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 to the podcast here
Interview With Financial Thought Leader…Me (Jack Gibson)
In the last episode, I had Brad Harris on the show. He’s an expert in leadership wealth and a good friend for over two decades. I then went on his show, which is incredibly popular right out of the gate called The Legacy Mindset Show. He interviewed me on money, on financial thought leadership. The interview turned out so well that I wanted to essentially what we call repurpose that content for all of you on this show. I thought that it would be impactful because a lot of times when you’re talking off the cuff yourself, that’s certainly a great way and quick way to get good content out to your audience.
However, when you dive deep into an interview and you’re asked questions and thought provoking-questions, I like the flow and the vibe. I’m going to give you guys this show to hear how I would respond to questions that Brad asked me. Everything that we’re going to share here was a real deep dive into my philosophy on finances and building wealth. I hope you enjoy it.
I’m super excited about this episode. One of the things we’ve talked a lot about go from survival to success to significance and having that legacy mindset. One of the most important things we can do is look at our financial wealth. Look at our money. What to do with the money? How to handle money.? I can’t think of a better person to bring on. He’s a good friend of mine and I’ve known him for many years. I’m going to read a little bio. It’s weird because he’s a good friend of mine. I’m reading this bio. Sometimes you read these and they’re like, “I do know this guy.”
He’s an entrepreneur and he is a financial thought leader. He’s an international serial entrepreneur and financial thought leader. He began his journey at nineteen in direct sales from his college dorm room in a nutrition distribution company and built a profitable business. After a series of stock market setbacks, he became obsessed with learning everything about real estate investing. He built another multimillion-dollar portfolio, generating passive income.
Who is this guy? He’s a proud parent of two boys who makes it their mission to bring out the inner teenager in him. When he is not playing around with them or focusing on business ventures, he’s playing high-stakes poker. He’s competed in the World Series of Poker and has been known to lose several thousand dollars on a single hand.
He is attempting snowboarding which has landed him in the ER. He’s not perfect but he’s made plenty of costly mistakes and business and investing that puts him in the death of depression but he fought through it and has turned those mistakes into lessons. He can teach and aspire entrepreneurs and wealth builders. I want to introduce my good friend and colleague. As I said, for many years, we’ve known each other and done business together, Mr. Jack Gibson. Jack, how are you doing?
I’m good, Brad. Any of those numbers that you talked about as far as losing in poker, as far as what my wife knows, it’s always half of that. I’m kidding. She’s probably going to read. I tell her the whole deal, and she understands how I’m built, so she shakes it off.
That’s part of your game. It’s like, “It’s amazing. I’ll never forget you came in and did a training in our business for us.” You’re like, “Brad, can you take me down to the boats?” I was like, “We can make that happen, Jack.” I’ll never forget that. That’s what our first introduction was like. He was serious too. He is serious about what he does. Jack, that’s part of your spirit too. There’s probably not a more competitive guy that I remember probably I met than you. You’re quite competitive. You’re not loud, but you are competitive.
I won’t play anything unless I have a chance of winning. The way you frustrate me and put me in a terrible mood is putting me in a competition I have no chance of winning. That’s a very terrible formula for me for happiness.
All of our personalities are successful in business. That’s one of the things you have to have. I look for athletes. I look for somebody who’s an athlete. I know you’re a big sports fan now. You and I don’t see eye to eye on that. We probably don’t need to talk about that on this show.
That’s a whole different tangent. Go, Browns.
They’re playing the first game of the season, so you and I probably won’t be good friends that weekend.
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 Browns’ Chief kicking off the first game of the NFL season? It doesn’t make any sense.
I wasn’t going to bring a Cleveland Brown fan into Arrowhead, the Kingdom. I wasn’t going to bring you in there.
I would behave.
Jack, let’s get into the money. Let’s get into what your specialty is. What impressed me especially, I’ve seen Jack last several years. Knowing you, it’s like you’ve got into what we know, your bio, I read here. We gave a little bit of background. At seventeen, you’re starting your business or anything. How did you get to where you’re at now? Get everybody warmed up to you and how we’re going to talk a little bit about investing.
Brad, finance and money is part of my DNA, according to my mom. When I was selected to do a speech about money and finance, she said, “Of course you were.” She said, “When you were three, you were counting money at the nursery school.” The nursery school teacher came out in the hall and said, “Did you know Jack can count money? He was accurate too and quick.”
She laughed. She said, “Yes, he does it with my father all the time. He dumps the coins on the table and he lets it rip.” I’ve always been fascinated by money. I don’t know. It’s part of who I am. It’s that fascination and I love it. I love everything about it. I hate losing it. I’ll tell you that. I love it because it permeates every single area of our lives.
There’s not an area of our life that it doesn’t impact in some way. 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 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.Money permeates every single area of our lives. There's not an area that it doesn't impact in some way. Click To Tweet
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. Anyways, it’s all of those things. I wanted to get good at this from an early age. I started in entrepreneurialism pretty young. I was washing boats and started up a car detailing business when I was a teenager.
I only ever had two W-2 jobs, where you have a job and have to report in. One of those was at a golf course, where the manager wanted to fire me. I know this for sure. She hated me 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.
I went into a marina, part-time washing boats for $5 an hour and my boss was a jerk. That’s when I said, “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 set it off is when I was nineteen and started doing the nutrition business. Around that time, I was still working at the marina. It took me 20 hours at $5 an hour to get $100, then I get taxed. I didn’t get $100. I sold a $200 program and made $100 in 15 minutes. I said, “That’s it. I’m out. Profits are better than wages.”
Jack, a lot of the folks are probably reading. It’s like schools. Talk about schools. What did you learn in school about money? If we go through high school, we come out a nineteen. Talk a little bit about that.
Nothing. That’s going to be a pretty short conversation. I went to a pretty good school in Michigan called Hillsdale College. I was in a four-year Liberal Arts college after high school. That was a great education because it taught me about the philosophy of economics, and how economics work. I learned that but I never learned about finance. I never learned about investing.
At no point, all throughout school was it ever even mentioned or talked about or anything. When I finally graduated from college and I hustled hard, I’d saved up around 50,000 in cash going through college. I didn’t buy anything. All my friends called me super cheap. I was. I was still wearing my tennis shoes from high school in college. It was bad but I had this goal to get a wealthy super early.
I wanted to bank everything and invest it and multiply my money exponentially so that I could be financially free, and be a millionaire by the time I was 30. That was always my goal. That was in 2000 and I stopped. One day, I was walking down to class during my senior year. There’s this brokerage company, Hilliard Lyons.
I walked in. I talked to a super nice guy. It turned out to be a salesman. He pitched me, “All the stock market always goes up over time, so you invest your money in and everything will turn out great.” I 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. We remember the 2000 dot-com bubble. Within three months, half of my money was gone.
For a 22-year-old who had worked, saved like crazy, didn’t discipline himself, and didn’t buy, I could have bought a lot with $50,000 back in 1998, 1999, and 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 had signed up for this, “Let’s turn my money over to somebody else and let them do it,” and then hope everything works out. That’s the way most people do it now. Personally, I feel like there’s a better way.
You lose a lot of that money. I love the philosophy. “You never lose. You just learn.”
I didn’t feel like that at the time. I wouldn’t have wanted to hear that from anybody.
That’s why I would coach you if you’d called me but you didn’t. Anyway, there is that. There are these lessons that you pulled out from those. Let’s talk a little bit about that. Let’s get into it. We got people reading this. Maybe they’re making $2,000, $3,000, or $4,000 a month or getting by, Jack or maybe they’ve saved.
We could talk about that. Maybe they’ve saved $10,000. Maybe saved $50,000. Let’s talk about maybe those three levels. There’s a guy who doesn’t have anything to invest. He’s making bills but he’s reading to this and he’s like, “I need to do like Jack and get into the game.” Talk about that person and progression all the way up.
For me, there are certain fundamentals of investing that we need to make sure that we understand. The first thing is what we’re trained by society, by what Wall Street pushes out, which is mainstream media, is that 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 with stocks. It’s a great way. It’s proven itself to help build wealth for millions of people but it’s just one asset class. There are fifteen or more different asset classes. 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. That’s why they’re pushing it and so adamant about it. There are a lot of people that are very well-meaning but essentially, they’re salespeople that are pushing us to buy stocks. We got to remember that if you go against the grain and you go against what society says for you to do, often, that’s where I’ve found the most success. None of my wealth has been built in the stock market at all.
The first thing that people need to do is to invest in themselves. That is the most important, by far. It will give you the highest return on investment. To give you an idea of what I should have done with hindsight, we can always look back and be like, “This is what I should have done.” If I had to go back in time and 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 myself?
I would say, “Take the $50,000 that you saved up, Jack, and put it back into yourself. Get educated. Be voracious, get books, go to seminars, hire coaches and put that all that money. Self-educate yourself on how to become a sophisticated investor.” When you have $50,000 and you’re asking, “What should I 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, ability, and skill set in this area.
Otherwise, if you do, you’re 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. You’re going to buy in and then you’re going to be buying in at the top. You’re not understanding what asset you’re buying. When it drops in half, you are going to panic and sell.
You’re going to be in that category. You’re going to panic sell like I did when the dot-com bubble crash hit. My money dropped in half. I needed money to live off of. I’m 22, and all of a sudden, I’m in the real world. Now, I’ve got bills. I sold everything, then that’s the worst thing because you’re capturing that loss. That’s the first stage. It’s investing in yourself.
Jack, that’s right down to our sweet spot and we always teach that. Invest in yourself. Most people invest and I did this, Jack. I had some money. It’s funny, $50,000 must be a term because I have $50,000. When you get $50,000, you think you have a lot of money.
You do and it’s not. It goes quickly. Let me tell you. You can tell us as well.
It is. I had this 50,000 and I had a friend that says, “I got this great deal,” and I gave it to the friend. Everybody reading, you have a friend that’s going to give you coaching. Talk about that a little bit. It could be a dad, a best friend, or someone. Many people I see are listening to someone and it’s one of these, “I still can’t believe I did it. It was this optic thing and it was crazy. I lost it all,” but talk about that. Talk about why we’re so engaged as somebody comes along and says, “Get in this.” They’ll tell you how much money it’s going to make and get you so fired up. They’re just a friend. They don’t have any bios.
You have to look at whom you’re taking advice from in any area of your life. 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 still sunshine and rainbows and all of that. Are you going to ask the couple that’s been through the wringer and they’re 15, 20 years in?
Whom are you going to ask for nutrition and fitness advice? Are you going to ask the person that’s 100 pounds overweight or are you going to ask the person that’s lost 60, or 50 pounds and made a transformation and they’ve been able to maintain it? Whom are you going to ask for money advice? The problem for most people is that they’re getting money advice from people that have no money.The problem for most people is that they're getting money advice from people that have no money. Click To Tweet
That’s such a true statement too.
It makes no sense. It’s just how we’re wired. We want to make the most amount of money for the absolute least effort possible. We want to get it as quickly as we humanly possibly can. Especially as young, naive investors, we’re very susceptible to these pitches of making money quickly with super high returns. We don’t want to hear the guy that’s built a multimillion-dollar portfolio that says, “Invest into yourself, or here’s what the wealthy do.” They think of safety first. They would never touch what you’re looking at doing ever. They may touch it but they’re going to speculate a little bit but with a very small percentage of their total portfolio.
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. It’s boring. It doesn’t fit our narrative. We reject that and we go out. We like, “What does the old man know? What does he know?” Times have changed. We go out and we buy it anyways. We have to suffer through the loss of principal capital. The wealthy do not do that. They think of safety first. That’s their number one mantra, safety first.
Jack, you’re into sports like I am. We read about all these athletes aside from these multimillion-dollar contracts and they’re broke. They had all this money but they took advice from somebody. They just took all their money.
The staggering percentages, Brad, 70%, and 80% of NFL players and 70% of MLB players go bust and bankrupt. It’s insane statistics. When I read about it, it didn’t make sense. They think that the gravy train is going to keep going. They never take the time to invest in assets that could pay them passive income past their retirement years when they’re earning power isn’t so strong. They get ahold of this young money. Money in the hands of young people is super dangerous.
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 got to go learn all this stuff.” How am I going to have time? Wouldn’t I call somebody up and say, “I don’t have time to do all this study?” or that’s what I’m thinking. How do you do that? How do you manage? I got a family. I’m building a business or maybe they’re even on here and they’re reading. They’re working six days a week. They’re working ten hours a day. How do you talk to that person there who’s like, “How can I do that?”
You don’t. Here’s what people get confused about. They don’t think that they’re an investor when they are an investor. People who think that their investors are speculators or gamblers. Let me explain. When you are doing step one, you’re putting money back into yourself, or you’re growing your own skills and personal development, I think coaches and going to seminars are incredible. That’s investing back into yourself.
Now, there’s never been a time in human history when we’ve had so much free information available to us at the click of a button. They don’t have to put in as much money to get the same level of goods that you and I had many years ago. There’s never been so much incredible content that’s out there for people to get educated on. They don’t have to put that much money now into stage one, which is awesome.
Here’s the problem though. Anytime something’s free, generally, we don’t value it as much. They may not value that free content as much as they should but nevertheless, it is there. Stage two 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, my money drops in half. I’m not touching that. That was way too painful to try again. All I’m doing is taking the money that I’m generating 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 while I was going to school. Part-time, I was going to class while my secretary, I’m paying her to help me run my business so I could get through school and make my parents proud. I was running ads and newspapers. People are like, “That’s antiquated.” Yes, it is but the concept is still the same.
You’re investing in marketing your business and getting the word out. That’s what I did. That was where my focus was for the first decade, to 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 cashflow coming in that then it didn’t make sense. There wasn’t a place for me to deploy that back into my business. That’s when I started saying Rich Dad Poor Dad, one of my top books. I know you’re going to ask me what books would I recommend.
Let’s get into that. Go ahead.
Rich Dad Poor Dad, so what did he say? He said, “Build a business. Create so much excess cashflow from that. Learn the tax code.” Nobody wants to do that at all. That’s the worst. That’s boring. You’re like, “That sounds great. I’m going to go study the tax code but there’s this Netflix show that hit in the algorithm, Ozarks. I got to watch that first. I’ll get to the taxes tomorrow,” then tomorrow never comes.
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 and a super nice car. You’re going to pay more taxes for sure. 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.
He said, “You understand how to save money on taxes,” which is a process. You’re not going to learn it overnight but then you can take that money and you invest it into cashflow-producing assets. Robert Kiyosaki is all real estate. I’m not 100% all in on real estate. It’s a part of my portfolio but what I am 100% all-in on is the next tier, which is stage three. After we invested in ourselves and invested into building our business, tier three is investing in cashflow-producing assets.
Stage one was investing in ourselves. What was stage two?
Invest back into your own business because you have 100% control and you have 100% equity.
A guy on here, he’s invested in himself, building a business that’ll produce income, and once that income exceeds what he needs to put back into his business, he has that excess cash, that excess money. Now, we can go to stage three.
Now, this is a critical step. This is where a lot of investors, our young investors are very naïve. I was naive. You were basically naive when you turned your money over. $50,000, all of it. It still hurts. It’s okay. We got to keep reminding ourselves of that pain. We learn from those mistakes. We want to be thinking that with that cashflow, that’s our next level of principal capital. We need to be thinking like the wealthy do, safety first. One of the guys that I know is a young guy. He makes good money. He’s doing very well. He came to me and said, “This person sent me this business or this investment. Can you take a look at it?” I’m like, “I will.”
He emailed it over to me and it took me two minutes. I’m like, “I wouldn’t touch it with a 10-foot pole because they’re promising you astronomical returns.” They’re in Canada and another part of it is in another country. I said, “You 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.”
I said, “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? 100% returns in a few months. It was crazy what they were promising.
I said, “They could. It’s possible but risky. Too risky.” This could be something that once all your assets in stage three are generating incredible cashflow, maybe you take a portion of this and gamble but don’t do it with your principal. Now, when I was given similar advice, I’m like, “I’ll listen, or I heard them but I didn’t listen.” There’s a difference.
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.” Sure enough, the old man was right. I did buy it and I did have problems. I did lose money and I should have listened but I didn’t.
Once again, you learned.
I did learn.
Jack, we talk about it all the time. There’s no way to get to success, not to significance unless we have failures. Failures are part of your portfolio. It’s made you who you are now. If you don’t have those failures, number one, you can’t even tell these stories that you’re telling. You become a wise investor. That’s part of the process.
We all wish that we could not have those failures if we did listen but you said it, we don’t hear. That’s part of the process. It’s like everything we do, so this is so good. We have all this free content, all this stuff. They can listen to this. You have a podcast they can listen to and can acquire all this knowledge now for free.
Many years ago, you had to go fly somewhere, pay for a seminar, and pay big bucks to go do that. Now, we’re able to get all this information. Do you think, this time on earth, this time that we’re at is probably the easiest time to be an investor? Would it be the time that would be much easier than it was many years ago?
It’s more difficult now than it’s ever been and here’s why. 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 are two big problems though that they’re up against, besides all the shysters that are out there that want to separate you from your hard-earned cash. They are out there, unfortunately.It's more difficult to become an investor now than it's ever been. Click To Tweet
That’s one thing that’s very difficult to understand when you’re grazed in, as most people are, a loving, trusting family where you don’t ever screw anybody over. Number one is that the government is printing money at such a furious pace. I’m not going to go into the politics of it. The reality is that our money supply went up 25% in 2019 alone. That money didn’t exist prior to 2019. Where did it 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 you thought of in your wallet. That is creating these incredible challenges because liquidity has to go somewhere. It’s going into the financial markets. It’s causing assets to go up at astronomical levels. There’s a reason why real estate is cranking. If somebody lists a house, ten offers on a house that 1 year or 2 years prior was sitting there on the market for 6 months.
Why? The money supply got injected and went up 25%. That’s more than probably all the previous hundred years of US history. That’s creating financial bubbles that make it challenging for us to navigate what to buy because things are priced pretty high now in all areas. Real estate has gone up. The stock market is up like crazy. Look at any asset classes and it’s up quite a bit. That’s one major problem.
The second major problem that we’re up against is technological disruption. Give an example, in maybe 2010 or 2012, Blockbuster was a 7-, 8-, or 9-billion-dollar company. I don’t know the exact numbers but it was a big company. A few years later, it ceased to exist. 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. 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 in what happens to technology. We’re like on day 2 or 26 of the penny doubling.
It’s going up at mind-boggling rates. What that’s happening as far as how that relates to investing is that it’s going to be hard for us to know when we put our money into a company that we’re investing into, if that company’s even going to be around in a few years. It may not be around. Something could come along and completely disrupt that company and go to the moon.
That’s what’s making it and going to make it challenging. 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, I’ve heard it is called the techno-gasm. It’s the technology gap. I thought, “That’s a cool way to look at it.” It’s going to separate people and create this wealth gap that’s going to be even more dramatic.
What’s the trend we need to get in front of now? What is it?
Having your money diversified into different asset classes is going to be a smart move. I know a lot of people that did well. They had one source of income and they took all that money. They put it one into one asset class. For example, the one asset class could have been stocks or the one could have been real estate or it could have been bonds or whatever.
I don’t think that personally, that’s a very smart move moving forward over the next decade because we don’t know which asset class is going to be disrupted. At any given time, an asset class can drop huge amounts. If your money is diversified and you’re doing the best that you can to put it into things, into a mixture of ultra-safe things, then some stuff that’s pretty super aggressive where you’re putting a bet on a trend, then you’re going to do pretty well.
Again, it all comes back to fundamentals. Are you investing in yourself? 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 cashflow of that business? You got to be always looking at those first two but don’t stop there. A lot of people stop there and they never look at, “How can I take this cashflow from this business and put it to work and generate more cashflow that can protect my family should anything disrupt my primary income?”
People who make a lot of money tend to buy nicer houses, cars, boats, and vacations. All this money gets dumped and they don’t invest. You talked about the Rich Dad Poor Dad and that’s that fourth 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. That’s a great point you’re making there.
Invest in yourself, build that business, get it rock solid, develop it then you can get into investing. As I said, you got to continue to study that part of it and find people around you that’s been successful. Somebody like you, listen to podcast like yours that can talk about money because we don’t get introduced to money very easily.
The most challenging part for most people when their income goes up is disciplining themselves to not let their spending on liabilities go up along with it. We were making good money in multiple business ventures years ago or so. We made a decision, my wife and I, that we were going to buy used cars. We subscribed to what I call the 40/90 principle.
You spend 40% of what you normally would on a car and you get 90% of the enjoyment and the value. That way, you’re not taking or getting hit by the depreciation of that vehicle. We bought a used Mercedes-Benz, Brad. 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. I took the savings and bought cashflow-producing assets. The income that was coming in from those assets, when that was enough, I went out and bought the Tesla.
I rode in that Tesla.
You did ride in the Tesla.
I did. You picked me up, yes.
We went to a $100-a-plate steak restaurant and I bought it for you because those were my assets. The cashflow from those assets pays for your luxuries and your extravagant lifestyle. Most people have it in the reverse. They’re spending all their hard-earned money and their business cashflow. They’re robbing their business out. They buy this 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 a liability. I could promise you that. They’re buying the boat.
We went out. I found out one of our friends, he’s handy. My wife and I wanted a boat but we didn’t want to spend $100,000 on one. We went out and we found two pontoon boats. You look at them, and you’re like, “I’m not ever buying those. Those are trash.” They’re trashed out. They look awful. They certainly don’t look like they can run. 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.
Now we have two pretty nice pontoon boats. They’re not new but they do for our family. We have a blast with them, and all kinds of great family memories but we got them at one-fourth the price because we were smart about it. 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.
That’s from learning about money. Nobody’s going to teach you that, especially in the stock market. People with money are going to take your money. They want you to get that loan. They want you to get that new car. They want that. That’s how they make money. Jack, we go out. We do those stages. We’re in stage three. Is there a stage four or are we done?
Stage four is where it gets fun.
Now in stage four, we’re making money. We’re doing stuff. Maybe it’s 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, we have all this stuff, we got the boat, the Tesla, the house. We’re starting to learn investments and do well, maybe they’re returning and you can talk about that in stage four.
You also talked about depression. I want you to weed this in here. Talk about the battle because, in my show, it goes from survival to success. Success is what everybody thinks but they want to get to the significance. There seems to be a disconnect between success and depression. We see a lot of people who get success maybe get divorced. They have problems. We see a lot of movie stars who kill themselves, all this stuff. Talk a little bit about that as we’re going here because it’s such an important thing. You and I did a show about our mental health. Talk a little bit about that.
This could be an entirely different separate show. Stage four is where we can start to take some big swings for the fences. In stage four, now we can comfortably take the cashflow that’s coming in from our stage 3 cashflow-producing investments from stage 2 from our business that’s generating excess cash and from stage 1, which is our personal earning power. When you’re in stage one, when you invest back into yourself, you increase your earning power.
Whatever you do, you’re going to get paid more because you’re more valuable. You have the skills and more knowledge. You got all three stages that are now generating potentially nice money. You can go into stage four and this is where you can do some real speculation. This is where we can start comfortably trying to move the needle fast on our net worth.When you invest back into yourself, you increase your earning power. Whatever you do, you will get paid more because you're more valuable. Click To Tweet
We can be buying up some asymmetric bets. An asymmetric bet is where you take $1 and your goal is to turn it into $100 or even $1,000. People are like, “That will never happen for me. That only happens for this other guy. The other guy always gets lucky like that.” If you take enough swings for the fences, eventually, you’re going to hit a home run. We’re going to get into cryptocurrency and we’re going to be buying stuff that’s super speculative that we don’t understand the value and where it’s going.
We’re going to buy the tech stock that is the cutting edge of driverless technology, gene editing therapy, or what could be potentially the next Amazon or what could be the next disruptor of Facebook. What’s going to extend human life? Biotechnology stock that could extend human life past 100. We can start investing in those types of things because here’s the thing. If they don’t work out, it’s okay.
You got your stage 3 cashflow-producing assets coming in, your stage 2 business coming in, and your stage 1 earning power. Stage four is where we can keep swinging and swinging and hit a home run. That one home run took care of all the other ten strikeouts you had. You made more money in that one swing than all the other ones that didn’t work out.
If none of them work out in a given year, no big deal. With my cashflow-producing assets, everything is going to replenish itself. I start all over next year. My lifestyle isn’t affected. I’m not living on ramen noodles. I’m still doing the same things I did before. Everybody’s got to understand this. You never want to risk your current lifestyle for a better one. It’s not worth it. If you’re getting to stage four and you’re swinging for some strategic fence-type place, you don’t care that much if they don’t work out.
That’s so good. 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 tried to like hit the home run. That affected my lifestyle. That affected me. It downgraded me. That’s so good because the first one I’m listening to you talk, I’m like, “When can I swing for the fences? When can I go for this?” You gave 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.
I have this personal philosophy. I could be completely wrong. I feel like whenever people get the stages messed up, the Universe, God, Impotent Intelligence, whatever you want to call Him, I feel like He hits us with a lesson ready to square in the face. Baseball bat to the face. “You’re doing it in the wrong order. You’re not ready for this wealth yet.” I do think this, I will add an asterisk as far as getting to stage four because a lot of people are like, “I’m a decade and I’m years away from stage four. This stink. I don’t want to wait another two decades for the Browns to win the Super Bowl. I want it this year.”
You can take 10%, 20% if you’re under 30 years old as much as 30% of your principal money, the principal cashflow that’s coming in and you can put it into these stage four swings for the fences as long as you keep it to that small percentage of your total portfolio. I have a lot of regrets. I shouldn’t say that but that’s the regret I had. It might not peel off 10% or 20%. 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 cashflow policy, which is a 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.
It’s almost like the Jack Ramsey theory. You live on ramen noodles until you’re 59 then you have lots of money. I’m not interested in living my whole life like that. I want to have some fun. I want to have some stuff. I believe you can die rich. To have all this money for your kids that you’ve spent 60 years building and you get to spend three years of it is a terrible concept to me.
It’s awful because number one, we don’t know what’s going on with our health. Anything at any time can hit us with our health even if we do all the right things. My college roommate, age nineteen, died of esophageal cancer while I was living with him in the dorm room. How would that seem even remotely possible that could happen? I don’t want to wait until I’m 60, 65, or 70 to enjoy my money and live 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 want to be responsible for building for the future, Jack. That is at some point going to come back and say, “Thank you.” He’s going to thank his past self. I want my future self to thank me now. Say, “Thanks for looking out for me. You did some good moves. We’re living a great life.” I don’t know that. I don’t know a lot of variables. There are so many unknowns of where life is going to be at that stage. I don’t want to bank, wait, and keep pushing it off. I want to enjoy life now.
I believe in that when you’re talking about it. That’s so good but as you said, there’s a strategy. There’s a thing that we can do. That’s good.
To answer your part two question about the depression stage, it’s a tough thing for a lot of people to talk about. It happens a lot more for people than what we even realize or what were led onto. We think that and we make these assumptions that even when people get successful that they don’t battle that. All of those are not true. It’s not the way it works.
I tried to keep this brief. What happened to me is this. I was in stage two success. I had this somehow from my competitive drive. You mentioned I’m one of the most competitive people. I’ve heard that many times before. Your biggest strength is also your greatest liability. This competitive nature for me was so far out of whack or out of equilibrium that I couldn’t handle it emotionally, spiritually, and all of that.
There were so many other people that were doing what I perceived as doing better than me in business, money, life, and all that. I was so hyper-focused on creating as much massive success as I possibly could that I was neglecting fulfillment. Success comes from what you get and fulfillment comes from what you give. I was creating success. In my real estate business, in my first year, I made almost $1 million. Incredible. I had other businesses that were doing well. I had investments that were doing well too. I put so much value on that. When some things went wrong, I had a bad couple of bad business partners that ended up in FBI handcuffs. It costed me a lot of money.
I had to take a step back and reexamine like, “What just happened?” I was putting all my eggs in the success basket. Essentially, I learned something from the book, The Second Mountain. 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 success mountain you’re climbing. It knocks you off onto the second mountain, which is the significance mountain.
I got batted, slammed like a hurricane took me off the one 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. You’ve created some success. Maybe not as much as you think is worthy or what you’re like set out to do but you can do more success. It’s not like you’re done here. Now let’s get you focused on fulfillment.” That’s when I took a step back.
That whole stage went on for a good year. That was a depressing year. Was I depressed? The most I’ve ever been in my life. I don’t know if I would’ve been. I never sought a doctor or anything like that or took meds but probably should have. I knew that things need to change. I need to change. I need to change how I’m going about what I’m doing. A lot of things changed but the main thing is that I looked at, “How can Jack wake up in the morning and live his life focused on being happy and not being focused on success and what’s my next achievement?”
This whole show is about what you said there. It’s about getting to significance. It’s getting there and it’s like going from that survival to success and getting there like what you did. I remember having several conversations with you. I don’t know. At the time, you were probably making great money. We were in this comparing mode. It’s like, “Why am I not going to this level where this person is? Why am I not doing this?”
We started getting that process. We started saying our significance on that level, that next, and that’s where our significance was. It can get there so quickly. It’s like not being able to be the significance that we could do where we’re at. What you’re saying there is an important thing. That does cause depression. I always say, “If you can’t be happy here, you will be happy there.” It’s being able to figure that out and that’s where it comes, like you said, “I got a boat. I’m on there. I’m with the family. I’m creating memories.”
You ever get your Facebook memories from a year or many years ago? It’s not the picture of me maybe going to the bank. It’s a picture of the family on the 4th of July. All of us together are taking that picture. That picture of us at the lake altogether. That’s what gives you that warm, fuzzy feeling. It’s so much in there.
I’m extremely grateful that I had multiple streams of cashflow coming in because that knocked me out of the game for about a year. I didn’t have any desire or energy. I was not myself and I couldn’t produce. I had some things that I had to take care of personally and I did not have the same earning power that I would’ve had before.
I needed to take that year off and go golfing every day and hang out with the kids, not work essentially. Having spent smartly with my money and diversified, all of that allowed me to that space where I didn’t have to go make money. This is what everybody’s got to be clear on. Life is going to hit you at some point hard and it’s going to be tough. You think it won’t happen to you. I don’t think that we escape that.Life will hit you at some point really hard, and it will be tough. When that happens, you want to be in a position where you can take time to heal, self-reflect, and figure out your next move in life and business. Click To Tweet
When that does happen to you, you want to be in a position where you can take time, heal, and self-reflect. You can try to figure out, “What’s my next move in life, in business? Where am I going next?” Take your time and do not be in a rush. Make sure that when you do come back into the game, you’re coming back into the game fully recharged. Batteries are 100%. You’re ready to go. That’s when I decided to launch my own podcast and platform. I needed that fulfillment. I was not getting that fulfillment and we talked about that. That was a major drag.
This is so good. Jack, this has been awesome. We probably could sit here for another 2 or 3 hours and talk. We probably haven’t gotten through most of our points. It’s already an hour here but you’ve given the meat, the four stages, which that’s something I can take away from this show. I can take those four stages away and I can coach that too. This is going to help me because I work with a lot of young people myself. This is so good for people who are reading this and doing that. That last part there, you summed it up though. You summed it up in the real things of life and the beautiful way we did that. I appreciate you jumping on here.
There is a stage five. We can’t leave stage five out.
No, we can’t. I didn’t know there was stage five. I’m ready. I thought I’m already hitting the home run. I’m ready to.
Stage five is quick. We don’t have to dive. We don’t have to take much time. Stage five is you keep repeating stages one through four until you’re wealthy and you move the needle on your net worth. Ultimately, stage five is where you can truly give without any repercussions. Now, what’s important to understand with that point is that’s where we hit philanthropy essentially.
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. You can be a philanthropist in stage one. That’s what people think that they’ve got to push it off. They don’t. In my own opinion, you should be a generous giver all the way through and that’s going to attract so much more goodness and great things into your life.
To me, I feel like I’ve been protected from some bad things that could have been a lot worse 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. I didn’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 hundred.
Start flexing that muscle and start working your way into the attitude of, “I’m a generous giver. I’m a philanthropist.” Again, it comes down to fulfillment. Success is what you get. Fulfillment comes from what you give. Being a generous giver, and living a life of philanthropy is going to set you up for so much more fulfillment in your life and that’s a beautiful thing.
That’s so good. Biblically, it’s more blessed to give than receive. It’s built right in there. Bob Proctor says, “Money allows you to make a difference without you being there.” I love that. One of the reasons to make money is that it allows you because most people can only give back with their time. They don’t have the money, so they have to invest their time in, which is awesome. I go help my neighbor. I go help somebody but money allows us to make a difference far out of our reach and we don’t have to be there and still. that’s the greatest value. That’s so awesome and what a stage five. What a level to get to. We can be doing that all along but you can make a difference at that.
When you’re in stage five, you can make a massive difference. You can build a church. You can send people on missions. You can feed massive amounts of the hungry. You can do so many things that are truly incredible.
Sometimes when people hear, “This is a show on money.” They think we’re all about the money. It isn’t. When you look at what you took us through, it gets to the ultimate. We talked about this in the show we did together. It’s giving back and that’s the ultimate. That’s where we get there and that’s truly where we’re going to get happy, Jack, and it’s like, “I’m feeling good about life.”
Brad, you and I are going to be the happiest when somebody comes back to us and says, “I tuned in to this show or I heard you speak on this and it changed my life. Thank you. You made this difference. Here’s what I did.” You’re in somebody else’s testimonial. That’s what we want. That’s what you want in that significant stage, stage three.
You got it. Jack, thank you so much for being on here and spending time with us. Tell everybody how they could listen to you if they want to learn more about you. Let them know.
It’s called the Indestructible Wealth show. It is exclusively about how to make, keep, and grow money. It’s a financial education platform. It is not any type of business opportunity or anything other than how to take better care of your financial life. If people are interested in learning how to master the money game, it’s dedicated to young entrepreneurs and professionals from all industries and all walks of life.
It doesn’t matter what business you’re in. You can get some value from it. We’re doing pretty well on the show. I’m super excited about the trajectory. Although, my competitive spirit is saying, “Brad’s number 80 on the podcast list. I’m not even anywhere close to that.” Congratulations on all that you’re doing in the success of your show. I hope to get even a piece of that.
I appreciate you. Keep it going and be listening with you. Think as we close out here, it’s like we talk about on this show going from survival to success to significance. Jack showed us how to get out of that survival mode and get to success but he also chose how to get to the significance. That way, we could have a legacy and we could pass that on. Jack, thank you so very much.
Thank you for having me. I loved every minute of it. Thanks, everybody, for reading.
About Jack Gibson
I’m an international, serial entrepreneur and financial thought leader. I’m the founder of multiple 7 and 8-figure businesses as well as a sought-after speaker. I’ve shared my experience with groups as intimate as 10 to stadiums of 30,000+. I have shared my message through my “Indestructible Wealth” podcast. I’ve pioneered a 7-part process that empowers people to make financially smart and strategic decisions. My goal is to help people live fulfilled lives now instead of waiting for retirement.