you can lose millions of dollars.

Yeah, there's opportunity to buy stuff, lower pricing for sure, to get your feet wet.

Even if it costs tens of thousands. Let's say it costs $50,000. Right. In the scheme of things, compared to a half million dollar McDonald's franchise. Right. It's a pretty cheap education for starting a bit. If you want to go start a dry cleaner, if you want to go start a convenience store, if you want to go sell cars, if you want to go all kinds of stuff like that, it's going to cost you more, way more than it will cost you to do a note and do one that's maybe not your dream property. Just do one and just learn it. You're not going to get wiped out on that. Or if you're getting wiped out, maybe you got in prematurely. If all of your savings can be wiped out on one deal, that's pretty terrifying because you're going to have ups and downs.

Yeah, there's always ups and downs. And I think that's the thing that kind of leads us into the next phase. I think it would be a good discussion is you always have to depend. I always say it's going to cost twice as much and take twice as long, if not longer than what the best. Because a lot of them, everybody puts out. Well, best possible solutions, we're going to sell like crazy. Well, what happens if you don't sell it like crazy? You know, what's your plan B? What's your plan C? And so starting with the end in mind, as you are famous for saying, starting with the end in mind is why your asset protection is so valuable. But most people slough off of that in the beginning, right, Aaron?

Oh, yeah. I was just with a fella in Houston who's been a client for a long time. This was last weekend. Last week. Well, depending on if you're watching this on Facebook or on the podcast. But it was before 4th of July, the weekend before 4th of July, we were talking about that, that he built up a real estate business and then was highly leveraged and lost about $100 million in the recession in the crash. But then out of that collapse with $200, he started loaning somebody. His first private equity deal was 200 bucks. Anyway, so since the crash to now 2019, he has $150 million private equity fund. That's all his own money, plus all the other stuff that he has acquired along the way. That makes him now the third largest minority owned company in the United States. Third largest minority owned company in hundreds and hundreds of millions. His goal. He hasn't rung the billion dollar bell yet, but that's his goal. And you know, that was one of the things he said was Aaron, I've been a client of Laughlin for 32 years. Laughlin, the strategies that you guys taught me way back then, I've built everything I've done on those. Which even in the worst time with the giant loss in real estate, still didn't wipe me out because I still had my assets segregated and nobody could come. He said, I've had battles with. He's taking several companies public. He said, we've had not battles, but like investigations and stuff with the sec. All the pieces work. Everything has worked. That's why I've been a client for 32 years and built all these companies on top of your strategies because they work. But again, it's just like going to conferences. If you set up a strategy and then you don't actually put a business into it or put real estate into it or do some. If all you do is buy a box and it's a beautiful shiny box that cost you a thousand or 25,000 or whatever it was, but you don't do anything with the box. It's worthless. It just sits there on a shelf and people go, oh, that seems cool. What is it? Nothing. There's nothing in it. Seems like it seemed like a good idea at the time. So whatever you do, you've got to start doing the thing, start doing the work. If you're going to set up a strategy like we do for all these tens of thousands of customers, if you're going to do that, then you start actually using it. Don't just buy it because somebody says, oh, buy an llc. Buy the LLC because you're ready to start working inside of it. You're going to use it for asset protection, for tax reduction, for leverage, for prestige, whatever you're going to do, but actually use it, you're going to be so much happier and you'll get. Tell you what, folks, if you actually start doing something, that's how you get rich. Most people think that's how you get poor. I'm afraid I'm going to lose everything. Well, you're going to lose everything if you spend all your time trying to get educated and, and never doing the work. We're seeing this with student loan debt, this huge, chronic problem of people deeply in debt because they got comfortable in academia. They went and got their bachelor's degree and they're like, hey, I did pretty good in this environment. I'll go get a master's. I'll go get a PhD. You know? And then all of a sudden they're checking groceries because their PhD in Russian literature just didn't do a lot for them in the job market, right? So you've got to start doing the work and don't just hang around where it feels fun and sexy and safe, always with a bunch of other dreamers. Get out there and leave the dreamers for a minute. Go get your hands dirty, then come back and recheck your education and make sure you're getting an education from people who've actually done the work and not people who've just become successful. YouTube. I mean, unless you want to build a YouTube channel, then do it. But otherwise, there's so many people out there that are coaches who have never done anything. They don't have a payroll. Their payroll is their Filipino assistant. Right. I mean, that's. That's six bucks an hour. And look at. I've built this six figure or a seven figure. I broke $1 million one year. Or the one I really love is we've made over $200 million doing this. How long have you been doing it? Oh, well, 25 years. Oh. So you have to divide the 200 million by 25. Still good. But don't be disingenuous. Tell the truth. Find people who are actually doing the work who can demonstrate repeated success, people who. Well, one of the expressions I love to use in my classes is people that play at the things you have to work at, be taught by people who play at the stuff you're having to work at.

That's a great, great bit of counsel there. Going out and talking to the people that are in this field. They're interested. I cool friends growing up that wanted to go to medical school. They want to be a doctor, cardiology. And Tasha, she went and interviewed about a dozen cardiologists in different hospitals. And what she got from all of them is that if they had to go back and repeat it again, they wouldn't do it. Yeah, they were making good money, but they also had malpractice insurance. They had all this other stuff now that wasn't the same when they started. They had all this debt in education and things like that in the get go. And it took them years. And working 80 hours a week, you know, being on call constantly.

Always on call as a doctor.

Yes. And so that led her to change fields, and she was damn glad that she did to do that. And that's the thing is, especially in the real estate industry, I was cracking up because I see here in Austin, we get some of the big national TV gurus to come through here. Oh, we'll make this work in Austin, Texas. Or we'll make this work in San Diego or make this work in Miami Hills. Yeah, exactly. Wherever.

Flipping some mansions. Yeah.

And I chuckle because I'm like, it's not the same market. We've got a guy here in Texas that wrote a book a while back about his experience in doing houses, and he's got stuff that he does in specifically one market here in Texas, and it works great. For that market. But when you look at it wouldn't work in Austin, it wouldn't work in Dallas, it wouldn't work in Houston, it wouldn't work in a lot of other areas of the country. And people get upset. I've had people go, well, I took this guy's class and it doesn't work where I'm at. I'm like, well, are those priced homes in those neck of the woods now? You know, I'm like, well, you know, have to look at the market.

Now this is, I mean this with a huge amount of respect. But there's another, There's a couple in little Waco, Texas, I won't even name the show, but a wildly successful show which has turned into a magazine and stuff in Target stores and all kinds of stuff. And I talked to all these people, including my children who go, well, if we bought a fixer upper, we'd be able to for, you know, an all in budget of 85,000 or you know, $250,000, buying the house and fixing it up, I can have this beautiful showplace home. And I said, so let me just tell the story. So they're in Waco, Texas, this wonderful family. So my dad wanted to go to the Dr. Pepper Museum, which is also in Waco, Texas. So we went over to Waco, my dad and I. And it was a weekday, right? It was a weekday. It was. School was out and there's a big universe. Baylor's there, isn't it? Baylor, that's in Waco. Yeah. So Baylor was out. It was summer, but it was a beautiful summer day in this town, Waco, Texas. And we drive into town and it's like freaking ghost town. There's no one there, there's nobody on the streets, there's nobody anywhere. Like every few blocks we'd pass a car and I'm like, this is like zombie apocalypse stuff. Like, where is everybody? Are they, is there a tornado warning I don't know about? Because nobody's on the freaking street. And I'm thinking, where is everybody? Well, there's nobody there. When you see a non bustling area, right? I bet you there's good prices on real estate. I bet you if there's nobody there and there's all these houses, probably somebody wants to sell one and get rid of it. There's nothing going on in this town. The Dr. Pepper Museum. And the only other thing, if Baylor's not in, the only other thing really going on is their place, which by the way had tour buses, had velvet ropes had people in queues to buy a hammer that says demo day. You know, I thought, is that hammer even going to be structurally well with as deeply as they've. They've branded demo day into the wood. You know, are you going to get something that's going to snap? But anyway, I think it must be put on shelf. But the point is they've taken a little market that was a little sleepy nothing town, done something with it, become wealthy in their little pond. They became the enormous. Not even a fish like this blue whale. And in this tiny pond, but in that little village of Waco, they were able to make something. And then they made so much money, guess what they did. They said, we're not going to do the show anymore. We're done, we're done. We made our money. You can make a lot of money if you don't, if you realize what your market is. So they could show a fantasy. This fantasy for most places like you said, San Diego, Dallas, Portland, Oregon, where I'm from, whatever of you can go buy a house. For all you know, you can buy this house. We offered him a deal. We got the house for $89,000. Now we're going to put 100,000 in. You're going to be $189,000 house and it's going to look like freaking Architectural digest. Okay, that doesn't work. In St. Kevin Day, our mutual friend. I was visiting his home a few years ago in Del Mar, California. There's a vacant lot just by him. It's just a little 50 by 100 foot dirt lot and it's for sale. I said, how much is that lot? He said, oh. He said it's not a very good lot because you can't see the beach. And he said, from my house you can see it, but you turn this corner and you're kind of blocked by the other houses, so you can't even see the ocean. I said, okay, but how much are they asking for the lot? He said, two million dollars. Two million four hundred freaking dollars. I don't care what that great interior designer is going to do. That house is going to be a 4 or 5 million dollar house in order to justify it sitting on the street. Well, that's not realistic for doing notes, for doing flips. It's not realistic. It's not realistic, no. If you're going to do it, you have to be prepared. If you're learning the note business and you're from Portland, Oregon, you've got to have a comfort level with going to Tennessee or to Arkansas or to Mississippi and owning real estate that you're maybe never going to see. Is that true?

It's totally true. It's part of the reason that I started getting in the no business years ago is the Austin market here got so overly hot and overpriced. It just doesn't make sense. So that's why I started looking. I need to go where other deals were. You know, if I just focused on the Austin market and just focused here in my backyard where I could touch it, then I would have gone broken bankrupt a long time ago now. Or Ohio or lived in Florida for years ago. There's plenty of deals in their backyard. They wouldn't have to go anywhere. But if you. That's one of the things I always tell people that. Listen, if you're looking for something just in your backyard, you need to make sure you know where your backyard is. And if it makes sense, if that's all you're trying to do, this may not be the business for you. You need to go somewhere else.

Detroit is different than Traverse City. A vacation area, a place where everybody wants to go, spend money to be up on the water. You know, Detroit has entire neighborhoods still, I'm sure, that are still overgrown because nobody's living on that block. Everything's, you know, turned into the jungle. So there's opportunity. Says you'll want. You'll give me money for that. You put some dogs in the front yard so I'm safe. Okay, good.

You know, not all Detroit is like that.

There are parts, but the good parts to make good deals, right, are the ones that it's like in real estate. This is about real. I know it's about no closing, but I'm gonna say this as a guy who's done a bunch of real estate deals. Most buyers don't have the imagination to see what it can be like under different circumstances. So sometimes you have to buy the thing that looks terrible on the outside and with very little money, clean it up, put a coat of paint on it, put the appliances back in that were all robbed out of the place, right? Repaint the walls, mow the lawn. And then all of a sudden, it looks different than it did two weeks before. The more you can buy something because you can see past the cobwebs, and you say, oh, if you can imagine it, you can create what other people want to have. The wealth is in seeing how to fill the gap. In any business, the wealth is always in. You don't see it, but I do. I can create something so that. Oh, you go, oh, that's great. You know, somebody figured out that a double lined walled drink holder would keep everything cold and that we could all buy these now at the grocery store. They're everywhere. But when I saw my first one, that didn't look like a thermos from middle school, right? When I found my first one of these bottles four or five years ago, or six, whatever, Swell, I was like, I thought this was like magic. Like, how did this happen? I really did, Scott. I thought, where the hell has this been?

Right?

And then now they're everywhere. But somebody said, you know what? I bet people would love to keep their stuff hot or cold for a long time. And we can make it, and we can even make it look interesting. We'll get freaking $50 a bottle for this thing. And you know what? I paid multiple $50 bills for swell bottles when they first came out. Now if it's 10 bucks, I'm like, I don't know, we can get a better deal. Yeah, but somebody saw the gap, they filled the gap, they made money. That's what business is all about. And it's the biggest thing people don't remember. Business is always about either finding something that's not being done. So you have to find someplace where the market is not served and find a way to serve them, or find a place where the market is being served poorly and you can do better. That's basically what happened years ago. I don't know that it's this way today, but it's what happened with Apple. Apple came out and just said, yeah, we're more expensive, but we're people are using these entry level PCs. We're gonna do something more interesting than that. We're gonna make it a little more beautiful. And even those old Macintosh, you know, back in 1985, right, they were still better than the HP's you could buy. And when the iPhone came out, it was so much better than this crap we'd been carrying around. And I remember the first time I grabbed a phone, I remember so distinctly. First time I grabbed a phone and they said, well, here's your contact list. And I said, okay. And I said, how do you look at the people? And they go, oh, just do this. And I'm like, it's moving. What the hell's going on? Like, I was so freaked out. How could it just scroll past me like that? Now we think of it, I mean, I'll grab a newspaper picture sometimes and try to make it bigger with my fingers. But the point is, because it's now, it's how it is. But when I first saw that it was like the freaking second coming. I couldn't. This was magic. This was mystical to me. I had no problem spending the money to buy a phone that would do that because it's like, oh, that doesn't exist with my Nokia. That doesn't exist with my flip phone. This is super cool. So one way is build a cellular phone. There's nobody in that market. The next way is make it better, better, better. And that's what we keep seeing between Samsung and Apple. And now Google's trying to be into it and other people or other companies, but now they're iterating on making it better. And how do you make yourself better? And prices went down for a while, but now they're going up because this computer in your pocket, they're saying. And I think the market to some extent believes if it costs more, it's probably better. I'm not saying that's true. But if you say, here's a sushi place and it's $9.95, all you can eat, or is it called Utai Itai? There's a place in Austin, it's really good sushi. And it might be. I mean, you go in there for four people, you're going to spend like 500 bucks for sushi that night. And I'm not talking about a bunch of drinking, I'm just talking about the chef's delivering you four pieces of sushi at a time. Everybody eats one and goes, I kind of detect a little flavor of this or that. You know, the swordfish is exceptional tonight with that little bit of roe on it. But you just think, oh, this place that's going to cost all this money is just by default better than the $9.95, all you can eat. Right? May not be maybe the same chef. The difference is people will pay for things that they think are better. May not get as many people, you probably get a classier group and people will pay. I'm going off on all these tangents.

But I think it comes into, if you're in a business and you see your competition, let's bring, well, you can tighten this back up. And like you said, hey, if you can make a better mousetrap that's better or higher priced or calls to people that will pay more because they think of it as a status symbol or see a tool that works, let's face it, you can go out and buy a camera these days you can still buy a camera Digital camera that's cheaper than a cell phone. And you can buy a cell phone cheaper than you can buy an iPhone or a Samsung. You can still do that. Would they still do the same thing? Yeah. Is it gonna be easier to use?

Yeah.

Are you gonna save some money? Yeah. Is gonna be as effective? Probably not.

It's not gonna have the camera, it's not gonna have the storage. But the thing about pricing, I guess I was trying to say was a lot of people. Another mistake people make in business is they think I can do it cheaper than the place I've been working. I see what's going on here and it doesn't cost that much to deliver this widget or this service. So they go, I can do it and I'll go out and make tons of money. Because I don't know, I feel like I'm basically paying the entire payroll with my sales per month. They get this idea in their head. So one of the things is that people come out one, they way underestimate what it costs to do the work, get the leads, deliver, fulfill guarantee and all that. But, but also they come out and they try to be a low price leader and I'll do it cheaper. There's usually a reason why the best companies cost a little bit more than the person working out of their beat up old van. Right? There's a reason. It's because they do better work. They have specialized teams, they're only using the best parts, they guarantee their work for two years or whatever. So to deliver on all that is way more than the sale. And so a big mistake people make is they don't actually understand the costs of being in business. They don't understand the costs of having a contingent liability of a guarantee that's still hanging around for another 12 to 24 months. They don't understand what that is. Or even not only do they understand it viscerally, they don't understand how to even put it on their books as a contingent liability, as a, as a negative on the balance sheet. Oh, they're guaranteed. Oh, we're taking payments. Okay. People don't even know the simple things about the accounting. It's not hard to be. Well, that's not true. It's not hard to be in business. It can be challenging to be successful in business. The people that are successful are the ones who, who already. It's why my guy could lose $100 million and then 10 years later have 100 and a half in a private equity fund. Right? That's his money, not investor Money. I mean, the reason is because he knows the system, he knows the way to do it. And once you guys learn the way to do it, once you learn the recipe to do it, once you know the right vendors to use, who will be specialized and give you what you need. Not more, not less, just exactly what you need, the more likely you are to have repeatable success. Because again, if you're a true entrepreneur, once you get this project kind of working, it's sort of like now it's becoming easy because all the parts are working. You're going to get bored super fast. You're going to be bored and you're going to want to turn it over to a manager and you're gonna want to go again. So the idea is how do you have repeatable success in different industries? Learn the formulas. Don't just go to things that say, here's how you do a Facebook ad and here's how you use Instagram and here's how to use the filters on Instagram to get better engagement. Because then you can make a million dollars. You know, it might help, but it's not gonna make you a million dollars unless you're. I don't know, I mean, I know a few of these Instagram models that make pretty decent money, but if they don't keep putting up bikini shots or whatever they're doing, their sponsors dry up.

You said something very important early on about people. They leave their, leave the mothership to go on their own to do it cheaper. Right. Or they think they've built a clientele list at that mothership and that mothership is going to follow them.

Right, right, right.

One of the biggest things that we talk with and see on a regular basis, people leave their regular 40 hour a week job. They don't market, they don't understand the power of reaching out to find clients. They think they just because they have the best phone or the best mousetrap that people, if you build it, they will come. It's not always that way. It's not Field of Dreams.

If they don't know it exists, how can they come get it? And even if you tell them today that it exists and they go, oh, super interesting, but I've got to run over here to the kids school. Oh, that's really interesting, but I've got a cold today. I don't have time to think about, I don't want to think about it today. It'll be gone an hour from now. You got to stay in front of them. You got to keep reminding them and if they like what you're talking about, they'll keep listening. That's why this show is doing well. It's because people like what Scott talks about. They like the people he brings on. They like the idea of it. And so they'll orbit this show. Thousands, tens of thousands, hundreds of thousands will orbit your show. And then someday, some moment, they'll go, oh, I'm going to take his class, or, oh, I'm going to do my first note, or I'm going to do the virtual workshop or whatever. All of a sudden it'll be, now's the day. Well, if you don't stay in front of them and let them be in your orbit, you know, as much as they want to be, if you stop producing content, if you start producing content, that's not really in line with your core message. You know, you start talking, if I'm selling incorporation compliance and asset protection and tax reduction, and then I start pitching toothpaste that whitens your teeth, people go, why is he doing that? And then if I come in and say, oh, my gosh, I found this other pillow that really works great, we should all be buying this pillow, then people are going to go, I'm not going to open here and stuff anymore. Because I wanted to hear about asset protection. I wanted to learn how to run a company. I don't want to be pitched toothpaste from him. I can get that on television, right? Stay in your wheelhouse. People get all spread out. The other huge mistake, they get all spread out. They're doing five things. They have fomo, right? Fear of missing out. So they do it all, and they do it all poorly, and none of it's making any real money. And they don't understand why such a great opportunity is failing so miserably. And it's because they haven't given it the effort. It goes back to what we said at the beginning. They haven't given them. Given it the effort to actually make it work. You said you want to talk about mistakes. I'm going to give. Can I give a couple more really quick before we get about?

Yeah, we got about 10 minutes left, so.

Yeah, people go in first one, which we've discussed ad nauseam here, is the idea wasn't right. You weren't ready. Nobody wanted it. You had misconceptions about how to deliver that product or service. So the idea or the fundamental deliverable is out of sync. That's always the first one to me. Either people want it or they don't want it, or they Go, oh, that's a cool technology. But you're ahead of the wave. So even though you've got something great and everybody acknowledges it's great, there's no way to use it yet, there's no way to plug it in. So the idea is usually the first make or break, you've got to have enough money to eat. Even if you have to eat, do like Mark Cuban, eat the ketchup packages. Do like J.K. rowling, sit at the coffee shop and collect welfare and for a little while. But if you can't eat while you're trying to launch, and if you can't launch because you have no money, it won't last very long. No matter how good it is, there's got to be sufficient money, even if you're bootstrapping, so that you can still survive. Now maybe that means you move from this beautiful apartment you're in or beautiful home to something much lower priced. So you could take that difference in money and invest it in your business. But if you don't do that, you won't last very long because you have to eat. And if you have dependence, if you have people counting on you for income, I guarantee you that money is going to dry up a lot quicker. You're going to be. The tolerance level will be very low. Now saying that I just heard Daymond John give a talk and he's on his second family. Why? Because he totally sacrificed his family for fubu, for his clothing line, and he didn't leave them. He didn't leave them physically, but he left them emotionally and time wise. They were married. He wasn't a bad guy. He just said, this is more important to me than you. And I don't think he consciously did that. That's what happened. And that wife and their children migrated away from him. Then he was single. When you're single, you can do a lot because you can live in a cardboard box while you're single and eat ketchup packages. But depending on your circumstance, you have to decide, how long can I pursue this before I start losing things that really matter to me? Third one is process. If you don't understand how, step one, step two, step three, step four. If you, if you don't understand it, you will just grasp around in the dark like a blind person trying to find your way through a maze. And it's very, very difficult. But if you can go, is my idea any good? Can I afford to do this or is there a more cost efficient way that I don't know about yet to do it. Is there money available to me? Is there, are there strategies available that give me than I currently know? Because I've just never learned about that before. And then are there systems to follow that are already proven, tried and true that if I have a good idea, I feel comfortable with the amount of money I have and I have a system so I cannot grasp around, I can take a straight path. Does that make it simple? Hell no. Well, simple, yes, easy, no. It's straightforward. But you have to do the work. And the work is hard. But once you get the momentum going, it's just like a rocket that expels almost all of the fuel in that first 30 seconds to try to get up off the ground and get moving. And then once it's up in the atmosphere where the atmosphere is thinner, it gets into space. Then all of a sudden just a little push of gas will move the whole thing. But to try to get lift off, it takes a lot of energy. But once you do, just gets easier and easier. So those are the big things. Is your idea any good? Can you afford to sustain this? Do you have a process that will help you be successful? If you can get those three things and then you're willing to do the work, I could go into much greater detail on actually how to build successful companies. That's not what we're here for. The other thing is folks, and I'd be remiss if I didn't say this because it's my company, if you build something on a shaky foundation, on a sandy foundation, if you want to go back to your Bible, Sunday school, it'll wash away in a storm. If you build something on a rock solid foundation, it can withstand the storm. And of course that's what we've been doing for 48 years, is building rock solid foundations. Which is why we have clients like the hedge fund guy who's been with us 32 years and who've built empires on that solid foundation. So whether it's your first deal and you want to set up your first LLC or you're opening a store or something and you want to, you're going to get an S corp set up, or you want to go out and build something big and you're going to set up a C corp and you need to get it all figured out, I mean those are the things that we do. You want to have a solid foundation because you will at some point you're going to bump into somebody, somebody's going to get mad at you, they're going to want to Report you to the Better Business Bureau. They're not going to pay you. You're going to get into a battle. They, the IRS or your state's going to come at you and say, well, we're going to check you out. Oh, you did nothing wrong, but you still spent 100,000 in legal fees. Something's going to happen at some point if you really get in the game. So the question is, have you organized yourself structurally properly so that when they come to look, they go, oh, this isn't the typical micro business owner. This person's actually doing it right. If they see that you're doing it right on the big chunks, they usually don't dig down into the minutiae because they assume if you're doing what most people ignore and you're doing it properly, you're following the rules. You're probably following the rules everywhere and you stop problems before they start.

That's the truth. Amen to that. Start with the end in mind.

Begin with the end in mind. Yeah, absolutely. It's always true, kids. It's always true. Get it figured out and you can be successful. You can have your dreams, you can have your beach house, you can have your farm. Those were my dreams. Now I'm working on a ranch. I'm looking at large pieces of property. And you can do it because you've created a flock of geese that lay golden eggs. Once you do that, when you take care of the goose that lays the golden eggs, you just keep making you wealthier and wealthier. But if you go out there and say, I'm going to do a crappy job and, oh, I'm hungry now, so I'm going to eat the goose, you're screwed. Don't do it. There are ways to do it. We can show you how.

That's the truth.

Between the two of us, Scott, and the people we know, we can show them how to do it.

Exactly. Exactly. For those that are interested, Aaron has been the CEO of Laughlin Associates, an amazing company, Arena Nevada, who helps specialize in putting your books together, putting the core veiled protection around your business, your assets yourself. You can check out them at Corp. Veiled Protection. Calm. You can also check out your upcoming event in November 7th, 8th and 9th. Correct?

Yeah. Magnify your wealth. Just think of what it's called, the Magnify youy Wealth Summit. You're gonna learn from guys like Scott Carson. You're gonna learn about note investing. You're gonna learn about oil and gas. You're gonna learn about proper structures, foundations, Meaning, you know, like a foundation to hold money, all kinds of ways to use trusts, all kinds of ways to do all kinds of stuff. Well, you maybe you should say as we wrap up, but we work really hard to bring great people to teach at that event. Not just fancy guru people, people doing the work.

Yeah, you definitely do. You bring in great people. Asset manager, I mean, people that help you with your asset protection. You've got the lawyers, the accountants, potential CEOs of your company are growing people to help you structure your business, help you structure your entities and your asset protection so that a, you are protected in case something does happen, in case that storm does show up, your businesses, your wealth, your, your livelihood doesn't get washed out to sea.

Yeah. And then people like you who say, now you've got money and in a safe place, how am I going to make, how am I going to magnify that wealth? That's what it's all about. November 7th, 8th, 9th. Magnifyyourwealth.com Go check it out. We still have early bird pricing if they want to go do that. It's limited to 100 people. The fall event particularly sells out early because it's only 100 people. And the reason you want to come is because you get to sit down with that $700 an hour lawyer and talk about your company for free. There's nobody pitching from the front of room. The you're sitting down and only talking to people to get your questions answered, to see what you want to do. And if you engage that lawyer, you engage Scott Carson. There's no magical package that we're selling. You choose to do it or not do it. But there's no run to the back of the room to buy. It's just giving you a chance to get in front of great experts in a way that can help you solve your specific problem or get you to your specific goal.

That's the truth. That's why you want to check it out. The event to attend. I think if any entrepreneur out there, whether you're seasoned, you got a business rock and rolling, or you're starting off, we've had students have gone to it from both facets or everywhere in between two and have just raved and said, man, I should have gone to this a whole lot sooner instead of waiting three or six months to do this, I should have done this in the get go and I wouldn't be sweating like I am right now.

We do definitely get that comment every single time. I wish I'd known about this 20 years ago.

Exactly. Exactly. Well, Aaron, thank you so much for joining us here on the Note Closer show. Appreciate having you, man. Good visiting with you and great knowledge, great nuggets. I got some great comments. Laura Blunt says love hearing Aaron on the show. Other people saying this is great content as well. So thanks so much, Aaron.

It's my pleasure, bud. Thanks for having me on.

We'll see you later, bud.

See you later. Bye. Bye.

Alright guys, it's gonna wrap it up in this episode. Like I said. Check out magnifierwealth.com to find out the dates and time. Like I said, It's November 7th, 8th and I believe Aaron just said but it's an amazing event. It's one of our must attend events. One of the few events that we actually recommend people going to for asset protection because it's not pitch. There's no run to the back of the room. You have the opportunity to really sit down with some great and amazing people to help you really get your ducks in a row, help keep your ducks in a row and take your business to the next level. Go out and make something happen, everybody. And we'll see you all, everybody.

Bye. Sat.