Wealth Building Strategies
Episode 988: Wealth Building Strategies, with Joey Mure and Russ Morgan
View this episode on:
Wealth building strategies—Discover actionable tips and proven techniques to grow your wealth with effective wealth building strategies.
Conventional wisdom says that you should always be pouring money into an IRA or 401k to plan for your eventual retirement. You’re taking money from yourself today, only to pay yourself back in the future. But what if there’s a better way? Russ Morgan and Joey Mure co-founded Wealth Without Wall Street, a company that teaches business owners to put their money to better use than squirreling it away in stocks, a checking account or traditional retirement account.
The wealth building strategies Joey and Russ have developed allow business owners to create lasting wealth and positive cashflow today, setting them up for true wealth in retirement.
Joey Mure’s Bio:
Joey Mure, aka, The Stallion started his career in the mortgage business in 2003. He grew to become a branch manager with one of the Nation’s top mortgage lenders leading 25 loans officers. By 2010 he had achieved national recognition. Despite earning an impressive income he still had significant questions about how to save for the future without having to borrow from banks. How does anyone save aggressively for retirement AND simultaneously pay for automobiles, save for college, weddings, and vacations? In 2010 Joey met Russ, who shared the Infinite Banking Concept and everything changed. IBC allowed Joey to get completely out of debt besides paying off his mortgage, he started saving four times the amount he had previously been saving, and now had a clear plan of how to save for all our life’s expenses without giving up retirement savings. Joey decided to join Russ and cofounded a company called Wealth Without Wall Street. They teach people to stop trading time for money to achieve financial freedom by following the 5 Pillars of Wealth Without Wall Street.
Russ Morgan’s Bio:
Russ Morgan, aka, The Idea Guy, started his career in the financial industry. With 4 years of planning under his belt, Russ was stunned in September of 2008 to see the DOW Jones plummet 800 points. He had no idea that the market could react in such a volatile manner and knew this was something he could never have control over. Russ began a journey that day to passionately understand more about how to take back and gain control over his money, as well as that of his clients. Russ believes that it’s time you stop following conventional planning methods and start thinking for yourself. He enlightens business owners and investors with the knowledge they need to make sound financial decisions. The best path to financial freedom is one that frees you to make decisions that allow your money to grow, allow you to have access to this money, and to protect this money from market swings and tax regulations. Yes, all of this is possible, and Russ thrives on helping people in their journey to reach this financial freedom using wealth building strategies.
What you’ll learn in this episode is about wealth building strategies:
- Why building wealth both inside and outside of your business is the most optimized way to achieve your goals
- How Joey realized that he wasn’t on the right career and wealth-building path and needed to make a change and how Russ helped Joey learn the secrets of efficiently building wealth
- How “wealth without Wall Street” is a money mindset that allows business owners to build wealth without taking all the risk of investing in Wall Street
- What are the best wealth building strategies for today’s business
- Why a checking account is one of the worst places to keep your money, and why your business is one of the best places to invest your money to create long term gains
- Why putting money in an IRA or a 401k is really just deferring cashflow until a later time, and why creating cashflow today is much more important
- Why becoming your own banker and loaning your money back to your business can completely reframe how you view your money
- How life insurance can be used in a way similar to a home equity line of credit, giving you cashflow without lowering in value
- How using your money in your business can offer a powerful payoff by freeing up more time and money for you to grow your business even more
- Why there are many options to invest your money even outside your business that create monthly cashflow
Resources:
- Learn more about wealth building strategies. You can find Joey and Russ here
- Joey Mure’s LinkedIn: www.linkedin.com/in/joey-mure-b376824/
- Elevate your wealth building strategies by tuning in to this podcast: This is How to Make Passive Income in 2024
- https://www.wealthwithoutwallstreet.com/community-offer/onwardnation
- Russ Morgan’s LinkedIn: www.linkedin.com/in/russ-morgan-72595519/
- LinkedIn: www.linkedin.com/company/wealth-without-wall-street/
- Facebook: https://facebook.com/wealthwithoutwallstreet
- Twitter: @withoutwallst
Additional Resources:
- Sell With Authority by Drew McLellan and Stephen Woessner: https://amzn.to/39y7x13
- Predictive ROI Free Resource Library: https://predictiveroi.com/resources/
- Stephen Woessner’s LinkedIn: www.linkedin.com/in/stephenwoessner/
Wealth Building Strategies: Full Episode Transcript
Get ready to find your recipe for success from America’s top business owners here at Onward Nation with your host, Stephen Woessner.
Good morning. I’m Stephen Woessner, CEO of Predictive ROI and your host for Onward Nation, where I interview today’s top business owners so we can learn their recipe for success, and how they built in how they scale their business. I am excited as always to have you hear Onward Nation for a variety of reasons. And one that is top of mind is that if you’ve been listening to the podcast for a while now, you know that I am a big proponent of you getting the cash out of your business so that you can consistently build Wealth outside of your business.
And yes, it would be lovely, lovely, lovely. If we all experienced that wonderful day, when somebody gets in touch and says, Hey, we wanna buy your business and we are willing to pay top dollar. And then you and your family right off into the sunset, you live the rest of your life, filled with financial freedom and impossibilities. That would be awesome. But the reality is, it is a very, very small percentage. The small businesses actually Sell each year. Unfortunately, the typical scenario for most business owners is that if you haven’t built a succession plan around someone who is currently on your team, then unfortunately, the data is not on your side.
You will likely not have a successful sale. And if you don’t find a buyer, or if you do find a buyer and then they come in and you try to then exit out of the business via an earn-out agreement, by the time you reach your three of the agreement is going to feel like I’m telling you is going to feel like a whole lot of not awesome. So I am excited for you to be here, to be able to spend some time with our very special guests today, Russ Morgan and Joey Mure from Wealth without Wall Street, because we are going to talk through how you can build wealth inside and outside of your business.
Russ and Joey have some really innovative and super creative strategies. So the, you can set yourself up for success, no matter what exit strategy or financial scenario comes your way, and you can confidently build your business as you begin 2021. So, without further ado, welcome to Onward Nation, Russ and Joey.
Wealth Building Strategies: Joey and Russ’s Introduction
Hey, Good morning, Onward Nation. I’m so glad to be here. Yeah, Steven, I really appreciate you having your own well. Thanks, guys, for saying yes. I’m grateful to our mutual friend, Chris Prefontaine, and then we also have a friend and Stephen for making the introduction so that we could have this great conversation in front of Onward Nation.
But before we do, before we dive into the, what I’m sure is gonna feel like a broad set of questions that I sent your way before we do that, actually, take us behind the green curtain and tell us more about your path in your journey. ’cause I think that is going to give us a lens into this philosophy that you guys have built this wealth without Wall Street, which is awesome. So tell us a little bit more about what’s behind the curtain, and then we’ll dive in. Well Stephen, I love the fact of how you introduce this whole topic, because if you’re like me, you were just nodding your head the whole time. You’re like, wow, that sounds amazing. If I could build a business, build wealth inside the business and outside of the business. That is just the most optimized way to do what we’re doing.
And the other thing that I took away from that was, man, you have to love what you do. And I think that that’s really how our story starts out for us. And I was first Russ as a client. He actually shared with me a book in 2009, 2010. And it was all in light of Hey Joey, I want to start sending people to you as a referral. And I was in the mortgage business at the time. And I said, well, of course, yeah, I’m open to that. I’ll even buy your lunch, maybe, and then he turned around, he said, Hey, you have to read this book, though. And by the way, it’s $20. And I was like, Russ, I mean, I didn’t think you are hurting that bad.
Like literally, that’s a low blow. That’s like low rent that just charges me 20 bucks for the book. Do you want me to read the deal? I will. You have to invest in yourself. And that’s the part of that process? Well, he knew he was too cheap. A that if I put 22 bucks behind it, I had actually read it. So I did, and it completely changed the trajectory of my life because I knew, financially speaking, that the plans that were set out for me just didn’t make sense. I couldn’t really put my thumb on it, like exactly what it was. I just knew it was kind of uncomfortable. And it really, up to that point, I was making over a $300,000 a year and I just looked back and I was like, wait a minute.
Wealth Building Strategies: A Journey from Overwork to Impactful Wealth Building
This, I should have way more success than I have right now. Like, this doesn’t feel like financial freedom, but I thought that the bigger my income would get, it would feel like financial freedom. And in fact, what was happening, my, my family was getting further and further away from me. My vacations looked like just a different location to take more phone calls. And my wife was becoming a stranger. And I think the cool thing was that once I read this book and started down the path at Russ and I are working together for years later, we had seen so much change in the way, I think the way that I act with money, that I was like, I was compelled to say, why am I not sharing this information with other people?
What are the best wealth building strategies in modern businesses? That goes back to when I started this business with Russ in 2014. And it came out of a desire to impact others with a message that has totally changed my life to the point where I went to my wife, She was pregnant with our fourth daughter here. I was making over $300,000 a year. And I knew I had to come to her and ask her a very simple but difficult question. That was, Hey, babe. I really feel like I’m supposed to quit my very comfortable job and start this business from scratch with Russ.
And it was kind of reeling at that point. Like, what is she going to say? Like, is she gonna slap me? I don’t know what’s going to happen next. And yet she said, you absolutely should do this the bottom line was she knew she needed to have me back. And if that meant changing total careers, she didn’t even know what the whole future was going to look like, but she knew that she wanted me out of that existence. So circumstance. So anyways, that’s how we got started. And 2016, we launched out on our own, and then it started the podcast and 2017 and that has just totally blown up our business from there.
Wow. Okay. Joey thanks very much. Russ anything that you want to add? Any additional context? Well, I would say that he was a great student. He invested in himself, and it was amazing to see him take on that role. And then we are going to get in touch the discussions today and we all have been, or maybe still are in the position that Robert Kiyosaki would call being in the S quadrant business owner position, or are, we may be making a good living, but sometimes our business is control in our life and finding ways. Joey did a good job of this early on, finding ways to move out of those two tortas, B quad at business owner, and an investor position.
Wealth Building Strategies: Beyond Wall Street’s Mindset
What are the best wealth building strategies in modern businesses? And all of that is really what we’re after. Right? I mean, the reason we create businesses, the reason we do a lot of things is for the freedom that it gives us and the success of seeing others being impacted by what we’re doing. And what I love about Joey’s story is that he was a key player in it and he was the guy he was in control of the whole time. And I came out of the typical financial planning world that was really doing anything, but helping people be free. You know, like my goal was to separate people from their money and I was really good at it. But after the market crashed, I learned that there, there had to be better strategies.
And that was where some of the book concept that he talked about came in and then we sought out other streams of income outside of what we did for a living that really just opened the door. and he said as created a business that we wouldn’t couldn’t even have imagined back then. So let me ask you to take us inside. Wealth
Without Wall Street and I don’t mean the business, but I mean like philosophically, like, like philosophically, what does wealth without Wall Street mean to you and to your members? Like, again, not the business, but just like high-level first.
What are the best wealth building strategies in modern businesses? I mean, we always refer to it from a mindset position because the really the crux behind Wall Street, as we will, we’ll break out a lot of times on our own podcast, is that there is this mindset that I can make those sorts of financial decisions. I’m not qualified. I’m a busy professional, I’m a busy business owner, and I need to leave that stuff to those specific specialists. And I need to keep doing what I’m doing, and that’s the best way to freedom. and that may be how I managed my money. That might be where I invest. That may be the way that I pay off debts or whatever.
It means that people had lots of struggles. And it really comes back to, I’m not educated. I don’t have the financial IQ to do this, so I must divert or hand that off or abdicate that responsibility Joey likes to say to someone else, well in Stephen. And the thing is, is those that are listening to us right now. You’re a business owner and you already that something’s not quite right with the way that Wall Street operates because what they’re doing is, we talk about this as the Wall Street mindset is, they’re saying, give us as much of your money as possible.
We’ll hold it as long as possible. And we’ll give it back to you while you take all the risk over the next 20, 30, 40 years, however long it may be. At that point, you will just hope it’s enough to get you to write off into the sunset and not run out of money.
Wealth Building Strategies: Beyond the DOW 30
I think that it is so well said because it is fascinating that as we’ve watched the DOW. Recently crossed that barrier of 30,000, which is the number that doesn’t mean anything other than just mindset-wise, or how is it gonna get there whatever is, Oh, it’s big history. It’s a number. It is.
And what’s fascinating is so many people. Unfortunately, many politicians, because it’s for their betterment, like during the campaign season, look at how the economy is doing by pointing to the DOW 30 as a leading economic indicator. I’m like, you’ve got to be joking. The Dow 30 is not a leading economic indicator. It doesn’t talk about labor or it doesn’t talk about debt. It doesn’t talk about consumer confidence. It talks about nothing other than the average of what these 30 companies are doing, which is, could likely be inflated by institutional investors. It’s ridiculous that people point to it.
Well, and even bigger though, as business owners, you have a unique gift you can take out, like, let’s just say people on average. They say, man, you know the stock market, on average, it grows by eight, nine, 10% per year. Yeah. And literally you did that last month in your business potentially by making a small tweak on some marketing things that you were doing or doing this new email campaign or whatever it may be like you had the ability to do that in like no time. And yet we’re literally giving money over to somebody else’s control when we are the ones that make it rain.
Like, I mean, it just doesn’t compute. If you’re a business owner, you have so much more to offer in terms of love, the name of your company, and predictive ROI. Well, why is it predictive is it because you have more control over your business? Like you know how to make your business grow. And that’s where we should be investing in ourselves and in our business, and those things are not in this completely speculative environment, which they call Wall Street.
So Russ, if you are okay to share with Onward Nation again, as we’re thinking about wealth without Street from a philosophical perspective, like are there, are, there are a series of if we want to call them core principles or Pillars or some things that they kind of that would also take this philosophy piece a little bit deeper. I just want to make sure that we’ve got a solid foundation here as we will then branch into other strategies and so forth. But so are there some core principles that make the same?
Wealth Building Strategies: Building from the Ground Up
Oh no, absolutely. Well, one way we look at it we kinda looked back into our days of college and I don’t know if you ever had a psychology class, but you would have taken if you took psych one Oh one, you would have learned about Maslow’s hierarchy of needs. Yeah. And in Maslow’s hierarchy of needs, he covered the basic foundations: food, water, shelter, love esteem, and self-actualization all of those things. And the concept was until we meet the bare minimum, we’re not motivated to move up that ladder. Well, the same thing should be true with money, but is not operate. We’re not taught that way. We are actually taught the opposite.
We’re literally taught self-actualization first, if you will, if we were looking at Maslow’s hierarchy of needs. So, we created a map, like a hierarchy of wealth pyramid, we put four or simplified it instead of having five at the top of that speculation. Hmm. And that is where most people start. Right? I mean, think about it. The first job that you had at a college, you were taught to invest in your IRA or 401k, and you may still be doing it to this day. And your CPA is probably a big component of it because it’s going to help you save taxes today and in the room until tomorrow. Well, but if we like what Joey was saying, and then we are speculating because we truly don’t understand the value.
I mean, you mentioned DOW 3000 or 30,000, Stephen. This is a very, very little-known fact, but in order for the DOW to have the same growth over this century as it had the previous century, what do you think the Dow has to be at in 2099 or 21? A hundred.
Oh gosh, I don’t know. That’s a cool extrapolation. And I’m curious about the number— what is it? It’s about 2.2 million
So were 20 years, and he was there for 20 years and we’re at 30 grand. I mean, just to give you the time context and by the way, that was a five and a half percent return over the previous hundred years for us to have, and we have to be at 22.2 million at December 31st closing bell have 2099. Just people don’t understand like, that when they see these numbers, the cap is compared to what, right? So as Joey said, yes, we can invest in things that make a lot more sense, but the speculation that’s happening on the market. And I could go story after story, personal experiences on there, and I won’t waste your time, but that is where people speculate. We say, well, that the guy on the, on the side of the street, who’s panhandling for change to get a hamburger, right?
Wealth Building Strategies: The Pyramid of Financial Security
Maslow is a basic need for food or the motivation of food. What should that be for us? And as business owners, we know what it is cash and cash flow. Yep. And right now I speak to a business owner all over the country and they’re terrified by what’s going on in the world and they’re, and they’re with COVID and the political changes and everything that’s happening, they really are concerned. So what they’re doing is stockpile and cash and the stockpile in it, in their business in checking accounts, some of the worst places for us to store money, but they’re, they’re terrified of what to do with it. And so we start with, how do we create more cash?
How do we create more cash flow? Where do we store cash? And how do we put it in a place that benefits as a set of hurts us. And then, as Joey says, the next step on that pyramid is for us. So that’s our foundation. And the next step is focusing on things that we can invest in that we do control. And for some people, this is like an old, have they been investing in their knowledge and their networks and their expertise in everything? You know, they’re working with groups like yourself and that’s just a normal everyday experience. But for some business owners that are still struggling to make those extra investments into their business, into the things that they need to do, there’s been that mastermind that they needed to join, but they didn’t ’cause, they were afraid as the $25,000 price tag.
But we both know that we’ve had conversations before the record about the experiences that we’ve had personally in how that’s impacted our businesses forever. And so we talk about that, which needs to be the first place that you can invest in. Now, some people are already working in an environment that they can invest in, that they also have impact and control, and it can influence the outcome and it may be outside of their personal business. And those are great things. And then the third step before you get this speculation when people really start investing outside of themselves, and the things that they can influence is into things that are collateralized. So we’re, we’re big fans of investments that regardless of what happens, there’s still something you can see, feel or touch and that don’t mean the paper with the ink that they print stuff on it, but like real stuff, real estate buildings that these are businesses stuff that you can go see, touch, feel that that’s the kind of stuff we are personally put our money in and love because it’s collateralized.
What are the best wealth building strategies in modern businesses? Right. And you know, a lot of times I’ve had friends talk about this, that real estate, for instance, it’s like a bad haircut. They are given enough time. It will work its way out. and there’s there’s, there’s a lot of truth in assets that we buy that actually have collateral. and then, and then once we get past that very few of our clients ever wanted to get past that because they are seeking financial freedom, and financial freedom is a simple formula. It’s when you have more passive income than you have monthly expenses. And when they are following our process or steps, they get to that point in the concept with an idea of speculating on something that may go up or may go down, and just becomes unattractive.
Wealth Building Strategies: Lessons from a 10-Year-Old’s Perspective
It becomes a discouragement. Now I’ll leave this. I’ll shut up. And just a second, but my daughter is 10 years old. And during the COVID was practicing on a little pull up bar to be able to hang By for two minutes because we had saw right before the mall close for quarantine, that they had this little game in there for $10. You could when a hundred, if you could hang on it for two minutes. So, have you ever seen those little games in kiosk around the country anywhere? I have not seen that one. That sounds kind of cool. It was just a really interesting thing. And so I was talking about at one day and she’s an agenda. So she jumped on my pole, jumped up on my pull-up bar was holding, and helped for two and a half minutes. And all she could wait for.
It was quarantined in, so we could go up there so she could put her $10 down and went on a hundred bucks right now. Well, of course he stopped. We had a shooting at the mom, like we’re not going back while my daughter just had an opportunity to go to them all for the first time. And it has told you this to me and she’s up there and she was so ready. She knows she can hang for two and a half minutes. So she has to hold this for two minutes. She was going to, when her money, she lasted 30 seconds. What, what? Yeah. Two things that I learned about a year after she fell. One is that the door there was like three times the diameter of anything she’d been practiced on and secondly it rotated all nice and it was in a cylinder.
So it wasn’t, it wasn’t stable. So when you have to do it this way, over time, your weight actually pulls the bar and it rotates. So in 30 seconds, she fell. She was so mad. My wife said that she didn’t talk for 30 minutes or so when I got home. And I asked her the question, and this is the stock market. This is the feeling that most people experience, and why are our clients will not invest using the speculation is that I asked her, I said, well, let me ask you, what was the worst feeling for you? Or was it losing the $10? Because she used her own money or lost the a hundred dollars. You thought you were going to win? Ooh, great question. Well, thinking about that, when it comes to the market, which one are we more upset about?
Are we more upset about not getting the huge upside when we sell short of the huge upside or we were upset when we invest in something, and then we lose the money to go into selling when it goes down? Yeah. And if everybody’s a little bit different and she, even at 10 years old was perplexed by the question, because I was at a certain, she was gonna say the $10, but she would, she really couldn’t. She was like, I don’t know. And that is the frustration that many people have. And so when we talk about that framework and I thought that was a long way to go, but our framework is cashflow control collateralization, and then speculation, if you invest in it.
Wealth Building Strategies: Building Wealth Through Cashflow
Could you please provide some more context on wealth building strategies? In reality is Stephen just as he was telling me, or talk me through that, each one of those steps should turn into cash flow. And that’s the problem with speculation when we’re investing in things like we do our IRAs and 401ks, we are literally deferring cashflow. We’re putting it off until some magical time in the future and hoping that there will be enough cash flow at that point to live off of it. It was a big sell. It was just the same way as business owners were hoping for the big cell at the end, that is going to do it. And as you said in year three, you’re disappointed by the results of what’s happening.
So we want to be about creating cash flow today. And that’s why we go in that order, right? Our cash and cash flow is the king. It’s the very baseline that has to be present. If you’re, if you’re cash flow, shuts off, your business is gone, right. We already know that we’ve seen a million opportunities where that has happened. So we have to continually protect that. The second part is control. So if your business is not creating cash flow for you passively, that is the biggest missed opportunity and I’m sure we can get into that more, but that should be our next step. That should be our number one investment in Russ.
When did you start your journey on wealth building strategies? I have actually learned the hard way over that we had a great business three years ago, and it was totally dependent on him and me, a hundred percent that one of us got sick and couldn’t be on the next phone call. Okay, well, there is no income coming from that, but so we had to. We were trying to invest in all of these things outside of the business. And we really woke up one day. We’re like, wait a minute. What are we get? The biggest return from his, from our business, is what we know is what we can control, but we have not done what we needed to do to invest in the systems and processes to create a passive Business. So it was always gotta be depended on us.
And I probably take more and more of us if we didn’t make a big change pay Onward Nation. I wanted to take a quick break from the Episode to share a practical and tactical Resource with you. When we first released our book profitable podcasting, it became a number one new release on Amazon in less than 18 hours. Well, that was nearly three years ago, and we’re still getting great feedback on hill. The book has been to business owners just like you, as they launched a podcast to build their business.
When I think of strategies that you could be applying right now, during these challenging times, having your own show, which would be a conduit that you could use to teach and share your insights with your community, launching a podcast or growing your existing show really should be at the top of your list. I want to help you get started by giving you access to a free chapter of my book. Just go to Predictiveroi.com/Resources in you’ll get the chapter where I show you how to confront and overcome your three biggest obstacles to success. And we will send it right to your inbox.
Wealth Building Strategies: Simplified Strategies for Financial Growth
Okay. This is, this is really awesome. So, let me make sure that I got the pyramid, right. And then, and then I’m going to ask you guys for your insights and recommendations, like maybe there is two or three. I know I’m looking for a very overly simplified approach here, but maybe there are a couple of golden nuggets that somebody can take and apply to move from one stage to the next maybe. Sure. So let me make sure that I have them in, in the correct syntax cash flow first or second control, third collateralized or collateralization, and then the fourth speculation. Do I, do I have the right syntax?
Yes, shockingly. We are not communication masters. Ask any of either one of our wives, and they will confirm that, but yeah, so I’m grateful you got that.
Well, Christine would probably jump into the same canoe, your spouse’s, and say the same things about me. So I think we’re good there. So let’s say that a business owner is thinking, okay, what Joey and Russ are saying, yes, I wanna double down on cash flow. That’s why I’m at the base of the pyramid. I want to do everything that I possibly can in order to maximize cash so that I can move into control. What are some, maybe two or three golden nuggets that you would suggest they consider?
Do you have examples on wealth building strategies? Yeah, here’s one. And so this is very common that, that you and your business, if you’ve ever gone through it and an experienced early on not making a payroll or fearing that you were going to make a payroll and knowing the heartache that, that created within you and, or your employees, you, you, you started storing tons and tons of cash, right? I mean, that’s a very common thing right now with the business owners that we may have large six figures sometimes in checking accounts. And I’ve never met anyone who has been super excited. Stephen about their checking account, except for the fact that it provided liquidity.
Right? And so one of the things that Joey was talking about this book that I introduced him, it was we actually, it was at this conference that this man named Nelson Nash was talking about this idea of having your money at work at all times, and you being your own banker and it was great. It was so, yeah, it’s so funny. So I would say what a nugget would be, if you’ve never read the book, come to your old banker, that’s a total must. Let me tell you Why that makes sense. ’cause my wife was a business owner. She had started a dental practice at the end of 2008. It was a wonderful time to get into the, into the business world.
Wealth Building Strategies: Lessons from Personal Experience
She was starting to have a dental practice, and we were borrowing $700,000 to start a business at that time, her father, about a year and a half earlier had entrusted her financial planner or son in law and to manage his money. And he gave me that would be Russ. He gave me several things, but one on one was about 2200 shares and a stock called Bank of America. Okay. And he said, whatever you do, don’t fill this up. My father gave it to me. It was his life savings. And when he died, he said never to sell it. And I said, okay, well, the thing I’ll do is make sure we put a protection measure.
So if it ever falls below 15% of his value to sell it, but Bank of America stock doesn’t do that. So we’ll never worry about it. About six months after I gave it to me, that was the front end of the financial crash in which the market went down. And as you might imagine, it sold it. So there he is with Sydney and, in cash, completely hacked at his son-in-law. Cause I sold the one thing his dad said never to sell. You know, I read the book becoming your own banker. And my father-in-law’s terrified. He was sitting on cash and not knowing what to do with it or not wanting to invest it in the market. There. My wife is borrowing $700,000 from Bank of America. That was one of the leading lenders in the dental field and was paying them 8% and almost $8,000 a month in my father-in-law’s got his cash sitting in a checking account, earning points, nothing.
Right. And I’ve read that book in it. And that was like, wait a second. We could put those two ideas together. Immediately start making the payments to her. Our dad had him take the cash, pay off Bank of America. And now we’re in a position so that the cash went to work in an asset class that he could own and understand control his wife’s dental practice. He knew that he knew the numbers. I knew he was operating in it, and he created a cash flow, which was the number one thing he needed. And from my wife’s perspective, she was gonna make a payment no matter what. So, I always teach people this concept of becoming your own banker in that base foundation step.
And it is so important because typically, what happens is in our business, we, because we have so much cash to even, we make the mistake of believing that we can pay for things. Yeah. We got that new operating system that we need, it’s $15,000. We’ve got a hundred thousand sitting here in cash. I can buy this new marketing program is just another 30 grand, or I’ve got 150,000 in my checking account. Let’s do that, oh, this new piece of equipment. It’s another 45,000. I can make that purchase. And it does. It increases my outflow. It just coming out of this reserve that I’ve been building up. And what you said earlier it made so much sense to me as business owners, we don’t build businesses to create wealth for the business.
Wealth Building Strategies: Maximizing Business Investments
We create businesses to create wealth for us, but yet if all the wealth resides in there, we’ve fouled up the main priorities. So what we teach is to get the money out of the business, get the cash out of the business. We create these accounts through the becoming your own banker Concept. And then when our business needs these things, as Joey said that, number two on our hierarchy, we’re saying, okay, this is something that I can invest in to control. We do one financial calculation. We see if we make this investment, our business has to not only pay us back the money at cost, but it has to pay it back at interest. And then we can, we can say, well, what’s that monthly payment? So if it’s a $50,000 investment and it costs 3000 a month to pay it back over to the next four years of whatever our terms, how much will that investment produce for us?
And if it can’t produce more of what it costs to pay it back, we immediately have a principal that says, don’t do it just because we have cash. Does it make it the right investment? And I think business owners missed that too often. And that’s why Kash is in the right position, because we got to get out of the business, get it out of there. So then when our business is, I need it, and we go, that’s a good business investment. Well, let’s do the math, lets see what it would cost us to pay ourselves for that principal. And if we can do that and make the math make sense, then we do it.
Okay. So let me give that back here again to make sure I’m tracking with you. So in this scenario, when you mentioned Nelson Nash, it’s an excellent book. Onward Nation so if you haven’t read it, I highly recommend it as well. So then, in this scenario with your wife and her dental practice, it sounds like you then did go to an insurance company, took out the whole life insurance with the Special Ryders and so forth. So, your father-in-law was lending out of his policy. And then the business was paying back the policy with interest, and my tracking sort of the transaction here correctly,
You know, you’re totally right. Obviously more than the average bear when it comes to this, a lot of times people are saying, Stephen, what are you talking about is if it’s okay, we will give a link to a free course at, have you do a lot more in-depth analysis of what you’re saying? But the absolute right is that we took the Banking function from the banks and put it into our own family’s hands. And out of that one transaction, I got to see like the beginning of how our family then started operating from a position of control where we were borrowing money, I guess, accounts that have cashed that we had created for our businesses and for real estate purchases that we made and other investment and endeavors that we pursued over the last 10 years.
Wealth Building Strategies: Leveraging Business Investments
And it put us in a position to say, okay, let’s stop. You know, and in her situation she was just starting a business. But I had had one for many years, let’s start accumulating cash and businesses, checking accounts, retained earnings, let’s move those dollars out of those accounts. So we can make informed decisions when our business needs it. And from that, we will be in a much better position and sure we’ve been able to take over debts and some debts we’ve done with that. Some we’ve just left at the bank because it may not have a financial sense not to take them over, but it was just a great example early on in my career to see how important it is to be in a great position of cash, but also knowing of where that cash should reside
Well, in Joey to see if this is accurate as well. So in this scenario of, let’s say that I’m a business owner and you know, I’ve got a hundred thousand dollars sitting in a checking account. You know, it kind of follows this scenario that Russ has been talking about. And I decided that I needed to double down on a particular area in the business. And I know that the internal rate of return of that investment might be going back to the stock market, the 8% that you were mentioning before I knew that I might get 20 points out of that. I might get 20 to 30% of my money, right? So if I take that a hundred, a thousand dollars and I put it into the strategy that you are talking about and I do the write the properly structured home life insurance policy, what the right riders to give me the ability to do that.
And I lend out of the whole life insurance policy, take the cash value out. And then I make that investment in the business. That money, as far as the insurance company is concerned, is still invested in the policy. And I still appreciate that is going to be lower than the stark market, but maybe four to 5% I’ve taken a loan against it. But all that does is lower my death benefit. Right. But I mean that money is still technically invested with the insurance company. Right.
Wealth Building Strategies: Leveraging Assets for Expansion
That’s right. Yeah. It’s very similar. I always try to compare it to equity in the house. Okay. So, for instance, if you own a house for free and clear and you go to the bank, you say, I need to borrow against the equity in my house. They are going to give you a line of credit against it. They’re not physically taking money out of your house. Right. And so what does that allow you to do? It allows you to take access of the capital that the bank has then lent you and go do what you wanna do with it. But the actual value of the home can continue to rise with whatever the current market is. Now, the only differences in a life insurance contract or the way we structure them in the way you’re talking about they are guaranteed to rise and guaranteed to go up without ever coming down, unlike your home equity, which we saw in 2009 and 10 came down. That’s the only difference in that case.
Okay. So if I’m understanding correctly again, back to the pyramid, when we’re looking at cash flow control, collateralization speculation. So, at the cash flow stage, you guys are putting in this type of, because those are cash flow instruments, right? When you went out of the policy into the business, that does help boost the cash flow, make things nice and stable because it’s protected is backed up by insurance. The growth in that too, I think, is tax-free.
Isn’t it? Correct? It is a hundred percent. Okay. Oh. So then once that foundation is set than a business owner ought to be looking at, okay, now how do I move to the country the whole stage?
Yeah. How do I find, like just what we were talking about, what we’re, what are some of those investments in the business that they may already have, but maybe there’s some that they have it taken. Maybe there is I remember for my wife, it was, it was a machine that she could do panoramic images of someone’s mouth and they really needed to do that. It was much more depth than just the normal scans they would do when every six to 12 months it gave them a bigger scope. Well, it was a hundred-thousand-dollar machine. Wow. Every time they did that, they made about $120 per thing. And it allowed them even from there to see more stuff, to be able to share with their patient what’s going on.
And obviously, from there, there were more elective cert procedures done. And so we could really sit down and do the math. If we take a hundred thousand dollar loan against her life insurance policy, as you said to buy this machine, we need to pay ourselves back. And we created a fixed cost. What will it produce? What does that investment buy in our business? What could it do? And so when we talk about control and investing in things that we understand, we have investments in our business. One of the ones that Joey and I made early on was about investing in an operations manager or someone who could run all of the business things for us because we are just not super detailed in that way.
Wealth Building Strategies: Maximizing Time and Resources for Business Growth
And the things that would take us two and a half days a month to work on, he could do in a matter of a half a day. And just what those two hours or those two days freed up for us that the production value of our business went way up. Now, of course, we had an expense, a couple of two or $3,000 a month to hire him to come in and do those things for us. But our business grew almost 75% over the next 12 months because of us being freed up two days a month. So it’s just thinking of little things in our, of how can we invest in things that can create content. And that’s just a couple of examples of those.
Okay. So Joey, if we’ve got this foundation of the cash flow piece, so we’ve got the policies in place, it gives us the ability to make the investments that then provide us with control. I love that because that tells me that like fits right into one of my favorite words of predictable. And so now, the cashflow of the business is at an even higher rate because those two pieces are working together. Right. That’s and then, and then that, that gives us enough cash to be thinking of opportunities at the next stage, the collateralization
That’s right. In that, it would actually be one or two things. And this was actually what our operations consultant was really meeting with us in the last year. He said, okay, we’ll tell me what you guys need to make from the business. All right. Well, we’ve already built these systems. We’ve already built the sales force. Like we started to build all of these things to make the business more and more passive, and he said, well, how much do you mean to make? We will put ’em in a number out there. And he said, well, you’re already making them. I said, well, we said, yeah. He said, okay, well now you need to decide, what do you want from the business? Do you want more time or more money? Okay. And so then we kept off what we wanted to make and said, let’s invest even more in the people and processes to get more of our time for our success in this came from our very first process in our system is clarity and we step back and he said, what do we do?
What do we really want at the end of the day is success for us. It is time. And so if we are a year from now and we’re working fewer hours, we are moving towards our ultimate picture. If we’re going the opposite way, in terms of hours, we need to make some changes. Like that’s our kind of milestone. And so what I would say to your question is there is either one to two things. One, I’m either going to invest that cash flow back into my business to get more time, more lifestyle in, into people and processes, or I’m going to a man I’m really comfortable with the time that it’s given me and the income that it’s given me.
Wealth Building Strategies: Leveraging Surplus for Financial Freedom
And I’ve got this surplus. Now, I step into that third stage. What you just mentioned was collateral. And I started looking at passive income ideas that don’t necessarily take a whole lot more of my time, but there are ways that I can start to now cover even more of my monthly expenses with things like real estate, or it could be lending opportunities to other entities or other businesses that I feel confident and I understand that that’s what I do. I think you mentioned that I know a lot of the Onward Nation are already coaching and consulting people, and we, that a lot are those, those type of entrepreneurs come to us and they say, okay, I feel like my business has right where I want to.
I don’t necessarily want to see it grow anymore. It’s hard to produce income, but I see a lot of my coaching students. They have so many opportunities, but they need to invest in certain things it to take them to the next level. Would that be a good position for me to be investing in their business or me to be lending to their business or whatever, and they, and they make those sorts of decisions. So they start investing in an asset that they already own. They already understand they can help influence and control. I mean, why do people go to Shark Tank? They are going for influence, right? To, to get the wisdom of the two of those sharks sitting on there. But those sharks then do what they turned around and take their understanding and their connections to help amplify the businesses in which they are investing.
Right. And we tell people that a lot, that those are the things, Joey, there’s a handful of things. So one of our AR, you know, the blessings of our business, that we personally benefit from it, and we did this on purpose is that we started interviewing entrepreneurs all over the country to share ideas and businesses have ways to create passive income and cashflow models that most people have never even heard of. One of us met several people right together. You mentioned Mitch, Stephen, and Chris Prefontaine. And those business models are really cool opportunities of how people can get, can get in business with someone and create income. Joey and I created a land flipping business where we buy and sell raw land in places that we’ve never seen and do it in terms we are, we actually have a short term rental business where people go in an Airbnb and they booked we have 11 different units.
And here in Birmingham, which obviously is not a vacation town, we have a very successful short-term rental business that is three to 400% greater profitability than a normal long-term rental business.
We would have never known that had we not interviewed and understood more about how that model worked. And I could keep going because we have lots, we love getting involved in those things, but there are so many different asset classes that could fall on that collateralized space that you can get those surplus dollars. You were just talking about Stephen from the business. And if you don’t have to reinvest in it, and you’re looking for an hour outside way to do it, you can get cash flow coming back that is greater than your overall personal monthly expenses. And then that’s just added freedom. That’s just added security two. What happens if we go through another downturn and my actual business, I’ve got this to back it up to where I don’t have to ramp back up how much time I’m spending.
Wealth Building Strategies: Last Bit of Advice and Connect with Joey and Russ
This has been awesome, guys in super helpful and grateful that you are able to verbally sort of visualize that, that model, that the, ah, the stepping stones or the pyramid, or whatever, a sort of description of the image that we want to use, but this was super helpful. Really great examples. Awesome. So I know we covered a lot. I know our time is running quickly short here. I know we covered a lot, but before we go, before we close out and say goodbye, do you guys have any final advice, any final recommendations, or anything that you think we might have missed? And then please do tell Onward Nation, business owners, the best way to connect with them.
Yeah, I would say one thing. I mentioned this early on, and I’ll just reiterate it as a business owner. Your instincts are really, really good, but the marketing of Wall Street and big banks will have you question what you should be doing with your finances and what we are here. What Wealth Wall Street is all about is empowering you to do what you already know what to do but to make sure that you’re doing it in the proper steps. Does that make sense? So, what I want to encourage you to go to be empowered. One of the ways that we’d love to share with Onward Nation is a community where they can be a part of and actually take some different, there’s actually some courses we’d like to offer that are free, that they can be a part of. They can learn some of the things we talked about today. Would that be okay?
I think that would be awesome. We’re always game when our guests experts like you guys, or you’re just a generously give of their smarts. So thank you very much.
Yeah. Well, so we created a special link just for an Onward Nation. So if you go to WealthWithoutWallStreet.com, OnwardNation, you’re going to get access to the community where there are roughly 3,500 other business owner entrepreneurs who are on that same journey and are seeking financial freedom. Some are closer to there than you are, but I would say that they are all on the same journey and all super helpful, because we see people communicating back and forth asking questions. And I love when, when I, when they’re connecting the dots together, but also there’s tools in there, as Joey was mentioning, that can help clear the path, because sometimes you don’t know what a good idea it looks like until you’ve trained your brain to know what a good idea actually looks like a man.
And our objective is to show you what that means. We will take you through a four-step process. And so some of those courses it will help you organize your cash flows. It will help you understand where it’s a good place to store your cash. It will start to help you understand more about your own investor DNA how are you built, what is it that interests you and what are areas of expertise you have. So when you start looking at Stephen toward that step three, that collateralized passive income steppe, you have some framework of how to choose because you don’t choose just because it creates cash flow, as I made those mistakes early on.
So, you choose based on things that match up more with your own investor DNA. And we’ve built a model in there that helps people to go through that process. If you ever need help, raise your hand. There is an opportunity to reach out. One of our coaches will jump on a 15-minute call for free with you to give you some guidance. And we’d love for you when you join. If you hit the little chat function in a Joey and I direct message and say, Hey, I heard you on the Onward Nation show, and we’ll be glad to help kind of also make your journey and path as much easier as you’d go through it. Awesome. So guys, The URL again, was WealthWithoutWallStreet.com, OnwardNation.
That’s right. Okay. Onward Nation no matter how many notes you took or how often you go back and relisten to Joey and Russ’s words of wisdom, which I sure hope that you do the key is you have to take these four steps. You have to take the cash flow and control collateralization and speculation. You have to take those four steps. You have to take the golden nuggets that they generously shared with you in each of those steps. Take them, apply them to your business right away, and accelerate your results. And guys, thank you so much for saying yes to my invitation to come onto the show, to be our mentors, our guides, and to help us move our businesses.
Onward to that next level. Thank you so much, my friends. That was our pleasure. Yeah, absolutely.
This episode is complete. So head over to OnwardNation.com for show notes and more foods that fuel your ambition. Continue to find your recipe for success here at Onward Nation.
Fill Your Sales Pipeline Q&A
LIVE Wednesdays at 1:00 pm Eastern / 12 Noon Central
The Sell with Authority Podcast is for agency owners, business coaches, and strategic consultants who are looking to grow a thriving, profitable business that can weather the constant change that seems to be our world’s reality.