Ep 329: Selling A $3.5M + Business & Building Wealth Through Investing & Real Estate with Justin Williams

When, why, and how should you sell your online business? Hi, I'm Jaryd Krause. I'm the host of the Buying Online Businesses podcast, and today I'm speaking with Justin Williams, who dropped out of college with a bold vision, convincing his wife Tara to leave her teaching job so they could start their first business.

But their million-dollar dream quickly turned into a 120K debt nightmare. He was determined to turn things around, obviously, and they hustled their way out of debt and pivoted to real estate.

Eventually flipping over 100 houses a year, the success led to launching the House for Flipping Headquarters business, which helped other people in real estate thrive and business. And after selling the company, they took time off to focus on different investments and new investments and ventures.

Now, as the founder of Millionaire University, their vision is simple. Help people graduate rich, not broke. With over 600,000 monthly podcast downloads, MU is transforming the way entrepreneurs learn, grow, and create wealth. And in this podcast episode, Justin and I talk about how he sold his education business, real estate education business, why he sold it, and what that deal looked like in terms of how they structured the sale.

It's not a typical structure, but it's a great structure if you're looking to sell your business to a certain person who is already in the business, say an operator. In this example, we always talk about the different examples of buying an online business using SBA or without SBA, and Justin talks about whether he would buy a business, and he thought about it, he wouldn't want to buy a business and operate it.

And what that would look like buying a business with finance and hiring an operator and how much money he'd be left with after buying say a $2 million business with finance and hiring an operator and spending 200K down on a deposit, how he could be making 300K net per year without running the business. Pretty cool example. We also talk about the difference between real estate and business.

When, why, and how to do either, Justin's thoughts on real estate and business, and mine, and different ways to invest and build your wealth. And lastly, I asked Justin a pretty cool question about how he gets through the tough times in business.

What are the behaviours and things he does and tells himself to get through those tough times? For example, when he was 120K of debt, living in a shared house with his young son and his wife, how did he get through that time?

And then I also share some experiences of what I like to do and how I like to think when times are tough in business and life. This is such a fun, valuable podcast episode. I'm sure you're gonna love it. You're gonna feel the love and the vibe and the energy between Justin and I.. Enjoy.

But before we dive in, make sure you get my due diligence framework. We do talk about buying businesses. It's free, buyingonlinebusiness.com, four sizes, and free resources. It takes the guesswork out of buying a business. It's made people millions of dollars. It's saved people millions of dollars. It's yours to go to the site. Links in the description.

Justin, welcome to the pod. Thanks for coming on.

What's up, Jaryd? I'm excited to be here.

Yeah, I'm excited to dig into so much. I was on your pod about a year ago now. That's wild. Yeah, yeah. So I'm glad to have you on here. Now you've built this amazing business, yeah? And your education business that I mentioned at the start of the pod in the intro, and then you sold it. Tell me more about that. Why the sale?

Yeah, what got you to the point that you wanted to exit?

Yeah. So let's see. I've been my wife and I, Tara, we've been in real estate for years. We started our first business was a satellite dispensary that for two years. Then we got into real estate right after that, did that for many years, got to the point where we were flipping a hundred houses a year. Now there were lots of ups and downs. Like it wasn't easy. Like we hit our heads, the school of hard knocks, so many times, but I know we're just trying to get to the cell here.

Yeah, I mean, that could be maybe part of the reason is like you're just maybe sick of the business. Mean, and people do just get sick of the business, and the business can still be a good business and worth selling.

So I did get kind of sick of like flipping houses, like we flipped hundreds of houses. And then we started. Yeah. So I wanted to get into a different kind of business, and it was online education. It's at the time, like it sounds funny, but I didn't know what a podcast was. I didn't know much about online marketing, but I knew online was like the future, AKA the present at that time. And so I was like…

Well, that's crazy.

I should start an online business. Want to learn about, I'm interested in. When we had our housekeeping business going, the same thing that allowed us to flip a hundred houses a year also caused us to work less, which is interesting because we had to put in the systems and processes.

And so we moved to San Clemente, California. You and I were talking before about, I know you live in Bali. We recently went to Bali. Like, I'm not much of a surfer, but I've always been a wannabe surfer.

So the minute we started doing well financially, we moved to San Clemente, and I was like, hey, I'm gonna surf every day and just live this dream and work a few hours a week. But I started to get bored after a while is what happens with a lot of entrepreneurs.

So it was like, hey, what else can I do? I don't wanna keep flipping houses. I couldn't even watch any more housekeeping shows. So we started an education business, and I remember I was talking to John Lee Dumas one time and…

It's like, what are you going to do your podcast on? This was back when, like John Lee doing this, was like top of the charts and business podcasts. I'm like, what are you, I'm not doing a podcast. What are you talking about?

It was like, well, you're talking to the podcast guy. Like, okay, let's go. Started. I was like, I know how to flip houses. He's like, Hey, do it on that. So that's kind of how this whole thing got started. Like it wasn't my intention to teach people about flipping houses, but that's what I knew the most. So, rather than go off into some obscure thing, I started a podcast, and then I started a website and had a guy.

So this is getting into the business now, right? And I hired this guy, like I didn't pay him a ton, but I paid him as much as he was currently getting paid, which wasn't a lot. And I said, plus I'll give you 25 % of the business. And so we went and we were going along and for like, cause I didn't know anything about like online. So he made my website, and he was just doing all this stuff to an operator.

So you give him 25% straight up. Like, did you say employ him and then give him 25 % straight up?

Yeah, which I shouldn't have done, but the interesting thing, I'll just kind of jump to this because we can get into the cell. But he came to me at one point, and he's like, hey, my wife says you're ripping me off. I don't agree with her. He said, so I'm walking. And I'm like, OK.

It was the craziest thing. Well, this guy did not make a ton of money. Like, there were times I was like, man, I can't believe I'm giving him 25 percent. Well, his wife and I were paying him. So I was like, listen, bro, like I'm not getting paid anything, I'm paying.

Yes. You're getting 25%, and you think I'm ripping you off. Cause I'm into morals, you know? I'm like, I don't like someone telling me I'm ripping them off. I'm like, okay dude, sounds good. So long story short, it's like we started with the podcast, we had the website, and eight months in, I was like, I'm done with this.

By then, we had like a membership group called House of Inform. I kind of modeled it, like if anyone knows John Lee Dumas, like back in the day when he did Podcasters Paradise, same idea. I started with $200, I went to 300, 400, and it was just almost like a lifetime membership into this group called a housepling formula.

And so got a bunch of people that joined, and, it's like at the beginning, I scraped the cream off the top from the email list that we had created and from our podcast, and all these people joined, but then it was harder and harder.

Like I was doing webinars and trying to get people into this program and I'd get a few, but it's like, I'd like bust my butt all week for webinar and make like a few hundred bucks that method, that method of just like constantly selling is just, I mean, it works if you're like really hungry and you're young and you're following Russell Brunson back in the day and all that stuff, but it's not sustainable for the owner of the business. So after eight months, I was going to throw in the towel, and then we got back from a trip in Costa Rica, and my web guy, this guy I'm talking about, he put like a countdown timer. I had never done a lot of urgent stuff. And I remember we made like five grand that night, and I didn't do anything.

I didn't know what from, and it's like, oh, he had a countdown timer on the thing. So we kept going and speaking of Russell Brunson. So this was back in the day, we joined his mastermind group just cause, like, I'm either going to quit. Cause I'm making way more money flipping houses.

Or I'm going to like figure this thing out. So we went to his first event that he ever did and swore that we wouldn't pay for his inner circle program thing. And sure enough, before the event was over, you'd popped down 25 grand and joined his group. It's funny.

We were in like the same group as Alex, Alex and Layla Hermosy, and skipping my mind, man, this was like, we had the, we had business for six years, and we sold it six years ago. So this was like 12 years ago, the very first.

Funnel Hacking Live that he ever had in Vegas. I remember Garrett White, I was like, who is this crazy dude up here in his army boots? I was like…

Gary J white. Yeah. Some OG guys that were crushing it at that time, already in 2012. A lot of people listening to this pod wouldn't maybe not know these names because they might be fresh in the space.

But I remember startint, I started my first business online business in 2013 and I was listening to JLD and that when I first, yeah. And then I mean, you probably would have been in his first mastermind group called Fire Nation Elite.

Sam's and you know Shane Sam's and his…

Was he in Russell's group or was he in JLD's group?

In the same circles, yeah.

Yeah, I don't know. Mean, I was with like Lady Boss, Kalen, and stuff. We went to this mastermind group that Russell invited us to in Pirates Cove. And yeah, there was like, I remember Alex and Hermosi and I were talking about stuff, and anyway, there's stuff I won't fully divulge, but it's pretty funny looking back. I remember after we sold our business, I came back online, and I was like, what the heck? Like Alex like blew up. Like, he's like a celebrity now, which is hilarious.

This is the funny thing is people like. This is my question with the online business space is that people will people will have their, like they'll try something, and that's just what they do. They try something, and if it doesn't work, then they move on to another thing and try again. Whereas the people who are successful online or in business or life, they're not just going to try something.

They're doing it. And this is like, you said 12 years ago, you mentioned it was roughly 12 years ago. That's more than a decade of sticking at the same thing.

The results can show if you're committed. It's just that people aren't ready. And people know these names, listening, like Alex and all that sort of stuff. Like, well, yeah, if you're committed to 12 years of work, probably more, because I'm probably in the business longer than before you even met them.

That's my climate space. People try things, right? And then they just, if it doesn't work after a year or two, they give up. And that's a year or two is just not long enough.

Yeah, so we were at one of Russell's events, and I remember just being like, I'm not making enough money. This isn't worth it. And he's like, Do you have a high ticket? And I'm like, no, cause all those guys are like scamsters. Mean, we had in our past with our first event, we went to the guy who sold a $12,000 package.

Now it would be 25,000, and like we joined and we won a car that we never got. And it was just like, we realized the guy wasn't anyway, we were like, Oh, those guys are scamsters. He's like, well, you paid me 25 grand. I'm like, okay.

So we went back to our hotel room, sent out an email, launched our $25,000 mastermind group, and we had like 13 people sign up within a few days, and we're like, okay, we'll stick to the online thing. There's something here.

So one of the people who joined that group showed up at our first meeting, and in my mind, I thought, no, this guy isn't qualified. How'd he like to slip through the cracks? But long story short, he became like one of our best students ever and ended up buying.

Came our CEO, came our coach, COO ended up buying the business from us, right? Six years later, when we were ready to sell. So, full context there. Thanks. So I think, kind of how I mentioned from the beginning, we had already been doing real estate for several years.

And honestly, I didn't want to teach real estate, even when I started it, but there was enough newness there. There was enough excitement. It was nice to piggyback off something I knew. So even going into it, I was just…

That's a great sale. What got you ready to sell?

Like, do I want to do this? So I had talked about flipping houses for so long that there just came a point where I was just over it. I was just ready to move on, ready for something new.

That aligned with, I've always been a big fan of building the machine, right? Creating a machine. I read Emeth early on, and I just wanted to create a business that could work for me, not the other way around, right?

I love hopping on stuff like this, but I don't like to have to, you know what I mean? Like that's the kind of business I lie. I've heard you talk about this too. Everyone's out there preaching brand, like a personal brand. And I'm just like, I believe in using your personality to like get where you need to go.

But then I like to create systems around that. So I did that with my education business as well, which a lot of people don't think you can do. But over time, I started to replace myself with coaches, and it got to a point where I wasn't needed anymore. And so this guy was my COO, his name's Bill Allen.

And we were talking one day, and I kind of made a joke about maybe like selling the business, and then he made a joke about maybe like buying it from me, and then we're like, are you serious? It's kind of like, you know, if you're, I'm married, but like back in the day, if you're like asking out a cute girl, like, hey, you're like filling it out, right?

So like, it was so interesting because he was probably the only person I've heard, oh, with the way you buy and sell businesses, or most people do, I shouldn't even say you, I've listened to some of your podcasts, I'm kind of aware of what you do, and I know you have all the online brokers and things like that.

I think he was the only person, maybe not the only person, but the best person who could have bought the business in the way that he did, because I wanted to be done. I didn't want to stay on, I just wanted to be able to move on, and everybody knew him, they loved him, they trusted him.

It's the best thing for the business, for all your clients, and for the business itself to have somebody who's already in it. That's for that type of business. Sometimes it can be better for an outsider to come in and take over something that has maybe been neglected. So what was the structure that you did in terms of the sale? Is it an earn-out over a long period? Because you already had most of your…

Not a high level of workload for yourself in the business. What did this structure look like?

Yeah. So like I said, he just took it over immediately. We went, had a master meeting in Baltimore where he created a cool video, and we made the announcement, and people were kind of shocked, but it also made sense. they were told we had to like make sure everyone like stuck in. Right.

Yeah. So the purchase price agreed on was 4 million, then looking back at this, I'm like, I'm trying to figure out there was some kind of tax thing where I don't know if he ended up paying more taxes.

So we reduced the price, or there was some tax advantage, but we settled on 3.65, I'm looking here at the closing statement. And he put 400 down and the rest I seller financed. So that's a lot of seller financing, right?

You put 400k down, right? With the seller financing, was it an earner, or was it actually like a percentage, like 7% interest only? Now we don't buy and sell businesses. We didn't know what we were doing, but we knew real estate, right?

So we just kind of made this up, right? Like looking back, maybe I would have talked to someone like you, maybe I would have gotten more money, maybe I would have done it differently, but this is the one person whom I trust more than anybody. Like this is the person that.

This is the thing. This trust is there. Like that's the biggest thing. You can do it any way you want when you've got the trust. Yeah. Even if you did hire me or somebody to advise you, the only way a deal comes together is if two parties agree on it. And exactly that's the deal that can be made. I can be tweaked a little bit, but then on the day, like, I trusted him.

Yep. Yep. So I trusted him and he's the one I wanted to take this business. Like I, these clients trusted me. Like, I have relationships with them. I think he, like I said, was the only one at that time.

So he's like, well, I don't have, you he's an investor. Like, so he, while he did well financially, his money was like, so I don't have all the money. Like I'm like, Hey, let's be creative. Let's figure this out.

So I wanted them to have some skin in the game. Oh, him putting down 400, which technically is like, the goal is for him to put down 20%. But like I said, we went from the four to a little bit lower. And then we agreed the reason why I was good with it too, was cause I would then have to take all that money.

If I had gotten it all at once, pay taxes on it and then try to figure out where to invest it. So when one fell swoop, I was able to have a higher principle to get interest off of. And then we agreed on 7%, which I can usually make higher than 7 % of my money.

But the fact that the principal was higher, like I was making that on 3.65 million instead of whatever the amount would have been after Uncle Sam in California. Everyone took their money, right?

Yeah. So it's been a cool thing. Mean, from the get-go, making like 20 grand a month just from the sale of this. And then he was able to, I knew the numbers, he knew the numbers. So I knew he was making the cash was more than that.

So it just made sense for both of us because he would be doing the same amount of work, but he could call the shots, which he was; he was my COO. So he was kind of doing it, but it was kind of like two cooks in the kitchen, right?

So he's like, okay, with this, I'm in complete control. I own my own business. I don't have to work anymore. He's in complete control. He owns the business completely. It just made sense. He's making more money. I'm still getting paid for not working, right? It worked for everyone.

Congrats, and how long did the earn-out go for? Was it the time?

So there's a 10-year balloon, but he can pay off the principal at any time. So now we're down to like 1 million at this point. So I have a ton of security, know, like where I'm like, we got, you know, close to 50 % or whatever. Cool. I've gotten paid a lot of my money. We've made a lot of like, we're calculating the interest, like, gotten paid over a million dollars of interest, probably end up with another half a million or whatever. Yeah.

Yes, right.

So yeah, it's been great. Mean, anytime he needs money, I invest it. He does apartment complexes. So yeah, he can call me up, send him whatever he needs, and my family invests with him and other stuff. We just have this great ongoing relationship. So it's been cool.

So cool that you are connected to the business still, kind of, then also for him, and also that you are connected to the real estate space as well, because, like you've got money, you need to put it somewhere. It's not just going to sit in the bank accounts. It's cool.

So you get access to deals as well, which is another thing, a factor of ROI to consider when you're selling the business. Some people just, it can be good to cut ties completely, but in this instance, it makes total sense to stay connected, especially to the space.

Absolutely. Yeah. At the beginning, we took some time, like I think we just, we didn't talk for a while because I wanted to let him, this to be his baby, right? He took it over. He changed the name from House Flipping HQ to Seven Figure Flipping, which was the name of our mastermind. And he just made it his, right? And so it just kind of worked out. But yeah, we were good friends. We've been in touch. He's come and stayed at my house and stuff.

Congratulations on that. Have you ever bought a business?

I've not bought a business. It's interesting because I've started multiple businesses. Like right now, like a couple of years ago, we started Millionaire University because we sold the business and we took time off, and it's like, we've arrived again, like a kind of second retirement, but this time it's for real. This time, the business was sold. We had more money than we needed for the rest of our lives because we had other things going on. It wasn't just the sale of this business.

So no, I've bought lots of real estate, and just recently I've been getting into, like really listening to a lot on buying and selling businesses. And I think it's fascinating. I think it makes a lot of sense. I was thinking about that today.

Like, I'm naturally kind of, I feel like I'm a builder of businesses, but also I heard you talking about some of the numbers, and I've learned more about the SBA and stuff like that. Like, wait a minute. So you can put down 10%.

You can, and I know a lot about creative financing. Like I've raised millions of dollars, tens of millions of dollars from private money lenders. I'm like, wow, I could work some of these numbers here with the ROI's that I'm hearing, and the business is already going.

So it's, I have not bought a business, but it does sound intriguing. Maybe I have a lot of money right now on different apartment deals and stuff like that. But I was like, maybe someday I will.

Yeah, what else fascinates you about it? Is it just that you are an entrepreneur and you know that you could take over one of these and grow it and sell it, or- I've started and stopped like three, four, four businesses, right? And I've done a lot of investing. So I understand ROI. I understand houses and kind of get apartments.

I've invested in apartments passively and storage units and all kinds of stuff. So just combining those two worlds and then the leverage that you can get through, like SBA and all that and different loans. Yeah. To me, I don't want to be out like operating it myself, but it's just intriguing to me that.

I don't know why. It's like we all live in our little bubble, right? Yeah, yeah, yeah. There are a million ways to make a million. There are millions of ways to make a million dollars. And it's just kind of a fascinating way of doing it. I think not for everyone, but for the right person, it makes a lot of sense.

Yeah, I think somebody good at like building relationships and speaking to people, being in businesses, that's like, that's maybe like one of the best skills you can have. Understanding sales and marketing is important, but you can also hire that in.

And so let's run with the example of because I put out a video on YouTube about buying with SBA and throwing out some figures, and people are fascinated about it and want me to create more content around it. And so let's just throw that out, right? Cause you mentioned it. So,o say for example, you've got 200k cash, right?

And you go and buy a $2 million business, for which you get 1.8 mil in financing for that business. And a $2 million business is roughly probably going to make with a 30 % ROI, it's probably going to make about 600K a year. Yeah. Net profit with a 30 % ROI. And then you've got a $1.8 million loan, right? At say 10 % interest rate. So you take that.

600K off, we take 180 off the 600K, and you're left with 420 in net profit per year. Now, maybe you bought a business that takes you 10 hours a week to run, and you go, I've got 420K, do I want to work a 420K job for 10 hours a week? Well, for you, you don't want to operate a business, but there's an opportunity for you to go; I can hire an operator and pay them.

Yeah, 120k a year. The exact numbers are in my head.

Yeah, yeah, it's crazy. Well, I like to keep it round figures and easy for you. You sound the same, and it's good for the listeners. So, you left with 300k then, right? You got your 420k net profit, 120k for the operator of a $2 million business.

And there's a great quote, Show me the incentive and I'll show you the result. And so when you give the operator an incentive to reach certain KPIs and benchmarks in the business, you give them 5% of equity.

And then again, when they reach the next one, 10%, and the next one 15%, and the next one 20%. And what they start to do is they start to see like, I'm not doing this as a job, I'm building this as a business that I can exit in maybe five years, build it up to a $10 million business. So, five exits over whatever period.

And then they take their chips off the table. Maybe they've got 30 % equity in the business, and they've had a job during that time, saving money. So it's like such a win for everybody because you're sitting back getting 300k a year, and somebody else is actively growing your business. And what did you put in 200k?

200, yeah. So you're making like 150 annualized return, which isn't so like, I currently shoot for 15 to 18%, which is very good. Right? So that's why I was running some of these numbers, and I'm like, wow, that's like 10 times, you know what I mean? Like that's great. Now there's, you know, things can happen there.

You're still operating a business, and there's stuff like that, but if you make it work, if you buy the right business, yeah, it's a very interesting thing. And then for me, and I, once again, like I'm kind of out of the state in my life where I'm just, I still want to have fun, but I've like, I'm not saying I've arrived, but like, don't want to say I'm not playing to not lose either, but like we've already won, right?

So it's like, anyway, I get too crazy, but if I did, if I was still my younger self, then it's like, okay, I can make 150 % not to over leverage, but it's like, could borrow money at 10. I could buy like 10 businesses, and then you have 3 million a year, right? Like, anyway, you know what I'm saying?

Yeah, you don't need to. I mean, like this is the thing, like if you want to increase your wealth, you need concentration. If you want to preserve your wealth, you need diversification. So, for you, you can kind of preserve your wealth, and you can buy multiple businesses and do it that way.

Or you're not in a spot that you need to invest. And some people go, well, maybe why do I put 200K down to buy a $2 million business? They could go 400K down, 500K down to buy a $2 million business. They've got a smaller loan.

The repayments are less, and then you still have some money left in the deal to pay an operator and grow it as well. You just decrease your risk, the more money you put in, and there's no right or wrong way to go about it. It's just so many different ways that you can do it.

But I thought it was just worth explaining that because you're thinking about it. Everybody was very fascinated with my last video, but do you have any questions around it before I move on to more questions for you?

No, I think it's fascinating. But yeah, not right now. Any specific questions now?

Cool. So, do you invest in other businesses as well? Like businesses that are already operating, and you have no partner because you've invested so much.

Yeah, so we've started multiple businesses, and then we invest. Like right now we're in, I invested in Bitcoin early on. So we got really lucky with that. I got it for $75. But anyway, if we had kept all of our Bitcoin, I think it'd be worth like 30 million, but we kept a chunk of it, where it's still several million. So we invested in that. And then, like I said, we have a lot of our net worth tied up in apartment complexes and things like that.

Congrats.

We've also invested in, we've probably invested in like four startups. One of them, like it's like, anyway, I won't get into details, but I got people who didn't get into it. That was like, if I could just like take a part of my life away, other people that we may be mentioning on this podcast were invested anyway. They don't all work out. That's my point.

No, especially startups. I startup are pretty tough. It's a lot easier to make an acquisition work because it's already proof that it's working. But a startup, 90 % of these things fail.

But a couple of them have worked out, and like one is kind of mid-range, but it's just to me, you don't just go invest, like you gotta be very careful and very mindful of what you invest in. Who's the operator?

Like one of the guys I knew for a long time, I knew he was an amazing coder and all these different things. I saw the opportunity and invested in that, and that's looking like it'll be pretty good. And then I did invest, and this is almost a…

Maybe like a lesson learned, right? I invested in it when we, after we sold the business, I got a little antsy before we started Millionaire University. And I went and kind of teamed up with this guy who had an agency.

He did marketing and he did coding, liked programming, stuff like that. So it was like, Hey, I could help you like grow this thing. And I realized quickly, I didn't love trying to get like a hundred clients, and then they all become my boss and tell me what to do. Anyway, just for me, that wasn't, I was like, this isn't.

We have these great marketing things they could do, and they're like, I'll think about it. You're like, what? So we decided to do our software and we did kind like a review automation software and had like the chat and all that stuff where I royally screwed up because I was like, okay, I don't want to be an operator in this, but I was like, I'll fund it and everyone can have equal equity. So from the get-go, I was just like, let me know if you guys need anything. So I'm just like cutting checks to these guys, right?

The guy building it, the guy selling it, and the guy doing the marketing. I was just draining a lot of money, and we got clients, but there wasn't enough incentive there because I already said, yeah, you can have the equity and all these things.

Anyway, long story short, we're still making money with that but one of the partners, I don't know how much I can get into because we went through a little legal thing, but he ended up going off and doing his own thing and I should never have just given the equity, like if you're given the money and the equity, like that's a mistake, right?

So anyway, we're still getting paid from it. Will I recoup the money I put into it? Probably not. But that's why once again, I mean, probably put seven, eight, $900,000 into that. Here, oh, I could have just bought a business. Already like working, duh, you know? So, anyway, it's kind of funny.

I mean, it's all good lessons. That's that. Know why. Like, my next question is around real estate and business versus business, depending on how you feel about it, because I love real estate. I bought a bunch of properties in the last few years and will continue to acquire real estate. And I love business from doing both. You've been heavily involved in real estate, and you still do a little bit of real estate, and you're in business.

What do you like more or less, and which ones do you like to move into when and why? For example, like, and it's a pretty broad question. Lik, I'll give you an example of why I like real estate is that I like taking money off the table. Like I feel that in business is I can make far more money in business because there's no stealing, right? In terms of there being no capital growth ceiling, and there's no income ceiling.

Whereas in real estate, you do have a capital growth ceiling based on the area and the income ceiling based on even if you renovate the place, you can't keep renovating it bigger and bigger and bigger. So I like to take money off the table with business and put pocket in real estate. And I shouldn't say pockets.

It's probably not the right word, but invest in real estate and put a small amount of money down for a less risky asset that In Australia, we go for capital growth here compared to America. It's more so you're going for like positive cashflow properties from what I've learned from a bunch of on-property investing.

Yeah. It depends on your goals, but mostly, yeah. Yeah, that's accurate.

I have an interview with Mary…

Yeah. What are your thoughts around it? Cause you went, you know, I went the other way. I went into business and then into property, and then I still like to do both and weave them together, and you went from property into business, and yeah. What's your take on it first?

You always hear diversification, right? And I think first you need to focus because if you're too diverse, then you're not focused, right? So you got a hyper focus, which sounds like it's what kind of thing we both did. And then I agree.

Like I think it's a matter of diversification, but I agree 100%. There is no faster way to make money than in business. That's like build your money, build my money machine, Like Millionaire University, like right now, when we started Millionaire University just over two and a half years ago, and we're currently making like 40 grand net profit from, and all we currently focus on right now is a podcast, right? So we have sponsors.

I have, like, my only goal, ie, how do I get paid more? But not my only goal. The goal is to help people, obviously, but as far as the monetization goes, it's like, how do we grow our listenership, and how do we get paid more for each download? Right? So we're working with sponsors and things like that.

Right. But you can't, mean, in what other place can within two years you create something that's popping off 40 grand and we're just getting started, right? So to me, that's amazing. But I don't know, like AI, all these different things, like what happens if, like in a year, I mean a year and a half ago, I've heard of people are just like rocking out on their blogs, right? And like it's crazy how fast, like that's kind of changed a lot.

Like, Google is no longer just the thing, right? So I wouldn't want to, we invested quite a bit in our podcast at the beginning. And then last year we kind of like broke even, this year we're just making money, right?

But I would feel very uncomfortable taking, like, I don't mind putting several million dollars into real estate, but I wouldn't take several million dollars if I had it sitting in the bank. Okay, I'm gonna put this all into the podcast. And then who knows in a year if AI?

I don't know, as people are listening to an AI podcast, I think you kind of nailed it. I think like a house or an apartment, even though it can go up and down, I think, I don't want to say there's less risk, but it's like you still have that like physical asset, if that makes sense, right?

So there's a ton of nuance, like you said, like not that it's like an intentionally loaded question, but there's so it depends on what kind of business and how you're running it. I always tell people, you can't lose money that you don't spend.

Right? So I'm not saying like, don't buy a business. Saying this is where I usually teach me how to start businesses. But if you have, anyway, we can get into the nuance of, but as far as like starting a business, like you don't have to like go out and take your grandma's like all her savings and all your savings roll into something that's super high risk that you don't know anything about.

But that's also where there's in a sense, there could be less risk of buying a business if you're going to invest, you know what I mean? If you're going to invest more money, if you're going to start a business, just do it in a way where you're not putting everything, like everything, out there, right? So anyway, I know I kind of just threw up all over you on the, all a great discussion because people listening are at different levels of savings to invest.

You've got some people that have like, okay, and I'm with you on that. And I say like, don't invest, okay, to buy a business if that's everything you've got. Maybe it might, and this is not financial advice, but maybe it's worth buying something or using, I should say, up to 70%. Yeah.

Sometimes, maybe 80 %, because you need funds, right? For me, when I first started, I invested as much as I could, but I didn't invest all of my cash. Also had like a little kitty there in case of personal expenses in medical or whatever. And then it changes as your net wealth builds.

Maybe you have a business, and you go, do I take some money off the table and invest it in real estate? Or do I have two houses now, and they've grown over this COVID range, and I could take maybe 200K equity out, do a here lock, and then I could use that 200K to buy a business with SBA. So then you're playing both fields.

And I think in that second example, like, normally it takes people a bit of time. They don't already have a bit of wealth to get into playing both games, real estate, and business. But once you do have the real estate, you've got that two real estate, then you get the business. You get into business, and then you can get high growth.

So with the 200K deposit, for example, we talked about the example before, you could be making 300k net a year with an operator who's growing a business, and you could take that 300k net or maybe a 100k income out per year and buy another property with an. Right. And you could do that over five years and buy another five more properties on top of your seven.

Yeah, exactly.

Yeah. And it'll be easier to manage. Money is hard to manage. Like, there comes a point where you're just like a money manager. If you make enough money, it depends on what you're doing with it. And if you're maybe running multiple businesses, depending on your bandwidth and your personality, it might be easier to park some of that in real estate, which is exactly what you're saying.

There's nothing like that's like building the money machine. Like, there's nothing like business. If you do the right things, you have to focus on sales. You've got to focus on the marketing.

A lot of people, I know, you mentioned like 90 % of businesses fell. That's why I mentioned, like we talked about, build the money machine. I don't even like when you're starting a business, buying a business is different, but when you're starting a business, I don't even like people to think of it as building a business.

Cause it sounds so big and stuffy, and I need to go get like a ton of overhead. And like, that's what screwed up our first business. We ain't got a big office. I got partners. I hired all these people. Like you don't have to do that. Like, just fine. Like for us, we found the one thing, like we were trying a bunch of things, we're like, okay, we love podcasting, for us it's podcasting.

Let's just focus on growing the podcast and getting sponsors for the podcast. Increasing those two metrics, that's it. And now we're gonna be able to, at the end of this year, take the funds from that and hire a high-level person to help us grow more. But if we did all that at the beginning, you might drain the tank before you get things going. So anyway, it's, it's fun.

Agree. It's funny if you're starting a business from scratch, you might have the perception that you need to get all these things in place to make it work, when you can get money in the bank first and then work out the rest.

Now, I want to ask you about the tough times because business is tough, and investing can be tough. Do you have one or two things that you do to get yourself out of those tough times? Like say your business isn't going so well.

What do you do, and how do you behave? What do you tell yourself differently? Cause this is the trickiest part about business is like it's easy when things are good, but when things are tough, this is where people break and give up.

And that's where we need to, if we want to not go out at a critical time, we need to do something differently to be able to get ourselves through. What are some of the things that you do or teach or have done in past sorts of work?

Yeah, for sure.

I was listening to a podcast today that resonated with kind of the way I think. And I think I've heard you talk about stuff like this as well. But the guy was talking about the difference between financial freedom and financial independence. I'm trying to remember the word that he used.

Financial security, I think. Right. So, a lot of times when we say financial freedom, we think of it as having more money coming in each month. Then you spend. So you're financially free, you're out of the rat race. But he was saying.

Financial freedom, you really think about it, is being free from money. So when I think of wealth, I think of money. I try to think of it this way. Most people think of wealth as just money. I try to think of money as just one of several forms of wealth or success.

Yeah, exactly. If you don't have your health, who cares how much money you have?

You're like in your health.

Yeah, health is primary because if you can't do anything with the money.

Exactly. How many people put making money above their health, right? But you need money, a certain amount of money to eat, you know what I mean? So it's like, you've got to take care of your basic needs. You want to keep making money because it's fun, it's enjoyable, but it's so easy to take your eye off the ball. So he was talking about financial freedom.

It's like the freedom from money from the poll, from the control that money can have over us. But he was saying that unless you're financially independent, I think is what he called it, financially secure, it's very difficult to be financially free. So you want to be financially independent, so you don't have to every month trying to figure out how I going to get more money. So I remember when our first business was a satellite-ish business, and we thought we were going to make a million dollars within a year. Instead, we had $120,000 of debt and, failed partnership. We moved to Bakersfield, California, and lived in what we called the bachelor pad with my wife's brother, my brother, and some guy named Matt who would sleep on the couch. It was a mess. We had our six-month-old son. He would sleep in the closet. I thought I was going to be a millionaire. And instead I was in this freaking like small house with a bunch of people, right? And it was not ideal, but I just kept telling my wife, I was like, you know what? We are going to be wealthy. Like I knew we would be wealthy. I knew other people had done it. It was like, we can, like, we will not fail. We cannot fail. We just have to like, they're not anything more special than us. So I said, as long as we have food on our plates and a roof over our head, even if it is sharing with a bunch of people, we're going to be okay. And we're just going to keep taking it one step at a time. Because if you let your, you can have a downward spiral. If you let your mind get caught up in the, can't do this. It's not going to work out. Business and everything, right? Absolutely. So I would say that's one of the biggest things for me. Something that Terri was just telling me today. She said some people are so poor that all they have is money. You know, and so that's kind of along those lines. I'm kind of like, put two lessons in one. I love that. It's like the mindset, and then, oh, and then once you have enough money to sustain, like I'm all about still making money, but like make sure you're taking care of your health. And if you look at all those things, because business is a game. A lot of times, people get, they want the money for a reason, but they get going and forget the reason they initially wanted the money, to where they're not seeing their kids or not. Like I used to go to dinner sometimes with my wife. I'm not perfect either. And like, I would just, should be talking to me and I wouldn't even hear what she said, you know, cause I was thinking of like business ideas. But to me, I'm like, no, like I'm, I'm making the money, you know? It's like, I already have enough money. Like we wanted more, but I was off. So I've been working on mindfulness lately and just taking care of my health, going, even my back's been kind of hurting. I'm like, I'm going to the chiropractor. I just got done getting a massage, and it wasn't a pleasant massage. Like it was painful, you know? But it's like, you gotta put your health first. You gotta put different things, your family, different things, first in your life. So, sorry. I love that. Love that. You've got to work out how you can continue to believe in yourself through those times when you're going backwards, when you're spending money and you're not making money, or when business is just tough. You need to have that self-belief. And I think what happens for me, when I have been in those positions, is I'm like, I need to get out of this as soon as possible because I don't like this feeling. And what I've worked out and realized is I need to slow down and get myself out of the position of being in fear and come back to myself and realize that I can do this. And if I give myself a longer timeframe, of course, I'm going to get out of this position. Right. And so I'm trying to do this right now. The philosophy that I like to use is that time is with you, not against you. But when you're in fear, time is typically like we believe that time is against us. But if we change this completely, flip the timers with us, then we realize like, I've got space, I've got rooms, I have less pressure on myself, a nd I can do this in, I can get out of this hole within two to five years, likely. Maybe even less, but if I give myself two to five years, maybe 10 years, I'm out of this hole, and you're not going to be in that position forever. That's one really good tool that I like to use. It's funny you mentioned that because I used to think in terms of months and a year, like I was like within a year I'm a millionaire, and what I d,o I ended up with $120,000 of debt. And then my second and third business, it was like, okay, I was more looking at like three to five years. And now I'm just like, and partly, you know, we don't need money, but when we started Millionaire University, we were like 10 years old, we're going to do this for 10 years. And now that we're two and a half years into it, I'm like a 15- to 20-year-old. You know what I mean? Because I have big goals. We haven't reached our goals. We're still making 40 grand a month net profit. But I thought by now would be like two, three times that. But that's not my main goal. I don't need the money. But if I get so obsessed about the money that I'm missing the rest of life, then I get depressed and don't feel good. Nothing works. But knowing that, oh. I just added another five years instead of the 10 years. Like, okay, I'm good. I'm chilling. Like I'm just not going through the motions, but every day just getting, making a little progress in the business and then taking care of my health, spending time with my family, going on that trip to Disney, wherever, know, traveling around the world for nine months, whatever it might be. That's what life is all about to me. If you're Elon Musk and your goal is to get to Mars, then fine. That's your goal, right? That's not my goal. So I'm all about family health and taking care of some of these other things. I'm not dissing on Elon Musk either, I'm just saying, well, depends on what your goals are, right? Depends on what your goals are. And that point on, like thinking about months, months up to a year. I think most entrepreneurs do think that is like, all right, cool. I'm like, when we first started, os like, I'm going to get, I'm going to be here by this date. And that just the short of the period, the more pressure and stress you put on yourself, the more pressure and stress you put on yourself, the worst decisions you make. Cause whenyou'reu making decisions, when you're stressed, like you're running around looking for your keys, cause you can't find them and you're late for something. Yeah. It just gets harder and harder to find them, right? Because you're just putting more pressure on yourself, the less time that you have. So I think getting out, the hard thing is when you see these case studies and I throw them out there as well, is that people buy a business within six months and they make X amount of money from the business, and people are like, I can do that. And they get six months in and they're like, I'm a failure now. Because I didn't see this result in six months. It's like, hang on, hang on. You can't compare yourself to this person because this is just a short snippet of the story of them achieving the result. This isn't like everything they've done five, 10 years before this. Absolutely. I love having or saying having big goals and low expectations, right? Like, be okay if you don't reach that goal. Because for a lot of people, if we plan on doing something, we don't do it, we feel like a failure, and we feel horrible. And so I have to, like, even for me, I have to reflect. Like it sounds crazy if someone is listening, but like, there have been moments where I feel like a failure that I haven't reached that over $100,000 net profit yet in our business. I'm like, I've done this many times. Like we should be there. I'm just like, no, like that's not your main goal right now. Sure. You want to make more money. You want to help more people. You just got to check yourself sometimes. And I tell you what, from someone who's like reached more money than I ever needed or planned on making, I wish I could go back to the times where I was stressed out and be like, dude, just relax. Like, don't, some people need to work harder. Like I have, have teenage kids and stuff and I see, I won't give specific, I don't want to like calling it out, but I know if people who they want XYZ thing, but they're like sitting on their butt, like doing nothing, like not progressing. That's different. If you're in the boat of like, you haven't done anything, I haven't heard you mentioned, there are times in life when you just got to hustle and grind because maybe you're not, you don't have the habits yet. You're not in the mentality yet. You haven't learned enough, whatever it might be. But for most people, that's not the end goal. You don't work just to work, just to work, just to work, right? Yeah, it's a really good point, I like that. And then also when you said, you have so many times, you felt like a failure because you hadn't achieved this. Thinkk even when people are counting the months and then counting years, and then just keep telling yourself every month, I'm a failure because I haven't gotten there. I'm a failure. Like that is like the worst thing to compound that thought process. It's just so bad. Well, what they call keeping up with the Joneses, right? But there's, we do it in business, where it's like Alex Hormozi does all this content. I got to do that. And then it's like, oh, Russell Brunson has all these funnels. I got to do that. It's like, oh, Jaryd has all these businesses. Got to like, when you feel like you have to do everything that everybody is doing, and everyone is like you like be you do it works for you. That is not success. Like success is where do you feel? What are your goals? Like, do you feel good in your heart? Like, do you feel like that piece? Are you spending time with your family? Like that's success. And then just keep going at your pace of what works for you. I love that. I love that. Justin, thanks so much for coming on. Where can we send people to find out more about what you're up to? Yeah, just Millionaire University. Can check out our podcast wherever you listen to podcasts or millionaireuniversity.com. We've got some resources there. We have a little course thing, but for the most part, we don't have anything we're selling. Just people following the podcast, and reach out if you have any questions. Guys, I'll link to millionaireuniversity.com in the show notes. Check it out, check the podcast out. And again, thank you so much, Justin, for coming on. Yeah, thank you, Jaryd. What do they say in Bali? How do you say thank you? I'm trying to remember. Thank you. Okay, anyway, I don't know. Thanks, everybody, for listening. I'll see you at the next one. All right, I'll see you.