Thanks to Brad Harris and The Legacy Mindset Podcast for having me on to discuss moving from survival, to success, to significance. It’s a journey, and it helps to have friends along the way. Listen now on Spotify or Apple Podcasts!
About Indestructible Wealth: I’m Jack Gibson. I’m your wealth strategist and I’m here to help you make some money. The Indestructible Wealth Podcast is for young entrepreneurs who want to make, keep and grow wealth to enjoy now, and for years to come.
Episode #21 – Interview with Financial Thought Leader…Me (Jack Gibson)
Welcome to the Indestructible Wealth Podcast. This is the place where we help young entrepreneurs to make, keep, and grow wealth that you can enjoy now, and for years to come. I’m your host Jack Gibson, a serial entrepreneur, founder of multiple seven and eight figure businesses, and wealth building strategist. Each week I’m going to share my tips, resources and secrets, to help you create a plan and build the life you’ve dreamed of.
Brad: Welcome back everyone to the legacy mindset podcast Brad harris with you here your host, super excited about today. One of the things we’ve talked a lot about, go from survival to success to significance and having that legacy mindset. In course, one of the most important things we can do is look at our financial wealth. Look at our money, what to do with money, how to handle money and I can’t think of a better person to bring on today. He’s a good friend of mine and I’ve known him for 24 years. I’m going to read a little bio about him. It’s weird. Because he’s a really good friend of mine. So I’m reading this bio. Sometimes you read these and they’re like yeah. I guess I do know this guy. Okay. So I’m going to read this to you guys. Very important. He’s an entrepreneur and he’s a financial thought leader. He’s an international serial entrepreneur and financial thought leader. He began his journey at 19 and direct sales from his college dorm room in a nutritionist distribution company and built a profitable business. After a series of stock market setbacks, he became assessed with learning everything about real estate investing and he built another multi-million dollar portfolio generating passive income. Now who is this guy? He’s a proud parent of 2 boys. Who makes it their mission to bring out the inner teenager in him. When he’s not playing around with them or focusing on business ventures he’s playing high stakes poker and I can attest to this. He’s competed in the world series of poker and has been known to lose several thousand dollars on a single hand. His wife could probably attest to that. And he’s attempting snowboarding jumps that have landed him in the ER. He’s not perfect, but he’s made plenty of costly mistakes and business and investing that puts him to death of depression. So we’ll probably talk about that a little bit, but he fought through it and has turned those mistakes into lessons. He can teach aspiring entrepreneurs and wealth builders. I want to introduce my good friend and colleague. Like I said 24 years, we’ve known each other and done business together. Mr. Jack Gibson, Jack, how are you doing? My friend?
Jack: I’m good Brad. I’m really good. Any of those numbers that you talked about as far as losing in poker? As far as my wife knows, it’s always half.
Brad: It’s always half lol.
Jack: Sorry, half of that.
Brad: Oh yeah.
Jack: I’m kidding. I’m kidding. She’s probably going to listen. I always, yeah. I told her the whole deal and she just understands how I’m built. So she shakes it off.
Brad: Totally. That’s part of your game, right? Sounds like, I’ll never forget you came in and did training in our business for us. And you’re like, Hey Brad, can you take me down to the boats? And it’s yeah. I, yeah, we can make that happen, Jack. So I’ll never forget. It’s so that’s what I first heard reductions like, no and he was serious too and he was serious about what he does. So Jack, that’s just part of your spirit to you. There’s probably not a more competitive guy that I’ve ever probably met than you. And you’re that quiet? Competitive, you’re not loud, but you are competitive.
Jack: Yeah. I won’t play anything unless I have a chance of winning. The way you really frustrate me and put me in a terrible mood is put me in a competition I have no chance of winning. That’s it. That’s a very terrible formula for me, for happiness.
Brad: I think all of our personalities are like that to some degree to be successful in business. I think that’s one of the things you have to have. I look for athletes, I look for somebody who’s an athlete or as I know you’re a big sports fan now me and you don’t see eye to eye on that. But we probably don’t need to talk about that on this podcast. And so they’re playing the first game this season. So me and you probably won’t be good friends that weekend.
Jack: Oh yeah. You were supposed to take me to the game and then all of a sudden you have work. How could a business conference get in the way of the Brown’s cheats kicking off the first game of the NFL season doesn’t make any sense.
Brad: I wasn’t going to bring a Cleveland brown fan into Arrowhead kingdom. I wasn’t going to bring you in there.
Jack: I would behave.
Brad: Okay Jack. Let’s get into money. Let’s get to what your specialty is.
Jack: I feel like we could go over this part for a while.
Brad: It’s fun. So what’s really impressed me especially seems like Jack the last 10, 15 years, knowing you it’s you’ve really got into your bio it just read here. And we gave a little bit of background 17 starting a business or anything to give a little background on you. How did you get to where you’re at today? Let’s get everybody warmed up to you and how we’re to where we’re going to talk a little bit about investing today.
Jack: Yeah, Brad, it’s part of my DNA according to my mom, finance and money. When I was selected to do a speech about money and finance she said, of course you were, when you were like 3, you were counting money you were counting money at the nursery school and the nursery school teacher came to my home and said, did you know, Jack can count money? Like he was accurate too quickly. And she laughed. She said, yeah he does it with my father all the time. He just dumps the coins on the table and he just lets it rip. I’ve always been fascinated by money. I don’t know. It’s just part of who I am, that fascination and I love it. I love everything about it. I hate losing it. I’ll tell you that I absolutely hate losing it, but I love it because it permeates every single area of our lives. There’s really not an area of our life that it really doesn’t impact in some kind of way. So if we can have and learn about it, learn the rules of the money game, because there are rules that govern it. If we can understand how it flows, who it flows to, if we can really get a good relationship with it too, a lot of people have a very poor relationship with money and think that having money is evil or that rich people are evil. So it’s almost like they’re sabotaging themselves financially. They figure out a way to get rid of it and they don’t even know what’s going on. So anyways, all of those things I wanted to get good at this from an early age so I started in entrepreneurial-ism pretty young I was washing boats and started up a car detailing business when I was a teenager, I only had ever had 2W2 jobs, where you actually have a job and have to report in. One of those was at a golf course where she really wanted to fire me. I know this for sure she absolutely hated me, the manager, but she couldn’t because I was in a church group with her too as well. She was super connected in that way. So that got me through that summer. I didn’t get fired. And then went into a marina just part-time washing boats and I for $5 an hour and my boss was a jerk. And that’s when I just said, you know what? I’m never going to have a boss for the rest of my life. This is the worst. I get paid peanuts for working super hard. What really set it off was when I was 19 and started doing the nutrition business . At the same time around that time I was still working at the marina so it took me 20 hours at $5 an hour to get $100. And then of course I get taxed. So I didn’t actually get $100 and I sold a $200 program. I made $100 in 15 minutes and I said, that’s it I’m out. profits are better than wages.
Brad: You got it. Oh, wow. So good. Jack its like in a lot of guys who probably listen like talk about schools what did you learn in school about money? You know what I mean? We go through high school, you come out of 19. It talks a little bit about that.
Jack: Nothing. That’s going to be a pretty short conversation. I went to a pretty good school in Michigan called Hillsdale college, and that was a 4 year liberal arts college after high school and they taught that it was a great education because it really taught about the philosophy of economics. How does economics really work? So I learned that, but I never learned about finance. I never learned about investing. So at no point all throughout school did it ever even mentioned or talked about or anything so when I finally graduated from college and I had hustled really hard I’d saved up around $50,000 in cash while going through college. I didn’t buy anything Brad, like I was, they call me super cheap all my friends, I was still wearing my tennis shoes from high school in college. It was bad. But I had this goal to get wealthy super early. So I wanted to bank everything and invested and multiplied my money exponentially so that I could be financially free to be a millionaire. By the time I was 30, that was always my goal and so what happened though? That was 2000 and I stopped one day, I was walking down the to class like my senior year and there’s this brokerage company and I walked in, I talked to the guy, super nice guy turned out to be a salesman, he pitched me on all of the stock market always goes up over time so you just, invest your money in and you’ll be, everything will turn out great. So I just turned over my money to him. I had no idea what I was buying and what companies I was in. He put me all into tech stocks and for you and I we remember the 2000 Dot-Com bubble. 3 months later, within 3 months, half my money’s gone.
Jack: And for a 22 year old, who had just worked and saved like crazy and bidden disciplined himself and didn’t buy all like I could have bought a lot with $50,000 back. Nineties 1998, 1999, 2000. But I didn’t buy anything because I wanted to put my money to work. That didn’t work out because I wasn’t an educated investor. I just signed up for this. Hey, let’s turn my money over to somebody else and let them do it and then just hope everything works out and that’s the way most people do it right now. And I just, I think that personally, I feel like there’s a better way.
Brad: So you lose a lot of that money. Lose a lot of that money. Of course. I love the philosophy. You never lose, you just learn.
Jack: I didn’t feel like that at the time. I wouldn’t want it to hear that from me.
Brad: Yeah. Yeah. That’s why I would go shoot if you’d have called me and you did. But anyway there are these lessons that you pulled out from that. And so let’s talk a little bit about that. Let’s just get into it. We’ve got people listening to this, maybe they’re making $2,000, $3,000, $4,000 a month or just getting by Jack. Maybe they’ve saved, we could talk about that. Maybe they’ve saved 10, maybe say 50, so let’s talk about maybe those 3 levels, don’t have anything to vest. He’s making bills, but he’s listening to this and he’s like man, I need to do like Jack and get into the game.
Brad: Talk about that person and the progression all the way up.
Jack: That’s great. I think so for me, there’s certain fundamentals of investing that we really need to make sure that we’re understanding and the first thing is what we’re trained by society by what wall street pushes out which is mainstream media is you need to buy stocks that’s almost always what we’re told you got to buy stocks, hold for the long term. Now there’s nothing wrong, absolutely wrong with stocks. It’s a great way. It’s proven itself to build, to help build wealth for millions of people. But it’s just one asset class. There are 15 or more different asset classes and why is it being pushed so hard? The main reason is because of fees wall street can make a lot of money and they make a gargantuan amount of money charging fees to mainstream America so that’s why they’re pushing it and so adamant about it and that there’s a lot of people that are very well-meaning, but essentially they’re sales people that are pushing us to buy stock. So we just have to remember if you go against the grain, if you go against what society says for you to do often that’s where I’ve found the most success. So none of my wealth has been built in the stock market at all. The first thing that people need to do is to invest into themselves. That is the most important by far that will give you the highest return on investment. So to give you an idea what I should have done with hindsight being 2020, we can always look back and be like, oh man, this is what I should’ve done.
But if I had to go back in time and just sit down and I could have a chance to have a conversation with me at age 22 what would I tell you? What would I tell me? I would say take your $50,000 that you saved up Jack, and put it back into yourself. Just get educated, be voracious, give books, go to seminars, hire coaches and just put all that money into self-educating yourself on how to become a sophisticated investor and then when you no longer have to ask the question of what should I invest into? I have $50,000 and you’re asking what I should invest into? If you’re asking that question that means that you haven’t done enough self-education, you haven’t put enough back into yourself first to raise your level of confidence and ability and skill set in this area that otherwise if you do you’re just going to probably lose your money in all likelihood. That’s how it’s going to go, you’re going to do the same thing I did. You’re going to go out and you’re going to buy, cryptocurrency because it’s going up for everybody else and then you’re going to buy in and then you’re going to be buying in at the top and you’re not understanding what asset you’re buying and then when it drops in half and it recently did about 3 or 4 weeks ago then those are the people who are going to panic and sell and you’re going to be in that category. You’re going to panic sell just like I did when the Dot-Com bubble crash hit my money just dropped in half. I needed money to live off. I’m 22 all of a sudden I’m in the real world right now, like bills.
So I sold everything and then that’s the worst thing, cause you’re capturing that loss. So that’s the first stage Brad is investing into yourself.
Brad: And of course Jack, that’s right down our sweet spot right in and we always teach that and it’s invest in yourself. And Most people invest. And I did this Jack, I did this, I had some money. It’s funny. $50,000 must be a term because I have $50,000. I think when you get $50,000, you think you have a lot of money.
Jack: You do. You absolutely do. And it’s not.
Brad: And it’s not.
Jack: It goes really quick. Let me tell you, you can tell us as well.
Brad: And so I had this $50,000 and then I had a friend that says, Hey, I got this great deal and I gave it to the friend. You know what I mean? And they get everybody on this line here, you have a friend that’s going to give you coaching and talk about that a little bit. It could be a dad, it could be a best friend, it could be something so many people I see are listening to someone and it’s just like one of these I still can’t believe I did it. It was this optic thing and it was crazy and I lost it all. And talk about that. Talk about why we’re so engaged when somebody comes along and says Hey, get in this and they’ll tell her how much money it’s going to make and get you so fired up. And they’re just a friend they’re really they don’t have any, they don’t have any bio. So talk about that.
Jack: You have to look at who you’re taking advice from in any area of your life Brad so if you want to have a successful marriage who should you ask for marriage advice? You can ask the newlywed couple that’s a year in and everything’s just still sunshine and rainbows and all of that and are you going to ask the couple that’s been through the ringer and they’re, 15, 20 years in, where are you going to ask for nutrition and fitness advice? Are you going to ask the person that’s a hundred pounds overweight or are you going to ask the person that’s lost 60, 50 pounds and they’ve made a transformation and they’ve been able to maintain it. Who are you going to ask for money advice and what the problem is for most people is that they’re getting money advice from people that have no money.
Brad: That’s such a true statement, too.
Jack: It makes no sense.
Brad: It makes no sense.
Jack: We get them what we as humans want to do, Brad. And it’s just how we’re wired. We want to make the most amount of money for the absolute least effort possible and we want to get it as quick as we humanly possibly can so we’re going to get susceptible especially as young naive investors. We’re very susceptible to these pitches of making money quickly with super high returns and so we don’t want to hear the guy that’s built a multi-million-dollar portfolio that says invest into yourself or here’s what the wealthy actually do they think safety first, they would never touch what you’re looking at doing. However, they may too touch it, but they’re going to speculate a little bit, but with a very small percentage of their total portfolio, and they’re going to make sure that they also understand what it is that they’re buying and what they’re investing into. We don’t want to hear it as boring. It doesn’t fit our narrative. So we reject that and then we go out and we like, what does the old man know? What does he know? Times have changed. And so we go on and we buy it anyways and then we have to suffer through the loss of principal capital and the wealthy do not do that. They think safety first, Brad. That’s been the number 1 mantra, safety first.
Brad: Will you read it Jack, you’re into sports. Like I am, we read about all these athletes assigned these multi-million dollar contracts and they’re broke and they had all this money but they took advice from somebody to hold their money.
Jack: Yeah. The staggering percentages, Brad, 70%, 80% of NFL players go bust and bankrupt. 70% of the MLB players. It’s insane statistics. When I read about it, it just didn’t make sense. They think that the gravy train is going to keep going so they never take them time to invest into assets that could pay them passive income past their retirement years when they’re not their earning power isn’t so strong and they get ahold of this young money, money in the hands of young people is super dangerous.
Jack: Very dangerous.
Brad: Yes. Yes. Fast cars and money.
Brad: Yeah. So I’m hearing you. But if I’m listening to you and I’m thinking, I’m knee deep in my business building this thing. Now Jack’s telling me I need to go and figure out all this investing stuff. I gotta go learn all this stuff. How the heck am I going to have time? Isn’t just wouldn’t call somebody up and say, Hey listen, I don’t have time to do all this study or that’s what I’m thinking. So how do you do that? How do you manage? I have a family, I’m building a business or maybe they’re even on here and they’re listening. They’re working 8 to 6 days a week they’re working 10 hours a day. How do you talk to that person there? Who’s like, how can I do that, Jack? How can I do that?
Jack: You don’t, see here’s what people get confused about. They don’t think that they’re an investor when they really are an investor and people who think that their investors are actually really speculators or gamblers. So let me explain. So when you’re doing step one and you’re putting money back into yourself or you’re growing your own skills and personal development and you’ve got, I think coaches are incredible. I think going to seminars, that’s investing back into yourself. There’s never been a time in human history where we’ve had so much free information available to us at the click of a button.
Jack: So now they don’t have to put as much money to get the same level as the goods that you and I had 25 years ago, there’s never been so much just incredible content that’s out there for people to get educated on. So they don’t have to put that much money now into stage 1, which is awesome. Now here’s the problem, it is like anytime something’s free generally we don’t value it as much so they may not value that free content as much as they really should but nevertheless it is there. So stage 2 then is building your own business. When I thought of it this way. This hit me like a ton of bricks, because for a long time I didn’t invest in the stock market after that event and my money dropped in half. I’m not touching that now. It was way too painful to try that again. So all I’m doing is taking my money that I make through hard work and effort and I’m reinvesting that back into my business by what? I opened up a brick and mortar location, rented a little office when I was in college and hired a secretary. I was going to school part-time. I was going to class with my secretary I’m paying her right to help me run my business so I could get through school and make my parents proud. I was running ads and newspapers so now obviously people are like that’s antiquated. Yes, it is. But they agree. But the concept is still the same. Marketing you’re investing into marketing your business and getting the word out, so that’s what I did that was where my focus was for the first decade was just keep pouring money back into my business to accelerate the growth and to build an incredible infrastructure that then I could have so much surplus cash flow coming in that then it didn’t make sense for me to deploy that back into my business. So that’s when I started saying rich dad, poor dad one of my top books. I know you’re going to ask me. Of course.
Brad: Yeah. Let’s get into that.
Jack: What books or books would I recommend? Rich dad, poor dad. So what do you, he said, build a business that creates so much excess cash flow from that, learn the tax code. I’ll tell you what Brad, nobody wants to do that at all. That’s the worst. That’s boring.
Jack: You’re like, that sounds great. Jack. I’m going to go study the tax code and there’s this Netflix show that just hit me in the algorithm Ozarks. I gotta watch that first. I’ll get to the taxes tomorrow and then tomorrow never comes. But having a basic understanding of the biggest expense of your lifetime by far you’re going to pay more in taxes than you’ll pay anything else even if you get a big house, really super nice car, you’re going to pay more in taxes for sure.
Jack: So understanding how you can legally pay the least amount of money possible to the government. Is very important to wealth building and investing in wealth preservation. What he said, you understand how to save money on taxes, which is a process and you’re not going to learn it overnight, but then you can take that money and you invest it into cash flow producing assets. So for Robert Kiyosaki’s, he’s all real estate. I’m not a 100% all in on real estate is a part of my portfolio but what I am a 100% all in on is the next tier, which is stage 3. After we invested in ourselves, invested into building our business, tier 3 is to invest into cash flow producing assets.
Brad: So stage 1 was to invest in yourself. What was stage 2?
Jack: Invest into your own business because you have 100% control and you have 100% of What’s called equity.
Brad: So a guy on here he’s invested in himself, he’s building a business that will produce income. And then now once that income exceeds what he needs to put back in his business now he has that excess cash, that excess money. Now he can go to stage 3, which you’re saying right now.
Jack: That’s right now, this is really a critical step and this is where a lot of investors are young investors who are very naive. And I was naive. You were basically naive when you turned your money over $50,000. All of it, right? Bam!
Brad: $50,000. I still talk about that. Okay. So it’s okay.
Jack: Yeah, I know.
Brad: We’ll talk about last year’s super bowl and we won’t talk about that.
Jack: It still hurts. It’s okay. We got to just keep reminding ourselves of that pain so we learned from those mistakes. We want to be thinking with that cash flow. That’s our next level of principal capital. We need to be thinking like the wealthy do, safety first. So one of the guys that I know he’s a young guy, he makes really good money. He’s doing very well. He came to me and he said, I’ve got this person who sent me this business and this investment can you take a look at it? And I’m like, yeah, man, of course I will. So emailed it over to me and it took me 2 minutes. I’m like, I wouldn’t touch it with a 10 foot pole.
Brad: Oh wow.
Jack: Because they’re promising you astronomical returns there in Canada and then another part of it’s like in another country, I said, so you’d send them this money you have no recourse, you could win a lawsuit, but you’re never going to recover your money. You’re going to get an IOU, which they will not make good on and I said, think about it, you got to think of it this way. What would anybody who’s wealthy do? Would they ever do this investment? They would not because it’s not safe. Could it blow up? Could it be incredible? Could you get this return that they’re promising, a 100% return and a few months it was crazy what they were promising and I said they could it’s possible, but whew! Risky, too risky. So this could be something that once your, all your assets and stage 3 are generating incredible cash flow, maybe you take a portion of this and gamble, but don’t do it with your principle.
Now, when I was given kind of similar advice, Brad, I’m like, I listened or I heard them but I didn’t listen. There’s a difference.
Brad: Yeah. Yeah.
Jack: So I didn’t do what they told me to do. They told me don’t buy this property. You’re going to have problems. There’s a reason why they’re trying to sell it. The returns that they’re showing you are way too high and sure enough, the old man was right.
Jack: And I did buy it and I did have problems and I did lose money and I should’ve listened, but I didn’t.
Brad: Yeah. But once again, you learned.
Jack: I learned.
Brad: It’s like a series, we talk about all the time. There’s no way. There’s no way to get to success. Definitely not to significance unless we have failures. Failures as part of your portfolio, I think it’s made you who you are today. If you don’t have those failures, number 1 you can’t even tell these stories that you’re telling. Now you become a wise investor. I just think that’s part of the process. We all wish that we could not have those failures and if we did listen but you just said and we don’t hear I think that’s as part of the process, it’s like everything we do. So this is so good, but here’s to you to say it, we have all this free content, all this stuff, they can listen to this, you have a podcast they can listen to and they can acquire all this knowledge today. For free.
Brad: We didn’t have like you said, 20 years ago, you had to go fly somewhere, pay a seminar, pay big bucks. Just to go do that and so now today we’re able to get all this information. So you think it’s at this time on earth, in this time that we’re at is probably the easiest time to be an investor? Would you say? would it be the time that it would be much easier than it was 20 years ago.
Brad: I think it’s more difficult now than it’s ever been and here’s why Brad. Okay. There’s a lot of free content and there’s an incredible amount of information and knowledge that we can grab and they can get ahold of, to change their lives and all of that. There’s 2 really big problems though that they’re up against, besides all the shysters that are out there that want to separate you from your heart are in cash, right? They are out there, unfortunately and that’s one thing that’s very difficult to understand when you’re raised as most people are in a loving, trusting family where you don’t ever screw anybody over. So number 1 is the government is printing money at such a furious pace. I’m not going to go into the politics of it. It’s just the reality that our money supply just went up 25% last year alone while that money didn’t exist prior to last year where to come from, it was printed. It’s called quantitative easing. The only thing it eases is how much spending power your money has. It eases the money out of your wallet. So that is creating these incredible challenges because it’s going, this money is going, liquidity has to go somewhere, right? So it’s going into the financial markets causing assets to go up at astronomical levels. There’s a reason why real estate is cranking. The market is getting if somebody lists a house 10 offers on a house that a year or 2 years prior was sitting there on the market for 6 months.
Jack: The money supplyInjected and went up 25%. That’s more than probably all the previous hundred years of US history.
Jack: So that’s creating financial bubbles that are going to be, it makes it challenging for us to navigate what to buy because things are priced pretty high right now in all areas. Real estate has gone up. Stock market is up like crazy. Look at any asset classes and it’s up quite a bit.
Jack: So that’s one major problem. Second major problem that we’re up against is disruption. So specifically speaking, technological disruption. So giving an example, I don’t know what year it was. I don’t know, 2010, 2012 blockbuster was a 7, 8, $9,000,000,000 company. I don’t know the exact numbers, but it was a big company and 3 years later it ceased to exist. Like it was gone. Completely wiped off the face of the earth, no longer in existence. Why technology, Netflix came along with a new technology and completely shattered the entire company that had been around for a long time. So that’s going to happen over the next decade at a much more furious pace because technology is exponentially growing. It doesn’t go up linear. It’s like a penny doubling every day for 30 days. It’s an exponential increase of what happens to technology and we’re like on day 25, 26 of the penny doubling where now it’s going up at mind-boggling rates. So what ‘s happening as far as how that relates to investing is that it’s going to be very hard for us to know when we put our money into a company that we’re investing into. If that company is even going to be around in 5 years, it may not be around. It may not be around. So something could come along and completely disrupt that company and go to the moon. So that’s what making it and going to make it challenging is how do we put ourselves in front of these trends that are happening, that are inevitable so that we can be on the right side of the technology gap and not be left behind, on the other side of the I’ve heard it called the technogasm, there’s the technology gap. It’s called technogasm and then I thought, oh, that’s a cool way to look at it. It’s going to separate people’s create this wealth gap. That’s going to be even more dramatic.
Brad: So what’s the trend we need to get in front of it right now. What’s that trend? What is it?
Jack: I think I don’t have all the answers. I think that having your money diversified into different asset classes is going to be a really smart move. I know a lot of people that could make that do really well, they had one source of income and they took all that money and they put it one into one asset class.
For example, it could have been the one asset class could have been stocks or the one could have been real estate, or it could have been whatever bonds or whatever. And I don’t think that personally, that’s a very smart move moving forward over the next decade, because we just don’t know which asset class is going to be disrupted and at any given time, an asset class can drop a huge amount. So if your money is diversified and you’re doing the very best that you can to just to put it into things into a mixture of really ultra safe things, and then some stuff that’s pretty super aggressive, or you’re putting a bet on like on a trend then I think you’re going to do pretty well. But again, it all comes back to fundamentals Brad, right? Are you investing into yourself because that’s always going to be your biggest return on investment? Are you investing back into your own business to grow your own equity and your own valuation of your own business and the own cash flow of that business? You’ve got to be always looking at those first 2, but don’t stop there and that’s where I think a lot of people I think they stopped there and they never really looked at. How can I take this cash flow from this business and put it to work and generating more cash flow that can protect my family? Should anything disrupt my primary income?
Brad: Yeah. Because people who make a lot of money tend to do what Jack, when they make a lot of money, tend to buy nicer houses, nicer cars, boats, all the stuff that, nicer vacations, all this money gets dumped and they don’t invest. They don’t invest in, of course you talked about the rich dad, poor dad, and that’s his, that poor quadrant of investing. And they don’t get into that. They take all their money and blow it or put it into stuff that burns up. And so it’s that’s a great point you’re making there. It’s invest in yourself. Build that business get it rock solid, develop it. And then you can get into investing and that’s when you said you got to continue to study that part of it and buying people around you that’s been successful. Somebody like you listen to podcasts like yours that can talk about money. Because we don’t get introduced to money very easily.
Jack: Yeah. The most challenging part for most people is when their income goes up is disciplining themselves to not let their spending on liabilities go up along with it.
Jack: We were making really good money and multiple business ventures, 10 years ago or so. And we made a decision with my wife and I that we were going to buy used cars. We subscribed to what’s what I call the 40-90 principle. So you spend 40% of what you normally would on a car and you get 90% of the enjoyment and the value. So that way you get hit by the depreciation of that vehicle. So we bought a used Mercedes-Benz Brad and I drove it all the way to 135,000 miles. I could have easily bought a $100,000 car at that time, but I wanted to take the savings from that car that I wasn’t spending. And I took the savings and I took that and I bought cash flow producing assets and then those assets, the income that was coming in from those, when that was enough, I went out and bought the Tesla.
Brad: I wrote about Tesla.
Jack: You did write in the Tesla, right? And we went to a $100 a plate steak restaurant. I bought it for you, right?
Brad: You did.
Jack: Because those are my assets. The cash flow from my asset while you came in as a guest trader.
Jack: The cash flow from those assets pay for your luxuries and your extravagant lifestyle. Most people have it, the reverse.
Jack: They’re spending all their hard earned money and their business cash flow they’re robbing their business out they buy the super big house thinking that’s an asset. It’s not, it’s an enormous liability. They’re buying a $100,000 car. It’s not an asset. It is absolutely a liability. I can promise you that. They’re buying the boat. When we went out, I found one of our friends he’s handy, my wife and I wanted a boat but we didn’t want to spend a $100,000 on one. So we found a pontoon boat, 2 of them that you look at them, you’re like, I’m not ever buying those, those are trash. They’re trashed out. They look awful. They probably don’t look, they don’t certainly don’t look like they can run and so we put the money up, we bought the Junker, put some money into it and then our friend put all the labor in and fixed it up.
Jack: So now we have 2 pretty nice pontoon boats. They’re not new, but they do for our family and we have a blast on them with all kinds of great family memories but we got them at 1/4 the price because we’re smart about it. And because boats are a depreciating asset. It is a liability. It doesn’t make me any money. If it doesn’t make me any money, it’s a liability.
Brad: Got it. And that’s from learning about money and psych. And like I said, nobody’s going to teach you that, especially the stock market, like I said people with money are going to take your money. And so they want you to get that loan. They want you to get that new car. They want that. That’s how they make money. So Jack, okay. So we go out, we do those stages right. We’re in stage 3, right? Is there a stage 4? Or are we don’t?
Jack: Of course.
Brad: There’s a stage four.
Jack: Stage four is where it gets fun.
Brad: Because we’re coming up on time here but I want you to weave in because now we’re starting to probably stage 4. We’re making money, right? We’re making money. We’re doing stuff, maybe big money and we’re putting money in. I want you to weave in, because one of the things in your bio we talk about, when we have money, when we have all this stuff, we got the boat, we got the Tesla, we got the house. We were starting to learn investments were starting to do well, maybe they’re returning and you can talk about that in stage 4. But also then there’s this, you talked about depression. I want you to weave this in here. Talk about the battle because of course in my podcast, it goes from survival to success and success is what everybody thinks, but they want to get to significance and there seems to be this disconnect, a success depression. We see a lot of people who get success and maybe get divorces. They have problems. Of course, we see a lot of movie stars who killed themselves with all this stuff. So talk a little bit about that as we weave in as we’re going here, because I think it’s such an important thing. Because you did a podcast a week or so ago about our mental health feels incredible wealth. So talk a little bit about that.
Jack: So great. Incredible. This could be an entirely different separate podcast. You realize that, right? So stage 4 is where we can start to take some big swings for the fences. So in stage 4, now we can comfortably take the cash flow that’s coming in from our stage 3 cash flow producing investments from stage 2, from our business, that’s generating excess cash and from stage 1 which is our personal earning power, right? Because in stage 1, one thing I didn’t mention, when you invest back into yourself you increase your earning power. So now, whatever you do, you’re going to get paid more because you’re more valuable. You have the skills, you have more knowledge. So you got all 3 stages that are now generating really nice potentially really nice money. And now you can go into stage 4 and this is where you can do some real speculation. This is where we can start comfortably, really trying to move the needle fast on our net worth. We can be buying up some really asymmetric bets. So this is an asymmetric bet where you take a dollar and your goal is to turn it into a hundred or even a thousand. People are like that doesn’t happen. That’ll never happen for me. That only happens for this other guy. The other guy always gets lucky like that.
Jack: If you take enough swing for the fences, you’re going to eventually hit a home run. So we’re going to get into cryptocurrency and we’re going to be buying stuff that’s super speculative that we don’t really understand, the value and where it’s going but we’re going to buy the tech stock. That is the cutting edge of driverless technology or gene editing therapy or what could be potentially the next Amazon or what could be the next disrupter of Facebook, what’s going to extend human life, biotechnology stock that could extend human life past a hundred. We can start investing into those types of things because here’s the thing. If they don’t work out, it’s okay, because you got your stage 3 cash flow producing assets coming in your stage 2 business and coming in and your stage 1 earning power stage 4 this is where we can keep swinging swinging swinging, bam! I hit a home run that one home run took care of all the other 10 strikeouts you just had.
Jack: And you made more money in that one swing than all the other ones that didn’t work out. And if none of them work out in a given year, No big deal Brad, my cash flow producing assets everything is just going to replenish itself and I started all over next year my lifestyle isn’t affected. I’m now living on ramen noodles. I’m still doing the same things I did before because here’s what you got, everybody’s got to understand this. You never want to risk your current lifestyle for a better one.
Brad: It sounds good.
Jack: It’s not worth it. So if you’re getting to stage 4 and you’re swinging for some strategic like fence type plays, you don’t care if they do that much, if they don’t work out.
Brad: That’s so good, Jack, that’s so good. And here’s when I’m listening to you talk there, I’m thinking I try to do stage 4 when I was in probably stage 2 or stage 1. I tried to take the $50,000 and I try to hit the home run. And that affected my lifestyle. That downgraded for me.
Jack: Absolutely me too.
Brad: And it’s that’s so good because it was the first one I listened to you talk, when can I swing for the fences? You know what I mean? When can I go for this? But give me a blueprint where I can get to that stage and I can go from that and have exponential growth. But I can’t get the stages messed up.
Jack: I just have this personal philosophy Brad I could be completely wrong. I just feel like whenever people get the stages messed up, the universe, God, Infinite intelligence, whatever you want to call them. I feel like he hits us with a lesson, right square in the face. Baseball bat to the face.
Jack: No, you’re doing it in the wrong order. You’re not ready for this kind of wealth yet. So I do think this I will add an asterix on as far as getting to stage 4 because a lot of people are like oh man, I’m a decade I’m 20 years away from stage 4. I don’t want to wait another 2 decades for the Browns or win the super bowl this year.
Jack: So you can take 10%, 20%, if you’re under 30 years old, as much as 30% of your kind of like your principal money, the principal cash flow that’s coming in and you can put it into these stage 4 swings for the fences, as long as you keep it to that kind of small percentage of your total portfolio and I wish that’s the only kind of regret. I have a lot of regrets. I shouldn’t say that, but that’s like the regret I had is I didn’t take it. Why not peel off 10%, 20%? And instead of doing all safety plays like real estate that I was doing or I got a ton of money into my whole life insurance cash flow policy instead of doing that which is all it’s super ultra conservative play. Take a little bit out of that and let’s swing for the fences a little bit earlier like when I was young 30s.
Brad: No. Because almost like the Jack Ramsey theory, right? You live on ramen noodles until you’re 59 and then you have lots of money. I’m not interested in living my whole life. Like you said, I want to have some fun. I want to have some stuff. I really believe that. You can die rich and so it’s I have all this money for your kids that you’ve spent 6 years building and you get to spend 3 years of it. That is a terrible concept to me.
Jack: That’s terrible. It’s awful because number 1, we don’t know what’s going to be going on with our health.
Jack: Anything at any time can hit us with our health. Even if we do all the right things, my college roommate, age 19 died of esophageal cancer while I was living with him in the dorm room. How is it that it seems even remotely possible that could happen. So I don’t want to wait until I’m 60, 65, 70 to enjoy my money and live like this super tight conservative life. No way I want to enjoy it now I want to have my proverbial cake and eat it too now at the same time I’m also I want to be responsible and building for the future Jack, that is at some point going to come back and say, Hey man, thank you, he’s going to thank his past self. I want my future self to thank me today. Say, Hey thanks. Thanks for looking out for me. You did some good moves that we’re living a great life, but I don’t know a lot of variables. There’s so many unknowns of where life is going to be at that stage that I just don’t want to bank and just wait and keep pushing it off.
I want to enjoy life right now.
Brad: I just, I totally believe in that. I totally believe in that Jack, when you’re talking about and that’s so good. But like I said, there was a strategy and there’s the things that we can do. So it’s really good.
Jack: So yes, to answer your part 2 question about the depression stage, I think it’s certainly a tough thing I think for a lot of people to talk about, I think it happens a lot more for people than what we even realize or what we’re led on to. We think that and we make these assumptions that even when people get successful that they don’t battle that and all of those are not true. That’s just not the way it actually works. So what happened for me and I try to keep this brief, but if you’re stages, I was in stage 2 success, and I have this somehow from my competitive drive, you mentioned I’m one of the most competitive people you know which I’ve heard that many times before your biggest strength is also your greatest liability. So this competitive nature for me was so far out of whack or out of equilibrium that I couldn’t handle like emotionally, spiritually, all of that, that there was so many other people that were doing what I’ve perceived is doing better than me and in business, money, life, all that. So I was just so hyper focused on creating as much massive success as I possibly could, that I was neglecting fulfillment. So success comes from what you get and fulfillment comes from what you give. So I was creating success in my real estate business. My first year I made almost a million dollars, like incredible.
Jack: And then I had other businesses that were doing well. I had investments that were doing well too. And so I put so much value on that, that when some things went wrong, I had a couple of bad business partners that ended up in FBI handcuffs. It cost me a lot of money and I had to take a step back and just really reexamined, like what just happened while I was putting all my eggs in the success basket. And so which is essentially in the book the second mountain who I don’t even know who it’s by. I just read it a few months ago. He talks about events that knock you off the first mountain which is the successful mountain you’re climbing. It knocks you off into the second onto the second mountain, which is the significance map. So I got battered like a hurricane just took me off the lawn and slammed me against the second one and said this is where you belong. You belong on the second mountain, you should be in the fulfillment mountain now Jack you’ve created some success. Maybe not as much as you think is worthy or what you’re set out to do but you can have more success. It’s not like you’re done here but now let’s get you focused on fulfillment. So that’s when I took a step back and that whole stage went on for a good year. So that was a depressing year. Was I depressed? Are the most I’ve ever been in my life? I don’t know if I would have been like, I never saw a doctor or anything like that or took meds, but probably should have. But I knew that things need to change. I need to change. I need to change how I’m going about what I’m doing. So a lot of things changed Brad, but the main thing is I really looked at how can Jack just wake up in the morning and live his life totally focused on being happy and not just being focused on success and what’s my next achievement.
Brad: Jack this whole podcast is about you just said right there is what this whole podcast is about getting to significance. It’s getting there and it’s like going from that survival to success and getting there what you did and I remember having several conversations with you. I don’t know at the time you were probably making great money. You’re doing good. You know what I mean?
Brad: But we were in this comparing modes like, why am I not going to this level what this person is, why am I not doing this? And we started the process. So we start saying our significance on that level that next and that’s where our significance can get there so quickly. Not being able to be like the significance that we could do where we’re at and I think that’s just such an important thing and then what you’re saying there and that does cause depression because I always say if you can be happy here you will be happy there. And so it is just being able to figure that out and able to figure that out and that’s where it comes. Like you said, I got a boat there. I’m with the family, I’m creating memories at the end. That’s when I look at Facebook memory, do you ever get your Facebook memories from a year ago?
Jack: Oh yeah.
Brad: Those pictures that it’s not the picture of me maybe go into the bank. You know what I mean, family on the 4th of July, all of us together taking that picture of us at the lake altogether. That’s what gives you that warm fuzzy feeling.
Jack: You’re absolutely right.
Brad: There’s just so much in there.
Jack: 100%. And I will say this I’m extremely grateful that I had multiple streams of cash flow coming in because that knocked me out of the game for about a year where I just didn’t have any desire, energy. I was not myself and I couldn’t produce and I had some things that I had to take care of personally that I was not the same earning power that I would have had before. And I needed to take that year off and go golfing every day and just hang out with the kids and just not work essentially.
Brad: Yeah. I get it.
Jack: And so having spent smart with my money and having diversified and all of that it allowed me to that space to where I didn’t have to go make money. And this is what everybody’s got to be really clear on is that life is going to hit you at some point really hard and it’s going to be tough. And you think it won’t happen to you and I just don’t think that we escape that and so when that does happen to you where you want to be in a position to where you can take time, you can heal, you can self-reflect, you can try to figure out what’s my next move in life and business. Where am I going next? And then take your time and not be in a rush and just make sure that when you do come back into the game that you’re coming back into the game fully recharge, batteries 100%. You’re ready to go.
Jack: And that’s where I decided to launch my own podcast and platform. I needed that fulfillment Brad and I was not getting that fulfillment and as we talked about that was a major drag.
Brad: Wow. This is so good. Jack, this has been awesome. This has been awesome. And I can say we probably could sit here for another 2 or 3 hours and talk. We probably hadn’t got through most of our points. It’s already had an hour here and but I think you’ve gave him the meat the 4 stages, which I’m think guys really that’s something I can take away I really Jack and I can take away from this podcast. I can take those 4 stages away and I can coach that too is this going to really help me? Because I work with a lot of young people myself, this is so good. And people who are listening to this and really done that. And then that last part there but you just summed it up though you summed it up in the real things of life and it is just a beautiful way we did that and I appreciate you jumping on here. Go ahead.
Jack: There is a stage 5. Like we can’t leave stage 5 out.
Brad: No. We can’t. I did stage 5. I’m ready. I thought I’m already hitting a home run. I’m ready to write.
Jack: Stage 5 is quick. We don’t have to dive. We don’t have to take much time, but stage 5 is you just keep repeating stages 1 through 4 until you’re wealthy and you really moved the needle on your net worth.
Brad: I like it.
Jack: But ultimately stage 5 is where you can truly give without any repercussions. Now what’s important to understand is that point and that’s where we hit philanthropy, essentially.
Jack: But philanthropy is a way of life. It’s a way of being you don’t hit a stage or a time and you’ve arrived at that. So you can be a philanthropist in stage 1. And that’s what people, they think that they’ve got to push it off. They don’t, you be generous. I think that you should be a generous giver all the way through, and that’s just going to attract so much more goodness and great things into your life and to me, I feel like I’ve been protected from some bad things that could have been a lot worst that because I’ve been a generous giver, we give more than the average American makes in a year we’ve been doing that for years. And I don’t say that to brag or impress. I didn’t always do that. I couldn’t always do that. But you want to start with the dollar out of the hundreds, start flexing that muscle and start working your way into the attitude of I’m a generous giver. I’m a philanthropist. And that is ultimately it comes down to fulfillment. Success is what you get from what you give, being a generous giver living a life of philanthropy it’s going to be it sets you up for so much more fulfillment in your life. And that’s a beautiful thing.
Brad: It’s so good. That’s biblically, it’s more blessed to give than receive right in. So it’s built right in there and Bob Proctor says money allows you to make a difference without you being.
Brad: And I love that one of the reasons to make money, it allows you because most people can only give back with their time. They don’t have the money. So they just have to invest their time in something awesome. You know what I mean? I go help my neighbor. I go help somebody but money, but you’re talking about allows us to make a difference far out of our reach and we don’t have to be there and still and I think that’s just the greatest value that’s just so awesome and what a stage 5, what a level to get to and like you said though, we can be doing that all along, but you can really make a difference at that.
Jack: When you’re on stage 5, you can make a massive difference. You can build a church, you can send people on missions, you can feed home, you can feed massive amounts of the hungry. You can do so many things that are just truly incredible.
Brad: Because sometimes when people hear, this is a podcast on money they think we’re all about the money. It really isn’t. And when you look at what you just took us through, he gets to the ultimate. And we talked about this on podcasts we did together. It’s given back and that’s the ultimate, that’s where we get there and that’s truly where we’re going to get happy Jack, that’s we’re going to truly be and I’m feeling good about life.
Jack: Brad, you and I are going to be the most happy, right? When somebody comes back to us and says, I listened to this podcast, or I heard you speak on this and it changed my life. Thank you. You made this difference. Here’s what I did. Like you’re in somebody else’s testimonial, right? That’s what we want. That’s what you want in that significant stage 3.
Brad: Yeah. Got it. But Jack, thank you so much for being here spending time with us and tell everybody how they can listen to you. If they want to listen to more of you, let them know how they listen to you?
Jack: Yeah, it’s called the indestructible wealth podcast. It is exclusively about how to make, keep and grow money. It’s a financial education platform. It is absolutely not any type of business opportunity or anything other than how to take better care of your financial life. So if people are interested in learning how to master the money game it’s dedicated to young entrepreneurs and professionals from all industries, all walks of life. It doesn’t matter what business that you’re in. You can definitely get some value from it. And yeah we’re Brad. We’re doing pretty good on the podcast. I’m super excited for the trajectory although my competitive spirit is saying man, I’m Brad’s number 80 on the podcast list. I’m not even anywhere close to that. So congratulations for all that you’re doing and the success of your podcast. I hope to get even just a piece of that.
Brad: Appreciate you buddy. And yeah, keep it going and definitely be listened to with you and the guys distinct as we close out here, it’s like we talk about on this podcast going from survival to success, to significance and Jack definitely showed us how to get out of that survival mode and get to success, but he also shows is how to get to significance that way we could have a legacy and we can pass that on. So Jack, thank you so very much.
Jack: Thank you for having me, Brad. I loved every minute of it. Thanks. Thanks everybody for listening.
Brad: Bye everyone.
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