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Action Academy | Millionaire Mentorship For Your Life & Business
Stop Playing SMALL: How to Reprogram the Beliefs You Inherited w / Rich Somers
01:10:08
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- [00:00]
A
And those stories that you're telling yourself about why you can't do things are mostly just reflections of your parents failures that were imparted into you. And it's not that your parents are malicious. It's not that they're evil. It's not that they're trying to make you fail. It's just they don't know any better. And they were. They're doing their best job at loving you for the most part. And they just don't have a playbook for the shit, you know? And they don't know that you can do anything because when you're a kid, do. We're all like, we could do anything. And it's just the external world that convinces us that we can't. And once you unplug yourself and unprogram yourself from that way of thinking, like you have and like I have and like people that are listening to this, you're in the process of it. Once you do it, you realize that the scariest thing that you can do, the number one way that you can fail, is creating a vision that's too small.
- [00:53]
B
All right, guys, welcome to another episode of the Report. Today I got someone who I've actually seen three times now in the last three weeks. I was just speaking at his event down in Cancun, the second time on a podcast, and he's coming to Tulum retreat. I got my man Brian Lubin back in the building. Let's go. Brian, how we feeling today?
- [01:11]
A
Feeling good, man. We're feeling international. Feeling international.
- [01:14]
B
You got a new girlfriend too?
- [01:16]
A
Got a new girlfriend. Wifed up. Wifed up. Plane tickets booked, man. We. Oh yeah, we booked him. Busy over here, man. I love it. It's a good time. We're blessed. We're abundant. Too blessed to be stressed, bro.
- [01:27]
B
And I cannot wait to meet her. Yeah, we did a little dinner last night at Anime. It was good to catch up. But I'm stoked that you're coming down Tulum. It's going to be a hell of event. You inspired me to throw our retreat down in Tulum. Just so you know. Let's go, man. We got some expectations, high expectations.
- [01:43]
A
But again, man, that's the, that's the point. Like, that's why I think the online course market is going to completely dry up over the next couple of years. I think all the money and everybody that knows what really what they're doing, like a smart, educated consumer, they're all going to go for the in person mastermind. I think like the entire market all of the economics for everything. It's going to go with more AI, with more virtual reality. I think we're actually going to make a shift back to more in person. So I think concerts, like in person events in person networking, in person meetups, and in person events in particular like this because it's like, it's the energy that you're getting while you're actually in the room. We've thrown five events and now we just. We're planning our sixth right now. And so it's not only the energy from being in person, but it's those hot tub conversations. It's those conversations at the bar. It's like somebody makes a comment, you're like, whoa. Like, what are you doing in your business? Is that just that interaction, man? It's that contact and then that's what gets the ideas going. That's what get the juices flowing.
- [02:39]
B
I agree, man. The in person stuff is where it's at. It's the networking opportunities, the partnership opportunities. And like, often, like, one good nugget will be $100,000 of value. Two good nuggets is $200,000 of value. The value you get at these events is insane. And I always say, surround yourself with winners. Quickest way to level up your life.
- [02:56]
A
Surround yourself winners. What's the, what's the quote that you said? Don't go off of your dreams. Go off of people who stop listening.
- [03:01]
B
To people closest to you. And often that's friends, family members, co workers, people that have never done the thing that you're looking to do, and start listening to people closest to your dreams.
- [03:08]
A
Boom. Don't listen to people closest to you. Listen to people closest to your dreams. Bar.
- [03:13]
B
Bars. So you mentioned before we started recording that you just paid the IRS $110,000 in quarterly business taxes. Bro, we got to get you some depreciation.
- [03:24]
A
You try to make me cry on this podcast, bro. Yeah, man, that was. My quarterly tax payment is 110k. So, I mean, for people that are in business, it's like talk about. We can talk about the differences between massive income and passive income. I think more people need to focus on massive income before the passive income, especially if you're making good money in corporate, which is like what I primarily do. So the four people that are brand new, they haven't heard me before, they haven't seen my face before. I'm kind of the quit your job, travel the world guy. Help people go from employee to entrepreneur. And so I was working a corporate job for four years, and I'M three years removed from that, running my own companies. And so it's a lot of people trying to passive income their way out of six figure salaries. And I'm like, bro, you got to build that massive income first through business acquisition and business building, and then you can start distributing funds into passive. But yeah, that is the downside of it is. Yeah, I mean, I got hit with the tax bill because I don't have any real estate right now. I'm not what you would label as a real estate professional. So when you do not have rep status, man, it's. It's a hard gang out here, you know, and so I'm paying, I'm in the highest tax bracket. Blessed to be there. It's first world problems. Champagne problems. Right. But putting the pain in champagne.
- [04:33]
B
Yes.
- [04:33]
A
Over here.
- [04:33]
B
Yes.
- [04:34]
A
But yeah, man, it's. So we're paying high, high six figures. Going to be up into seven figures in taxes now. There's some strategies that we can use to obviously remove that and reduce that. And we can also talk about the advantages of actually showing taxable income. So we could take it whatever direction you want to take it.
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B
Yeah. One thing I'd like to, you know, double down on is, as you said, a lot of people try to exit their 9 to 5 corporate America through passive income.
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A
Yeah.
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B
And I was the same way. You see, like, bigger pockets, pushing a lot of stuff. It's like, hey, like, buy some real estate deals. All you need is $10,000 of passive income. You can replace your salary, you're good. Go live on the beach. Well, a couple of things here. For one, happiness stems from growth and progress. And so if you think that you're going to be in your 30s, 40s, early 50s, and you're just going to go retire and sit on the beach, life's going to get boring pretty damn quick. I always got to be building something, so I don't think I'm ever going to retire.
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A
One of my favorite quotes is, I don't want to go to heaven well rested. Mm. It's like hell on earth would be the main. To meet the man that I could have been.
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B
Mm. That's so good. That's so good.
- [05:34]
A
Yeah, to your point, man, it's like we're here to work now. The point isn't to stop working. So people are working these jobs that they hate with people that they don't like and bosses they don't respect, and they think the point of the game is to quit. No, the game is not to quit. Working hard, the Game is to replace work that you're forced to do with work that you choose to do.
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B
Yes.
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A
That's the game.
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B
Yes. To have the option to work or not work. That's the game.
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A
Yeah.
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B
And it's a good spot to be in because once you hit that, then you can strategically make moves that you want to personally make. You're not trading your time for money and doing all this other stuff. Now the, the second part of your point is there's some strategies behind ways to offset if you are not a professional real estate status individual. And I'm not a tax strategist, I'm not a cpa, so definitely do your own research. Now this is just how I understand it. But you have the STR loophole. Right. And then you also got the hotel loophole, which no one talks about, but the hotel game.
- [06:30]
A
Similar.
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B
Very similar. And you, you're actually developing a hotel.
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A
Yeah. For that reason.
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B
Yep. With Ben Wolf, by the way, Ben Wolf and yourself are both gonna be speaking down at swim event. Very excited for it. I saw some renderings of your guys project. It looks absolutely phenomenal out there in Miami. South of Miami. Right. But anyways, that, that is one strategy. You're going to be a GP on that deal. So you will have that play. Now for someone listening, this is like, dude, you could go buy a million dollar hotel, get seller financing, put little to no money down and then you can get a cost seg study and use the depreciation to offset not just the cash flow that hotel spits off, but also use it to offset active income that you have even though you don't qualify as professional real estate status in the eyes of the irs.
- [07:11]
A
Correct. And that's where we're getting like for my deal personally. So for people that are listening, I built four businesses. Bought four businesses. So like my thing is buying small businesses. So our cash flows through the freaking roof right now. And I actually tell people, when you're trying to decide what do you want to invest in, do you want to invest in hotels, small businesses, mobile home parks, whatever. You have to decide if you're optimizing for equity first or if you're optimizing for cash flow. Super important question nobody asks but like if you want cash flow, which means you want to get out of your job asap, like you need to invest in a completely different way. Um, so like I said, I buy cash flow and I've bought cash flow over the last three years. And so the pros and cons. Now the issue with my hotel though is that we're building it. So until it's activated, we can't take the accelerated bonus depreciation. But in 2027 we're going to take millions of dollars of depreciation. We're going to front load all of it. But for right now as we're just horizontal because it's modular, so we're at horizontal forever and then, and then we're eventually going to build up. That is one of the benefits to your point of buying an already pre existing hotel because you can come in and accelerate the depreciation on the bones of that day one. So I mean, and that's why that's, that would be a benefit of investing in a fund like yours.
- [08:18]
B
Yeah, yeah. I think a lot of people get into real estate because of the cash flow. But if you talk to wealthy people, real estate's about debt and taxes and understanding debt and taxes and then the long term appreciation gain that comes from holding real estate long term. Right. And so you know, I think early on, obviously everyone wants a little bit of cash flow because it gets them out of the day job. But appreciation is where the true wealth is built. Thatch talks about this all the time. Grant Cardone talks about this all the time. Like appreciation and investing and holding in high growth markets where real estate tends to double every 10, 12 years like clockwork is, is the game where a lot of people play.
- [08:55]
A
Yeah, cash flow gets you freedom, but so like business gets you freedom and then real estate gets you wealth. So if you want to get rich, do business, focus on business. If you want to get wealthy, real estate bonus points. If you have a real estate business. Right. So now you get all the benefits. So that's what like you guys, you're able to charge lower fees and do have more control because you have a property management company, a business that's within your real estate. So you get to be a real estate professional while also being a business owner. A huge thing that I've seen I've interviewed over frickin right now I have a seven figure net worth, mid seven figures, I'll be at eight figure 2026, 2027. But from the 500 plus multimillionaires and billionaires that I've interviewed, all of them kind of say the same thing, which is, you know, you want to focus on like you have to figure out what game you're playing. Like the rich versus wealthy. If you're a seven figure guy or girl, you're thinking like an investor. If you're an eight figure Guy or girl, you're thinking like a business owner. Huge distinction. Because investing is, how do I. How do I passively deploy capital that will make a return without my involvement? An ownership, like, business owner thinks, how can I force appreciation, whether in a business, a piece of real estate, or a large commercial project? So it's, it's. You're thinking about things more strategically and systematically. So, like, when you go into a deal, you're not like, oh, I'm going to passively invest money into these hotels you're going in and saying, hey, where can I force $1 million of equity? And you have some really cool ways that you guys are using AI and different things in order to be able to take that owner suite, convert it into noi, and all of a sudden, you're forcing equity. That's an ownership decision, not an investing decision. Huge distinction. And if people just change the hat that they're wearing, they can flip their net worth, like, within two to three years.
- [10:40]
B
What is the Freedom Framework?
- [10:42]
A
Freedom Framework, man. So this is actually something that I've spent $545,000 working on across the last three years, from investing in coaches, courses, masterminds, basically all of the above. And I've kind of condensed everything down into one thing, which is we're sold. This kind of, I would say, lie. That acquisition, like, acquisition is going to get you freedom. Like buying hotels, buying businesses, buying real estate is going to get you freedom. And like, we all say that too. Like, I have a community that does this, you have a community that does this. But the difference is that we know where true freedom lies, which is in the ownership, in the management of said assets. So everybody's talking about part one of the game. But there's three parts to the formula. Everybody's only talking about part one, which is acquisition, acquisitions, part one, Acclimation is part two, and architecture is part three. So if you view all of real estate, like business, your life will be substantially better. And here's how the Freedom Framework works. So acquisition is number one. You're going to look at deals, you're going to underwrite deals, you're going to submit offers. Lois. And you're going to get under contract, normally with real estate and with business. Look at 100 deals, fully underwrite 10, fully underwrite 20 to 30, submit 10 offers, hopefully you get one accepted. Now, that's subjective. It's just ballpark numbers. Good rule of thumb to start with, right? So that's the acquisition game. Pretty simple numbers and metrics. Acclamation is. Congratulations. The Other is accepted. You just got to the closing table and now you own the asset. You just took ownership of the hotel, you just took ownership of the business, took ownership of the multifamily property. Right. Anybody that's a substantial multifamily or commercial real estate operator will tell you that the money's in the operations, not in the buy. The safety is in the buy because you have enough of a margin, right? A delta between market rate and where you're buying it below market. But it's the operations that actually drive the value and the appreciation. So acclimation is, now I've got the asset. How do I go from thinking like an employee or thinking like an investor to now thinking like a business owner? So it's the mental parts, and when it comes to small business acquisition, it's also the emotional parts where you're going to think like an operator, where when you were an employee, you were trained your entire life. More work equals more money. But as a business owner, that doesn't ring true. You actually have to remove yourself and delegate and elevate other people to go take over the business for you. And that's where you have passivity that were sold as business owners. That is architecture. So think of architecture in a house. You've got like, the walls, you have the scaffolding, you have, you have the bones of the house. Those are your meeting cadences. So you use eos. Yeah, so it's L10s for us, where we have one weekly large level 10 meeting with all of our operations and leadership staff. And then you have your rocks, which are your key deliverables for each employee. And you have a chest to poke and a throat to choke for each employee. So you're building your meeting cadences, your org chart for today for three years, for five years. These are all parts of architecture. So to wrap this all up with a bow, acquisition is part one. You buy the asset. Acclamation is part two. You go from employee to actually an owner of the asset. And architecture is all the different systems, processes and people that you design to build to where you guys have a fully functioning asset that runs without you. And that is so much more of a different skill set than somebody just calling brokers and analyzing deals. This is a leadership conversation. And it is just night and day, completely different. And we crash and burn on some of the businesses we bought because we didn't have those last two parts. And we're like, oh, shit, why are our operators crashing and burning right now? It's because they didn't understand how to lead. And that was completely on me. That was my fault. And that's again, as a business owner, everything is your fault. Like, all the stuff that's wrong and all the stuff that's right is all your fault. But I like to say it's a cash and credit business. Like, I'll take the cash, give all the good credit to everyone else, you know, so when your team so good rule of thumb for business owners, like, and subscribe to this freaking podcast if you guys haven't already been riches. If something goes wrong in your business, my brother and sister in Christ, that is your fault. You do not blame your team. That is your fault. You either did not communicate something properly or you didn't educate or inform or train your team well enough to get the job done. If everything goes right, none of that's your fault. All of that goes. All that credit goes to your team. And then you elevate your team. You wow. You say wow, Ashley, Eric, John, you freaking crushed it. Caitlin, you crushed this.
- [15:06]
B
Yeah.
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A
If you just do that as a business owner, you're ahead of 90% of business owners.
- [15:10]
B
Yeah, I agree with you. I mean, it's. And it feels good to take responsibility even if it's not 100% on you. I always love saying, hey, guys, like, that's on me. I need to get better. Because ultimately, at the end of the day, it is on you. Even if you hired someone, made the.
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A
Hire, you set the process.
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B
Yeah. If you hired someone that hired someone that hired someone, and you didn't even have anything to do with that someone, it's still on you. It's your company, it's your responsibility. And. And so, yeah, it does feel good because it puts you in control of the future. Assuming that you take responsibility now, what are the other business owners do? What do the other people do that deflect? Oh, it's not on me. It's not on me. Well, if it's not on you and it's everyone else's fault, then that means you have no control of decision making. You have no control of where your company's going full. And that's not a good spot to.
- [15:49]
A
Be in full offense. Full offense to the business owners listening that fall into that camp. That's. That's a bitch way of thinking. Like, you cannot think like that. If you have. If. And I'll make a statement here that I fully, wholeheartedly believe and I think that the true business owners and operators will agree with me. If you are an individual that places blame externally and not internally, you're never going to make it in business. You have to put everything on you, on your shoulders, on you. If you're blaming the economics, if you're blaming the economy, the politicians, the, the market, you know, your employees, the, your competitors, and you don't do anything about it, my brother in Christ, go get a job. You do not deserve to be in charge. You are. The reason that you get the big bucks is because you are the person that's going to lead in the battle, burn the boats and say, okay, cool. Like, this sucks right now. Like, everyone in commercial real estate right now, for the most part, this sucks right now. Like, interest rates are fricking insane. Um, like all this stuff is really insane. We know good operators that are in bad situations right now, and it sucks. But it's not about your resources, it's about your resourcefulness. So it's like, okay, cool. I'm not going to blame the, the Jerome Powell or them for adjusting the interest rates. I'm going to go figure out how to get out of that. And that's my responsibility, period.
- [17:04]
B
Yeah, you're not a victim of your circumstances, not a victim of your.
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A
Dude.
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B
If you're a product of your decisions.
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A
If you're a victim, like, go, go get a job.
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B
Mm, that's so good. You talk about state story and strategy. Yeah. Break that down.
- [17:18]
A
So this is for anybody that's stuck in their personal lives or in their businesses. So this applies to a business owner that's running a multi million dollar company, the same as it applies to somebody that is trying to lose weight for the summer. So if you're stuck on a problem, this is how you solve it. So what everyone does is again, you, you jump a step. So you jump to strategy first to fix it. So in business, you're like, okay, what's the hire that I need to make? What's the strategy that I need to do? And then a weight loss is like, okay, you know, what's the gym workout that I need to do? What's the diet I need to go on? But what people don't do is if that were only so to rephrase, if that was the only answer. Like, we have chatbots, we have AI, we have Google. Everyone would accomplish every goal like that. But people aren't. And so why. And it's because their state and their story is wrong. So this is from Tony Robbins. I took this from him. And now since I've applied this into my business for people that are like, oh, this is woo. Woo. I'm not going to do it. I increased my business 600% 6x since applying this strategy. And so if anybody thinks it's woo, they can go kick rocks, take a long walk off a short pier. All right. This stuff works. And it is 80% of the struggle that people don't realize. So what are, what is state, what is story? So your state is how you are physically. It's how you show up in the world. So if you have a good state, somebody that has a good state, shoulders are back, they're up, they're confident, they're ready to go, they're projecting. Like they have an air of certainty about them physically versus somebody that's just like really uncertain. They're really stressed out and they're always kind of hunched over and talking like this and they're not really certain of anything. So it's a physical state that you can control. And so for me, whenever I'm really stressed out, pissed off, or sleep deprived, that is not the state that I'm going to be in to make a decision for my business. I have to get into a different state. So it's always state before strategy, always state before strategy.
- [19:12]
B
Now to take it a step further. I think as an entrepreneur, you know, if you're really in the game, you're putting out multiple fires every single day. And definitely throughout the week, there's multiple fires to put out. And one thing that you have to learn is take the emotion out of it.
- [19:25]
A
Yep.
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B
And you have to be able to walk out of a meeting and dissect some, maybe bad news or a fire that's going on, and then show, show.
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A
The fuck up back in the meeting.
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B
Jump right into another meeting where we might be having a podcast conversation. I gotta be able to shut that out and be present, have good energy, have high energy and high frequency and be a completely different version of myself. Even though I got all this other stuff going on in the other room.
- [19:46]
A
Exactly. Which proves it's a muscle.
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B
Yes.
- [19:48]
A
Some muscle that can be built. And I don't care if you're an introvert or an extrovert. I have introverts that can do this. It's just a decision. It's like you go lift away at the gym. It's the same thing with controlling your state. Your state controls your fate. So tactically, what does that mean? So whenever I'm really stressed out or pissed off and I'm stuck on a problem, I realize, bro, I gotta go out and I gotta get a walk in. I gotta get Some sunlight, I gotta drink my water. Stupid simple stuff like that. Or if you have the ability to, and you have the privilege to, I control my physical location. So whether that's going to a certain coffee shop where I'm like, this is my spot, or if that's traveling for me to certain areas, I'm like, this is where I get my inspiration. Like, for me, I get my inspiration in the mountains. So your state is how you're physically showing up in the world. So that is, that's where you start. Story is what you tell yourself. So the biggest lie, the biggest liar that you're ever going to meet is the person that you look in the mirror. Biggest liar that you're ever going to meet is the person that you're staring at in the mirror.
- [20:42]
B
Why do you say that?
- [20:43]
A
Because think of your brain as a computer. You have hardware and software. So the hardware is the actual computer. The software is what kind of operating system you're running on it. Most of us are running software that was downloaded onto us and into us by other people growing up. And we've never updated the software consciously. So if you haven't updated your software consciously, you're running your parents or your friends or the people that you grew up with like that their software. So how this shows up tactically and to land the plan on story is when you have stories. Like stories are all the reasons that you're telling yourself why you can or you can't do something. And if you tell yourself why you can or why you can't, you're both are true, both are correct. And you're going to convince yourself of why, why you believe that, because you're always going to find evidence for the story that you choose to believe. So you, for instance, you spent decades in air traffic control telling yourself a story that like real estate and all this stuff was for other people. And like, I did the same thing, or I told myself a story, it's going to take me 10 years to leave corporate America. But then I had somebody come and just replace that story with, why don't you do it in six months? And just that story and that state change allowed me to actually find the strategy to pull it off. So your stories, you can control what's happening. I'll give you a prime example. Just happened last September 2024. I almost didn't make payroll on my company. Our revenue dropped 40%. And I could make every excuse in the book about why that happened. People are coming back to school, people are before the holidays. The economy is tightening all these different things this year, this September. I said that I don't care if this has historically been a bad month for us. Come hell or high water, we will do what's required to have the best month in our company history. And now I'm sitting here the last day of September and we 4x'd what we did last year. So we are at the best month in the company history today as I'm sitting here doing this podcast because I changed my state and I changed the story I told myself, which then leads to the strategy. So strategy, for the most part is way simpler than we anticipate. And it's, it's like the really blocking and tackling that we're just not seeing because of the stories that we're telling ourselves. And so the strategy for me is, oh, I'm just going to host webinars. I'm going to hire a sales team. I'm going to hire an Instagram DM setter. Stupid simple strategies, not rocket science. But because I had a story that nobody can do sales, like I can, nobody can message in my DMs, like, that'd be scammy. And also that September was a bad month. Those are three stories I told myself. And when I changed the stories I was telling myself, I literally forex my income.
- [23:19]
B
That's so good, dude.
- [23:20]
A
State story strategy. So do your state first look, analyze the stories that you're telling yourself. Does this serve me? And is this helpful? And then you'll be able to focus on the strategy. The strategy will come to you instantly.
- [23:32]
B
To your example about the limiting belief you had when you were working in corporate America. You thought it would take you 10 years to exit. And someone said, let's just flip it to a six month game plan.
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A
It was just a new story.
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B
Six months. One thing that I'll say on that is, you know, sometimes when you're making a decision, you got to ask yourself, does it feel heavy or does it feel light? When, when I think of a long time horizon, there's. There's no feedback loop. And so when I think of something taking 10 years, that actually kind of feels heavy to me. But when I, when I think of like, okay, we're going to figure this out in six months, that actually feels light and easy to me because I'm like, it's exciting now. I get excited, I get new energy about it. So it's like, yeah, let's do it quick.
- [24:09]
A
Yeah, bro. It's called, it's called Parkinson's law. It's like the most powerful law that exists.
- [24:13]
B
What is Parkinson's Law? So Parkinson's law say.
- [24:16]
A
Yeah, so Parkinson's law is. Work will expand to fill the time allotted for its completion. Work will expand to fill the time allotted for its completion. So think back to when you were in college and you had the entire semester to do a final exam or a final project. You're going to condense all of that into the last week, right?
- [24:32]
B
Yes.
- [24:33]
A
And you're going to figure out a way to make it happen. Um, you're. You had your mold that was happening in one of your hotels that you were about to buy at the last minute. You're like, shit, we got like a week to figure this out. You made it happen. So the what rich people do and what wealthy people do, that's such a stupid, simple hack that normal people can do and instantly like 10x their net worth. Seriously, it's just shorten the time frame that you allow yourself to accomplish a goal. If you give yourself six months instead of six years to do the same thing, the same outcome, nine times out of 10, you'll actually hit that outcome. Do you have any experiences? Because I can name a million experiences like that where I'm like, okay, instead of doing like 10 million in 10 years, why don't we do it in three years? And now we have the plan and the path to hit 10 million next year in three years. I've done it over and over and over again. I can name thousands of people that have done as that showed up in your life.
- [25:23]
B
Yeah, I mean, I would say one of the recent opportunities where this had happened for us is most of these commercial real estate deals that you buy. Hotel, big multifamily deal. It's gonna take 60 to 90 days from. From start of the PSA to, you know, raising private capital, securing debt, lending, doing all your due diligence. Typical due diligence in 30 days.
- [25:42]
A
That's after the LOI, except. Yeah, yeah.
- [25:44]
B
And then, and then, and then closing. It's 60 to 90 days. Right. And so with our last hotel that we closed, this is in San Clemente, off market opportunity. And I knew, hey, like, we know the due diligence here with this property. We know the location very well. Let's move really quick and let's try to close this thing really fast. Because I know that throughout the rest of the year, there's going to be some buyers that might be in some situations to where they want to go out and come out of these deals. And so if we can Say, hey, we closed our last deal in 30 days. Guess what? We're more likely to be awarded a good opportunity over another buyer. That might take 60 days, 90 days, and that sort of thing. Because when these buyers want or these sellers want to get out, they're typically in distress, and they want to get out quickly, and we're solving a problem. Right. And so I said, let's. Let's try to close this thing in inside 30 days. And we ended up closing it. I want to say it was like, 33 days.
- [26:35]
A
Yeah.
- [26:35]
B
Which is pretty crazy. And so now I can go to the marketplace with other brokers and other sellers and say, hey, we closed our last hotel in 33 days.
- [26:43]
A
Yep.
- [26:44]
B
We can do the same thing for you.
- [26:45]
A
Yeah.
- [26:45]
B
That builds a lot of trust.
- [26:46]
A
State it came from a state of absolute confidence and certainty. Story is like, okay, this is something that takes three months to do. I'm gonna do it in 30 days. Change the story. Strategy came to you.
- [26:56]
B
You're like, let's execute happen 100%.
- [26:59]
A
Yeah. So if people just applied Parkinson's Law, like, I'm serious. Like, just take whatever goal that you're wanting to do and just shorten it, like, even in half, and you'll. You'll hit it. It's crazy.
- [27:09]
B
Yeah.
- [27:09]
A
Yeah. I mean, Brandon Turner, who I introduced you to, over that was speaking with me.
- [27:13]
B
That was so cool. I got to meet him, by the way, because he. He was so influential. So influential in my start in my path. And we're talking about Brandon Turner of Bigger Pockets. I listened to the Bigger Pockets podcast in 2019, like, literally binge listened to it. I remember working my. My air traffic control job, and I was just the reason. I love the podcast because it was like, all nine to five corporate America, people that use real estate as a escape to their nine to five. And a lot of them built this really big thing, and I was like, damn, I can do it. Yeah, exactly. Like, it makes it actually achievable and attainable. And so I was like, damn, this is so cool. And so to meet him first time at your event, to have everything go full circle, that was really cool.
- [27:53]
A
Yeah, man. And he went from, I want to do $100 million in deals in three years, so I want to do a billion dollars in deals in three years. Again, Parkinson's law, he was able to condense it, and he did it, pulled it off. But yeah, man, the cool thing about podcasts like that, and it goes back to the events that we're talking about in the very Beginning. I'm curious to hear your experience on this, but my experience from meeting people in person, every single insanely wealthy person that I've met, especially at a mastermind or an in person event, the biggest takeaway wasn't something that they said. It was just me changing the story. I was telling myself because I saw somebody else where I'm like, you are for sure smarter than me and more experienced than me, but you're not like a hundred times smarter than me. You're not even 10 times smarter than me. I could figure this out too. And you see kind of your idols and you're like, oh, like you're a smart guy or a smart woman, but, like, you're not, like, special, but you're worth hundreds of millions of dollars. So now you give yourself permission to be like, if they can do it, I can do it. And that's what was so cool about the podcast, because you're just hearing up and down the street people, and when you meet them, because everyone has this story again, that people that are significantly wealthier than them are significantly smarter than them, are.
- [29:05]
B
Are cut from a different cloth.
- [29:06]
A
They're not.
- [29:06]
B
They're in a different. They're not stratosphere.
- [29:09]
A
Yeah.
- [29:09]
B
It's like, no, no, no. These are all just everyday people. And to be honest with you, like, some of the most successful people are also the. The least educated and the most naive because they had nothing to lose.
- [29:18]
A
Yeah. What's been, in your experience, what's been the singular trait that you found to lead to success in entrepreneurship?
- [29:25]
B
Easy. Taking action, regardless of feeling not ready, not prepared, and not feeling like you're. You're worth it.
- [29:32]
A
Yeah.
- [29:32]
B
I like just taking action anyways. Like, most people don't know what they're doing. That's just the truth. And it's like, we're all shooting from the hip. We're all figuring things out. The timing is never going to feel right to get started. But the only thing that separates you and all these people that figure it out, Jeff Bezos, Elon Musk, Mark Cuban, the list goes on and on. The only thing that separates you and them is those folks took action regardless of not feeling ready.
- [29:54]
A
Yep. And I would even add to that that the one trait that I found to be true is the ability to maintain focus through intense pain.
- [30:02]
B
Mm.
- [30:02]
A
You can endure long amounts of discomfort and still maintain singular focus.
- [30:08]
B
That's really good.
- [30:09]
A
You don't get distracted. You're just locked in on your one thing, and then you're able to branch off from that. But you can get kicked in the dick over and over and over and over again. And you're just like, please, sir, I may have some more. Like, that's entrepreneurship, dude.
- [30:21]
B
I always say life gets uncomfortable before the level up. And often I think most people give up when things get uncomfortable. There's a little bit of friction, There's a bit of tension. The thing that they wanted to do is take a little bit longer than they thought, and it wasn't as easy as they once thought. And it's not exciting anymore. Right. And then that's when they give up and they go, try that next thing.
- [30:41]
A
Yeah.
- [30:41]
B
But it's like, no, no, no. Like, when things get uncomfortable, like, that's where you go hard in the pain because. Because you got to lean in and know, hey, the breakthrough is coming.
- [30:48]
A
Yeah. I've got such a random quote for that. This is going to sound like so out of left field, but it applies here. So I heard this quote that was. Everyone says that marriage is so hard, but they said that. Then one of my mentors was like, marriage isn't hard. Life is hard. And then people are saying that marriage is hard because they're experiencing life with the wrong person. And when you just place that blame of this is hard or easy on life itself, and then you realize, okay, cool, life is hard. Regardless, I'm not going to label marriage as hard. I'm going to label life as hard. And then now I'm going to be really intentional about picking my partner that I'm going on this with. And that could apply to marriage. It could apply to business where you're like, this is going to be hard, dude. We're not escaping hard. We can choose which harder that we're facing towards, but we can't escape hard. So you choose your. Your partner, your spouse, your business partner as somebody that you're like, I can do hard with you for decades. Like, that's a good litmus test to decide who you want to partner with.
- [31:44]
B
That's really good.
- [31:44]
A
Yeah. Not like, oh, how are we going to split the profit? Like, that's easy. Easy conversation. It's like, okay, cool. Like, can. Can I lose everything with you and build it back?
- [31:54]
B
That's really good. So most partnerships in business don't work out.
- [31:58]
A
Most they're. Because they're terribly creative.
- [32:01]
B
Oscar, do me a favor. Google, what percentage of business partnerships in the US fail within the first 10 years? I think the numbers. The number is actually more than 80.
- [32:10]
A
Yeah. Especially it's worse than divorce and.
- [32:13]
B
And drop it in the microphone. When, when you get that for us, I'm curious, but it's worse than divorce rate. What do you look at when deciding to partner with someone in business?
- [32:23]
A
Man, this is a million dollar conversation. This is a hundred million dollar conversation. So I'm blessed to have some wonderful partners. And you cannot scale without partners. Like, you need partners to actually do this thing. Big. Did you get the stat? Over 50 to 70% of partnerships end unsuccessfully. So about 70% in the first 10 years. Okay, yeah, so we'll say about 70% of business partnerships fail. So what have I done and how do I view partnerships? So the first and foremost thing that you're looking for and the reasons that people mess up in business partnerships is they, they partner with somebody that's like them. Like, you know em, you like them, you like hanging out with them. That's not the person that you necessarily partner with. Has to be somebody with complimentary skill sets. If two of you are doing the one thing one of you isn't needed, it's gonna cause so much discomfort and disarray. Um, so I'm really good at sales and marketing. I'm not partnering with a sales and marketing guy or girl. Partnering with like an operations and analytical guy or girl. Number two is shared vision. Are you going in the same direction? And do you guys, I mean, you can go about it in different ways, but are you heading in the same direction? Number three is something that you actually said at our event, and I absolutely effing love this, which is your risk appetite. Do you have the same appetite for risk? Because if you want to build a hundred million dollar thing and somebody else wants to build a $5 million thing, same company, your risk appetite is going to be completely separate. So now your, your vision's not aligned and your risk appetite's not aligned. And lastly, I mean, you want somebody that is high integrity. High agency.
- [33:53]
B
What does that mean?
- [33:54]
A
So high integrity is like, do you have a high, say, do ratio when, when the lights are off and nobody's home? Like, what do you do when nobody's looking? And high agency is how. How fast is that. That discrepancy of time between thought and action? So do you need to be managed and told what to do, or are you somebody that gets the idea and you're like, all right, like, I'm gonna go figure this out. I just got this idea. I'll talk to you in two days. High agency.
- [34:19]
B
That's really good.
- [34:20]
A
High agency, high integrity, shared vision, aligned vision, and a relatively similar risk appetite. Yeah, is What I would use. Yo, what's up, guys? One sec. You're listening to a podcast right now, and I freaking love that. But this is not making you more money. What makes you more money, more wealth, more equity, is being in the room with the people that you're hearing on today's episode. If you want to be around hundreds of other people like you leaving corporate America, doing big deals in business, commercial real estate, and land, check out actionacademy.com, go in the show, link the show description, and click the link to book a call with our membership director team. We'll give you the resources, the connections, and the community to actually pull off the stuff that you're learning about on this podcast, and we'll hold you accountable to the actual implementation of the information that is actionacademy.com now let's get back to today's episode.
- [35:16]
B
The risk tolerance. Not a lot of people talk about, and. And I. I think that one of the reasons why we. We both. We both agree on this is, you know, partnering with someone that has a similar level of risk tolerance. Why this is important is because I had. I had two partners that I worked air traffic control with. We all cashed out our 401ks, we got into real estate, started buying real estate. We still own a couple of deals together. Love the guys. I'm friends with them, but I had a very tough conversation in 2022, and I decided to go on my own. And that's when I started Summer's Capital. I said, you guys keep the podcast. I'm gonna start my own. And it was tough conversation, but the reason that partnership did not work out is because their level of risk tolerance was very, very, very low. And in this game, if you want to build a big thing, and I want to build a big thing, you have to be okay taking and moving and taking action, not having all the answers to get from step A to step B or from point one to. To point two, you're not going to have all the answers. If you have all the answers and every single decision you make, it is no longer an opportunity. The opportunity is. Is gone. And so entrepreneurship is really taking actions and operating without knowing all the answers and having all the solutions and more importantly, having the confidence in the wherewithal that when shit hits the fan, and by the way, shit's going to hit the fan, that you have the resources, the wherewithal, and the ability to go figure out the solution, to push through. And that's really what it is, right? Like, we're Shooting from the hip. We don't have the answers everything. But I know when shit hits the fan, we can figure it out.
- [36:45]
A
Yeah. Can I give people $1 billion piece of operating advice partnership? I got this one from Gary Keller, the founder and previous CEO of Keller Williams Realty. Multiple billionaire found a billion dollar company and he said that operating agreements should not be called agreements, they should be called disagreements. Because the only reason that you're going to be looking at that son of a bitch is because you're fighting.
- [37:07]
B
That's the truth, bro.
- [37:08]
A
And so when people are doing their operating agreements, which is one of the single most important documents and where you will lose millions and millions of dollars by doing it poorly, which most people do it poorly. So if we already are going into business knowing that 70% of this shit is not going to work out from partnership perspective, then it's on us to take responsibility and put all that in the operating agreement to make sure that when we are fighting terms are covered. So everyone puts in their operating agreement. Here's how we're going to split the profit. Here's our GP split, here's our LP split. Here's all this good fun stuff, right? You're talking about cash flow and revenue and equity. You're not talking about what happens if you just decide to not work anymore. How do I buy you out of the company and at what present day value am I purchasing you out of this company? This will save people millions of dollars if they freaking listen to this part of the show. If somebody's brand new getting started, this will save you a headache down the road. If somebody's listening to this and they have $100 million company like Review, like re, re. Review your, your operating docs. Because what people don't do is they don't put in like the language of okay, these are my roles and responsibilities. Here's partner B's roles and responsibilities and partner C. If partner B or partner C were to not fulfill these roles or responsibilities, here is how they're getting bought out. Here's the value that they're getting bought out at and here's the financing method that they're getting bought out at. All three of these things need to be in your operating agreement because if not, then they can come and ask for a lump sum. They can. That's the difference between lump sum and seller financing where you could pay them out on a term basis that could bankrupt your company. Right there I have a friend. And then the valuation as well, because I had a friend that 50, 50 partners on buying a small business. Happens every single day up and down the street in America, millions of people are in partnerships.
- [38:58]
B
Real estate too.
- [38:59]
A
Real estate too. He just partnered with a guy because they know, like, knew, liked and trusted him that he knew for years. And then, you know, three years deep into the business, they doubled the value of the business. And this guy said, you know what, I don't feel like working anymore. I'm just going to sit off in the beach and I'm going to let you do all the work and I'm going to collect my paychecks. And he goes, no, dude, screw you, you're out of here. And he goes, okay, cool. They bought it at a 3x multiple of profit. When they purchased the business, this guy said, okay, cool. Now where we're at, I want a 6x multiple of profit. And they didn't have any language in their operating agreement at what multiple of profit that somebody get bought out in the future. And so now this guy's cool sitting drawn out legal fees because he knows he's going to get paid out millions of dollars that for doing nothing. And the longer he waits, the more money he's going to make. And that will be your reality if you do not put that in your operating freaking agreement. And so you're putting, this is how you get paid out at this, at this rate, at these terms. And so we're on the same page. Everyone signs the line that is dotted and you are good to go for the next decade.
- [40:00]
B
Mm, that's really good, dude. Um, you're right, because like you said, we just looked it up. 70% of business partnerships fail. And so how are you guys going to walk separate ways? Because if it's not in the operating agreement, these conversations back and forth can go on for months, years.
- [40:17]
A
Yeah.
- [40:18]
B
And maybe you never come to an agreement. And then expensive legal fees and all the headache. It's just not a good look. It's not a good look. Um, so to circle back to what I was saying is like with my partners that I left in 2022, the reason I just couldn't do anymore is because different level risk tolerance. Every decision would be a grueling four hour, six hour, eight hour meeting. And I'm like, dude, you can't grow like that. You cannot. And so since then, it's like a cool now everything's internal. We got so much capital empower my team to make decisions and we can move very quickly because guys, there's going to be dozens of decisions that come up every single week. You got to be able to make these decisions. And we got to know, hey, we're not going to get all of them right, but we're going to get 75% of them right, 80% of them right. Maybe we'll get 90% of them right on a good week. And I can live with that.
- [41:01]
A
Yeah, right.
- [41:01]
B
But it's okay if we don't get all of them right. We'll just pivot, we'll learn from them. We'll get better.
- [41:05]
A
If you're chasing perfection, you'll never make progress.
- [41:07]
B
That's so good. That's so good. Okay, so what are your thoughts for someone listening this? They have a 9 to 5. They're working in corporate America. They want to use business or real estate as an escape goat to get out of their nine to five. Would you suggest this individual to get into buying a small business, or would you say it's better to go buy a piece of real estate?
- [41:27]
A
Completely dependent on three individual factors. So the first individual factor is your risk tolerance like we talked about. Like how willing are you to put in the work, put in the reps and take big swings? Number two is how liquid are you? So how much do you have available and what income are you trying to replace? So you have to know your numbers. Um, are you trying to replace six figures? Are you trying to replace seven figures? Are you just trying to make $10,000 a month? Right. Uh, number three is your timeline. So how fast are you looking to make a, a notable change in your employment situation? Do you want to leave Your job in 6 months? 12 months? 6 years? Huge factor for people because we actually have me, we help people with all three. Um, so if somebody likes their job, they're making great money, they're cool, they're cool in it, and they want some wealth on the side. Absolutely. Going to commercial real estate. So don't do residential because that's too market dependent with the interest rates right now, you're not going to have enough control to be able to make any meaningful forced appreciation in today's market. I know people that are getting stuffed on wholesales and flips right now. Bad. So I would go commercial real estate and I would make my target window three to five years. Within three to five years. If you're focused solely, solely on one area of commercial real estate, whether that's mobile home parks, multifamily boutique hotels, I think in particular hotels is a wonderful strategy to focus on. You will, I think you'll become a millionaire faster than you'll become financially free through that process. But within three to five years, I think it's pretty reasonable to say that you can hit that income that you're looking to do and become a multimillionaire in the process. If you're looking to leave within six months to 12 months, buying a small business is the way, like it's the only way because you're buying six figures of cash flow in one acquisition and it's day one cash flow. So I'm not saying it's easy, I'm not saying it's passive. That's the one thing that really irks me about people online is they act like business buying is this passive income play. Absolutely not. It's a massive income play. And so you're, you can become more passive increasingly. So just like with real estate, when you become a better and better operator, but that's a skill set that is earned over time and with reps. So when you think of business buying massive income real estate, it's a little bit more passive income. So I would say go buy you a cash flowing business that's doing, you know, $2 million in top line revenue, maybe about 500,000 in profit. A huge mistake that people make in buying businesses is they, they mistakenly think that the profit number is what you take home. That's wrong and that will make people go bankrupt because they don't get that correct. So when you're looking at business, great rule of thumb like this is overly simplified for this podcast, but I want to condense this down into a lesson that's like a 60 second lesson and that is if you are buying a business with a partner, which I recommend. So two of you are buying a business and you each want to have a hundred thousand dollars plus in take home distributions, plus salary. You want to look at a business that's doing $500,000 in profit. So why 500,000? A good business is going to operate at a 22 to 1 DSCR. So debt service coverage ratio. So, so half of your profits already going to debt payment and that's a good business. That's a great deal. And so half of your profit's gone to the debt payment, whether that's to the seller or to the bank after that then you guys are left over with the the profit to split 125k each and then so 250k if it's you as a solo. But what people do is they're like, I want to make a hundred thousand dollars, I'm going to buy a business that makes a hundred Thousand dollars in profit, you're toast. That's why people are buying business on their own and they're crashing and burning because they don't have enough margin. And all of a sudden you just left a six figure job to what you thought was a six figure investment. But now you're making $30,000 working a hundred hours a week just because you didn't understand how the numbers worked.
- [45:12]
B
What are the best small businesses to buy? If someone was, you know, wanted to exit the nine to five, they want to get in something that's not going to be a huge learning curve or a huge barrier to entry. What would be a couple businesses that you like?
- [45:24]
A
So I like anything that doesn't require a specialty license. Something that is stupid simple that you can describe to your mom or your dad on the back of a napkin. Those are and, and has good operators. So those are my kind of simple parameters that I use. Because companies that I've bought are not ones that you guys would see like posted online. I just bought a company that does Northern Lights tours that's doing millions of dollars a year. And with the owner that was previous owner that was living in Florida half the year not even running the company, they shut the company down in summer, only ran in the winters half the year not even operating, they're doing $2 million a year. No marketing, no online presence. Insane. TripAdvisor. Get your guide. Like, they're the number one ranked Yelp review in Fairbanks, Alaska. Alaska Wildlife Guide. And so that's not a company that I would have like thought to buy. I bought another company that's a kitchen hood cleaning company. So it cleans like you have like the fryers in the commercial kitchen. The, the grease comes up, it gets sucked up into an industrial event. Those need to be cleaned. By law, we make millions of dollars a year cleaning those vents. So again, not a company that you'd be like, that's my buy box. Is I'm looking for grease cleaning companies.
- [46:31]
B
Yes.
- [46:31]
A
So what I was looking for is I'm like, okay, cool. Like how long have you been operating and how. What's the average tenure of your staff? So like for that kitchen hood cleaning company, the average staff member is working there three plus years. And like the company was like five plus years old. So I was like, this is a good business for me to buy. I could explain it to my mom, I could write the business plan on the back of a napkin. And I'm like, okay, cool. Like I get this is stupid simple. And the business is succeeding in Spite of itself. So that's what I'm looking for. Now businesses I wouldn't buy is an easier conversation. Okay, number one, bars or restaurants?
- [47:06]
B
Restaurants are the toughest.
- [47:07]
A
Bars and restaurants, man. Bars, restaurants are like, don't.
- [47:10]
B
There's a reason why it's very challenging to even get lending on a restaurant. Just don't risk a risk standpoint. Just don't. Vendors don't like them.
- [47:18]
A
Number two is going to be anything with a specialty license. So H vac like electrical, plumbing companies are pitched a lot as like the good businesses to buy. But with the new SBA rules, it's actually going to be a lot more difficult to have somebody that you're maintaining on payroll that's got the license, like the master plumbing or master electrician license. Anything with a specialty license is really tough because it's either going to be you trying to hold on to an old employee for dear life or you're giving equity away to somebody new to come in and like have that license on your, on your equity stack. That's a toughie. That one's difficult. So I stay away from licenses and anything that's like, like those FedEx routes or like Amazon FBA. Anything that's pitched and packaged is like super passive, easy and simple. Like no wonder that's half the businesses listed for sale. There's a reason, dude. It's because those things just crash and burn every single time. So like give me a business that's, that's succeeding in spite of itself. Something that I could go in and offer my unique skill set to. And really important piece of advice in business buying is do not buy a business that is already strong in your strength. Do not buy a business that's already strong in your strength. What does that mean?
- [48:36]
B
That's really good.
- [48:37]
A
That's kind of contradictory, right? To. To what popular belief would be you go buy a business? If I go buy a business that's already ripping in sales and marketing, but they are struggling in back end systems and ops. I'm not a systems and ops guy. How am I going to come in and add value, right? So I'm going, I'm fighting off my back foot because I'm coming into the skill set I'm not even good at. Whereas I would go by the company that's already rocking in system and ops because I hate that shit. But I'm really good at sales and marketing so I'm going to go in and triple the business overnight with sales and marketing. Every company I buy has got great systems. They've got great profit and great revenue despite not marketing. And we just come and introduce marketing and we freaking triple the value of the business.
- [49:20]
B
Yeah, that's really good. What if someone doesn't have any skill set in business? Would you say, like, what's, how can they get into buying a business that they have no skill set in business and mitigate getting in and really tanking this thing?
- [49:36]
A
Yeah, so I mean, it's a great question because to be honest, 95% of people aren't cut out to run a business, period. And so, I mean, we see it reflected in the population, you know, like, not everyone can be the business owner. So what I would say, what I would recommend is to go back and do an inventory, do an audit on your skill sets. And are you already a high performer in your current role? If you do a half assed job in corporate, why would you think that you would be successful as an entrepreneur? And like, that's just the real, real man. It's not sugarcoated. Everyone else can be like, hey man, I believe in you. You've got this. But I mean, to be honest, if what you're doing to pay the bills, you're already like not putting full effort into, what makes you think that you can go take ownership of a business and now you're leading a team, they're going to give that same effort that you're putting in. So I would say to somebody that's slack in today, be where your feet are. Be a hundred percent, like, max out your job, max out your capabilities. Max, max out your, your comp plan. For anybody that's maxing out their roles and responsibilities and comp plan, you can be in business owner. But anybody that's just like halfway doing it, I'm like, dude, don't even try to go down this rabbit hole. But for those people that are maxing it out, I would say go back and look and do an audit of all the things that you've accomplished. For me, I was the top sales rep in a company, like a Fortune 500. I was number eight out of 5,079. Like, I know how to negotiate deals. I could sell ice to an Eskimo. I was like, dude, I will make a business work like come hell or high water. I had that will, I had that decision. So I knew that it was time for me to go do it and do my own thing. But then again, like, there are people that have even like joined my thing and they're just not it. Like, they just are like, hey, you know What? I'm actually just gonna keep my job. Like, I don't want to do this. Like, this is too hard. And honestly, I respect that. I mean, what do you think about it? Like, I just. I think you either got it or you don't.
- [51:31]
B
Well, one of my old partners that I left in 2022, I just found out recently that he's back at the air traffic control job. Yeah.
- [51:38]
A
Yeah.
- [51:38]
B
That's crazy, dude.
- [51:39]
A
And, like, it's not even a bad thing, bro. It's like, most people are built for that. Most people.
- [51:45]
B
Like, it validates my decision in 2022.
- [51:48]
A
Correct.
- [51:48]
B
You made the perfect decision because you can't. You just can't grow with certain people, bro.
- [51:54]
A
Here's. Here's a. Here's a banger right here. Here's a good piece of advice. If you want to live a top 1% life, you have to ignore the advice of the 99 of people. So, I mean, when you think about. When you see it said like that, it makes a lot of sense. You're like, okay, cool, I have to ignore 99% of people if I want to be the top 1%. But then when it comes to the actual practice of it, that 99 includes your friends, your family, sometimes your freaking spouse.
- [52:17]
B
Yeah. Sometimes your parents, co workers.
- [52:19]
A
And so a good rule of thumb.
- [52:21]
B
People that have never done the thing that you're looking to do, and that's.
- [52:23]
A
The rule of thumb, is you have to do an audit of who you're taking advice from. And if that person has not accomplished the result that you're looking to accomplish, you cannot take advice from them.
- [52:33]
B
And often, you know, as much as people probably don't want to hear this, it's like, often it's. It's people's parents that are giving them bad advice. And, And I'm sorry, but unless your parents have done the thing that you're looking to do, and you actually are truly admired and inspired by the life that they live today, their advice that worked in the 70s, 80s, 90s is not good advice that works today.
- [52:55]
A
And those stories that you're telling yourself about why you can't do things are mostly just reflections of your parents failures that were imparted into you. And it's not that your parents are malicious. It's not that they're evil. It's not that they're trying to make you fail. It's just they don't know any better. And they were. They're doing their best job at loving you for the most part. And they just don't have a playbook for this, you know? And they don't know that you can do anything. Because when you're a kid, dude, we're all like, we could do anything. And it's just the external world that convinces us that we can't. And once you unplug yourself and unprogram yourself from that way of thinking, like you have and like I have and like, people that are listening to this, you're in the process of it. Once you do it, you realize that the scariest thing that you can do, the number one way that you can fail, is creating a vision that's too small.
- [53:47]
B
I think most parents, my parents included, they want their kids to play it safe, not take any risk. Yeah, diversify, because it's a safe route. Right? But unfortunately, there's two ways to play the game. You can play not to lose, or you can play to win. And you know, for me, I'm like, man, I had to reverse engineer this. This programming like you, like you alluded to, because that's how I was taught from a young age. Go to school, get good grades, go to college, get a job, play it safe, diversify. Invest in your 401k. I did all those things, and it was cool. It's cool.
- [54:23]
A
We saw people get fired all the time.
- [54:24]
B
But I got to a point where I started to feel like I was no longer growing. And I did all those things and I invested in 401k. I was like, cool. It's not going to, like, really, truly make you wealthy. It's cool. But then, dude, this life now, I exited that at 33, and now I'm 40. I'm like, dude, I feel younger at 40 than I did at 33. I ju. I sell a ton. I'm like, at 33. I thought I peaked at 40. I know it's just the beginning, dude.
- [54:48]
A
The number. And this is. This applies to business owners. And this also can maybe be the litmus test that helps somebody that's listening to this make the decision to leave. Because it's just a decision. It's courage to finally make the Draw the line in the sand and say, I'm done with corporate. I'm going to go do my own thing. And that is the reason a high performer leaves a corporate job is because they no longer have room to grow. You didn't have any room to grow. I didn't have any room to grow. My income was capped. I looked at my boss's boss and I was like, your life sucks. I don't Want to live that life. And so I realized best case, my best case scenario was actually my worst case, my worst daydream, like my worst nightmare. My best case scenario was my worst nightmare in corporate. And that's what helped me make the decision. So flip flop that advice in the inverse for when you're running a company. If you're running a company and you want to maintain and retain talent, you have to give them the path of growth. If you do not give them a growth path and you do not paint that vision for where you're going in the company, they're going to leave you for somewhere else they can grow. And so, man, people are like, what if I had trained my talent and trained my people and then they. They up and leave me? I'm like, well, that's on you. Because you didn't create a vision large enough for their visions to fit within.
- [56:09]
B
That's really good, dude. That's really good. I've heard you say that if you're making between between $150,000 and $250,000, it becomes a trap. Yeah, elaborate on that.
- [56:21]
A
Yeah, so 150,000 to $250,000 is like the ultimate income trap because that's as much money as you can comfortably make without playing the corporate politics game. Because as an individual contributor, that's your ceiling. And people are really stuck in this comfort zone right there and then they stay there for the rest of their lives. All of a sudden you're 30 or 40 or 50 years old and you're making the same money that you made two decades ago. So why is this? It's because corporate has you by the balls and they're convincing you to up your lifestyle to match your new income. They want you to buy the new house, buy the new car, buy the new watches, go out to the fancy dinners, propose with the big rock to your girl. And now all of a sudden, you're so riddled with debt that you can't possibly leave. There was a guy I used to work with, he was 47. He's still working the same company, same job, same office. Nothing against him as a man. But one day, I remember I asked him when I was early in my financial freedom journey, I asked him, I said, yo, man, like, do you think you're ever going to stop doing this job? And he goes, bro, do you know how much my kids little league baseball costs? You know how much my kids travel teams cost? Do you know how much my kids private school cost? You know how much daycare costs? All of A sudden, he had all these expenses coming up, and some of them weren't even his fault. Some of them are just being a parent. But now it's like you're trapped and you have to do what you're told. So, I mean, there's only two levers that you can pull for freedom. Number one is increasing your income that you make, and that's through investing, buying a business, building a business, or in your job. Number two is reducing your expenses. So if you can do both simultaneously, bonus points. What I do is I capped my expenses at a certain rate and I only focused on increasing my income. Because you can infinitely increase your income, but you can only reduce your expenses to zero. And so you do things a little bit differently where you increase your expenses to the new level of you that you want to be that can't afford that, and then you go up. Can you talk a little bit about that? Because I think that's interesting. Yeah, I like, I like the way you do it. I've did it with my, with my condo. I went from an apartment to a $1.5 million condo, and I tripled my payment monthly. But I like 400x my income.
- [58:35]
B
Yeah. Now, this advice is not good advice for everyone. This is, this advice. This advice is good for people that make a lot of the money online, Right? So if you make income online, you are a creator, you're building your personal brand, you have an audience, you get views on social media, maybe you have a podcast, maybe it's both for that type of person. Especially if you have an online business where you get the majority of your leads from your personal brand. This strategy I110 believe in. And it's simply this. Every time that I've had a decision to level up my lifestyle, whether it's getting the nicer place, whether it's getting the nicer car, whether it's getting the nicer boat, society tells you not to do it because all those things that I just mentioned are liabilities, Right? They go down in value. They're going to take money out of your pocket. You're not going to see an roi. The smart play would be go invest that money into Wall street, go invest that money into another piece of real estate. That's sound advice is what you're saying.
- [59:29]
A
Let your passive income play for pay for your tools.
- [59:31]
B
That's what society's going to tell you. Now, if you make your money online and you get views online, the smart play in this instance is to actually go spend up and go get the nicer place. Spend up and go get the nicer car. Spend up and go get the nicer boat. Because I'll tell you why, every time that I've done this, I've gotten more views online. I've become a better version of myself. My entire network levels up because now I'm put into a different room and I have access to higher caliber people, right? I become a better version of myself. I make more money and everything levels up as a function of it. This has happened every single time. And so now when I am making decision of like, oh, should I spend up and go get the nicer thing? I always have to lean into it now because I know I always level up as a function of it. The last thing I'll say is, this is like just getting that nice replacement. I know you got the nice replace in Austin. When I got my current place and I have a penthouse here in downtown San Diego and I was paying at the time $3,000 a month in rents. And I went from $3,000 a month to $13,000 a month. It's a big jump, right? It's not like going from 3,000 to 6,000 and then 6,000 to 12. I went from 3 to 13,000. And so it was a big jump. And at the time it felt very uncomfortable. I was like, I don't know if I can afford this.
- [60:45]
A
This is a lot.
- [60:46]
B
But I did it. And literally, like my whole perspective just changes because I wake up every single morning. What I found, what I discovered is I wake up, I see the entire city down below me. I see the water, I see Coronado Island, I see the planes taking off, taking, landing. I see people walking down below. And just that perspective when I wake up in the morning puts me in a better mood.
- [61:07]
A
That's your state.
- [61:07]
B
Makes me more confident.
- [61:08]
A
That's your state.
- [61:09]
B
It levels me up. And now I become a better version of myself. And it like literally just, I just start my day with a W. Yeah. And if you feel good, you're confident you're going to make more fun, money is a function of it. And then not to, not to, not to also include how many people I've had over at my place networking. And because of that network, because of the memories that I've, I've created for all these people, bringing together people has leveled up all my stuff. Same thing with a boat, like having a nice boat. It's like, dude, now we're creating these like, memories out on the water for people that, you know, otherwise maybe wouldn't be on the Water. And now you're creating these memories for them and talk about a networking opportunity. And that's leveled everything up as well.
- [61:45]
A
Yeah, it's like neon Dion Sanders, man. It's like, look good, feel good, play good, I love it. And even to your point, like, I. And like, I will even. I'll actually double click on what you said and actually add even more to it. I would say that I don't even do it for the views. Like, a lot of the nicer stuff, nicer watches, nicer car that I just bought a new car, but I haven't even posted on social media. It's just, I ask myself, like, who do I want to become? And I mirror the actions, the environments, and how those people move. So I was like, what does eight figure Brian do? Like, what kind of place does Eight figure Brian have? Like, what kind of car does a figure Brian have? What kind of watches does that guy have? And then where does Eight figure Brian hang out? And then, so you guys can name whatever Persona that you want to name for who you are. And that could be wealth, that could be with fitness, that could be with your family, but you could say, okay, now, like, where are those people hanging out? And like, for me, I'm like, all right, cool. Like, it is kind of more beneficial to have a wake boat so you can go out on the water and, and network with people. In Austin, Texas, it is nicer to have a. A penthouse that people can come to. You know, it is. It is cooler to have, like, the watches that I wear. I just got this one. It's the. It's the freaking Panda Daytona, which is super rare, bro. So this, my. This my baby. It's a freaking. This. This watch was more than my cars before. It's like $35,000. And I've already started multiple conversations with people, like, in hotel lobbies and at the bar that are like CEOs and people that understand, like, when you know, you know. And so it's kind of funny because people in the beginning are like, oh, yeah. It's like, I'm going to get the car and I'm going to get the boat and I'm going to get the watch for, like, dating, right? And then once you get to, like, the real game, you're like, bro, it's for other men, man. Like, pause, right? But for real, it's for the connections and the relationships because it starts those conversations. Like, somebody looks at the car I'm driving, they're like, bro, it's my freaking dream car. Or Somebody sees the watch and I bro, I have that watch. I've been waiting for my ad to give me that watch for three years. How the hell did you get it started? Conversation, start a relationship. The hotels I stay at, I stay at five star hotels now they're 1,000, $2,000 a night because the people that are staying there are people I want to meet.
- [63:50]
B
Mm.
- [63:50]
A
And then all of a sudden, my income just popped up to that level.
- [63:53]
B
That's so good.
- [63:54]
A
I still live beneath my means. I'm not in debt. So I would, I would say, like, don't go into debt. Everything that I just mentioned is 13% of my take home. So I mean like, yeah, don't fake it till you make it. But there's, there's an art to it. I say it's an art.
- [64:07]
B
Yeah. And again, this is not advice for, for most people.
- [64:11]
A
Yeah.
- [64:12]
B
But, but if, if you are making the majority of your money online and you are scaling your personal brand, this 100% is the play.
- [64:21]
A
But you better, you better use it correctly. I'll say this, man. I think you're not giving yourself enough credit because from an outsider looking in that like game knows game. Like the way that I see you use your boat, your yacht, I'm like, dude, that is not only like an absolute 100 non negotiable write off how you use it for networking, for business. Like the people that you've met in the networking that you do is perfect because you're getting an ROI from that. My friend Aaron in Austin, Texas, I'm uchege his boat. Like he's able to have so many people come on every single morning and he gets a really high roi. So what we're talking about isn't just buying the Ferrari or buying the boat to take a picture with and just leave in your garage. It's to go get out with other people that have the Ferraris and have the boats. That's where the ROI is.
- [65:11]
B
That's where it is.
- [65:12]
A
That's where it is.
- [65:12]
B
That's where it is.
- [65:14]
A
Yeah.
- [65:14]
B
I love it. And then, and then also like, you know, obviously having the wherewithal to know, like, hey, like, if I really needed to with this boat, if I really needed to, I can charter that thing for $15,000 for four or five hours, small groups, like all day. Right. And so, you know, do a handful of those a month and that covers the whole not right if I really wanted to. And so there's other ways that you can get creative to actually turn these liabilities into Assets. If shit really did hit the fan.
- [65:40]
A
Bro, that is the biggest benefit of being a business owner is how can I build a business around shit that I really enjoy doing?
- [65:48]
B
100%.
- [65:49]
A
Build a business around your life, not your life around your business. I love traveling. And so we're about to go to your event that you spent a lot of money on in Tulum with really nice houses. Really not. We're taking a freaking private job.
- [65:59]
B
Cannot wait, dude. This room is going to be insane.
- [66:01]
A
And so we're building businesses where it's like, you can't just randomly write shit off on your taxes, but you can build travel companies. And I'm investing in hotels now. So whenever I'm staying at five star hotels, I'm going and talk with the operations director. I've got an email exchange, you know, we're going and we're making meetings. How do you run your, your company? And I can write some of that stuff off as research, you know. And when I'm traveling in Europe, like there are places I'm filming ads, you know, that's, that's a good write off. Like there are places where you can write it off and if you build your business around it, like we just spent $30,000 to transform a conference room in Cancun into like club space for Miami.
- [66:36]
B
So sick.
- [66:36]
A
Dude. I saw DJ'd it spent 30,000, it was like $50,000 a party for my people. Didn't make us any profit, but it was a hell of a fun write off for our business. And so that's, that's a great thing. There's one last thing I want to say on, on finances that you wanted to talk about, which is my ten year rule.
- [66:52]
B
Okay, what is the ten year rule?
- [66:53]
A
So my ten year rule, I've, I've used this when I was broke, I've used this when I was just now making some money. And now when I make a good bit of money. And the 10 year rule is if I'm going to remember an experience or a thing that I'm going to buy, it's a large investment, a large purchase that I'm making. If I'm going to remember it in 10 years or more, that car, that watch, that, that new house I'm buying, or that experience, I'm going to do it. If I'm not going to remember it in 10 years, I do not buy it, I do not invest in it. And so there's been so many times where it's like, I'm staying at this Airbnb and I'm looking at that hotel off in the distance and I'm like, man, I want to stay at that hotel. Like, will I remember that in 10 years? If the answer is yes, I book it. I just go do it. And like, so that's what I've used for my experiences.
- [67:38]
B
That's a really good framework. I actually, actually genuinely like that one. Yeah, that's really good. Yeah, that's really good.
- [67:42]
A
Yeah. But it also allows me to say no to a ton of stuff.
- [67:45]
B
Yeah.
- [67:46]
A
I'm like, hey, that actually doesn't move the needle for me. Maybe. I think I'm going to forget about that in about a year. I'm just not even going to do it. So it gives me a good frame to say no to things too.
- [67:55]
B
Yeah. I would say that starting is about saying yes, growing is about saying no. So I think the more clear you can get on what the true vision is, what the end game looks like, and then reverse construct your life around that. Say no to everything that isn't that. That is the. That is the secret sauce right there. Brian Lubin, I appreciate you coming on, man. Round two and I cannot wait to level up, celebrate with you down in Tulum. It's going to be a hell of a week and we are just getting warmed up, man. Where can the guest. I'm sorry, where can the listeners get in touch with you if they want to learn more?
- [68:23]
A
For sure. So Brian Lubin on Instagram, it's just my name everywhere. Check me out at Action Academy podcast so you can find it on Spotify, Apple podcasts, wherever you guys listen. Rich has been on there multiple times. I do multiple episodes a week. We've done millions and millions of downloads. If you guys like hearing me talking to a podcast Mike, I'm interviewing the best and brightest people on that show. Talking about commercial real estate, business buying, and then also I do a lot of solo shows where I spit free game like this.
- [68:51]
B
And in all reality, like I've hung out with Brian's group was just down there in Cancun 3 weeks ago Speaking with Brian's group and a lot of folk. He helps a lot of folks get out of corporate America. So if you're listening right now, you work at 9 to 5, you're in corporate America, you feel stuck, you don't feel like you're growing, you're looking for that. Next thing, check out Brian's community. It's called Action Academy. I was with the group, great people. I, I definitely, I definitely put my word behind your group, dude. Super cool.
- [69:17]
A
Boom. Thank you guys so much for listening to another episode of the Action Academy podcast. My one ask real quick before you go. If you enjoy this episode, if it brought value to please share this episode with one to three friends that you think could get value from it. This is how we grow the show and at minimum, if you could leave us a five star rating and review on Apple podcasts, Spotify or whatever platform you listen to that would mean the world to us is how we get in front of other entrepreneurs. If you're done sitting on the sidelines, you're done listening to the podcast. You want to be the freaking guest on the podcast? Go into action academy.com go in the show description, the show link and book a call to speak with our Action Academy community. We have hundreds and hundreds of people just like you buying businesses and commercial real estate with full coaches, full mentors, full support, full capital. Everything. ActionAcademy.com is where you'll find us.