Financial Literacy with my Son. #podcast #entrepreneur #realestate

On this episode. Well, let's talk about Dave Ramsey and the good and the bad in Financial Peace University and some disagreements that I have with Grant Cardone while I have a very, very emotional conversation with my son about finances.

All right. Our first in car podcast. This is an interesting setup. I hope you can still see out of your mirror.

I can. Okay, cool. I'm good.

All right, well, right now we're in Flagstaff. We are hanging out, shooting some content in muns today. Dad, what are we shooting? What are we trying to give people value on today?

Oh, you know what? Since it's kind of fresh, let's have this conversation.

So here's what I believe.

I believe that Dave Ramsey has a great program in Financial Peace University, and I think it's phenomenal for young people in college, high school, preferably high school, to actually take this and go through it.

And the reason being is that.

Well, Christian, kind of have a shitty.

Conversation last night, didn't we?

Yeah.

Want to talk about it? We can.

Yeah, a little bit.

Yeah.

Here's what's important. I want to be real with you guys on this and to share some.

Things where Christian and I and Wendy were talking last night about finances and talking about. Do you want to tell them where you're at, Christian?

You don't have to divulge everything, but, I mean.

I mean, you dug yourself a hole.

Yeah, I'm like, I'm 21 with $20,000 in debt.

Okay. Basically, you dug a hole.

Yeah.

Now, as a parent, that sucks. And also, we had the conversation last night. Yes, I can fix it, but that doesn't solve anything for Christian. And we.

We had some long, emotional conversations last night.

And so here it is Sunday morning.

And we're just on our way to.

Home Depot and getting ready to shoot some stuff. And by the way, the dynamics of father and son working together. This is six weeks in the making. And I worked for my dad at.

Your age, and we're trying to navigate.

What that looks like, the difference between business and personal. And, you know, like, going back to Dave Ramsey is. I believe it's awesome.

And Wendy and I did it when.

We were early on, and we had a bunch of debt when we first got married, and we cut up our.

Credit cards and we paid off our.

Student loans, and we made a game out of it, and we were really excited to have that goal. And that was the only goal. And that's kind of what I was sharing with you last night was the only goal is to look at the debt and how we get it paid off before we start going into the next phase of things because that, that's the big drive. And so Dave Ramsey's theory is, you.

Know, you want to have some reserves.

You want to get your debt paid off, and you don't want to take your debt and buy interest rates, but you want to do the lowest debt you have, and that's where you put all your extra money to pay it off quicker. And then once you've paid that off, you apply all of that to the next debt in order to move through the debt. But what it does, which I love, what Dave Ramsey did, is he kind of made a game out and he, you got to see some small wins. So if you pay off a hundred dollar credit card, that's a win. Right now you've got a $500 credit card, it may take you two months to pay off. And then you get into your car where now you're taking the bottom debt, the next debt, and you're applying all that towards your car to get it paid off right now, early on in your life.

I think this is phenomenal.

I think it's a phenomenal way to do things. Now here's where I disagree with Dave Ramsey, especially on the housing side of things.

One, one of your goals last night was what you want to buy a.

Truck and a, and a house. And a house, right? So Dave would tell you you should.

Save 20% in this market.

So $400,000 house, you save 80 grand, how long is it going to take you to save 80 grand? You can't even quantify it.

No.

Okay, so what that does. If I told you, hey, you need to save 80 grand to buy your first house, that is a deflation of doing that. Now, Dave's theory behind that is when you put 20% down, number one, you're ready to do it. Number two, you're not paying mortgage insurance.

Right?

What's the. Here's, here's the problem with that. I want to give an example of if you went to 2018 and the prices in 2018 were $200,000, and you could have put 3% down, which was 6 grand, and your payment would have been at that time about 1200 bucks a month. Big difference, right?

You would have seen in six years.

You would have seen that house double in value. But if you had done what Dave Ramsey said and waited to save 20%, you would have missed $200,000 of value in that home. Right? And that's where I disagree. Like if you can afford it and you're paying rent versus a mortgage, then why not buy a house or partner with somebody or something of that nature? Because that is where you kind of start building assets and equity and things.

And, you know, add one more thing.

In here that, you know, I disagree wholeheartedly with. Rich Grant Cardone is he says that owning a house is a liability, which I agree with that part because we're spending money on it. It's not making money. But he also says that I would never own a primary home and that's not a good place to start.

The reality is it's the most inexpensive.

Way to start your real estate investing career.

So here's the example with you and Christian.

It's podcast, so ask questions.

I'm just letting you go because I don't have, like questions asked.

No, but I want you to ask, like, what, what it looks like. So if I were to take you.

For example, where you're at, here's the.

Plan I would put in place.

One, I want you to talk to a lender. Here's why we're going to talk to.

Andrew and we're going to go, okay, what would it take you to qualify to buy a home in this current market?

Right.

Now we know that your income probably.

Doesn'T match what needs to happen, but what it will do is give you an idea and a goal. So if by myself I would need.

To make X amount of money to.

Qualify for this house, can I partner.

With one of my friends that has the same amount of income and things.

To get us to buy something? Right. And now, now you've, you've made an investment with somebody and now you're living there. And potentially if it has two more bedrooms, you guys can both rent a bedroom out, collect income into that business. Right. That's the cheat code to getting four further fasters. By doing it with somebody, you have.

To determine which slob you want to live with.

Right. Because living with somebody, whether it's your spouse or roommate, it's kind of like a business arrangement. Yeah, right. You want to go into that knowing what did mom say last night? Expectation. Right, Right. So if you and Ethan set expectations, like, hey, dude, I think we should buy a house together. A four bedroom, you know, in this area. And I have X amount, I have X amount everything that goes into the house. 50, 50. Right. AC breaks 50, 50, rent comes in. It's a 50, 50 split after expenses. Right. Now what happens is you are building equity together and you have a little business. Well, as you guys do better or this is Creating income. Then you might say, hey, you know what? We should do this next next year again, right? Owner occupied. Small down payment.

Go do it again.

Now you have a house that has four roommates in it because you guys all have friends that are looking for places to live, right? They all know each other. Now you guys have to go in and set expectations with the four roommates, right? Here's the rules, here's the boundaries, here's the things. Here's the expectations. Right? You're gonna have a lease and all those things. Now, how can you do that if you don't have enough money or credit? The next step is can you partner with your parent. Right? Right. I already have multiple homes in mind for you to buy, hopefully with Chase for your first one. Think you live with your brother? He could kill each other.

I've lived with my brother for 21 years, and the fact that he still.

Can'T clean up his fucking clothes off.

The bathroom floor, floor.

Like, that's both of you.

Hang on a second, dude. I think since mom put that bathroom in our room, he's cleaned it once, and that's because I forced him to clean it.

No, he doesn't use the bathroom in the hallway.

No, we share that bathroom.

That's funny, because last time I used.

Those PLC well, he probably uses that one to piss in, But I know he uses use his arms to shower.

Right? Here's what I do know. There are some things that do happen when you go to live on your own is that you start to take pride. I'm on my own, and I want to do these things. And so things do change. Your cleanliness changes a little bit from living in mom and dad's house. And I honestly cannot wait for you and Chase to have your own homes because I'm totally going to shoot one of those videos that I come with up over and just destroy. Drink your milk, eat yourself, leave my all over the place especially. Yep, that's going to happen. That will be a future tik tok. So let's just go back to the debt thing, okay? For anybody out there listening to this, it's really important to understand that writing something down and having a plan that can be executed while having accountability. So we talked about accountability last night, Christian. What did you get out of that conversation?

The conversation that I've gotten out of accountability is that accountability isn't like me counting on you to come to me to fix my problems. It's more of a I've come to you with my problem, and my solution on how to fix it or we've come up with that solution together, and now I'm coming to you, checking in and basically giving you, like, progress reports of, like, you know what? This is how I'm doing right now. This is what I'm striving in. This is what I'm struggling with, like, what you're doing with your agents right now and just kind of like, giving a, like, well thought out, like, kind of baseline of like, where you're at. Where can you go from here? What could you use help with from here and just kind of like getting on that page of, like, understanding with each other about your goals and where you're trying to go from the spot that you feel stuck in.

Yeah. So that accountability process. And Christian, you're absolutely right. Once you got out of that conversation, is that what I've learned as a parent is that I can't give them. I can't give Christian the solution because it doesn't teach you anything. I need you to write it all down and say, okay, here's my plan, here's my goals. Help me structure this right. So then we can start asking questions to come up with a plan. That is your plan designed by you. Now you're accountable for that goal and that progress. Now, the accountability piece is this. We set the plan in motion. I will. I will help hold you accountable as long as you are doing the work, which means you have to check in with me and are stuck in striving. And, hey, I'm striving in these areas, which is bragging about yourself, what you accomplish in your finances. So if you're like, this week, I'm so excited. I paid off a credit card. Now stuff might be okay. I paid off my credit card. I need some guidance on the first step that we talked about because I'm a little confused. Right? So now I know where you're at here, and I also know what you need help with, and it's very easy to dial in that help on that one thing. Now if you come back to me in accountability, you're like, hey, I'm stuck in my finances. Where. How can you afford gas? Do you want a pizza? Can you do a date? Are you trying to buy a car? Like, where are you stuck? So you have to ask specific questions as to where you're stuck in order for your accountability partner to give you the wisdom that you're seeking. But it's too broad of a question or too broad of a statement to come back with any wisdom on it. That's also the conversation we had last night about more questions. I think on more questions, transitioning to this is really good because. Because last night, what was one of the things I was upset because over the last couple of years, you haven't come to me and said, here's where I'm at. This is what I'm doing now. Parents, listen to me. My kids grew up in a house of talking about finances, talking about money, owning a lot of real estate, been broke, can't afford it. All the things like we've been. The ups and downs, you've seen everything. But I was really surprised last night that you were almost embarrassed to ask for wisdom. Why? Because you had some answers last night as to why you wouldn't come and ask questions.

It's not even that I'm, like, embarrassed to ask for wisdom, but more that I, like, have a problem asking for help, especially when it's money related, because I was raised on the principle that if you want something, you need to work for it. And if you don't have the money for something, then why should you have that thing in the first place? You know? And so for me to have to come to my mom and dad and be like, I can't pay this bill this month, it seems like a lack of responsibility on my part because maybe I spent a little bit too much money, like, going and hanging out with my friends last month or on this side project that I was trying to do or whatever. And, you know, like, those things, like, I get embarrassed in my feeling that I'm not working hard enough to be able to enjoy the outside things and, like, be responsible enough to be, like, an adult. So why should I, like, come to you asking for money like a child would when I want to be treated like an adult?

Okay, I love that. Let me.

Let me give the example that I gave last night. And based on what you just said, so if you came to me and it's June, and you're like, I don't have enough money to pay my car payment, coming to me and saying, hey, I don't have money to pay my car payment, here's where I screwed up. Taylor and I went on a date. I spent a little more money than I should have, and I need a little wisdom on this. What do you think? Should I wait till my next paycheck and pay the late payment, or would you potentially loan the money until my next paycheck? I already know what I screwed up. I'm just asking for a little guidance of wisdom on this. And if you can help me with this. I would appreciate it. Here's my plan. Payback. That's way different than coming to me and saying, hey, I can't make my car payment this month. Can you help me out? Because then I have to ask all these, why can't you make car payment? Like, then it turns into conversation that doesn't end well. Christian, the main thing for you or anybody listening to understand is that if you're. If you have an ask, come with a solution, come with an idea. And just like we said, hey, I did this. I messed this up. I know where I went wrong. I need a little help. Do you have some wisdom on this? Now the conversation is different because you've come to me and said, I did mess this up. I need some guidance to put this back on track. You're not coming for a handout. That's the difference when you're coming for a handout. That's what makes the conversation shitty. And one of the things that is really, really important that we talked about last night was just my whole life from the time, you know, grandpa and I split our business, I learned that I was going to surround myself with really smart people, that I could ask a lot of questions, whether it's my finances, whether it's my business, whether it's whatever. So all these relationships I have, Christian, I ask questions all the time. All the time. I hate doing things by myself because I want somebody to help me see my blind spots. And when you do things on your own, you have blind spots. You can't see behind you. You can't see 100 miles in front of you. But by asking other people, you're going to seek that wisdom that helps you get you back on course. And it is. It is a life lesson that if you will learn at 21, you will save yourself a lot of pain and money. Got you.

What are, like, some of the things that, like, you and mom struggled with when you were my age that you were able to, like, get out of in the same. It's not in the same capacity, but it is kind of the same scenario that we talked about.

It's same capacity, different numbers, different time. Right. Some of the things that we went through don't apply to what you're going through, but they're the same. Same concept, same strategy to get out of it. It all works the same. So it's. It's an evergreen situation that no matter where you're at, it works. So our struggles were really.

When we got married, I was definitely.

Because I Was into cars. I would stretch myself to buy tools.

For my job, buy for my cars things I shouldn't have been doing.

Right.

And then we had bought a house.

Well, I bought a house when we first got married. Mom came with about, I don't know, 20 grand worth of student debt, a shitty car and some credit card debt. I had pretty much the same. But we also had a mortgage, right?

So we had two car payments, probably.

About 20 grand in credit card debt and another 30 or 40 grand in student loans.

Okay.

And we were probably making.

Because Wendy quit her corporate job to do real estate. So the first two years in real.

Estate, we were just broke because we, you know, a lot of in your position. I went and took a job with my dad, which was very low paying while I learned. So I was learning and earning and we struggle to get through it.

And my dad kept us broke enough to want more, but not enough money.

To like enjoy life. Like, dude, we used to have to ask for money for groceries every now and again because here was the structure.

We got paid $500 each a week, which was $4,000 a month, and we.

Got a tank of gas each a week.

That was it. So that was married couple with all our debt.

We were stretching it. And when we sold a house, we got a 10 bonus of the commission, which at that time the houses were about 100 to $200,000, which meant our commission checks were about 5 to $600 per deal. So it wasn't like we were getting rich.

Those were great bonuses. So what we had to do was.

Volume, which made us work harder.

So we had a base. But we had to learn that, hey, if we wanted to get to $10,000 a month between the two of us.

We had to sell 10 homes, right?

So if we sell 10 homes now, we're making $10,000 a month, right? What we didn't do at that time was go, oh well, if we sold 10 homes a month and we got a full commission, we'd be making 30 grand a month. We didn't have the knowledge, the experience or the guidance to do 10 sales.

A month without experimenting on people, right?

And so we chose to believe in the vision, believe in the business, and believe that my dad or my employer, my partner, we were going in a direction that I would eventually earn more money. But until I learned what I was doing, he wasn't going to allow me to move forward in income because it hinders your learning. So all of a sudden, real estate agents are really good like this. They make a Bunch of money. They spend a bunch of money and then they're broke. So, like, half the year they're broke, half the year they have money. So I. We had to change that. So our struggles were really getting into the discipline together, right. And being on the same page. And we made rules of engagement during.

That time, which is like, hey, if.

We'Re going to spend 25 bucks, we.

Have to have a phone call.

Seems like minimal right now, but 25.

Bucks was a lot 25 years ago when you're making 500 bucks a week.

So still a lot right now when you're making.

So here's what happens.

You asked about struggles. So at that age, it was definitely income to debt, right? We did it. We. We absolutely made those choices to put.

Ourselves in that position.

Once we took responsibility and said, we're going to get out of this, and we sat down together and we made a plan and we put it on the wall. We looked at it every week. What. What wins did we have this week? We paid $25 down on a credit card. It was a win, right? So we kept going through it, and we were really disciplined at home.

Like, we didn't eat out.

We didn't go to movies. Like, we. We really dialed it down. We just didn't do anything but work. So if you're in a time of your life, which we're talking about right now, where you feel behind, it's when you draw a line in the sand that I want to learn from this.

I don't want to go back, and I'm going to work my ass off to make this happen, which is a whatever it takes mindset.

But I also want you to see this. You're going to learn this now. You're going to learn some lessons, but then you're going to repeat a few of those pieces, right? And as long as you keep evolving and learning from every stage, you'll do.

It better next time.

It's never going to be perfect, and you're always going to be learning, especially in finances. You know, this last couple of years has been a struggle in the real estate business and our personal stuff. And we're behind on some things. Not behind as in, like we're behind on our payments and things like that, but from where we wanted to be.

We're behind.

So now I've looked back and said, well, I take responsibility for those things. And now I need to work my ass off, which, you know, I gave up a day in Months park because.

I need to work more.

This, this, this Summer. And we're. We're all grinding right now and going through the motions, and it feels. It's struggle. I don't want to say grind, because.

When you grind, you hate what you do.

When you struggle, you're going through the struggle because you know there's something better.

On the other side. Right.

And if you can just know that going through that struggle and going through the. That plan, that there's so much good on the other side.

There's so much learning in this.

That's the only goal in all this process, because it's never going to be perfect. You sat down. You're going to learn from this, and then you're going to move forward just like mom and I every time. So when we were having those struggles, we learned then we screwed it up, Right? Right. We got out of debt, but we screwed it up in 2006. Why did we screw it up in 2006? Because there was such a big vision in the companies that I wasn't aware of the pitfalls. Okay. Remember, I'm like 26. All these new businesses. We got a plumbing company, a painting company.

We're selling real estate.

We sold 800 homes that year like we were ballers.

Right. This could never end.

You know, we weren't doing. We weren't saving. We weren't investing. We weren't saving. We weren't doing anything. We were just spending money, credit card debts, and we were pouring all of our income and our credit back into the business to keep it afloat. And I knew better than to do that. So what do we learn the next time? Well, the next time we screwed it up was with seven zeros. So we went from $80,000 in debt to $1.2 million in debt five years later. Now, this is where we really learned, because I had to fight through that million dollars worth of personally guaranteed debt. And we did it. Four years it took us to pay off that debt. But we did it smart this time. I made sure we had reserve savings. I made sure we were paying debt off strategically. I was fighting with creditors. We were making sure that we never.

Had to go back there.

And so we learned from that.

We paid it all off.

We fixed it. What I did learn again was, okay, now we have savings.

Now I need to figure out how my income starts getting invested into assets.

So the assets are always there as cushions. I don't keep a lot of money in the bank. I keep a lot of money in assets.

Right.

So if you look at me on paper and in the bank, I Look, Yeah, but if you look at me on a net worth statement, it's much different. And that's. That's where it really truly is, is in your net worth and what your assets are.

Because those assets, they're working.

So in real estate, the assets are gaining value, they're being paid down. It's working. If I just have money in the bank, it's actually devaluing itself every day, especially in this economy.

Right.

So to finish this off, as you're going to sleep in the car.

To.

Finish this off, Parents, it's really important that you have structured conversations with your kids. It's also very important about finances and the little things. It's also very important that you let your kids fail a little bit and then pull them back to help them fix it. Because, Christian, I could have told you no credit card, no anything, and I could have kept my thumb on you.

A little bit more. But you needed to have this experience, right? Yes.

I could have kept you from it. What are you have learned anything?

No, no.

But we also know that it got to a point that there's. There's a way to fix it.

Right.

Before it's out of control. So even though you've gotten yourself in a little debt, you could have done.

It so much worse.

Like if I found out you had payday loans or other credit cards, you just kept doing it. This is a whole number of disaster. But I think you've learned enough from this. You may repeat it a little bit in the future, depending on how much money you're making. It's just as long as we learn.

Right.

And parents, make sure that you're setting this up.

Because the one thing that I told Christian before we had this conversation was.

I don't want you to have any guilt shame. I don't care what you did. I don't care what money you spent on. I care that you take responsibility for your actions. So we're not going into this with a parental discipline conversation. It's really more of a mentor mentee.

Conversation that Christian asked for.

And that is the important part of.

This, that I learned from the conversation.

Last night that I could have done more early on. And Christian's learning what to set expectations.

For the conversations that you're having.

Yeah.

And you're also learning to ask for help, seek wisdom, and go through those.

Without it being an embarrassment or you're needing something.

So thanks for joining in. Really appreciate a couple of things just to remind you of is that if you're looking for. For real estate, strategies. If you're looking to sell or buy a home, anything that has to do with real estate, you're looking for somebody.

To guide you through that, Hit me.

Up on my website, valentinegroupaz.com and go through that. There's a lot of great information there. If you're an agent looking for a new place to call home and you're in the process of exploring brokerages, teams, those types of things, let's have a conversation. Again, my website Go in there. Let's have a conversation about real brokerage.

And what it may do for your life in the future, as it's done for mine and many others that that.

I've attracted into the company. I appreciate you guys and I hope you join in next time. And if this provided some wisdom guidance, please share it and comment below.

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