Podcast appearances and mentions of mark hey

In the latest edition of the Ankeny Fanatic weekly podcast sponsored by Coldwell Banker Mid-America, publisher Dan Holm interviews coach Mark Hey and senior pitcher Joey Oakie of the Ankeny Centennial baseball team about the Jaguars' quest to qualify for the Class 4A state tournament and the upcoming MLB amateur draft.

Mark: Hey, Haruka. I have a question for you. Do you ever meditate? 马克：嘿，Haruka。我有一个问题问你。你有冥想过吗？ Haruka: Only occasionally. I know it's very good for your mental health, but I forget all the time. Do you? Haruka：只是偶尔。我知道这对你的心理健康非常有好处，但我总是忘记。你呢？ Mark: I do, but not in the most traditional or usual way. I don't sit in silence very often. I do that too sometimes, but I'll meditate either by going through a guided meditation, like a voice, someone telling me to relax your shoulders and focus on your breathing, et cetera. Or I meditate at other times like when I'm doing the dishes. I just focus on just the act of the water going over my hands or cleaning the dishes. And that's a form of meditation to me. 马克：我愿意，但不是以最传统或通常的方式。我不经常安静地坐着。有时我也会这样做，但我会通过引导冥想来冥想，比如一个声音，有人告诉我放松你的肩膀并专注于你的呼吸，等等。或者我在其他时间冥想，比如洗碗的时候。我只关注水流过我的手或清洗盘子的动作。这对我来说是一种冥想形式。 Haruka: Do you feel much better after that? Haruka：那之后你感觉好多了吗？ Mark: I feel calmer. I certainly feel more relaxed. Yeah. I feel like when I do that, my mind usually is going very fast and it's a good way to slow it down and bring it back to a more tolerable way of thinking. 马克：我感觉平静多了。我当然感觉更放松了。是的。我觉得当我这样做时，我的思维通常会转得很快，这是一个放慢速度并使其恢复到更容易忍受的思维方式的好方法。 Haruka: Is meditation similar to zoning out? Haruka：冥想和走神很相似吗？ Mark: I guess, but to me, zoning out is letting your mind wander. Whereas meditation, you're bringing it to a single focal point. 马克：我想，但对我来说，走神就是让你的思绪走神。而冥想，你将它带到一个单一的焦点。 Haruka: I see. Actually, I remember that I have used this app called Undo. It's a very simple three minutes or whatever minutes you choose. And it start with a bamboo sound. And I like it and I feel, yeah, much calmer after that meditation. Haruka：原来如此。其实我记得我用过一个叫Undo的应用程序。这是非常简单的三分钟或您选择的任何分钟。它以竹声开始。我喜欢它，是的，冥想之后我感觉平静多了。 Mark: Yeah. I have the same app. That is the one time I will do a silent meditation. I'll use that app because, like you said, there's this bamboo sound at the beginning and a gong at the end, but it's just silent in between. Other than meditation, what else do you do when you get stressed out? 马克：是的。我有同样的应用程序。那是我第一次进行静默冥想。我会使用那个应用程序，因为就像你说的，开头有竹子的声音，结尾有锣声，但中间很安静。压力大的时候，除了冥想，你还会做什么？ Haruka: Recently, I do try to do deeper breathing, inhale and exhale. And also looking at the window, mountains, skies, feeling the breeze. They are all very calming to me. How about you? Haruka：最近我确实尝试做更深的呼吸，吸气和呼气。还望着窗外，山峦，天空，感受着微风。他们都让我非常平静。你呢？ Mark: If I get stressed out or if I'm unhappy, I try to think about other people. What could I do for someone else to make them happy? How could I surprise someone, something like that. 马克：如果我感到压力很大或不开心，我会尝试考虑其他人。我能为别人做些什么才能让他们快乐？我怎么能让别人感到惊讶，这样的事情。 Haruka: That's very nice of you. Haruka：你真是太好了。Mark: Yeah, I guess. It just, it helps me. Because if I don't do that, I will probably focus too much on whatever's making me unhappy or stressed out. But if I put my attention on someone else, that makes me happy. 马克：是的，我想。只是，它对我有帮助。因为如果我不这样做，我可能会过于关注那些让我不开心或压力很大的事情。但如果我把注意力放在别人身上，那会让我很高兴。 Haruka: I love that way of thinking. I will try that. Haruka：我喜欢这种思维方式。我会尝试一下。

In the latest edition of the Ankeny Fanatic weekly podcast sponsored by Coldwell Banker Mid-America, publisher Dan Holm discusses the Ankeny Centennial baseball team's quest to win the CIML Conference title and earn the program's first trip to the Class 4A state tournament with head coach Mark Hey and senior catcher Nick Severson. Coldwell Banker […]

Words are exchanged around Apple's WWDC, especially the latest OS features, some of the hardware and, por supuesto, the Vision Pro – March is tryting to pump the stock so hard, no one can get a word in. Why is it so visionary anyway, without giving you anything genuinely 'new'? That's what we ask Mark Zuckerberg on the phone... For Zelda - Tears of the Kingdom,  we need to get our explorations aligned, not to spoil the fantastic adventure this game truly is.    

Gamers on their way to a convention run afoul of violent criminals on the run.  Can they use their "skillz" to survive? [warning - some violence, language, and mature situations] Written and Produced by Julie Hoverson Cast List Abby - Beverly Poole Mark - Brian Lomatewama Justin - Mathias Rebne Morgan Brianna - Lyndsey Thomas Tyler - Michael Faigenblum Clark - Brandon O'Brien News Report - Gwendolyn Gieseke-Woodard Man - Bill Hollweg Music of DARKEST OF THE HILLSIDE THICKETS!  used with permission Show theme and Incidental Music:  Kevin MacLeod (Incompetech.com) Recorded with the assistance of Ryan Hirst of Neohoodoo Studio Editing and Sound:   Julie Hoverson Cover Design:  Brett Coulstock "What kind of a place is it? Why it's a van on a road in the middle of nowhere, can't you tell?" _______________________________________ EXIT STRATEGY Cast: Mark - Game Master, in a wheelchair Abby - strategy girl Justin - the driver, Mark's brother Brianna - nurse, dating Tyler Tyler - wiry LARPer, dating Brianna Clark - a criminal Thug - another criminal SOUND     FOOTSTEPS OLIVIA      Did you have any trouble finding it?  What do you mean, what kind of a place is it?  Why, it's a car on a stretch of road in the middle of nowhere, can't you tell?  MUSIC SOUND      INSIDE CAR NOISES SOUND     Music plays on the radio SOUND     "BING" FROM THE DASHBOARD SOUND     Justin turns down the stereo JUSTIN     We're riding E.  [up] Eyes peeled for a gas station, everybody! MARK     Hey, Justin, remember when it used to be sooo cool to cross the state line? JUSTIN     Yeah - some things just lose their charm as you get older, little bro. MARK     And can drink legally in your own state... ABBY     Don't drink and game.  It dulls your edge. JUSTIN     You've got enough edge for all of us, Abby.  BRIANNA     [slightly off, giggles] I would too. TYLER     [slightly off] That is so great.  You are so great. ABBY     You do realize we can hear you? JUSTIN     Keep it clean back there.  I'll lose my damage deposit on the van if it comes back stained. BRIANNA     Ew!  We were just-- TYLER     [defiant] I was just telling Bree that if she ever got possessed by a demon, I would totally kill her. BRIANNA     [squeaky] Isn't that sweet? ABBY     [baffled] Yeah.  [whispered] What do you think brought on this declaration of undying love? JUSTIN     Tyler brought his DVD player.  I think they're watching Evil Dead. ABBY     Oh. [that explains it] MARK     You guys are all going to help with the "Super Five" tournament, right?  I can count on you? ABBY     Well-- MARK     Well? ABBY     [hesitant] I was checking, and the final round of the "AfterBlast" championship is in the same time slot. MARK     [excited] You really think you have a chance? ABBY     Hell yeah.  I plan to kick ass and take names.  MARK     That rocks.  JUSTIN     I-- I noticed you were the only - um - ABBY     Discernibly female? JUSTIN     Yeah, that - name on the semi-finals roster.  ABBY     Yup.  Time to represent. MUSIC JUSTIN     Pit stop! MARK     Man, you are this close to losing your deposit. JUSTIN     Shit.  Your chair's packed! BRIANNA     I got you, Mark.  SOUND     DOOR SLIDES OPEN, SHIFTING SOUNDS AS SHE GETS OUT SOUND     FRONT DOOR OPENS BRIANNA     Come on, then. TYLER     [teasing, going off] No groping my girl, now. MARK     Hey!  My hand slipped.  Once. BRIANNA     Girl. [snort]  I am a woman. [grunts as she gets Mark on her back]  OK, hold on.  Tyler, got the door? TYLER     [off] Getting it! SOUND     QUICK FOOTSTEPS ON CONCRETE SOUND     DOOR OPENS. MEN'S ROOM SOUND     FLUSH, STALL DOOR OPENS MAN     Hey!  You can't be in here! BRIANNA     Puh-lease.  I'm a nurse.  Almost.  [sarcastic] And you should get that looked at. MUSIC AMBIANCE     NIGHTTIME ROAD, VERY QUIET MUSIC VERY QUIET ON THE STEREO JUSTIN     [quiet] Hey Abby? ABBY     [quiet, tired] Hmm? JUSTIN     Just wanted to see if you're awake. ABBY     Really?  Nice of you to check. JUSTIN     Well... I'm not sure how much farther it is to the motel, and I was starting to fade a bit.  Help keep me on the road? ABBY     [half yawning] Sure.  What's on your mind? JUSTIN     Any chance you and I - you know - sometime? ABBY     [half a laugh]  I've sworn a blood oath not to date any man who can't beat me in a fair game of AfterBlast. JUSTIN     Really? ABBY     Something like that.  No offense, OK?  You're nice.  But we're kind of different worlds. JUSTIN     I used to game--  ABBY     Used to.  You traded in your dice for the corporate world. JUSTIN     It's not that bad-- [sudden change]  Whoah. ABBY     What? JUSTIN     Nothing.  Just - there's headlights behind us.  They weren't there a minute ago. ABBY     Must have come round a corner.  SOUND     CREAK, TURN ABBY     [turned to look] Hmm.  How fast are we going? JUSTIN     Why? ABBY     They're catching up.  Should I wake everybody? JUSTIN     Well...  if there's a crash, they're better off asleep.  Relaxed.  It's a fact - why drunks walk away more often-- ABBY     It's still coming.  Can we get off the road?  JUSTIN     There just isn't any place to go!  The ditches are ... gaping black chasms! ABBY     What's our speed? JUSTIN     Seventy.  So far. SOUND     GROWLING ROAR, GETTING CLOSER ABBY     How much can you push a minivan? JUSTIN     Don't know.  It's a rental. ABBY     All right. [thinking]  Turn off the headlights. JUSTIN     What?  ABBY      There's a good moon - the road is straight as far as I can see right now - can you hold the wheel straight while you're blinded? SOUND     ROARING REVVING APPROACHES JUSTIN      I... guess-- yes. SOUND     HEADLIGHTS TURN OFF JUSTIN     [heavy breathing] ABBY     Once our eyes adjust, we can look for a turnoff - in the dark, with the headlights, we won't see it until it's too late.  JUSTIN     Does that work? ABBY     I don't know.  Yes!  There, to the left, a road. JUSTIN     We're going too fast! ABBY     Start the turn early, and run in at an angle.  It should work.  MARK     [half asleep] Yeah, the roll factors are considerably less-- JUSTIN     Roll factors? MARK     "Street Wars," core manual.  The turn gauge modifiers. JUSTIN     Whatever, here we go! SOUND     SCREECH MUSIC AMBIANCE     OUTSIDE SOUND     TICKING OF THE ENGINE MARK     I'm suitably impressed. JUSTIN     Thanks.  Me too. ABBY     It worked! JUSTIN     A flat tire-- ABBY     Just one. MARK     --is not bad, all things considered. ABBY     [encouraging] Besides you missed the ditch, and the car didn't even flip. MUSIC SOUND     ON THE ROAD AGAIN TYLER     Doesn't this whole thing remind anyone of a movie? JUSTIN     Movie?  What, Texas Chainsaw Massacre? ABBY     Wo!  We do have the right carload for leatherface. MARK     Hey, Justin, don't pick up any strangers, kay?  I don't wanna be the first to die. TYLER     No....  OK, think.  A brother and sister in a car, in the middle of nowhere-- BRIANNA     [helping] In the middle of the day-- TYLER     Run off the road by a huge spooky truck--?  Hmm? MARK     That wasn't a truck.  ABBY     It wasn't? MARK     While you guys were watching the road, I watched it go by - It was big and square-- TYLER     A truck. MARK     No.  Better than that - I saw words on the side. BRIANNA     A truck? MARK     [sigh] Nope.  I must have made a perfect success on my perception roll, though - it was an armored car.  JUSTIN     In the middle of the night?  In the middle of nowhere? ABBY     Radio.  There must be something. SOUND     RADIO ON, SURF CHANNELS, STOP ON AN AD MARK     I like N-P-R. ABBY     News channel, bub. [Moment just listening.] JUSTIN     OK, enough with the ads - give us some news. TYLER     If this was a movie, the minute we switched over, the news bulletin would come on right then.  Cheesy, eh? BRIANNA     It's just a genre convention - a way of condensing all this boring time spent listening to-- JUSTIN     Shh. SOUND     TURNS VOLUME UP NEWS     ...the third armored car hijacking this year, and the second one with fatalities.  Three security guards were injured in the attack-- JUSTIN     Wow.  We should call someone. ABBY     Already on it.  SOUND     CELL PHONE BEEPS ABBY     Damn.  No reception. NEWS     --two are in critical condition.  Pursuers lost the car in a high speed chase when the hijackers realized they were being tracked and dumped the onboard GPS at the side of the road.  JUSTIN     Well, the motel must be close.  They'll have a phone. NEWS     Police believe that one of the hijackers may have been injured in the attack... SOUND      CLICK RADIO OFF - no music here MARK      I thought we were supposed to reach it by ten? JUSTIN     Well, with all you small bladdered people, we had a lot more potty breaks than I allowed for.  And, o'course, getting run off the road...  Changing the tire... TYLER     There was that. BRIANNA     Think your Uncle Joey'll give us a discount for coming in so late - half the night, half price? TYLER     I'll ask him.  [yawns] In the morning, though. MUSIC SOUND     CAR, SNORING FROM ALL BUT JUSTIN SOUND     BUMP, THEN CAR PULLS TO A STOP JUSTIN     [trying to stay awake noise]  Holy crap, I think we're here. ABBY     [waking]  Mmm?  Oh good... JUSTIN     One moment and I'll go and check in... ABBY     No, I'll get it.  Gotta pee anyway.  Small bladder.  [yawns] All that. JUSTIN     [receding] I didn't mean.... SOUND     CAR DOOR OPENS AND SHUTS SOUND     FOOTSTEPS ON GRAVEL, DOOR, BELL JINGLES ABBY     Hello?  Hello?  SOUND     RINGS DESK BELL SOUND     DOOR OPENS SOMEWHERE ABBY     [calling]  Look, I'm sorry to be coming in so late!  We had car trouble.  Can we get a room?  [beat]  Hello?  SOUND     FLUSH OF A TOILET ABBY     [needs to pee] Oh, jeez.  [deep shaky breath]  Hello? SOUND     DOOR OPENS CLARK     Hey.  Sorry about that.  I was catching a few.  You want a room? ABBY     Yeah, my friends and I - if you have a room with a couple of queens, we'll be fine. CLARK     Uh, sure.  Probably.  [looking around]  Nobody really here, tonight. ABBY     Could we have the one out on the end, then? CLARK     Don't see why not... um... ABBY     Says here it's room 14. CLARK     There you go.  [unconvincing laugh] So tired my eyes won't focus. SOUND     KEY SLAPPED ON TABLE ABBY     How much? CLARK     Oh, pay when you leave.  ABBY     Hmm.  Are you Joey? CLARK     Joey who? ABBY     [sharp intake of breath, then faking being ditzy]  Sorry - you look a lot like the cousin of a friend of mine.  CLARK     I get that a lot. SOUND     FOOTSTEPS, DOOR OPENS ABBY     Oh, can I use your bathroom?  It's kind of an emergency. CLARK     [too sharp] No!  I  mean, sorry - no can do.  Absolutely against policy.  Too bad you didn't get a room closer in, eh? ABBY     [flat, suspicious] Yeah. SOUND     DOOR SHUTS, JINGLE MUSIC SOUND     HOTEL ROOM DOOR SHUTS, FEET STUMBLE AROUND, BAGS DOWN, ETC. SOUND     BODY FLOPS ONTO BED JUSTIN     I am dead.  As driver, I call a bed.  SOUND     WHEELCHAIR ROLLS MARK     I'm with you.  SOUND     FLUSH BRIANNA     I suppose Abby and I should share the... other...? I thought she said the room would have two beds? SOUND      DOOR OPENS ABBY     That clerk didn't know his ass from a hole in the ground.  Did you park right next to the door Justin? JUSTIN     [half moan] Yes.  Why? ABBY     I have a bad feeling about all this.  TYLER     Any chance it has something to do with all the spooky movie talk in the car? BRIANNA     And the guy who ran us off the road? ABBY     Maybe.  JUSTIN     Well, unless you're ready to drive - and pay for the extra insurance - We're not moving from this spot until I wake up. ABBY     But the clerk - there was something wrong there.  Really.  God, for a chance at a spot hidden roll. MARK     [more awake] Describe him. BRIANNA     [groans]  Come on - it's beddy-bye time! MARK     Abby's got good instincts, Bree.  You know how hard it is for me to fool her. ABBY     That's just in game.  I'm not-- JUSTIN     [half asleep, but trying]  But you are the only girl-- BRIANNA     [half-hearted] Woman. JUSTIN     --to make it into the ... strategic final thingee-- ABBY     Ok.  Shit I'm tired.  [long deep thinking breath]  He wouldn't let me use the bathroom.  He didn't try and hit on me.  Didn't know which number room was the one on the end.  Didn't ask how many "we" were.  Didn't know which rooms have queen beds.  Didn't ask for a credit card. TYLER     So? He's dead tired too.  Big whoop.  It's [looks] 2 freaking 55 in the morning. MARK     Jeez, folks, we've had sessions which went long past 3!  What's wrong with you? JUSTIN     [muttered into the pillow]  Getting old. MARK     Yeah.  You 25-year old over the hill codger, you.  Abby, what would you do now?  ABBY     What? MARK     This is the scenario.  Right here.  What would you do? TYLER     Sleep. BRIANNA     Seconded. JUSTIN     [Snoring] MARK     Assume it's unlikely we can drive out of here - at least not conveniently.  How would you secure the room? ABBY      [perking up]  We could set watches-- TYLER     [mumbled] Screw you! ABBY     I can't watch all night.  Adrenaline is only good for so long. MARK     That guy struck you that bad? ABBY     Yeah.  I'm probably just-- MARK     Let's assume otherwise.  We have a map - of sorts - on the door there.  Take a look. ABBY     I - well, I got the room on the end, since we'd have a better chance of seeing or hearing anyone coming.  MARK     [chuckles] ABBY     I can't help it.  I'm already in strategy mode.  Ok, the room has windows at the front and back and a bathroom that abuts the next room.  No windows in the end wall.  If we could keep an eye either side-- SOUND     FEET ON CARPET, CURTAIN PULLED ASIDE, THEN WHIPPED BACK INTO PLACE. ABBY     Oh, shit. MARK     What? ABBY     God, I hope no one saw the light.  MARK     I'll turn it off.  Let them think we're asleep.  SOUND     CLICK OF SWITCH MARK     Now? ABBY     It's the truck - car - whatever!    The one that almost ran us off the road! MARK     [gasps]  Are you sure? ABBY     Come and look! MARK     I believe you.  We need everyone if this is a real situation.  Shit. ABBY     There's woods - cover - right out back.  If Tyler was up, he could go look. MARK     He's not going to be up any time soon. ABBY     I know what will-- I'm going to take a chance and get my other bag from the car.  I'll see what I can see.  MARK     I'll try the phone-- ABBY     No! MARK     Why? ABBY     Switchboard - I saw a switchboard in the office.  MARK     Shit.  Major "notice," though.  Good one. SOUND     DOOR OPENS MARK     Abby? ABBY     I'll be careful. MARK     [encouraging] I'm glad it's you. SOUND     DOOR SOFTLY CLOSES MARK      Shit.  SOUND     A moment of just snoring MUSIC      CREEPS IN, JUST A BIT MARK     [snorty, "almost fell asleep" noise]  Abby?  What time--?  Shit.  SOUND     WHEELCHAIR SHIFTS MARK     [urgent hiss] Justin!  Wake up, dammit! JUSTIN     Wha--? MARK     Wake Up! SOUND     DOOR OPENS QUICKLY, FEET COME IN, DOOR SHUTS AGAIN MARK     God!  You nearly gave me a heart attack! ABBY     Sorry - I spotted someone out in the parking lot, just after I got in the van, and I didn't want to move again until it was clear.  JUSTIN     [almost awake] What's going on? ABBY     I'll get Tyler up. MARK     Go for it.  I doubt you'll have much luck. ABBY     Ah, but I have a secret weapon - I always pack a sixer with me to gaming cons.  SOUND     SLOSHING OF LIQUID MARK     [almost drooling] Energy shots. ABBY     Un-huh.  It may take a minute or two, but we'll get everyone up and running. MUSIC TYLER     All you had to do was shout "Bob! Bob is coming!" and I woulda been up and running without the taste of ass - Bob was the demon in the larp last weekend, and man was he-- MARK     Shush.  EVERYONE     [Murmurs of assent] MARK     Let's assume this is not a drill. EVERYONE     [a bit undecided murmurs] ABBY     I know there's something odd here.  I feel it. JUSTIN     Are you sure you're not just jittery about the tourney? ABBY     Probably am, but that doesn't make me think I'm wrong. BRIANNA     [Still groggy] What do you want us to do? MARK     Tyler, are you up for something that could be really dangerous? TYLER     Hell yeah. BRIANNA     [cautioning] Tyler? TYLER     Well, how dangerous? MARK     Abby? ABBY     Out the back window of the room, I think I saw that armored car that nearly ran us down.  It's parked in a dark spot.  If it's really the one, and there's any chance it's the same one that was stolen, there's a good chance we've walked in on a den of thieves.  We need to know.  Can you get within range of it and have a look? TYLER      Gimme a second. SOUND     FEET. CURTAIN MOVES BRIANNA     When you say "really dangerous"--? MARK     They already killed a couple of guys during the holdup.  I can't see them hesitating at shooting a few more bystanders. BRIANNA     Tyler? ABBY     Bree, I've Larped with him, and if anyone can really sneak, it's Folemon. BRIANNA     But that's his character! ABBY     In live action games, there are things you either can do or you can't, and sneaking is‑‑ TYLER     [voice slightly different - "in character" as Folemon]  I spy the brigands' carriage.  I will hence and reconnoiter. BRIANNA     Be careful. TYLER     Fair maiden, with you to return to, I cannot fail.  [kiss on hand]  Douse the lanterns, lest my shadow betray me! MUSIC SOUND     LIGHT TAPPING NOISE, WHICH GOES ON THROUGHOUT JUSTIN     What are you doing? ABBY     What does it look like?  I'm checking for trap doors. JUSTIN     You're joking. BRIANNA     Didn't you see that movie Vacancy?  There was a trapdoor in the bathroom floor.  ABBY     That was so annoying.  They were so stupid about that. JUSTIN     About what? ABBY     Did you see the movie? JUSTIN     Well, no. ABBY     They could have easily blocked the hatch.  But they didn't and ended up fighting guys popping up out of it. BRIANNA     They couldn't block it - they tried.  There wasn't any heavy furniture. ABBY     [derisive laugh]  What do you call this? SOUND     DULL THUMP JUSTIN     A mattress. ABBY     Have you ever had to move one?  From a dead lift?  And if that's not enough, the trapdoor was right next to the tub - you just soak the damn thing and no one - not even Schwarzenegger-- BRIANNA     Well, back in his prime-- ABBY     Is going to be able to shift it. JUSTIN     You ...actually ...thought about this? ABBY     [matter of fact] It's what I do.  SOUND     KNOCKING BRIANNA     Lights out - it's the door.  SOUND     SCUFFLE OF MOVEMENT BRIANNA     Tyler? ABBY     Folemon! TYLER     [muffled] I return triumphant! SOUND     DOOR OPENS AND QUICKLY SHUTS AGAIN, LOCKS TYLER     And, I have a prize! SOUND     TAP ON SOMETHING METAL SOUND     LIGHT CLICKS ON JUSTIN     What the--? MARK     No, that's good.  If we can get to the authorities, we can prove we saw the damn thing. JUSTIN     You coulda taken a picture - you think they're not going to notice a missing license plate? TYLER     [chuckling, full of himself] I think they'll have other things on their mind. ABBY     Oh, god, what did you do? TYLER     I had my thieves tool handy-- JUSTIN     What? BRIANNA     Pocketknife. TYLER     So I hobbled their horses. ABBY     We need to go now. JUSTIN      You did what? BRIANNA     He let the air out of their tires.  Tyler, sweetie, speak English so I can stop translating. TYLER     Hey, what?  They won't be able to come after us-- ABBY     But they will know someone was spying on their truck.  They might not notice the plate, but--  aagh! TYLER     I was... um... in the zone?  My character would have-- MARK     Understandable.  Let's deal with it.  Were there any other cars out there? TYLER     Not out back.  MARK     Justin? JUSTIN     What? MARK     Any other cars out front? JUSTIN     I didn't notice.  Sorry. MARK     See what happens when you give up gaming?  You lose your edge.  You remember anything Abby? ABBY     Not in the parking lot.  I can take a look. MARK     Hold off.  What do we have for weapons, if it comes to that? JUSTIN     Jack Shit. ABBY     Torchiere for a club.  BRIANNA     No - no heft. ABBY     We can wire the doorknob as a last resort - give someone a bitch of a shock. TYLER     Shh! [They all do.] SOUND     SLIGHT CRUNCH, MIGHT BE FOOT ON GRAVEL MARK     Posts. SOUND     VERY QUIET MOVEMENT ABBY     Uh-uh. BRIANNA     shit. MARK     The front? BRIANNA     Movement. ABBY     Window?  Door?  BRIANNA     Distraction.  [starts moaning, loudly - very sexy] ABBY     Stay out the way of the window.  BRIANNA     Uhh!  [whispered] Watching. [Up] Ohh! TYLER     [joins in] JUSTIN     You won't be able to hear-- ABBY     Neither will they! SOUND     WINDOW SLIDES OPEN WITH A PROTESTING SQUEAL ABBY     Shit.  If we're going out this way, we're doing it sharp and hard. MARK     Out front? TYLER     [still groaning] BRIANNA     Someone's right outside.  Ohh! Just a shadow.  Ohh!  Peeping or about to try something.  Ohh! JUSTIN     This is insane.  This does not happen in real life. MARK     Look, bro- you can play along, and worst that happens is you look like an idiot with the rest of us, or you keep saying it can't be real and maybe take a bullet.  Why not play along? JUSTIN      Shit.  What do you need me to do?  I am not joining that party. [Moans continue intermittently] MARK     Can you see what's at the top of the closet? Usually if there's access to an attic space, that's where it would be. JUSTIN     Sure. MARK     And you're tall enough. JUSTIN     No problem.  [suddenly serious] If this is some psycho situation, you know I won't let anyone get you, right, bro? MARK     Shithead.  Get everyone else out first!  I'm the burden - now get in the damn closet. SOUND     CLOSET DOOR OPENS ABBY     You're not a burden.  MARK     Physically, I'm a drag on the party. ABBY     Mentally, you're the only one keeping us together.  So you can just shut up. MARK     OK, shutting. BRIANNA     He's making a move. MARK     Shit.  SOUND     KNOCK ON THE DOOR BRIANNA     [loud] Ooh!  Oh, shit!  Huh? TYLER     [loud] What the fuck? MARK     Abby?  Where are we? ABBY     Tyler, get behind the door. Ready to slam it if you gotta. TYLER     Check. SOUND     KNOCK AGAIN ABBY     Brianna, the torchiere, stay below the window, trip anyone coming in. BRIANNA     On it. SOUND      KNOCKING INSISTENT ABBY     [trying to make up her mind] Door - wall - wall - door.  Shit! [deep breath, then calling out] What? SOUND     SHIFTING FURNITURE CLARK     You all right in there? ABBY     What? CLARK     I heard a noise. JUSTIN     [whispered] See?  Normal. ABBY     No.  At the very least, he's peeping.  No way he'd hear anything from the office.  [up]  Everything's fine.  We were watching a movie.  MARK     Good one. JUSTIN     Oh, this is idiotic. SOUND     WALKS, UNLOCKS AND FLINGS OPEN DOOR TYLER     Hey! ABBY     No! SOUND     GUNSHOT, BODY DROP JUSTIN     [screams in pain] SOUND     DOOR SLAMS CLARK     [screams in pain] ABBY     Bree, can you get the lock, without getting in front of the door - it's crap, but-- BRIANNA     Done.  Justin - is he--? SOUND     LOCK FUMBLED SHUT JUSTIN     [sounds more annoyed than hurt] I'm shot. ABBY     At least now we know it's not a drill.  SOUND     GUNSHOT, WINDOW SHATTERS ABBY     Down! SOUND     BODIES FALL, WHEELCHAIR RATTLES AND TIPS MARK     Get him.  I'll cover Justin. SOUND     CAUTIOUS STEP ON BROKEN GLASS ABBY     [scream, distracting him] SOUND     FEET TURN ON THE GLASS, GUNSHOT ABBY     Bree! BRIANNA     Yaaaah!  SOUND     THUMP - BODY DROPS CLARK     Yowtch! ABBY     Sit on that bastard.  Tyler, check for backup? SOUND     HEAVY CRUNCH ON GLASS CLARK     [Whimper] TYLER     On it. SOUND     CAR STARTING TYLER     Oh shit - he's in for a surprise.  Front's clear. JUSTIN     You seem to all be ignoring the fact that I've been shot. MARK     I've been applying pressure. JUSTIN     To my mouth. MARK     oh, yeah, I was supposed to be stopping the part that got shot, not the part that shot off, right. ABBY     Brianna, swap - you take a look at Justin, see if we can move him.  I'll hold down the ...fort. TYLER     Fart. [Snickers all around.] CLARK     [Moans, then grunts when Abby turns him over] SOUND     CRACKLE OF GLASS UNDER HIS BODY ABBY     Need something to tie him with.  TYLER     Gotcha.  Thieves tools to the rescue again. SOUND     RIPPING FABRIC - GOES ON FOR A WHILE BRIANNA     Tyler, toss me your flint and steel. SOUND     CATCH, THEN FLASHLIGHT COMES ON BRIANNA     Looks superficial.  I was hoping I knocked you down quickly enough, but I wasn't sure. JUSTIN     I've been shot. BRIANNA     Yes, but not badly.  I'll bandage it in a second. TYLER     Here's your fifty feet of rope... ABBY     Check the back? TYLER     I am fleet enough to be in all places at once. SOUND     ENGINE STOPS TYLER     Oh. ABBY     [grunts as she ties a knot]  OK, shithead.  Talk. CLARK     What? ABBY     Well, we have your gun.  And a pocketknife.  You want to choose which one I do you over with? CLARK     What?  I was just-- ABBY     Shooting in through our door? CLARK     I thought you were - TYLER     Shut up. ABBY     No, let him talk.  I want to hear this. CLARK     Nothing. ABBY     Oh, well.  How many friends you got out there? CLARK     None. ABBY     So that's Christine out back?  Or are you Knight Rider? CLARK     Ow!  No - No!  Stop! JUSTIN     Let me.  I'm the one he shot. CLARK     No!  There's just the two - and B-Ball's shot. ABBY     Anyone else? JUSTIN     Is this what you were doing? CLARK     OWWW!  No, no one! ABBY     What about the real clerk? CLARK     Oh - um - ABBY     Right.  We need to dump this guy somewhere. TYLER     Out back?  ABBY     Chances are, we can get out the front. JUSTIN     Chances?  I don't want-- ABBY     No worries.  Tyler - eyes on the back until I signal, OK? TYLER      Sure thing. BRIANNA     What now? ABBY     We do what we have to do.  Mark, you ready to take a chance? MUSIC SOUND     OUTSIDE - DOOR OPENS SOUND     WHEELCHAIR BUMPS NOISILY OUT THE DOOR ABBY     No shots.  Good.  We're moving out.  Justin, you're behind me and the chair - get your ass into the car and start it.  We'll pile in, peel out, and worry about belts and seats later. JUSTIN     Are you sure this is safe? ABBY     Nope.  Tyler?  Got the rear? TYLER     Got it. ABBY      Bree, you're first in.  I'll cover you. SOUND     GUN CLICKS READY BRIANNA     Check.  Hold tight! SOUND     WHEELCHAIR GRINDS ALONG THE GROUND TYLER     He's coming!  ABBY     Everyone - Move!  Justin - get it in gear! JUSTIN      Yeah... SOUND     JINGLE OF KEYS, THEY DROP TO THE GROUND JUSTIN     Shit! ABBY     Dammit!  Bree, get your ass to the other side of the car! SOUND     HEAVY FEET RUNNING ON GRAVEL TYLER     I'll-- SOUND     GUNSHOT ABBY     You'll go.  Move it.  I'll cover you.  [solemn] Don't fumble the keys. TYLER     I won't. SOUND     RUNNING FEET TAKE OFF ACROSS THE GRAVEL, snatch up the keys. SOUND     GUNSHOT ABBY     [Gasps as she shoots]  Damn, that's a kick. SOUND     GUNSHOT SOUND     CAR DOOR OPENS ABBY     Yessss! SOUND     ABBY SHOOTS SOUND     SIDE DOOR SLIDES OPEN ABBY     [yelling] Stop shooting at the crip, you scumbag!  You'll be sorry! SOUND     WHEELCHAIR MOVES SLOWLY, ODD FOOTSTEPS AS ABBY CROUCHES BEHIND IT ABBY     Nice to have friends, isn't it? SOUND     GUNSHOT ABBY     [yelling] You really should stop that!  THUG     [evil laugh] ABBY     I told him. TYLER     Come on! ABBY     Bye-bye SOUND     WHEELCHAIR PUSHED, ROLLS SOUND     GUNSHOT SOUND     GRUNT OF PAIN [CLARK] SOUND     RUNNING FEET SOUND     CAR REVVING SOUND     JUMP SOUND     GUNSHOT, PINGS OFF METAL OF CAR TYLER     [grunting to pull her in] Come on! SOUND     CAR MOVES, FEET DRAG BRIANNA     Here. SOUND     GRAB, DRAG ABBY     [grunting] SOUND     DOOR SLAMS SOUND     TIRES SPIN IN GRAVEL, CAR ZOOMS OFF ABBY     [sigh] OK, whose lap am I in? MARK     Mine.  Sorry about that. ABBY     Hey, we're all here, no one got shot-- JUSTIN     I did! MARK     And we had to dump my chair... ABBY     No one got killed, and we're back on the road.  I'm gonna feel like shit for the tourney, but who gives a crap?  [giggles] [All join in the hysterical relieved laughter.] MUSIC SOUND     OUTSIDE ROAD - MORNING NOISES ABBY     [waking up noises, suddenly awake with a gasp] MARK     [whispering]  Shh.  It's ok-- SOUND     RUSTLE AS SHE TRIES TO SIT UP ABBY     Was it - It was a dream? MARK     Hell no.  But once you passed out, we figured you deserved it.  Let you sleep. ABBY     Oh... MARK     Hey Justin?  When's the next bathroom? BRIANNA     And a phone. JUSTIN     Like anyone's gonna believe us.  BRIANNA     You did get shot. TYLER      And I still have my trophy. SOUND     PING AGAINST METAL OF LICENSE PLATE MARK     Shh.  Abby's out again.  ABBY     Hmm?  [rousing herself] Like hell!  Justin?  Crank the music!! END  

“It doesn't matter how hard we work, or how many hours we put in, if OUR Paradigm (or mental program that has exclusive control over our habitual behavior) does not change, the results will ultimately remain the same, year after year.” Bob Proctor, from the Paradigm Shift Seminar.   Welcome back to The Neuroscience Meets Social and Emotional Learning Podcast, where we cover the science-based evidence behind social and emotional learning (for schools) and emotional intelligence training (in the workplace) with tools, ideas and strategies that we can all use for immediate results. I'm Andrea Samadi, and for this week's Brain Fact Friday, I want to revisit how exactly we change our identity, to build a stronger, more resilient, 2.0 version of ourselves, by reviewing our self-image and self-belief that we covered on EPISODE #199[i] that had over 1300 downloads, showing me that you are just as interested in this topic as I am. In this episode we will discuss: ✔ What is PRAXIS (the application of a theory) and how can we use this idea? ✔ What is our self-image vs our self-esteem? ✔ How is our self-image/identity formed? ✔ How do we identify gaps or areas we can improve? ✔ How can we change our self-image/identity? ✔ Can our confidence levels be seen by others? ✔ Can we predict a person's self-esteem levels (or what they think of themselves) by looking at their brain? ✔ 4 Steps to create a 2.0 version of YOU!   What is PRAXIS and How Can We Use it For Improved Results? This weekend I was thinking about life, and how we just get one shot to make it a meaningful one. I'm sure I'm not alone with this line of thinking, especially these days, when it comes to acknowledging how fragile life really is. Earlier this month, I lost another mentor—Mark Low, who was my neighbor in Toronto, who was the one who handed me “the” book that would change my life forever. You can read the story I've told often in the show notes[ii] but for this episode, after thinking about how precious life is, and all the lessons I've learned from the many mentors along the way, there was one profound lesson that stood out to me, that I want to tie into this episode that I'll dedicate it, to my neighbor, Mark Low.   When I first went to work in the motivational speaking industry, back in the late 1990s, I was hired by my neighbor, Mark, to help with administrative tasks, that eventually moved into sales, leading me to travel to each of the seminars and learn from all the speakers and connections made over the years and I talk about everyone I've learned from often on this podcast.  In those early days, I would receive a paycheck from Mark's company, that was called The Praxis Group. I remember looking at my check one day, and asking Mark “Hey, what does Praxis mean?” and he looked over at me from the desk on the other side of the room (we worked out of his parent's basement back then, with our desks facing a wall that was covered in charts with our upcoming seminars, and he replied, “Andrea, it's when you integrate your beliefs with your behaviors.” That's was it. He just stopped for a minute and watched my face looking confused, and he added that “people really change when this happens and that they become an entirely new person” with this concept of Praxis. I looked up the definition that Miriam Webster[iii] gives today and it says that Praxis is the “practical application of a theory” or the “practice of an art, science or skill.” If you look up “becoming a better version of you” these days, the topic is still of high interest. I remember thinking “that's incredible”, as I love everything about change, growth, or skill-building but looking back now, I'm sure it took me over 22 years to get the full understanding of the meaning of Praxis and how exactly we integrate our beliefs with our behavior to attain this sought-after change which happens when we repeat the new habits of what we want, over and over again.  I had to dig a bit, but I did find an old photo of our offices in those early days, before Bob Proctor Seminars took off and became The Proctor Gallagher Institute, with an official office.  But in these early days, Mark Low worked at the desk to the left of me, and while it's funny to see all of the old technology we used to use, or how we manually kept track of the seminar attendees with wall charts, there is much more behind the work that was done in those early days and it had to do with Praxis, which was why people paid the money that they did to attend these seminars.  Seminar attendees were all looking to create a new version of themselves, by changing their old beliefs, and then integrating their new beliefs (that they had learned) with their current life. They were paying for this concept of Praxis---whether it was around changing their beliefs about their ability to earn money, (there were many seminars on that topic) or improve their relationships, or creativity, or productivity, there was a change of thinking required that would lead to a paradigm shift, and then to permanent change, which I'm sure is what we all want in life. We are either improving and moving forward, to this new version of ourselves, or we are not. PHOTO of Andrea working with Mark Low, selling Bob Proctor's Seminars in Toronto, December, 2000. So What Does Praxis (or Integrating our Beliefs and Our Behavior) Have to do with Our Self-Image? The Mountain State Centers for Independent Living has a definition of self-image that I can relate to. It says that “Self-image is how you perceive yourself. It is a number of self-impressions that have built up over time… These self-images can be very positive, giving a person confidence in their thoughts and actions, or negative, making a person doubtful of their capabilities and ideas.”[iv] Our self-image is what we see when we look in the mirror, but like the definition we just read explains, what we see can be either be positive, giving us confidence, or negative, making us doubtful of our capabilities and ideas.” Our self-image is something that's built up over time and I would say that it exists in the non-conscious part of our mind.  See the image in the show notes that I took from my notes from the Winner's Image Seminar, that eventually went into my first book, The Secret for Teens Revealed. This way of looking at our mind originated from the late Dr. Thurman Fleet, the Founder of Concept Therapy, and is a good way to think of where our “self-image” exists in our mind. REMEMBER: We can have a self-image that controls our ability to earn money, where we either see ourselves as a strong income earner, or not. We can have a self-image that controls our weight and health, where we see ourselves as healthy, or not. We can have a self-image that controls our grades in school, where we see ourselves as a good student, or not. If we look at the image in the show notes of our self-image in our mind, it's easy to see how what we think about ourselves, (our self-image) controls our results in life. To change our paradigms, or old way of thinking, we need to do the work to overcome the old self-image that controls our results with a NEW self-image that with time, will override the old, outdated version of ourselves. Our NEW 2.0 self-image that's based on the new actions we must take, will eventually cause us to create new conditions and circumstances, setting us up for a whole new life. Who wouldn't want to choose this new path, over the old version of you? It just takes WORK and THE WILL to do it. When We Believe in Ourselves, We Will Do That Work Required for Our New Results. Our self-image also has a lot to do with our self-esteem “which is the overall sense of respect for ourselves and involves how favorably (or unfavorably) we feel about ourselves.”[v]  Obviously when we are earning more money than less, we will feel more confident, or if we are a student achieving excellent grades, this boosts our confidence levels. It's these strong confidence levels that we will need to override our doubts, fears and uncertainties that will come our way, allowing us to achieve PRAXIS, and the change that Mark Low mentioned comes along with creating a NEW identity.  You become a winner, or a good income earner or an excellent student. You Become a New Version of YOU! Can Our Confidence Levels Achieved by This Thing Called Praxis Be Seen by Others? When I look at the photo of myself that I found back in December, 2000, (I was 29 years old) I can remember sitting in that chair like it was yesterday. I know that I felt confident with myself, (my self-esteem) enough to quit my teaching position, and try something entirely new, but there was something missing with my equation. While I had a strong self-esteem (what I thought of myself) I had a weak self-image, as I worried about what other people thought of me. I think this is an age/experience concept, that shifts with time. But what goes on inside our minds, shows on the outside (with our behaviors and end results) like we can see with the diagram I drew out, so I do think that we can see someone's confidence levels, or lack of confidence. It's almost like this cybernetic mechanism that keeps us stuck from moving forward with whatever it is we are working on. When we are stuck, or unable to move forward, there's something blocking our results at the non-conscious level. And we can, with some introspection, figure out what it is. While writing this episode, I was talking to one of my close friends from high school she said to me “do you ever look back at pictures and think, wow, I wish I knew then, what I know now?” She got that right for sure. I wish I knew this quote 22 years ago,  from America's leading psychiatrist and brain health expert, Dr. Daniel Amen, who reminds us-- “When you're 18, you think everybody is judging you, and you care deeply about what they think of you. When you reach 40, you no longer care what anybody thinks about you. At 60, you realize nobody has been thinking about you at all because most people only think about themselves.” (Dr. Daniel Amen). Try This Activity Yourself. Find a photograph of you from a long time ago, and see what you see. It's really easy to see it in others, and more difficult when it comes to self-reflection. What do you see when you look at older photos of yourself? Do you remember how you felt in the photo? How is your self-esteem equation (what you think of yourself) vs your self-image (how you see yourself based on what you think others think of you), leading to your level of confidence? You can learn a lot about yourself, and what you can improve from this level of self-awareness. Once We See Our Gaps, How Do We Build Up Our Confidence? Once we see our confidence equation, if you were like me, and noticed that for whatever reason, you had an area of your equation that you could change (either your self-esteem levels, or self-image) then this week's brain fact Friday is for you. On this episode, we will create a plan to fix our gaps, and override the older version of YOU. The Brain and Self-Esteem Before we create this plan, for this week's Brain Fact Friday, I want to revisit a part of our brain that researchers at Dartmouth College have identified as a region of the human brain that seems to predict a person's self-esteem levels, or what they think of themselves (where our identity begins that leads us to our self-belief). We did cover this on EPISODE #199 but I want to look at this part of the brain from a different angle and how it relates to PRAXIS, or integrating our NEW beliefs with our NEW behaviors, for NEW results, and increased confidence levels that we will need to build this 2.0 version of ourselves. This part of the brain that researchers discovered can predict a person's self-esteem levels is called “the frontostriatal pathway, and the stronger and more active it is in the brain, the more self-esteem someone has.”[vi] The lead researcher of this study, Robert Chavez found that self-esteem lies in this pathway as shown in the image in the show notes and that “this pathway connects the medial PFC that deals with self-knowledge to the ventral striatum that deals with feelings of motivation and reward.” He called this pathway “the road” and that “a person with a strong road was more likely to have higher long-term self-esteem.” He also reminded us “how repeated behaviors (like meditation) can alter brain traits,” and we've talked about why repetition, or doing things over and over again can strengthen these neural pathways that lead to “stronger roads” and “higher levels of self-esteem.”     How Do We Build a New and More Confident YOU? Or How Can We Integrate Our Beliefs with Our Behaviors? This comes with time, experience and like we learned from Dr. John Dunlosky's research from EPISODE #37[vii], from repeating the same thing, over and over again to strengthen those neural pathways, leading to “stronger roads” in the brain. This weekend, as I was thinking about Mark Low and his business name, PRAXIS, and all the people he helped over the years, I went back to those early days when I watched many people “switch on” something with their thinking, and make significant changes in their lives as they changed their self-image, overriding their old paradigms, and created this NEW 2.0 version of themselves. I'm always on the look-out for those who do the work to make this change as many people get stuck in the process along the way, which is why I wanted to cover this on this week's Brain Fact Friday, to bring clarity to how we can all accomplish this change. So How Do We Create A NEW Self-Image and Override Our Old Paradigms? Now this is the part that I think took me over 22 years to really understand. I think this part is clear, that over time, or doing things a certain way, we can override our paradigms, creating a new self-image, leading us to new results and “stronger roads” in our brain, leading us to higher levels of self-esteem. That makes sense, right? When I asked Mark what Praxis meant and he said “it means integrating our beliefs with our behaviors” I don't think I really understood how “Praxis” happens, like how do we make this change? How do we integrate our beliefs with our behaviors? It doesn't just happen one day….it happens over time, after doing the same thing over and over again. One day, we look up from whatever it is we are doing, and notice that this change is now permanent. Like my high school friend reminded me, “don't you wish we knew what we know now, back in those days?” I wish I was more confident in my abilities, and didn't worry what others thought about me. I hope this awareness can help others to shorten their curve to changing old beliefs and habits, and create a NEW 2.0 version of themselves. I saw it when I interviewed Ryan O'Neill, with EPISODE #203[viii] on “Making Your Vision a Reality” because he changed in front of my eyes into an entirely different person. A NEW 2.0 version of himself. When I began working with Ryan, around 10 years ago, he mentioned that he never imagined where his life would be today, starring on Television shows around the globe for his work as a Paranormal Researcher. I thought about the hard work Ryan put in, to change his self-image, leading to new results, and I thought it was almost like taking a glass of water, and putting one drop of food coloring into it, likening the food color to the repetition of daily activity that's required for this change. To make a long-lasting color change on the water, we have to keep adding new drops of color to the water, every day. We can't just add a drop or two, and expect the color change to last. It will fade away, unless the drops are repeated. Exactly like the way we must repeat our daily actions, grinding away our old self-image, and building a new one in its place. It's a process, but this new self-image, leads us to new results, and this new version of you. This is all possible with a vision, hard work and persistence. How to Achieve PRAXIS and Integrate Your Beliefs with Your Behavior? I've included a ROADMAP for you to use in the show notes for the next steps, but it doesn't matter what you use. This is just a vision to help you to plan out where you are and where you are going. WHERE ARE YOU NOW? Start with the Self-Esteem Equation and Look for Your Gaps. Strong Self-Esteem (what you think of yourself) + Strong Self-Image (how you perceive yourself based on how you think others see you) = Strong Confidence Levels. Where is your self-esteem (your overall sense of self-respect)? Does this are need work? Where is your self-image (how you see yourself based on how others perceive you)? Are you like me, and just need to let go of what others think of you? Once you can see the gaps, you know where to begin. Write out the OLD identity you want to override (where you are now) and replace it with your NEW identity or vision. WHERE ARE YOU GOING? What is the NEW Self-Image you would like to create? (ie, good student, lose weight, leader in educational neuroscience?). Write out your NEW identity in as much detail as possible. DO THE WORK: What do you need to do to achieve this goal? Find someone who has achieved what you want to do, and ask how to begin. Create an action plan, and don't stop until you get to where you want to go.   INTEGRATE YOUR WINS: As you make incremental wins along the way, you must integrate these into your life. Celebrate each win, every step of the way, since the brain is a “prediction machine”[ix] (Andrew Huberman) and if you have too many losses in a row, the brain will begin to predict more losses. REVIEW: To review this week's Brain Fact Friday, did you know that researchers found a part of the brain that predicts a person's self-esteem levels called “the frontostriatal pathway, and the stronger and more active it is in the brain, the more self-esteem someone has?”[x] Did you know that we can change our self-image (how we perceive ourselves) by repeatedly taking action towards something that we want, (like Ryan O'Neill did in the Paranormal Industry) and this action will override our old self-image, watering down the paradigms that once controlled us (like we explained with the glass of water changing color with each drop of food coloring added), and giving us heightened confidence levels, and new results? Like Mark said to me 22 years ago, “It's called Praxis or integrating our beliefs with our behavior” and when this happens, it creates an entirely new person. It just takes WORK and the WILL to make this change. I hope you enjoyed this episode that took me back 22 years ago, as I thought of where my journey began, in those early days of working in the motivational speaking industry. This episode is for you Mark, and for all those people who you worked with, including myself, helping us to change into this NEW 2.0 version of ourselves, that we could barely imagine without your vision, and I hope that it impacts listeners, the same way it did for me, all those years ago. See you next week.   RESOURCES: My Roadmap 2022 https://www.achieveit360.com/wp-content/uploads/2022/02/My-Roadmap-2022.jpg REFERENCES: [i]Neuroscience Meets Social and Emotional Learning Podcast EPISODE #199 “The Neuroscience Behind our Self-Belief and Our Identity”  https://andreasamadi.podbean.com/e/brain-fact-friday-on-the-neuroscience-behind-self-belief-and-our-identity/ [ii] How a Book Can Change Your Life by Andrea Samadi https://www.proctorgallagherinstitute.com/43977/how-a-book-can-change-your-life?fbclid=IwAR0RHhcy0WXImsUkzyuMgfWwNPvQjXn2-36hiSBmKKEfZFI-MXtl_2U53Y0 [iii] Praxis definition https://www.merriam-webster.com/dictionary/praxis [iv] What is Self-Image and How Do We Improve it? Dec 22, 2018 by Courtney Ackerman, MA. https://positivepsychology.com/self-image/ [v] IBID [vi] There is Where Self-Esteem Lives in the Brain by Anna Almendrala Published June 16, 2014 https://www.huffpost.com/entry/self-esteem-brain_n_5500501 [vii] Neuroscience Meets Social and Emotional Learning Podcast EPISODE #37 with Dr. John Dunlosky on “Improving Student Success”  https://andreasamadi.podbean.com/e/kent-states-dr-john-dunlosky-on-improving-student-success-some-principles-from-cognitive-science/ [viii] Neuroscience Meets Social and Emotional Learning Podcast EPISODE #203 on “Ryan O'Neill, Making your Vision a Reality” https://andreasamadi.podbean.com/e/case-study-with-paranormal-researcher-ryan-o-neill-on-making-your-vision-a-reality/ [ix] LIVE EVENT Huberman Lab Q & A from Seattle, WA (32 min) https://podcasts.apple.com/us/podcast/live-event-q-a-dr-andrew-huberman-question-answer/id1545953110?i=1000576342167 [x] There is Where Self-Esteem Lives in the Brain by Anna Almendrala Published June 16, 2014 https://www.huffpost.com/entry/self-esteem-brain_n_5500501

EMV 3DS 2.0 is here, promising 10-times the data points per transaction. But what does that mean for the payments industry? We discuss the endless opportunities offered by richer data, such as increased consumer confidence, acceptance, payments flexibility, and more. Joining us are industry experts Mark Hey, Nathan Franks and Scott Paterson.

In the latest edition of the Ankeny Fanatic weekly podcast sponsored by Coldwell Banker Mid-America, publisher Dan Holm interviews head coach Mark Hey and junior catcher Nick Severson of the Ankeny Centennial baseball team. Coldwell Banker realtor Tom Butler also makes an appearance.

In this episode, I have the opportunity to sit down with someone that has digested and synthesize the tax code and brings the tax saving secrets to you. Grant  Hey, everybody, welcome to another episode of Financial investing radio. So today I have with me someone that just barely met. But as I review, his biography, his profile what he does, it is in one of those places, which I admittedly know so little about, I lean on so many people for help in this area. Now I get to meet with and speak with an expert in the area of how to take it to the tax man. All right, let me welcome Mark Meyers here today. Welcome, Mark. Mark Hey, thank you so much, Grant, I'm excited to chat with you about this. And, you know, hey, if you can keep more of that hard earned profit. It definitely helps in the wealth accumulation realm for sure. So this exciting topic. Grant Boy, for sure. You know, when when you think about taxes and talking about taxes, you know, it's probably right up there with flossing your teeth, right? It's like, oh, everyone should be doing it. Right. But oh, my gosh, do I really want to talk about taxes. Turns out, as I was reviewing some things that you have done to help people, individuals, businesses, really reduce their tax burden. And putting that money, like you said, or leaving that money back in your pocket, suddenly, it becomes really an interesting topic to address. But before you give away any secrets, let's back up. How is it that you got interested in taxes? What is it that even got you to this point?  Mark Grant, you know, it's an interesting story, because I started out my career at the University of Florida, with as an undergrad in exercise physiology, get my Master's in sports management, moved to New York City to manage health clubs, and then moved to Los Angeles to edit, manage more health clubs. And in the process of doing that, I helped a really large high end brand, open a number of different locations. And in that they were they went from a 10 clubs to over 100 clubs. And in that process, I really learn to be an owner operator, every club that I would open or go chant, you know, help return around, I'd have to really be mindful of driving revenue, minimizing expenses, putting the operations in in place, you know, the best practices in place to get the best output. And of course, I was compensated on EBIT margin, so I'd get a base, and then I'd have cash bonus based off of how profitable is the company process, I realized, you know, hey, I might be running health clubs. And I might have a background here, but I have a knack for running companies. And I know there's a lot more opportunity in the financial markets in the financial world, particular to consulting with business owners, that's when I said the light came on after, you know, working well over a decade, you know, 365 days a year, and these clubs are open from, you know, five in the morning till 12 At night, you know, they never got hit. So I'm like, Okay, I'm going to shift gears here and do something fun that can ultimately help other people, and also helped me kind of increase my income opportunity here. Get out of this glass ceiling environment. Grant Yeah. So So you are living this life of just constantly being on right, the lights on, right, because your clubs are on right, the gyms are open, and so you're trying to optimize as much as possible. Talk about school, hard knocks, right? I mean, you learn the lessons along the way, for sure, right? Oh, for sure. Mark I mean, it's one of those things where you know, every penny counts, particularly in that industry. And of course, I worked in a higher end layer. So it was, you know, we're looking at 200 plus dollar a month memberships with spa packages and training and Pilates and Yoga. But at the same time, you still have to be mindful of your margins. That's really, really important. So it was it was a nice experience. It was a nice way to understand how to really learn the p&l, learn the people, learn the drivers, and then of course transitioned over to say, hey, I can speak to business owners, I could speak to those that are looking to, you know, increase efficiency. And there's a lot of opportunity there. So that's kind of where this all kicked off. Grant So in the course of doing this, you start uncovering, I'm assuming, oh, here's a little secret about how I could save a little more money or take some out of the taxes. I imagine over a period of time you started to build up this cadre, or list of or selection of wait, here's some best practices of actually taking the tax back from the tax man and leaving it with you. There's it was it was it that it was a 10 year journey that you invested in to build up that knowledge base? It sounds like, Right? Mark Absolutely. And you know, you really said something important, and it was very accurate in that my, my getting to where I am now didn't happen overnight. In particularly shifting gears, I'd say the last seven or eight years is when I really really shifted gears, to not just talk about can I just not consult with with individuals on their businesses and help them with maybe some financial planning, really shifting gears and saying, hey, there are a lot of different opportunities to reduce tax. And I just went out there. And just like in the past, in my first few years of this, I was kind of more of an advanced insurance specialist and consultant to business owners, and I could go out there and work with any insurance carrier. And I could basically look and say, you know, this is the carrier need for this solution. And this is why this is I realized I could do the same thing in the tax realm, there's just not 100 different, you know, tax savings providers out there, there's probably about 20 to 30 that you want to do business with. And these are small groups are generally fairly boutique, they're not huge. And they offer something very, very specific. And it's somewhere in the 70,000 pages of tax code. And they just so happened to analyze it, apply it. And basically, that's their gig key. So I have a lot of different tools in the tool chest, I have a lot of different relationships with groups that do these things. And I break when I do consulting work, I just put all the pieces of the puzzle together. And it's really cool. I'm not a CPA, I'm not a tax attorney, I'm really literally I call myself a tax savings architect, I've just developed this ability to consult, oh, that's a great title.  Grant Wait, say that title again, you're a what? Mark A tax savings architect, Oh, I love it together, I just build I build the plan. And then I bring the vendors in, right, the right team on the on the coach, I'm bringing the right team in to put the right plays in at the right times. And then the implementation goes, you know, off, you know, from there. Grant So, what I want to highlight is you have developed this by doing it again and again, maybe making a mistake fixing it again and again, oh, learning more again, and you put in that 10 year effort to gather and build that experience and that that's the value platform that you bring to the people so they're not off doing 10 years of learning the lessons, right? Mark Oh, for sure. Grant, I'll tell you, these are types of things that, you know, people don't have time, even the best CPAs right. And you can think about any CPA out there, you've got out of every 10 You're gonna have to my experience, you're gonna have two out of 10 that have developed their practice in a way that they'll have forward looking have a forward looking approach. And they'll have more bandwidth than just, you know, recording and tracking and filing right most of them record track and file. Do you have any more expenses? Are you sure you don't have any more you know, you can buy this capital, we get section 179 it so why don't you spend $1 to save 35 cents? No, that's, that's really a good idea if you need what you're buying. But two out of 10 are forward looking right? They're actually stepping outside of the box and seeing what's out there. They're 70,000 pages of tax code. So this is where the key is at 10 years, you're talking about their 70,000 pages of tax code you if you're going to win a championship. If you're a team think about a just a collegiate team or a professional team. They have multiple coaches. They have strength coaches, they have quarterback coaches that are talking about football they have offensive line coaches defensive line coaches look at businesses the reason why Amazon and Microsoft and General Electric and Nike and DuPont the reason why they pay significantly lower taxes than the average individual is because they have teams they have accounting teams, more than one CPA, they have attorneys they have business strategists. So this is what I really do is I bring that team approach to the small to medium size business owner or you don't even have to be a small to medium sized business owner to have tax savings you can be a high income earning executive. Oh really how to Matt navigate the tax code. There's things that you can do to reduce your tax. Grant Okay, so that gets the the question I was gonna ask around who is this for? Definitely the business owner. But if you're, if you're in the High Net Worth areas and individual this is applicable to you as well. Mark Absolutely. There's three there's three He kind of avenues, business owners. And the reason why is business owners are great to work with because they have control over their income, they can determine how much salary they take, they can determine how they take their income. It really they have the control. The other side would be high income earning executives that maybe don't have as much control but they're they're looking at, you know, half a million dollars or more of taxable income per year. I can work with business owners with much less I mean, they can have as low as 250 or so in taxable income, okay, because the more there's more flexibility. And then the Third Avenue is people that are selling highly appreciated assets, once a lot of crypto traders or somebody that had a stock portfolio, but they didn't have this huge blend, it wasn't like a qualified account, it was just a brokerage account, they had positions that just blew up, and now they're sitting on, you know, $5 million with Apple stock. Well, if they pull the trigger on it, they're looking at, you know, if they're California 37%. Grant Yeah, goodbye to that.  Mark Yeah, well, I can help them, you know, really take care of that as well either eliminated or different depending on what solutions we're looking at. Grant So, okay, what about what about on the, on the inheritance side, same same sort of story. In other words, let's say you inherited something is you have techniques that helps with that group as well. Mark Well, on the inheritance side, I don't spend a lot of time there, because generally, that should be done prior to and a lot of the work that I do actually blends in with maybe some estate planning attorneys, because you really want to solve that equation prior to the need. If you don't, then unfortunately, if you're above the exemption rate, the estate tax man will come take, you know, 60% of that from your kids, right? Not from you, but from your kids and your loved ones. And they might even have to be, they might have to sell appreciate it like this is a real estate high net worth real estate holder, they're selling off real estate just to pay the estate tax, which is never a good thing. So we when it comes to the gifting and the you know passing on to heirs, we generally integrate that into our planning, but we're doing it prior to so that way the kids and their loved ones can breathe, you know, sleep well at night and not have to worry too much about worrying too much about about that sort of thing.  Grant So so let's take the scenario of you're a small and medium business owner and you've got the you've got this tax burden on you. Do you need to be doing the work ahead of time? Is this a whole year of effort that the business owner goes through? Whether they have to be intentional throughout the whole year? Or do your practices, techniques allow you to just sort of come in at the last minute and who 30% off? Thanks, Mark. Have a great year? Mark Yes, well, I would say a little bit of all apply. But proactive forward looking is always the best. The best approach is a forward looking approach. Now I can do hindsight foresight, and then give you insight. On the hindsight we're always looking at, well, what did you miss that you can go back and pick up a lot of people don't realize, particularly in business, there's tax credits that they can pick up in previous years. Currently, right now for the next few months. There's the employee retention tax credit. So there's there's r&d credits, there's there's trends for investing in renewable energy, they can go backwards and pick up previous taxes paid, it's always look at the hindsight, what can we pick up that you paid in the last year or two or three? Ford, Ford sight? Or, you know, foresight is okay, what can we do to change the trajectory of your current income? Because right now, the way we're always looking at pathways, how are you taking your income, because what we need to do is look at creating new pathways. And if you have different pathways to receive the same income, there might be a different taxable situation. But those pathways aren't going to save you. You can't save any money until the pathway is created. So the foresight we're always looking at, well, this is how much money you're taking in now. And you've taken it in one pathway, or maybe two pathways, and this is your taxable outcome. But what if we created two additional pathways? Now you have four pathways, and we're not talking about deferring it. And putting into qualified accounts. I'm not talking about any of that, obviously, that's been going on for years and years and years is there's arguments as to whether or not that really is saving them anything. At the end of the day, we're talking about really taking tax law and the tax code by the horns and saying, hey, the tax code says I can do this, therefore, this money is not taxable. Right. So now that you have this money in your hand, that's not taxable you and you've lowered your adjusted gross income because you took a portion of your money that the tax code says is not taxable because of the way that you've structured it structure that we've just just decreased your taxes and you're like liquid, like the money that you save is liquid, it's in your pocket. If you want to use that for investing you can if you want to use that to recapitalize your business you can if you want to use that to go to Vegas, you can. Grant Yeah, your choice and that's the whole point. It's your choice rather than Uncle Sam. So the strategy seems to be tell me if I've got this right. It's don't fire your CPA because you're going to keep The CPA as a business owner, because you're not the CPA, but what you are bringing is a way to be more productive as you work with the CPA, right, you're bringing in additional knowledge or insight that will then be brought into those conversations with the CPA currently have is that close 100%. Mark And what I always like to tell business owners, and right off the bat is, you know, let's, let's not put your CPA on defense mode, right? They, there's no CPA out there that has the bandwidth, to have this time to vet and research all these different ways to save taxes. I mean, they know a lot, but because they may not know everything that I'll bring to the table, that's okay. So the first thing is make sure that they're not on the defense. And also, I'm not looking to take over any bookkeeping, your tax filing or tax prep, I'm just looking to add additional layers that usually increase revenue for the accounting because it usually does increase their need to maybe have an additional filing each year, or maybe some additional bookkeeping to take to oversee these new solutions.  Grant So it's all day for you as a partner in it, your they don't see you as Oh, I'm here taking business from 100%. Mark Most of the time, when I'm speaking to the right CPAs. And I'm introduced to them by the taxpayer, I get introduced to three or four new clients that the CPA has, because they're like, this is great, I have you know, four or five, or depending on the CPA, they might work with a higher net worth individuals, they might have more, but I like those relationships, because they open the door for more opportunity. Now, I will say there's going to be out of that regard every 10 CPAs, there's two that are for thinking. And there's eight that are really just doing the numbers really doing the prep the recording and filing and prepping. Sometimes the eight, there could be some resistance there. And it's it's, it's only because they don't know what they don't know. So in those situations, hey, I always say it's up to you. It's up to the taxpayer, that you're the decision maker, the CPA is not the decision maker. And I have you know, I never want to pry someone away from their CPA, but if they really liked what I'm talking about under CPAs, just very resistant, doing anything that they're outside of their norm was to have dozens and dozens of CPAs all over the nation that would be very happy to interview you. Or you could interview them because they know the solutions and their clients use them. Grant Yeah, I was gonna ask you. So how does you know? What's some guidance for our listeners on? How do you pick? How do you find those two out of the 10? CPAs? Right? What are some of the key things that someone's looking for? to vet your CPA or while you're searching for someone to say, now you're you're part of the 80%? It's you you're actually not going to help me as much I'm looking for the 20% What What are some tips you have? Mark Yeah, first thing Grant is ask them if they do quarterly meetings. If the CPA or the tax preparer for you is not meeting with you quarterly, they are not forward looking, they're likely going to say hey, let's meet in might not even be before the end of the year, it might be in like January or February to say tell me what you have, is that all the expenses you have? Are you sure because we need to file. But if they even if they're only meeting once per year, at the end of the year, and just trying to figure out, okay, we need to shove a little bit more in the qualified account. And maybe you can have any more, you know, maybe you can buy some more capital equipment. That is not, you know, I'm not saying that's well, let me just say this, that is not the accounting, that that someone needs as they're climbing, the echelon of income, if they're still using that CPA, when they're climbing that income bracket, they are going to be paying retail taxes. When everybody else that has reached that level. When they get to a certain level of of success. They figured out how to pay wholesale sales, no different. There's no different there's a retail price, and there's a wholesale price and the people that pay the wholesale price go above and beyond and look for the coupons where the coupons they're in the tax code. Awesome. The IRS is not saying I'm giving out all day. Yeah, they're not putting a flyer out your mail.  Grant Wait a minute, are you saying there's no mobile app that they could the tax code mobile app with coupons? I think we should build that. That's a great I should yeah, that's my app.  Mark Together Grant. Grant  Let's go build that. I bet there's a market for that. Mark Okay. I would bet there is as well. Yeah, absolutely. Grant I love that idea. Okay, so there's something I saw on your profile that intrigued me many things intrigued me and one of those. I just gotta read this off here. Because when I read it, I was like, Where do I sign? It? It was it was learn how to get the IRS to fund a portion of your retirement 100% tax free. So like, right next to the mobile app. We just talked about developing there's this also. Okay, tell me all right. We want the IRS to fund a portion of our retirement 100% tax free any secrets you can share on that? Mark You know, there's a I'll, I won't give everything away, right? I want people to want to ask me some questions. But I will say this, there's a few different ways to do it. One of the ways is when you find these tax savings, right, when there's that when you're applying the code that's going to basically give you a deduction, right? Because there's codes I can actually, you know, there's a little golf tournament. Here's a nice secret out there. A lot of people know about this, but let's a lot of people don't as well, golf tournament out there. It's been going on for years and years and years. And the winner gets a green jacket. I'm not sure if you're a golfing fan. Oh, sure. Or Yep. If you know, who gets the green jacket every year, you know, there there is somewhere in Georgia and a little town. That's right. And it's a very prestigious golf tournament. So about 60 years ago, the higher net worth individuals that lived around that, that golf course realize that they could rent their homes to the corporation's coming in that were or anyone coming in that wanted to, you know, watch the tournament, and they could rent their homes for significantly more than they would you know, what would cost them to go have a little nice vacation? So in that process, they said, Well, these are our personal residence. This is not a this is not an income property. So they lobby to the their friends and Senate and said, Hey, we're not renting our this is not an income producing property. But we're not getting any deductions on this. We're not getting any tax benefits. But so can we have some benefits. So they basically the Congress, and there's two tax codes that validate this, you can rent your personal residence for up to a certain number of days per year. And the dollars that you receive for that rent is tax free, as long as you don't rent your home for over a certain number of days. Now, here's where it gets fun grant, because some people don't want strangers in their house. Right? So even if they could rent their house for significantly more than they could go do something else. They don't want to Airbnb their house, what if they're a business owner? Well, can they rent their business? Can they rent their house to their business for business purposes? Using the same tax code? Absolutely. Now, we just have to determine what the value is, and put it in your bot and your minutes and ultimately integrate it and know, now when you create those deductions, right? Because if you're renting your house, from your business, and you create a deduction at the business level, but didn't cost you anything at the personal level, or the business level, maybe there's a, you know, maybe the meeting you did was whatever, you know, lunch, well, you just created deductions with no cost, no cost. Now that tax savings now the tax savings is getting to you from that's where you're funding your retirement tax free from the IRS because those that those dollars are non taxable. Now, if you get them into a Roth, if you get them into a cash value life insurance policy, you're never paying the taxes again. So now you're looking at never even paying taxes again after you didn't pay the taxes on it to begin with. Okay, that was one little nugget. Grant That's you know, would you just drop the mic on that? You're not holding in my car? Yeah, yeah. Mark No, but if I dropped it, it might fall off my desk. Grant I might, I might fall off that. Yeah, I tell you, Mark, that that was awesome. Just following that flow of what you articulated. I think that's a beautiful thing. Okay. So let me ask you this. With all that you're doing, and with all that people are coming to you for? How do they engage with you? How do they dial it? How they interact with you? How do they how do they say I'm a good candidate for you? Where do they go to find out more about you? Mark Great question, I always just invite him to my website, Grant, I just PeakProfitSolutions.com. And as you know, peak as in a mountain peak, P-E-A-K Profit Solutions, plural PeakProfitSolutions.com. On that you can have, there's places where you can go get case studies, I click here for some case studies, there's a link that says, hey, book an appointment with me, and 20 It literally only takes me 20 minutes to have a conversation with someone to determine if they're a good candidate for any one of the dozen or more solutions that I can bring to the table. That's really the best thing though, the most important thing to know is, you know, just take a little bit of time, even if it's 20 minute phone call, you don't have to come super prepared. They don't have to come with their entire balance and their their previous tax years and their p&l Like just come and say, This is what I how I'm structured. This is how much I'm making every year. I'm writing a lot, you know, just all they need to do is do that. And I and from that point forward, I can determine right out of the gate if they're a good candidate for the architecture to start. Grnant The tax architect. Mark Architect, tax savings, architecture, tax savings architect good building. That's right. Grant That is awesome. That is awesome. Excellent. Mark, thank you for your time today. Any final comments? Mark No, I just appreciate being on the show. Appreciate your, your hosting style, and of course, all the interviews that you've done on your channel so are fun to listen to. So thank you. Grant I'm having fun. It's a fascinating world, right? There's just so many great people doing so many cool things. So when your profile came across me as like, Oh, I gotta talk this guy. He's got some secrets about reducing taxes. Okay, yeah, he's in. So thanks for doing that mark for thanks for taking the time everyone. Thanks for joining another episode of Financial investing radio. And until next time, go check out go check out Peak Profits Solutions. Thank you for joining Grant on Financial Investing Radio. Don't forget to subscribe and leave feedback.  

In this episode, I have the opportunity to sit down with someone that has digested and synthesize the tax code and brings the tax saving secrets to you. Grant  Hey, everybody, welcome to another episode of Financial investing radio. So today I have with me someone that just barely met. But as I review, his biography, his profile what he does, it is in one of those places, which I admittedly know so little about, I lean on so many people for help in this area. Now I get to meet with and speak with an expert in the area of how to take it to the tax man. All right, let me welcome Mark Meyers here today. Welcome, Mark. Mark Hey, thank you so much, Grant, I'm excited to chat with you about this. And, you know, hey, if you can keep more of that hard earned profit. It definitely helps in the wealth accumulation realm for sure. So this exciting topic. Grant Boy, for sure. You know, when when you think about taxes and talking about taxes, you know, it's probably right up there with flossing your teeth, right? It's like, oh, everyone should be doing it. Right. But oh, my gosh, do I really want to talk about taxes. Turns out, as I was reviewing some things that you have done to help people, individuals, businesses, really reduce their tax burden. And putting that money, like you said, or leaving that money back in your pocket, suddenly, it becomes really an interesting topic to address. But before you give away any secrets, let's back up. How is it that you got interested in taxes? What is it that even got you to this point?  Mark Grant, you know, it's an interesting story, because I started out my career at the University of Florida, with as an undergrad in exercise physiology, get my Master's in sports management, moved to New York City to manage health clubs, and then moved to Los Angeles to edit, manage more health clubs. And in the process of doing that, I helped a really large high end brand, open a number of different locations. And in that they were they went from a 10 clubs to over 100 clubs. And in that process, I really learn to be an owner operator, every club that I would open or go chant, you know, help return around, I'd have to really be mindful of driving revenue, minimizing expenses, putting the operations in in place, you know, the best practices in place to get the best output. And of course, I was compensated on EBIT margin, so I'd get a base, and then I'd have cash bonus based off of how profitable is the company process, I realized, you know, hey, I might be running health clubs. And I might have a background here, but I have a knack for running companies. And I know there's a lot more opportunity in the financial markets in the financial world, particular to consulting with business owners, that's when I said the light came on after, you know, working well over a decade, you know, 365 days a year, and these clubs are open from, you know, five in the morning till 12 At night, you know, they never got hit. So I'm like, Okay, I'm going to shift gears here and do something fun that can ultimately help other people, and also helped me kind of increase my income opportunity here. Get out of this glass ceiling environment. Grant Yeah. So So you are living this life of just constantly being on right, the lights on, right, because your clubs are on right, the gyms are open, and so you're trying to optimize as much as possible. Talk about school, hard knocks, right? I mean, you learn the lessons along the way, for sure, right? Oh, for sure. Mark I mean, it's one of those things where you know, every penny counts, particularly in that industry. And of course, I worked in a higher end layer. So it was, you know, we're looking at 200 plus dollar a month memberships with spa packages and training and Pilates and Yoga. But at the same time, you still have to be mindful of your margins. That's really, really important. So it was it was a nice experience. It was a nice way to understand how to really learn the p&l, learn the people, learn the drivers, and then of course transitioned over to say, hey, I can speak to business owners, I could speak to those that are looking to, you know, increase efficiency. And there's a lot of opportunity there. So that's kind of where this all kicked off. Grant So in the course of doing this, you start uncovering, I'm assuming, oh, here's a little secret about how I could save a little more money or take some out of the taxes. I imagine over a period of time you started to build up this cadre, or list of or selection of wait, here's some best practices of actually taking the tax back from the tax man and leaving it with you. There's it was it was it that it was a 10 year journey that you invested in to build up that knowledge base? It sounds like, Right? Mark Absolutely. And you know, you really said something important, and it was very accurate in that my, my getting to where I am now didn't happen overnight. In particularly shifting gears, I'd say the last seven or eight years is when I really really shifted gears, to not just talk about can I just not consult with with individuals on their businesses and help them with maybe some financial planning, really shifting gears and saying, hey, there are a lot of different opportunities to reduce tax. And I just went out there. And just like in the past, in my first few years of this, I was kind of more of an advanced insurance specialist and consultant to business owners, and I could go out there and work with any insurance carrier. And I could basically look and say, you know, this is the carrier need for this solution. And this is why this is I realized I could do the same thing in the tax realm, there's just not 100 different, you know, tax savings providers out there, there's probably about 20 to 30 that you want to do business with. And these are small groups are generally fairly boutique, they're not huge. And they offer something very, very specific. And it's somewhere in the 70,000 pages of tax code. And they just so happened to analyze it, apply it. And basically, that's their gig key. So I have a lot of different tools in the tool chest, I have a lot of different relationships with groups that do these things. And I break when I do consulting work, I just put all the pieces of the puzzle together. And it's really cool. I'm not a CPA, I'm not a tax attorney, I'm really literally I call myself a tax savings architect, I've just developed this ability to consult, oh, that's a great title.  Grant Wait, say that title again, you're a what? Mark A tax savings architect, Oh, I love it together, I just build I build the plan. And then I bring the vendors in, right, the right team on the on the coach, I'm bringing the right team in to put the right plays in at the right times. And then the implementation goes, you know, off, you know, from there. Grant So, what I want to highlight is you have developed this by doing it again and again, maybe making a mistake fixing it again and again, oh, learning more again, and you put in that 10 year effort to gather and build that experience and that that's the value platform that you bring to the people so they're not off doing 10 years of learning the lessons, right? Mark Oh, for sure. Grant, I'll tell you, these are types of things that, you know, people don't have time, even the best CPAs right. And you can think about any CPA out there, you've got out of every 10 You're gonna have to my experience, you're gonna have two out of 10 that have developed their practice in a way that they'll have forward looking have a forward looking approach. And they'll have more bandwidth than just, you know, recording and tracking and filing right most of them record track and file. Do you have any more expenses? Are you sure you don't have any more you know, you can buy this capital, we get section 179 it so why don't you spend $1 to save 35 cents? No, that's, that's really a good idea if you need what you're buying. But two out of 10 are forward looking right? They're actually stepping outside of the box and seeing what's out there. They're 70,000 pages of tax code. So this is where the key is at 10 years, you're talking about their 70,000 pages of tax code you if you're going to win a championship. If you're a team think about a just a collegiate team or a professional team. They have multiple coaches. They have strength coaches, they have quarterback coaches that are talking about football they have offensive line coaches defensive line coaches look at businesses the reason why Amazon and Microsoft and General Electric and Nike and DuPont the reason why they pay significantly lower taxes than the average individual is because they have teams they have accounting teams, more than one CPA, they have attorneys they have business strategists. So this is what I really do is I bring that team approach to the small to medium size business owner or you don't even have to be a small to medium sized business owner to have tax savings you can be a high income earning executive. Oh really how to Matt navigate the tax code. There's things that you can do to reduce your tax. Grant Okay, so that gets the the question I was gonna ask around who is this for? Definitely the business owner. But if you're, if you're in the High Net Worth areas and individual this is applicable to you as well. Mark Absolutely. There's three there's three He kind of avenues, business owners. And the reason why is business owners are great to work with because they have control over their income, they can determine how much salary they take, they can determine how they take their income. It really they have the control. The other side would be high income earning executives that maybe don't have as much control but they're they're looking at, you know, half a million dollars or more of taxable income per year. I can work with business owners with much less I mean, they can have as low as 250 or so in taxable income, okay, because the more there's more flexibility. And then the Third Avenue is people that are selling highly appreciated assets, once a lot of crypto traders or somebody that had a stock portfolio, but they didn't have this huge blend, it wasn't like a qualified account, it was just a brokerage account, they had positions that just blew up, and now they're sitting on, you know, $5 million with Apple stock. Well, if they pull the trigger on it, they're looking at, you know, if they're California 37%. Grant Yeah, goodbye to that.  Mark Yeah, well, I can help them, you know, really take care of that as well either eliminated or different depending on what solutions we're looking at. Grant So, okay, what about what about on the, on the inheritance side, same same sort of story. In other words, let's say you inherited something is you have techniques that helps with that group as well. Mark Well, on the inheritance side, I don't spend a lot of time there, because generally, that should be done prior to and a lot of the work that I do actually blends in with maybe some estate planning attorneys, because you really want to solve that equation prior to the need. If you don't, then unfortunately, if you're above the exemption rate, the estate tax man will come take, you know, 60% of that from your kids, right? Not from you, but from your kids and your loved ones. And they might even have to be, they might have to sell appreciate it like this is a real estate high net worth real estate holder, they're selling off real estate just to pay the estate tax, which is never a good thing. So we when it comes to the gifting and the you know passing on to heirs, we generally integrate that into our planning, but we're doing it prior to so that way the kids and their loved ones can breathe, you know, sleep well at night and not have to worry too much about worrying too much about about that sort of thing.  Grant So so let's take the scenario of you're a small and medium business owner and you've got the you've got this tax burden on you. Do you need to be doing the work ahead of time? Is this a whole year of effort that the business owner goes through? Whether they have to be intentional throughout the whole year? Or do your practices, techniques allow you to just sort of come in at the last minute and who 30% off? Thanks, Mark. Have a great year? Mark Yes, well, I would say a little bit of all apply. But proactive forward looking is always the best. The best approach is a forward looking approach. Now I can do hindsight foresight, and then give you insight. On the hindsight we're always looking at, well, what did you miss that you can go back and pick up a lot of people don't realize, particularly in business, there's tax credits that they can pick up in previous years. Currently, right now for the next few months. There's the employee retention tax credit. So there's there's r&d credits, there's there's trends for investing in renewable energy, they can go backwards and pick up previous taxes paid, it's always look at the hindsight, what can we pick up that you paid in the last year or two or three? Ford, Ford sight? Or, you know, foresight is okay, what can we do to change the trajectory of your current income? Because right now, the way we're always looking at pathways, how are you taking your income, because what we need to do is look at creating new pathways. And if you have different pathways to receive the same income, there might be a different taxable situation. But those pathways aren't going to save you. You can't save any money until the pathway is created. So the foresight we're always looking at, well, this is how much money you're taking in now. And you've taken it in one pathway, or maybe two pathways, and this is your taxable outcome. But what if we created two additional pathways? Now you have four pathways, and we're not talking about deferring it. And putting into qualified accounts. I'm not talking about any of that, obviously, that's been going on for years and years and years is there's arguments as to whether or not that really is saving them anything. At the end of the day, we're talking about really taking tax law and the tax code by the horns and saying, hey, the tax code says I can do this, therefore, this money is not taxable. Right. So now that you have this money in your hand, that's not taxable you and you've lowered your adjusted gross income because you took a portion of your money that the tax code says is not taxable because of the way that you've structured it structure that we've just just decreased your taxes and you're like liquid, like the money that you save is liquid, it's in your pocket. If you want to use that for investing you can if you want to use that to recapitalize your business you can if you want to use that to go to Vegas, you can. Grant Yeah, your choice and that's the whole point. It's your choice rather than Uncle Sam. So the strategy seems to be tell me if I've got this right. It's don't fire your CPA because you're going to keep The CPA as a business owner, because you're not the CPA, but what you are bringing is a way to be more productive as you work with the CPA, right, you're bringing in additional knowledge or insight that will then be brought into those conversations with the CPA currently have is that close 100%. Mark And what I always like to tell business owners, and right off the bat is, you know, let's, let's not put your CPA on defense mode, right? They, there's no CPA out there that has the bandwidth, to have this time to vet and research all these different ways to save taxes. I mean, they know a lot, but because they may not know everything that I'll bring to the table, that's okay. So the first thing is make sure that they're not on the defense. And also, I'm not looking to take over any bookkeeping, your tax filing or tax prep, I'm just looking to add additional layers that usually increase revenue for the accounting because it usually does increase their need to maybe have an additional filing each year, or maybe some additional bookkeeping to take to oversee these new solutions.  Grant So it's all day for you as a partner in it, your they don't see you as Oh, I'm here taking business from 100%. Mark Most of the time, when I'm speaking to the right CPAs. And I'm introduced to them by the taxpayer, I get introduced to three or four new clients that the CPA has, because they're like, this is great, I have you know, four or five, or depending on the CPA, they might work with a higher net worth individuals, they might have more, but I like those relationships, because they open the door for more opportunity. Now, I will say there's going to be out of that regard every 10 CPAs, there's two that are for thinking. And there's eight that are really just doing the numbers really doing the prep the recording and filing and prepping. Sometimes the eight, there could be some resistance there. And it's it's, it's only because they don't know what they don't know. So in those situations, hey, I always say it's up to you. It's up to the taxpayer, that you're the decision maker, the CPA is not the decision maker. And I have you know, I never want to pry someone away from their CPA, but if they really liked what I'm talking about under CPAs, just very resistant, doing anything that they're outside of their norm was to have dozens and dozens of CPAs all over the nation that would be very happy to interview you. Or you could interview them because they know the solutions and their clients use them. Grant Yeah, I was gonna ask you. So how does you know? What's some guidance for our listeners on? How do you pick? How do you find those two out of the 10? CPAs? Right? What are some of the key things that someone's looking for? to vet your CPA or while you're searching for someone to say, now you're you're part of the 80%? It's you you're actually not going to help me as much I'm looking for the 20% What What are some tips you have? Mark Yeah, first thing Grant is ask them if they do quarterly meetings. If the CPA or the tax preparer for you is not meeting with you quarterly, they are not forward looking, they're likely going to say hey, let's meet in might not even be before the end of the year, it might be in like January or February to say tell me what you have, is that all the expenses you have? Are you sure because we need to file. But if they even if they're only meeting once per year, at the end of the year, and just trying to figure out, okay, we need to shove a little bit more in the qualified account. And maybe you can have any more, you know, maybe you can buy some more capital equipment. That is not, you know, I'm not saying that's well, let me just say this, that is not the accounting, that that someone needs as they're climbing, the echelon of income, if they're still using that CPA, when they're climbing that income bracket, they are going to be paying retail taxes. When everybody else that has reached that level. When they get to a certain level of of success. They figured out how to pay wholesale sales, no different. There's no different there's a retail price, and there's a wholesale price and the people that pay the wholesale price go above and beyond and look for the coupons where the coupons they're in the tax code. Awesome. The IRS is not saying I'm giving out all day. Yeah, they're not putting a flyer out your mail.  Grant Wait a minute, are you saying there's no mobile app that they could the tax code mobile app with coupons? I think we should build that. That's a great I should yeah, that's my app.  Mark Together Grant. Grant  Let's go build that. I bet there's a market for that. Mark Okay. I would bet there is as well. Yeah, absolutely. Grant I love that idea. Okay, so there's something I saw on your profile that intrigued me many things intrigued me and one of those. I just gotta read this off here. Because when I read it, I was like, Where do I sign? It? It was it was learn how to get the IRS to fund a portion of your retirement 100% tax free. So like, right next to the mobile app. We just talked about developing there's this also. Okay, tell me all right. We want the IRS to fund a portion of our retirement 100% tax free any secrets you can share on that? Mark You know, there's a I'll, I won't give everything away, right? I want people to want to ask me some questions. But I will say this, there's a few different ways to do it. One of the ways is when you find these tax savings, right, when there's that when you're applying the code that's going to basically give you a deduction, right? Because there's codes I can actually, you know, there's a little golf tournament. Here's a nice secret out there. A lot of people know about this, but let's a lot of people don't as well, golf tournament out there. It's been going on for years and years and years. And the winner gets a green jacket. I'm not sure if you're a golfing fan. Oh, sure. Or Yep. If you know, who gets the green jacket every year, you know, there there is somewhere in Georgia and a little town. That's right. And it's a very prestigious golf tournament. So about 60 years ago, the higher net worth individuals that lived around that, that golf course realize that they could rent their homes to the corporation's coming in that were or anyone coming in that wanted to, you know, watch the tournament, and they could rent their homes for significantly more than they would you know, what would cost them to go have a little nice vacation? So in that process, they said, Well, these are our personal residence. This is not a this is not an income property. So they lobby to the their friends and Senate and said, Hey, we're not renting our this is not an income producing property. But we're not getting any deductions on this. We're not getting any tax benefits. But so can we have some benefits. So they basically the Congress, and there's two tax codes that validate this, you can rent your personal residence for up to a certain number of days per year. And the dollars that you receive for that rent is tax free, as long as you don't rent your home for over a certain number of days. Now, here's where it gets fun grant, because some people don't want strangers in their house. Right? So even if they could rent their house for significantly more than they could go do something else. They don't want to Airbnb their house, what if they're a business owner? Well, can they rent their business? Can they rent their house to their business for business purposes? Using the same tax code? Absolutely. Now, we just have to determine what the value is, and put it in your bot and your minutes and ultimately integrate it and know, now when you create those deductions, right? Because if you're renting your house, from your business, and you create a deduction at the business level, but didn't cost you anything at the personal level, or the business level, maybe there's a, you know, maybe the meeting you did was whatever, you know, lunch, well, you just created deductions with no cost, no cost. Now that tax savings now the tax savings is getting to you from that's where you're funding your retirement tax free from the IRS because those that those dollars are non taxable. Now, if you get them into a Roth, if you get them into a cash value life insurance policy, you're never paying the taxes again. So now you're looking at never even paying taxes again after you didn't pay the taxes on it to begin with. Okay, that was one little nugget. Grant That's you know, would you just drop the mic on that? You're not holding in my car? Yeah, yeah. Mark No, but if I dropped it, it might fall off my desk. Grant I might, I might fall off that. Yeah, I tell you, Mark, that that was awesome. Just following that flow of what you articulated. I think that's a beautiful thing. Okay. So let me ask you this. With all that you're doing, and with all that people are coming to you for? How do they engage with you? How do they dial it? How they interact with you? How do they how do they say I'm a good candidate for you? Where do they go to find out more about you? Mark Great question, I always just invite him to my website, Grant, I just PeakProfitSolutions.com. And as you know, peak as in a mountain peak, P-E-A-K Profit Solutions, plural PeakProfitSolutions.com. On that you can have, there's places where you can go get case studies, I click here for some case studies, there's a link that says, hey, book an appointment with me, and 20 It literally only takes me 20 minutes to have a conversation with someone to determine if they're a good candidate for any one of the dozen or more solutions that I can bring to the table. That's really the best thing though, the most important thing to know is, you know, just take a little bit of time, even if it's 20 minute phone call, you don't have to come super prepared. They don't have to come with their entire balance and their their previous tax years and their p&l Like just come and say, This is what I how I'm structured. This is how much I'm making every year. I'm writing a lot, you know, just all they need to do is do that. And I and from that point forward, I can determine right out of the gate if they're a good candidate for the architecture to start. Grnant The tax architect. Mark Architect, tax savings, architecture, tax savings architect good building. That's right. Grant That is awesome. That is awesome. Excellent. Mark, thank you for your time today. Any final comments? Mark No, I just appreciate being on the show. Appreciate your, your hosting style, and of course, all the interviews that you've done on your channel so are fun to listen to. So thank you. Grant I'm having fun. It's a fascinating world, right? There's just so many great people doing so many cool things. So when your profile came across me as like, Oh, I gotta talk this guy. He's got some secrets about reducing taxes. Okay, yeah, he's in. So thanks for doing that mark for thanks for taking the time everyone. Thanks for joining another episode of Financial Investing Radio. And until next time, go check out go check out Peak Profits Solutions. Thank you for joining Grant on Financial Investing Radio. Don't forget to subscribe and leave feedback.  

We've assembled a list of priorities to keep in mind as you count down the days to retirement. Helpful Information: PFG Website: https://www.pfgprivatewealth.com/ Contact: 813-286-7776 Email: info@pfgprivatewealth.com Disclaimer: PFG Private Wealth Management, LLC is a registered investment adviser. All statements and opinions expressed are based upon information considered reliable although it should not be relied upon as such. Any statements or opinions are subject to change without notice. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investment involve risk and, unless otherwise stated, are not guaranteed. Information expressed does not take into account your specific situation or objectives and is not intended as recommendations appropriate for any individual. Listeners are encouraged to seek advice from a qualified tax, legal, or investment adviser to determine whether any information presented may be suitable for their specific situation. Past performance is not indicative of future performance. Transcript of Today's Show: For a full transcript of today's show, visit the blog related to this episode at https://www.pfgprivatewealth.com/podcast/ ----more---- Mark: Hey everybody. Welcome to the podcast. It's retirement planning, redefined with John and Nick and myself talking about the countdown to retirement. What to do on those days, as we're getting closer, working our way towards it. We've assembled a list of priorities to keep in mind, as you are counting down those days to retirement. And we were getting ready to get this podcast started and we were kind of laughing at some of the things that we seem to run out of in this whole supply chain issue, had ourselves a good giggle along the way. So hopefully we'll have a good podcast for you to tune into as we talk about these things, because there's some good stuff on here. And guys at the time we're dropping this, I think we're going to drop this right after Memorial Day if I'm not mistaken. Anyway, it's right around it.   Mark: And Memorial Day is kind of the unofficial kickoff to summer. It's not technically summer yet, right? I think it's what June 20th or something like that. But when we get to 50 and a lot of times, if you want to think about this countdown 50 plus, it's kind of the unofficial kickoff to retirement. We're not actually retired yet, but we start thinking about it, paying more attention to it. So on and so forth. So John, the first one on my list is getting healthy and staying healthy. Many of us develop chronic issues in our 50s. So it's a good time to put some thought onto this so that you can actually enjoy those golden years.   John: Yeah, 100%. I would even because I'm sure, I don't know in the previous podcast I talk about my health issues, but I think it's important for everyone at any age, especially though I will say 50.   Mark: True.   John: Focusing on health and getting to the gym and just do whatever makes you feel good. But when you have an health issue and you can't do the things you were doing, I'll tell you it's quite a, it's a challenge. It's quite upsetting. And I'll say from the clients that we work with, we see a big difference in those that actively in retirement are working out, maybe seeing a trainer a couple of days a week to those that are not. And as you age, I think it's more, it's very important just to stay active because you're not recovering like you were in your 20s.   Mark: No, I think that's a great point. I like that too. Yeah, we should start sooner. Right. But if you kind of want to put a, some sort of a time table or something to it when we get, and it kind of works with our conversation for retirement, just get there, start making some of these changes. So you can really enjoy what we call the go go years. Right. So when we first get to that early days of retirement. And then this is a really big one, we could kind of merge two and three together, but we'll do them a little bit separately, but two Nick, is the free time. Now there's a lot of it. And maybe silver lining in the pandemic has been the fact that many couples got to realize life together, 24/7 working from home, being at home.   Mark: Because that's what retirement is. That's a big shift that we don't often talk about. We put a lot of focus on saying, yeah, we want a big travel and we want to go out and play a ton of golf or whatever. But like there's a lot of free time and you're spending it with that significant other that maybe you guys didn't see each other for eight, 10, 12 hours a day. Now you're together all the time. I don't know how many advisors I talk to where they're like, they have funny stories about one spouse or the other saying get them out of my house. They're driving me nuts.   Nick: Yeah. The time challenge can be significant. I can tell you two things that I would recommend against. And those things would be watching a lot more news and,   Mark: Right.   Nick: Deciding that social media is going to be your new hobby.   Mark: It's not your friend. Right.   Nick: If anything, there's a pretty good documentary on Netflix. I forget what it's called, but it's about social media and really kind of the big data side of things and how the algorithms work and really kind of feed into things. And in general, there's been a lot to handle for people over the last few years with the pandemic and everything else going on. So can not underestimate the importance of having constructive hobbies, doing things that kind of keep you sharp or engaged. And even from the standpoint of being social, things that you can do both alone and with others. The relief that people get from a psychological standpoint of being engaged with others and doing different things, kind of being out and about is really, really important and it's going to help keep you fresh. It's going to help you be able to focus on the things that are important versus the things that aren't, and that you don't have control over. And so, making sure that you're developing hobbies, and we would say that that's even separate from things like travel and that type of thing where,   Mark: Right, right.   Nick: Being inquisitive, doing things that have your brain still working are really important.   Mark: That's a great point. And John, I mentioned blending two and three together. So two was determining what you want to do with your free time. Three, we put post retirement career, maybe career is too heavy of a term, but a post retirement something. Right. Retire away, like if you hate your job, let's just say you despise it and you can't wait to retire and you're leaving with nothing else to go to. Like, I get that frustration, but I think people tend to be happier if they're retiring to something. And maybe that's not necessarily another career, but something like, even if you took a year off and literally did nothing, I'm sure you guys have story upon story of retirees who first enjoy doing nothing. But as humans, I think we crave some sort of structure, something to help us kind of fill the time and fill the days.   John: That's 100%. It's important to really start thinking about that. And I can't tell you how many times we've been in meetings and it's when do you want to retire? And the response is, well, I don't know if I'm ever going to retire, but I want to leave this job at this age.   Mark: Right. Right.   John: So it turns into what am I going to do next? And I think kind of what you said there. My mother watches my kids and that's kind of a level of importance to her and she watches them two or three days a week, and there's actually a study where grandparents that kind of are helping out their children, watch their grandchildren actually live a little bit longer. And I think it's all about that level, feeling important.   Mark: Yeah.   John: So whether that's watching grandkids, my clients had started to be a realtor and they actually end up making more money than they were at their previous job. So whatever it is, it's just making some type of level of importance. Whether it's making money, helping out family, volunteering is just feeling like you got to get up and do something in the morning.   Nick: And a good way to kind of sum that up as purpose.   Mark: Purpose. There you go.   Nick: Purpose. When people feel like they have a purpose for both themselves and those around them, they tend to do a lot better.   Mark: Yeah. No I'm with you there. And we used to retire at let's say 65 and you probably were passing away at 67, right? So sitting on the porch for a year or two and doing nothing felt great because we were tired. We were worn out. The concept of retirement is a little less than a 100 years old. So a lot of stuff is actually changed quite a bit. So a post retirement, something or another post retirement purpose instead of career. I like that. Thanks, Nick. We'll use that. And going forward is a great way to think about that on this countdown days to retirement list. Let's go to number four, Nick. So why don't you throw us some things to think about in the opportunity to save more. Again, I mentioned 50, right? So at 50 plus, some stuff starts to change and there's actually some good time to catch up a little bit or just cycle a bit more away if you need to.   Nick: Yeah. Oftentimes whether it's in their 50s or early 60s, people have, maybe they have children coming off the payroll and they don't necessarily plan to figure out how are they going to be able to recapture some of those dollars that they're used to spending on the kids and kind of help them really build up their retirement and maybe catch up from all those years of taking care of the kids. That can be something that's a big deal. One thing that's come up multiple times in the last, I'd say three to four weeks with what's been going on in the market is, we have clients emailing or calling us asking, Hey, the market's down, should we stop saving? And, the way that we try to kind of explain to people is that markets are cyclical.   Nick: We have had this period of time, 10, 12 years, where the markets have generally gone up and people's conception of what, or I should say, perception of what, typically happens in normal cycles, one to three to four year cycles is a little bit thrown off, but an easy way to think about this is that this is why we have a plan in place. You want to continue to save. And if anything the thought process is that you're buying at a discount from what things were previously. So in a lot of ways, the market's on sale. And so continuing to average in and chipping away and taking advantage of the benefits of being able to save money pre-tax, or those sorts of things is an important thing.   Mark: Yeah. It can make a huge dent, right? We're hopefully making the most money we've ever made and all that good kind of stuff. So 50 plus there's should be some good opportunities to sock a bit more away. And that might help John with number five, which is reducing down the debt. So even if you're not necessarily putting more away into a retirement account, because you've done a good job or whatever, maybe the focus is take some of that extra money with the kids being off the payroll and get rid of some of that, especially bad debt.   John: Yeah. 100%. I mean, with rates being as low as they have been, we have seen a lot of people go into retirement with mortgages, but you're at 2.6%, that's nothing crazy, but let's take mortgage out of it. Other debt definitely recommend trying to get that down and off completely, but get it off your books because when you go to retire, it's a big cash flow, where's your income coming from? Social security, pension, investments. The last thing you want at that point where there's no longer a paycheck coming in is debt. What that's doing at that point, it's really eating into kind of things you want to do, which we talked about for hobbies or enjoyment. And then on top of it, it actually adds some stress level to Hey, I need more income coming in to pay out all these bills and all this debt. So definitely before you hit retirement, it's good to be debt free. It's easier to pay off the debt in your working years than when you're not working.   Mark: Yeah. And on the concept of the house, right, there's always the arguments back and forth there, the different things. So certainly, that can also still be on the get debt free list if you'd like. I don't think it's a bad idea to necessarily get rid of it, but just make sure that you're doing that smartly and not being house rich cash poor as the saying goes or whatever the case is. So just kind of bear that in mind.   Mark: But yeah eliminating, if bought an RV or the big plans where the RV in retirement, maybe getting that paid down, if you bought it a little early or whatever, or boat, or I don't know, muscle car, whatever it might be. Right. Just get rid of the stuff that you've got some debt on. And then Nick, the final one here, number six on the list on just counting down stuff is the risk conversation. So if we're reducing our debt, maybe we ought to also think about reducing our risk. Now last year, people would've said, I'm not reducing my risk, the market's on fire, but right now they're like, okay, well let's maybe reduce the risk. Point being at 58 should we be investing like we're 38?   Nick: Yeah. So risk is an interesting word. And we wanted to take a little bit of time to kind of chat about this because there are different types of risk, and depending upon who you talk to, how they rank the different types of risk via priority is different. So for example, inflationary risk, which is something that we're dealing with right now, that's a risk. So in other words, losing the spending power of our money via inflation is something that we need to keep and take into consideration. However, we're in this kind of perfect storm where taking too much risk, if you're shifting money out of cash per se and moving substantial amounts of money into the market, you're dealing with a significant amount of market risk. And then we have interest rate risk from the perspective of, as they've increased interest rates, that's really pushed down the prices of bonds and bond funds.   Nick: And one conversation that we've been having with people is them not necessarily realizing that the bond market and even if you look at the most general bond index is down almost 10% year to date. And so we've been trying to take a lot of time in one-on-one meetings with people to try to explain how this has an impact and really this is a, with what we're dealing with right now is probably the best case in the last 15 years or so to show people why it's important to be diversified and understand that trying to fully time the market, whether it's from the stock side to the bond side, to the cash side, real estate, et cetera, it can be really tricky. And when things are going great, it's hard to remember that, but right now it's showing us that it's really important to make sure that when we think about our risk, that we're taking into consideration poor times, not just great times and understanding that just because maybe throughout the majority of your investing career, taking less risk has meant, Hey, let's reduce our stock exposure and increase our bond exposure.   Nick: It doesn't mean that that's always going to stay flat or go up, there's risks along with that too. So, diversification, understanding that sometimes we do run across periods of time where we just kind of have to take our medicine where all markets have been up for the most part over the last 12 years. There's going to be times where we run into corrections, which is kind of what we're dealing with now. And we have to be patient and try not to go overboard with overreacting to the short period of time. Sometimes looking at the lens through the last, even one year, two year, three year period of time and realizing that in the scheme of things we need to just kind of stay steady.   Nick: But yeah, in general, I would say that making sure that you kind of do an update on what you feel comfortable with from a risk parameter. Now is a good time to reevaluate that. Because what we have seen is that people have been comfortable with a certain amount of risk over the last 10 years, because things have just been going up. And so now that things aren't just going up, what they thought of risk and how they feel comfortable managing it is substantially different than it has been.   Mark: Yeah. Oh definitely. Our risk tolerance level's been like, yeah, I'm fine. I'm fine with the risk. I'm fine. Whoa, wait a minute. I'm not so fine now, right?   Nick: Yeah. The risk over the last 10 years has been okay. I'm okay getting 8% instead of 15%,   Mark: Right.   Nick: Not oh, I'm okay being down negative 11 versus negative 20.   Mark: Yeah. Yeah.   Nick: Everything's been more on the positive side of things and even with COVID, we had the fastest bear market in history where it boomeranged right back up. And so even though that only happened a couple years ago, people have already forgotten about that.   Mark: Oh yeah. Yeah.   Nick: So, yeah. And I can't emphasize enough the importance that this sheds on having a plan and thinking longer term.   Mark: Well, there you go. So that's some countdown items to think about for the days towards retirement, sixth list, list of six things there, excuse me, that you can think about and address towards your retirement strategy. And those are the things that you'll go through when you have a plan put in place when you're working with a team like the team at PFG Private Wealth. So if you're not, then reach out to them and have a conversation, set up some time to get that started, pfgprivatewealth.com, that's pfgprivatewealth.com. That's got all the tools, tips, and resources there. You can schedule some time. You can reach out to John and Nick and the team and get started that way. Of course, you can also find the podcast, subscribe to us on whatever platform you like to use there. So you can catch future episodes as well as check out past episodes. Again, pfgprivatewealth.com. That's going to do it this week for the podcast for John and Nick. I'm your host Mark. We'll see you next time on Retirement Planning Redefined with John and Nick from PFG Private Wealth.

There are plenty of external factors that often negatively influence our chances of having a successful retirement. But often, failure comes from within. On this episode, we'll talk about some of the common ways people get in their own way when it comes to financial planning. Helpful Information: PFG Website: https://www.pfgprivatewealth.com/ Contact: 813-286-7776 Email: info@pfgprivatewealth.com Disclaimer: PFG Private Wealth Management, LLC is a registered investment adviser. All statements and opinions expressed are based upon information considered reliable although it should not be relied upon as such. Any statements or opinions are subject to change without notice. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investment involve risk and, unless otherwise stated, are not guaranteed. Information expressed does not take into account your specific situation or objectives and is not intended as recommendations appropriate for any individual. Listeners are encouraged to seek advice from a qualified tax, legal, or investment adviser to determine whether any information presented may be suitable for their specific situation. Past performance is not indicative of future performance. Transcript of Today's Show: For a full transcript of today's show, visit the blog related to this episode at https://www.pfgprivatewealth.com/podcast/ ----more---- Mark: Hey, everybody. Welcome into another edition of the podcast. It's Retirement Planning Redefined with John, and Nick, and myself. And we're going to talk about the secret to retirement success. Here, it is. Get out of your own way. Typically, we are the success or the reason for failure, one of the two, because we tend to muck up the works ourselves by often injecting our emotions and thoughts into these things. And rightfully so, because that's part of it, which I think, again, we're going to talk about the value of working with a team and some professionals like John and Nick, because we tend to get in our own way. And I think we all realize that we do that in many aspects of life, and certainly money is one of those. What's going on, guys? How you doing this week, Nick? What's up buddy?   Nick: Everything's great. Perfect.   Mark: Yeah. Rock and rolling?   Nick: Yep.   Mark: Feeling good?   Nick: Yep. It's great.   Mark: That's fantastic. John, how you feeling my friend?   John: Doing all right. A little upset over the weekend. The Celtics lost game three to the Miami Heat, but there's another game tonight. So-   Mark: Another chance.   John: Hoping that they could tie up the series.   Mark: There you go. Fantastic. Well...   Nick: Yeah. I'll throw in a good gold [inaudible 00:01:01] lightning, our own fire.   Mark: Okay.   Nick: Free nothing as we record this.   Mark: Nice. Very nice. So what do you think about my statement there, getting out of our own way? There's lots of external factors obviously, that negatively influenced stuff in our retirement world. Right? We can't control the markets, but we can control how we react to them. Do you feel like that's a fairly accurate assessment of finding some keys to success sometimes is, getting out of your own head?   John: Yeah. Yeah. I would 100% agree with that. And we're seeing that right now where the market is, it's down year to date. There's a lot of negative news out there and, there's always negative news out there. But there's a lot of things happening in the world and it's creating a lot of fear. And what that does is it really eats into people's perceptions of what's going on with their portfolios. So naturally what's happening is, hey, when is the bleeding going to stop? Do I need to pull out of the market? Do I need to get more conservative? What should I do? So this is really a period of time where, important to get out of your own way and just stay the course.   Mark: Yeah.   John: And we harp on it quite a bit in all of our podcasts, but this is where the plan is essential, because we've had some reviews and people are nervous and rightfully so. But when they see the plan, it's like, how does this 10% pull back, whatever it is at the time, affect your overall plan? And they look at it and they say, oh, it doesn't really affect that much, just yet.   Mark: Right.   John: And when they see that, it's like, oh, okay, that makes you feel a little bit better. See where I'm at. So yeah, 100%, stay the course and definitely get out of your own way so you make good decisions.   Mark: And I think if we're talking with the market being the first one on the list, fear and greed, that's the normal stuff, jumping in and jumping out. And we tend to feel like it's the only thing we can do are these two things anyway. A lot of people, we're going to touch on that in a minute as well, but often it's well, all I can do is the market are cash and the market's scaring, the pa jeepers out of me so let me just jump out, and that's typically when we're making the wrong decision, especially if you don't have a plan. So having a strategy in there, because yes, it stinks when we're losing, we talked a little bit about on the last episode. Everybody's fine with risk when the markets have been on fire for 12 and a half years or whatever, but when they get real shaky for a few months, that's when people tend to get in their own way and allow that fear or greed to jump in there.   Mark: So since we covered that one on your initial part there, John, I'm going to jump to number two. No, go ahead. If you've got something else.   John: Yeah, yeah. One, actually you mentioned greed there and actually, it plays into the fear thing as well-   Mark: Okay.   John: Because, we've talked about the markets running up and when that's happening it's, I only got X percent this year. If I was more aggressive, I would've got a little bit more. So we have had those conversations where it's like, hey, should I get more aggressive? And the answer is no. Go to the plan, look at your risk tolerance, stay the course because when you try to get greedy and then all of a sudden, let's say you do go to a more aggressive portfolio.   Mark: Right.   John: And we have a big pullback in the S&P and in equities and all of a sudden, you're more nervous than you should be because you're taking more risk. And now you start to jump out and you get to that fear stage and you just make bad decisions.   Mark: Yeah. Great point. Great point. Well, Nick, talk to me a little bit about getting in our own way, when it comes to picking an investment or doing something solely because we think it's a tax help, right. It's not part of the plan, it doesn't make sense in other arenas. The idea is, no I'm doing this simply for the tax advantage. Is that a bad move?   Nick: Yeah. A really good example of this would be towards the end of last year, early this year, we made a pretty big cycle in client's portfolios from the growth side of the market to the value side of the market. And so that did cause some capital gains and probably a bigger capital gain shift than we typically have for clients that are in taxable portfolios. But again, the premise was that we felt strongly that moving forward, it was going to be something that benefited them from a performance standpoint, which is the number one priority. And that's really turned out to be the case where really the value markets are down closer to 3% or 4%. The growth markets are down close to 30%. So that's kind of a perfect real world, real life example of, yes, nobody likes taxes, but sometimes taking some gains and recycling the portfolio and shifting to where we think things are going to look better moving forward, is something that makes sense.   Mark: Yeah.   Nick: Taxes are again, something that people don't like and when we want to, we avoid it, but it should rarely ever be the number one priority in any sort of financial decision making.   Mark: Yeah. Don't let the tax tail wag the dog, as the saying goes, don't do something solely for the tax advantage, especially if it doesn't fit well into the overall strategy. And I'm glad that you brought up that point there where, looking at that and saying, hey, we do things, they all work together. There's a lot of these puzzle pieces that ebb and flow and move in and out together. So sometimes you do one thing and it has a ripple effect to another. And that's a great point. So I'm glad you brought that up.   Mark: John, another one on here is the cash conversation. I mentioned a minute ago, people tend to think there's only two options, the market or cash. And when it gets choppy, we go heck with this, I'm getting out and going to cash. And then we can even, maybe even just right now, we might even find this need to justify it by going, well, the Fed's ticking the rates up so I'll get a little bit more in cash, right. Even though it's nothing compared to inflation, but anyway, that can be a bad decision. You're getting in your own way. And then you might wind up just sitting there too long. And I mean, what if you jumped out in April of 20, when the pandemic was happening, we're down 30%, you jump out, you sell, you get your losses locked in and you stayed in cash the rest of 20. Well, you missed a heck of a second half.   John: Yeah. That that's accurate. And that's why it's always important to stay the course, because timing to get back in is almost impossible. Because the rallies up happen really within, if look at historically, it's always a couple of days or a week or two.   Mark: Right.   John: And if you miss it, you miss a majority of it. So important to stay the course. Be in the right risk tolerance so you don't go to cash or something like that. And then we have seen this quite a bit as well with cash in the sideline. And it can happen in an upmarket where we're hitting all time highs constantly, because it's like, hey, I don't want to put this money in because we keep hitting highs, it's going to come down at some point. And then now where it's the reverse, where we're having a pull back and it's like, well I don't want to put the money in because it's currently going down. So strategy against that would be dollar cost averaging into the market. Just piecemealing it and that typically will help some people get back into it with less risk.   Mark: Yeah.   John: And there are other strategies involved, but definitely you got to put your money to work [inaudible 00:08:15] pace inflation and especially nowadays.   Mark: That's a great point for sure. All right. So Nick helped me out here, buddy. I don't want to fall to fear. I don't want to necessarily fall to greed. I don't want to make bad choices from a tax standpoint. I don't want to go to cash and do nothing. Well now I don't know what to do, I'm just stuck. That's number four on my list. We overthink it to the point where we just freeze and we do nothing. And as the song says from the great Canadian rock band Rush, if you choose not to decide, you still have made a choice. So doing nothing is just as bad sometimes as doing something in the wrong way.   Nick: Yes. The overthinking side of things is definitely something I have empathy for people with. It takes me about a month to book a trip and probably sitting down five different times with 20 tabs open each time. So I get the process issue.   Mark: Well, humans procrastinate. Doesn't make you bad, it just-   Nick: Yes. Yeah.   Mark: We all do it. Yeah.   Nick: For sure. But what this does and people hear this a lot from us because we talk about it a lot is, it's the importance of the plan. So a lot of times what ends up happening is, the reason that people are frozen with indecision is because they're worried about their process. They're worried about the outcome and usually the fear of the unknown is more fragile and worse than actually knowing, having some certainty on what things look like, even if they're not ideal. So when we have people that are overthinking things or are really fretting about a certain decision, usually what we try to do is go back to the plan. So hey, let's re-review the plan. Let's look and see what things look like. And one of the things that we emphasize with clients that work with us from a planning perspective, is trying to help them start to make decisions differently.     Nick: And so the way that we do planning, the way that we're able to model out different situations and scenarios, we'll joke with people, let us tell you no. Because a lot of times what happens is people are limiting themselves out of concern of the unknown. And so, let us be your guardrails a little bit, let us be the bumpers in the lane to use an analogy and we'll help you work through these decisions, but instead of worrying about what the outcomes are. It's almost impossible for people to figure out all the outcomes on their own.   Mark: Yeah.   Nick: And so let us help you figure out, let's see the potential outcomes, let's see what we can do to mitigate some of the risks associated with it. And we can really narrow down. And so having that open door policy with clients and having them work with us, to work through these sorts of decisions where, we're a team member versus them trying to figure it out on their own is really important.   Mark: Nah, I like that. And I'm a heck of a bowler with the bumpers up. I'm just saying, so.   Nick: Yeah. Yeah. For sure. It definitely increases the average.   Mark: It did a little, just a little bit. So to check this out, John, let's do one more here on this conversation about getting in our own way. So a friend of mine, super nice guy, we're chatting the other day and this is what he says to me. Tell me what your reaction to this. So he says, Hey, my neighbor and I, we're good buddies. We're the same age. And our house costs the same amount of money, roughly that, where we live here. He's going to cash. And he's like, and I know you talk about stuff on podcast and stuff all the time. He's going to cash and he's advising me to do the same thing. I think it's a good move. And I said, why? Because you're the same age and your house costs roughly the same? Don't you think there's like about a million more things you could base this on?   Mark: So my point being is, is getting advice from people who really don't need to give you advice. I'm sure his friend and his neighbor didn't have any ill intention, but that just seemed like a goofy scenario to me. It's water cooler talk, so many of us do that.   John: Yeah. Yeah. We see that quite a bit where people are, my friend's doing this or like you said, my neighbor's doing this, but we have to constantly remind [inaudible 00:12:20] everyone that every situation's completely different. Something that might be good for someone else isn't good for you. And that's the importance of really getting the plan and making sure all your decisions are based on your plan.   Mark: Yeah.   John: And not your neighbor, not your cousin, not whoever-   Mark: Cousin Eddie. Yeah. Right.   John: Yeah. What we typically find with this is everyone always tells you about their good decisions. Like, oh yeah. I went for cash and this is what happened. They don't tell you when they didn't make a good decision.   Mark: Yeah.   John: It's not exciting to talk about when you lost money or lost an opportunity. So definitely want to leave it to the professionals and not a neighbor, a buddy that really doesn't have much experience in navigating these environments.   Mark: Yeah.   Nick: Yeah. It's the whole wins in Vegas scenario.   Mark: Exactly. Exactly.   Nick: People always talk about the wins and I just want to jump in on this one-   Mark: Sure. Go for it.   Nick: Because one of the things that I've been trying to emphasize with clients as well, especially those that are new to maybe, having an advisor or a planning relationship is that the advice that we're giving for them is the advice that we're giving at that set place and time. And so meaning, people tend to feel more comfortable when there are like general rules of thumb or those sorts of things. And so maybe it's a question like, a basic one that happens all the time is extra payments towards the mortgage or not. And so one of the things we've been trying to really get through people's heads is that, hey, we may be telling you to not do that right now, but it's because we have goals over the next one to three years that we're trying to hit because of X, Y, Z factors. And that might be something that we target three years down the road, but right now, it's more important for you to do these other things, to put yourselves in a better position to be able to do that.   Nick: And so what having that kind of conversation with people have seen the light click on quite a bit, because giving them the situation where, Hey, let's take you and your friend, and let's say that nine out of ten factors are the same, but that one factor can dramatically change-   Mark: Yeah.   Nick: The advice. And so even though you might feel like you have a twin in so many different ways, that one factor can be a huge differentiator on the sort of advice or the sort of strategy that you should have in place from a financial perspective. And really, you hear people talk about, each situation's unique, but really being more specific in helping them realize that has been something that has been helpful for some people lately, especially with the choppy waters that we've been in the last four or five months.   Mark: Oh, absolutely. I mean, you listen to this podcast and there's three guys on here having a conversation, but the three of us need different things for the time of life that we're in and whatever's going on. You two might be similar in age for example, but one's got kids, one doesn't.   Nick: Exactly.   Mark: I'm older than exactly you guys. So there's a million variations could go into what you need individually. So again, I don't think that the neighbors or coworkers or cousin Eddie or whatever it might be mean any ill will, but it's just not the best advice. So again, getting in our own way sometimes is listening to those people who really we shouldn't be listening to. So that's going to wrap it up this week for the podcast. So the secret to retirement success is you and how willing you are to not get in your own way, to make sure that you realize the things that you know, and the things that you can do, and then turning to those people to help you in those shortcoming areas.   Mark: I don't pretend to try to rebuild my car from the ground up, because I have no idea how to do that. Sure, I can change some spark plugs and change the oil, but that's the limit of my knowledge. So I'm not going to tear the whole thing apart and start from the ground up. Same kind of idea. So that's the conversation, make sure that you reach out to John and Nick. If you've got some questions, if you're worried about sabotaging yourself, doing some things you shouldn't be, especially in these choppy waters, as Nick mentioned, it's easy to do. It's easy to let that little fear monster jump up and nibble in our ear. So reach out, have a conversation with the team at PFG Private Wealth, before you take any action, especially if you feel like you need to make a change.   Mark: I think that's a fundamental thing that we do as humans as well. Sometimes we feel like if we're not doing something, we're doing something wrong and often not doing anything could be a good move for your situation, but you need to find out through the process of getting a plan put together or just reexamining the plan that you may already have in place. So pfgprivatewealth.com is how you make it happen. That's where you can find John and Nick and the team at PFG Private Wealth. Again, pfgprivatewealth.com. Pretty easy to remember and reach out to him if you got some questions or concerns, get on the calendar, hit the subscribe button for whatever platform you like to use. Athol, Google, Spotify, so on and so forth. For John and Nick. I'm your host Mark. We'll see you next time here on Retirement Planning Redefined.

There are some important terms you're going to come across as you prepare for retirement. Having a basic understanding of these will help you achieve financial success, so we'll cover what they mean and what you should know on today's episode. And don't worry. We won't go quite so far down the rabbit hole where we expect you to be able to explain how a company's P/E ratio meshes with it's Alpha and Beta ratings to determine how much stock you should buy. Helpful Information: PFG Website: https://www.pfgprivatewealth.com/ Contact: 813-286-7776 Email: info@pfgprivatewealth.com Disclaimer: PFG Private Wealth Management, LLC is a registered investment adviser. All statements and opinions expressed are based upon information considered reliable although it should not be relied upon as such. Any statements or opinions are subject to change without notice. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investment involve risk and, unless otherwise stated, are not guaranteed. Information expressed does not take into account your specific situation or objectives and is not intended as recommendations appropriate for any individual. Listeners are encouraged to seek advice from a qualified tax, legal, or investment adviser to determine whether any information presented may be suitable for their specific situation. Past performance is not indicative of future performance. Transcript of Today's Show: For a full transcript of today's show, visit the blog related to this episode at https://www.pfgprivatewealth.com/podcast/ ----more---- Mark: Hey everybody welcome into the podcast. Thanks for hanging out with John and Nick and I, as we talk about Retirement Planning Redefined here on the podcast. As always, don't forget to subscribe to us on whatever platform you like to use. Find all the information you need at pfgprivatewealth.com. That's the guys website pfgprivatewealth.com. Lot of good tools, tips, and resources to be found there. We're going to have another conversation today about some financial jargon. This is more kind of investment terms you might want to know or have heard and maybe you want to get a better understanding on, especially if you're sitting down and you're shopping for a professional or something like that. You want to kind of understand some of these things that you're talking about. Now we're not going to go super deep. We're not going to get into PE ratios and alphas and betas and all that kind of stuff, but we're going to keep it kind of high level. So we'll jump into that this week on the podcast, Nick, what's going on, buddy? How you doing?   Nick: Pretty good. Pretty good. Staying busy. We're recording this, just kind of closing up tax season. So happy that that is over for-   Mark: I bet.   Nick: Everybody that is at least not filing an extension.   Mark: Yeah.   Nick: But yeah, it's obviously a lot going on in the world. So it's been keeping us pretty busy.   Mark: Yeah that's true. Very true. John, what about you buddy? You glad tax season's over?   John: Yeah. Yeah. It's a fun kind of hump to get over.   Mark: I like that little pause. It's fun. Yeah.   John: Yeah. So, no, it's good. It's kind of a mark that people have on their calendar, so that's over with, and really we start to kind of get busy afterwards.   Mark: Yeah.   John: Because a lot of people kind of delay meetings until after tax season, so excited to get back at it. And then also excited that NBA playoffs started. So Boston Celtics are playing the Nets right now.   Mark: Alright now, there you go.   John: Gearing up for that, so-   Mark: There you go. Very good. Well we probably should have done a show really on tax planning versus tax preps right after tax season because really tax planning is something you should be doing all year long with your retirement professional anyway, but we're not going to do that this week. Maybe we'll do that here in the next couple of weeks, we'll come up and do something.   Mark: But for now let's talk about some terms that people hear and probably should know. Maybe you know, maybe you have that kind of cursory high level view, whatever the case might be. Maybe you don't. So let's talk about a few of these. Let's kind of start with fiduciary guys. And this is a term that I think people should know. They should know what it is. I kind of wish, and I was thinking about this before we started that our politicians had to do what fiduciaries have to do, right? They have that legal, moral, ethical responsibility to do what's right for their client AKA us as American citizens. I wish our politicians had to be fiduciaries, but either way explain what it is and maybe a little bit of the difference between that and like suitability.   John: Yeah. So fiduciary, especially in our world's investment advisor, it's where the fiduciary is obligated to put the client's best interests ahead of their own. So really looking to do what's best for the client, regardless of any other factors. And what you mentioned there with as far as, how does that compare to suitability, where kind of like a broker has to recommend something that's suitable for the client, so there's a big difference when you start to kind of analyze that is something might be suitable for you, but it might not be the best thing for your situation.   Mark: Right.   John: Or maybe there's other things out there that are better. So fiduciary has the due diligence and say, "Hey, I'm making this recommendation. And based on my expertise, my knowledge, everything I've compared it to this is what I believe is the best for you." And also if there's any conflict of interests for the advisor as a fiduciary, they must disclose that to you upfront.   Mark: Yeah.   John: So one thing, what people really need to do when they're interviewing advisors or kind of taking that step to try to find someone to work with, it's really one of the first questions should be asking. I'd say the good thing is the industry is really going in this direction-   Mark: Mm-hmm (affirmative).   John: Over the last, decade or so. It's really been kind of going, fiduciary, fiduciary, so that's.   Mark: Making that the standard, making it more the standard?   John: Yeah. Yeah, no, I think that's a great point. So if I'm getting this right, then maybe to kind of break this down for people, and Nick feel free to chime in, but so if there's three options available, suitability would say, "Hey, any of these three technically work for my client, but this one actually pays me better or there's a reward of a trip or something like that attached to it." You're not doing the wrong thing by picking that. It's still suitable. Whereas a fiduciary has to go with the absolute best thing for the client period. Is that a fair way to break that down in layman's terms?   Nick: Yeah, I think that's a pretty fair way to kind of break it down and it can get tricky because when you really get into the nitty gritty in theory, people can argue about what's better now versus what might be better down the road and that sort of thing.   Mark: Right.   Nick: But if anything, I think what's important for people to understand is the conflicts of interests, the potential conflicts of interest and where they come from. So, if you're working with an advisor that is tied in with a parent company that has proprietary products, then they're probably not able to function as a fiduciary. So-   Mark: Gotcha.   Nick: Understanding that there's a conflict of interest, a potential conflict of interest, there is just something that people should ask about so that they understand it. It can be from experience just kind of chatting with people. It can get a little overwhelming for people to kind of really drill down understanding the difference between fiduciary and standard versus a suitability standard. But people oftentimes understand conflict of interest. And just to kind of piggyback a little bit on your short little rant earlier about politicians, many people would be shocked to know that many politicians are able to invest in companies even though there may be conflicts of interests.   Mark: Yeah.   Nick: And the fact that's able to happen. And there's some websites that track those sort of things, but oftentimes they're privy to information that will impact a company in the marketplace and they're able to take advantage of it even though, the rest of the country can't do that, so-   Mark: Yeah, I was just even talking financially. In just their basic decision making when they pass laws.   Nick: For sure. For sure. But that's a good example of them not passing laws that-   Mark: True.   Nick: Aren't good for everybody.   Mark: Well and to John's point, so there's nothing wrong with asking, right? When you go in and sit down with someone, you just say, "Hey, are, are you a fiduciary?" Right? That's a fair question, and there's nothing wrong with asking that.   Nick: Agreed.   Mark: Yeah. Okay. All right. So let's move on to the other big term right now that everybody's getting hit over the head with, on a regular basis, and that's inflation. At the time we're doing this podcast guys, the CPI numbers came out a couple of weeks ago for March, pretty ugly. Gross is a term that has been thrown around quite a bit some of these numbers, 8.5% on the inflation, we're talking what 48% on gas, 35% up on used cars, food 13 to 17% up. So inflation break it down a little bit.   Nick: Yeah. So inflation has to do with spending power of money. And so one of the easiest ways for people to kind of think about it is, you mentioned food for example, one of the things that we kind of joke around with people is they were able to a couple years ago, do you remember when you could walk out of Publix and get everything you needed for 70, 80 bucks versus it now costing 100, $120 for the same amount of stuff. And the tricky thing with inflation is that it's there on a consistent basis year to year, but every 10 to 15 years, it kind of creeps up on us. And then we realize, Hey, this is kind of annoying.   Nick: And then obviously we have times we're in right now where there's some hyper inflation and kind of pocket books are getting hit. The one thing that I would say just to kind of pour some water on it is that although there are some real substantial issues that people are dealing with, there are some kind of, I guess, what we would almost call acute factors that are having an impact on it, that we would hope subside to a certain extent within the next year or two. But also there are going to be ramifications that we're already starting to see where the FED is doing things to try to combat inflation, like increasing interest rates, which we're kind of already on the docket, but has been getting pushed down. The cans been getting kicked down the road for a while.   Nick: And so things like mortgages, mortgage rates are now I think mid fives I read, whereas a year ago, closer to three. And I was just having a conversation with somebody to kind of put that in real world numbers. A half a million dollar mortgage at rates a year ago, a half a million dollar financed amount is from a monthly payment standpoint is equivalent to around 370,000 now, or if you look at it inverse half a million dollar mortgage at current rates is going to cost you around $700 a month more than it was a year ago. So that's going to have a real impact on housing prices and a lot of other things as well. So those are some real world examples of how inflation kind of impacts our life.   Mark: All right. So yeah, obviously we're hyper aware, we've talked about it before a little bit, but inflation we always kind of think of, at least I do it anyway, like calories, right? We know it exists and we don't often put a lot of thought into it until it's slapping us in the face, so to speak. And it's definitely doing that right now, so a lot people very concerned about that. So when we are talking about that, what happens is you start thinking, well maybe I should take a little more risk or whatever the case is with my portfolio to try to outpace inflation or keep up with it or whatever the case is, especially in these crazy times. So that leads us into risk tolerance guys. So what is your risk tolerance? And is that a wise move to try to take on more risk to combat something? Usually it's not.   John: No, it's not. And this is one of the most probably important things in building a portfolio that someone should really take a look at, and it's often overlooked. So risk tolerance is, to kind of bring it down to the simplest form is how much loss is an investor willing to take in their portfolio? How much volatility can they tolerate? So one of the things that we do when we are building a portfolio for our clients, the first thing actually is we have them go through a risk tolerance questionnaire to determine, are they conservative, moderate, aggressive? And from there we really help us design the portfolio so that way we can kind of match up the expected volatility of the portfolio with kind of what they could bear.   John: Because one of the worst things you could do investing is jumping around. And I hate to say it seeing a little bit right now I've already kind of feel a few phone calls I'm like, hey what should we do with the market? And if this volatility's already got you nervous and it hasn't really, it's been a pullback but it hasn't been anything too significant.   Mark: Right.   John: You really need to take a look at am I invested correctly because as we all know, as you shift to conservative or to cash, and then the next week the market just rally up and all of a sudden you just lost all. You realized your losses and didn't get to recover from it.   Mark: Yeah, knee jerk reaction is not the best right now. Right?   Nick: Yeah. And I would even jump in with that too going along with what John said where I think we have hit that point where people have forgotten what it's like to have bad markets, or even a normal market cycle of having a negative year. Even during COVID when the markets pulled back, 35, 40%, they bounced back by the end of the year. So it was never really realized. There was a short period of panic, but the recovery was quick, but.   Mark: Mm-hmm (affirmative).   Nick: There's a lot of people that don't remember that hey, there are going to be years where the market is down 10% for the year, the whole year. 12 whole months, so that's something that's interesting that's happening right now that we're seeing. Plus, historically where people would shift would be to fixed income or bonds. And that's not necessarily a safe place right now, either. So we're kind of in this, almost unicorn phase that only comes along every 50 or 60 years where there's not a lot of opportunities in many places. And so there's going to definitely have to be some patience involved-   Mark: I like that.   Nick: In the next 12 to 18 months.   Mark: Yeah. I like the unicorn phase. That's a good way of putting it. It's definitely been interesting, that's for sure. So do you guys kind of with the risk tolerance, is it kind of that number kind of system? Do you guys do that risk tolerance kind of thing where you kind of give someone almost like sleep number, if you will. If you're 100 or if you're a 20, how does that work?   John: Yeah. So how we do it and I've used actually some programs that do that. They give you a risk number based on how you answer questions. We have a set of some pretty good questions that give us an idea of what that person can kind of stomach.   Mark: Okay.   John: And what their expected return is. It's really, when you start to break it down, it's a lot of the same questions just asked differently to really kind of understand how the person ticks.   Mark: Yeah.   John: So we do a real good job of figuring that out. And then as advisors, part of our job is to make sure we put them in the appropriate portfolio based on how they answer.   Mark: Yeah. Because it's pretty easy to say conservative, and you go, what does that even mean? Right? Or I'm moderate.   John: Yeah.   Mark: Well what does that mean? That's probably a wide window, right?   John: It is.   Nick: Yeah. And then I would say one of the things that without it sounding like a commercial for ourselves, one of the things that we do that's a little bit different than some places that we do have what's called like a tactical tilt to how we manage money, where if we do have significant concerns, we will tamp down the risk. So maybe if somebody's normally in a portfolio that's a 50/50 mix stock to bond and what we would consider a moderate portfolio, if we have significant concerns in the market, we may drop them down to 30% on the stock side of things in certain cycles where we have high concerns. So sometimes what we found is that helps allay some fears for some people that there's some proactive potential changes, where if we really feel like it's going to hit the fan, we will make that change.   Mark: Right. Okay. So risk tolerance, another big one then definitely making sure that you're having that proper risk tolerance for yourself, especially in these inflationary times. When it becomes, it's hard to not feel, I think as humans, we feel like if we don't do something, we're doing something wrong or we have to take action or therefore we've made a mistake. And sometimes doing nothing can be a smart move. Especially in volatile times when it comes to a financial standpoint, if you don't know the correct answer, making no move might be a good place to start at least. That way you're not having that knee jerk reaction. And then of course, talk with a professional. Get some advice, and get a good strategy in place so that you know the right moves to make at the right time. Let's do another one here, guys, another technical one, dollar cost averaging, what is that?   Nick: So dollar cost averaging is the easiest example that most people have exposure to on a regular basis. And they don't probably realize that they're doing it is when people are contributing to their 401k. So every two weeks, a certain amount of your paycheck goes into your 401k and you have a set allocation and you are buying in to that allocation at whatever price it's at that point in time. So the thought process with dollar cost averaging is that you are balancing, you're investing over a period of time. Where sometimes you'll be buying at a premium, sometimes you'll be buying at a discount, but the objective is to continually invest and make sure that you are not trying to time the market.   John: And part of that is also what we're finding with the current market where it's at, with people with money on the sidelines, it could be a good way to kind of take some of the risk of putting all your money into the market and all of a sudden it dropping. So there's a strategy to basically say every, if I have 100,000 I want to put into the market every month or so, I'm going to be putting in 10 grand into it. That way, if it does dip down immediately, I only have $10,000 at risk. So dollar cost averaging, as Nick mentioned, most people are doing the 401k, not knowing it, but if you have money on the sideline in a volatile market, or if you're nervous, it is a good way to kind of get money that was on the sideline into the market.   Mark: Okay. All right. Well let's do one more guys and we'll wrap it up this week. Asset allocation, another big term we hear. We probably get that tossed around a little bit. Give us the kind of high level view of what that is. And because often I think people wind up feeling like they have a whole bunch of one thing and they're diversified because they've, I don't know, for example, I've got a whole bunch of mutual funds, so therefore I'm good. So explain what asset allocation is and is that correct? What I just said, is that really diversified or not?   John: Yeah. So asset allocation's kind of taken diversification to a different level. You could have seven different mutual funds, but if it's all the same type of funds, for example, like a large cap growth fund, they're going to do the same thing in reality when the market goes up or down. So when you do asset allocation, you're spreading your money, your portfolio within different asset classes, such as large cap stocks, small stocks that Nick mentioned, fixed income earlier, cash, some alternatives.   John: So what you do there is when you're building a portfolio and again, starting with your risk tolerance and your goals, you determine, hey my risk tolerance is X, here's my goals. I should be in a, let's just call it in income in growth portfolio. Well, what's the right mix of asset classes to make that work and to kind of bring it down to layman's terms here? Imagine kind of cooking, you're making recipe for a pie. The pie has certain ingredients to make it work and make it taste good. And that's basically what you're doing in your investments. It could be 20% large cap, 5% small cap, 20% fixed income, and our job as advisors and wealth management is we build that portfolio for the client if they hire us to do so.   Mark: Gotcha. Okay. All right. That's a good way of breaking that down. You just think about like a pie. So, and who doesn't love pie? So there you go. All right guys, thanks so much for the conversation this week. Good stuff talking about these technical terms, some jargon here. Hopefully we kept that pretty high level and it helped out with some of the things that you might be thinking or hearing. And if you've got questions, definitely reach out to the guys.   Mark: As always, before you take any action sit down. If you're already working with them, maybe share this podcast with someone who might benefit from it. If not, if you've been listening for a while, just reach out to them, have a conversation, and chat with them for yourself. You can find all of it at pfgprivatewealth.com. That's their website pfgprivatewealth.com. They're financial advisors at PFG Private Wealth, which makes a lot of sense. So make sure you subscribe on Apple, Google, Spotify, all that good kind of stuff. That way you can catch past episodes as well as future episodes. For John and Nick I'm your host, Mark. We'll catch you next time here on Retirement Planning Redefined.

There are certain age milestones where you should really pay attention to your retirement planning progress. On this episode, we'll look at the most important birthdays as you approach retirement and cover the exact things you should be checking off your to-do list at each age. Helpful Information: PFG Website: https://www.pfgprivatewealth.com/ Contact: 813-286-7776 Email: info@pfgprivatewealth.com Disclaimer: PFG Private Wealth Management, LLC is a registered investment adviser. All statements and opinions expressed are based upon information considered reliable although it should not be relied upon as such. Any statements or opinions are subject to change without notice. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investment involve risk and, unless otherwise stated, are not guaranteed. Information expressed does not take into account your specific situation or objectives and is not intended as recommendations appropriate for any individual. Listeners are encouraged to seek advice from a qualified tax, legal, or investment adviser to determine whether any information presented may be suitable for their specific situation. Past performance is not indicative of future performance. Transcript of Today's Show: For a full transcript of today's show, visit the blog related to this episode at https://www.pfgprivatewealth.com/podcast/ ----more---- Mark: Hey, everybody. Welcome into another addition of the podcast. This is Retirement Planning Redefined, with John and Nick and myself, talking investing, finance, retirement, and birthdays.   Mark: We're going to get into important birthdays in the retirement planning process. As we get older, I don't think any of us really want birthdays, but these are some things we need to know. They're pretty useful. Some of this is pretty basic. Some of this stuff's got some interesting caveats in it as well. So you might learn something along the way. It can go a long way towards that retirement planning process.   Mark: We're going to get into that and take an email question as well. If you've got some questions of your own, stop by the website, pfgprivatewealth.com. That's pfgprivatewealth.com.   Mark: John, what's going on, buddy? How you doing?   John: A little tired. Got woken up at 2:00 in the morning with two cranky kids.   Mark: Oh yeah.   John: So if I'm a little off today, I apologize.   Mark: There you go. No, no worries. You get the whole, they climb the bed, and then you're on the tiniest sliver?   John: I got one climb into bed, I think kicked me in the face at one point.   Mark: Oh, nice.   John: Another one climbed into bed missing out on the other one, because they share a room. Then I had the sliver. I woke up almost falling off the bed.   Mark: There you go. And usually freezing because you have no blankets.   John: Yeah, yeah.   Mark: That's usually the way it goes. Nick's sitting there going, "I don't know what you guys are talking about."   Mark: What's going on, buddy. How you doing?   Nick: Yep. No. Pretty low maintenance over here.   Mark: Well, that's good. Hey, don't you have a birthday coming up?   Nick: I got a couple months still.   Mark: Okay, a couple months.   Nick: Yeah, I just got back from a trip a few weeks ago. Some buddies that I grew up with, a group of us have been friends for a really long time, I guess, going back to middle school. We're all turning 40 this year, so we rented a house in Charleston, and all survived.   Mark: Nice. There you go.   Nick: Yeah. It was good.   John: This is how you know Nick's turning 40. He came back with neck pain.   Mark: Exactly.   Nick: Yeah.   Mark: Hey, when you start to get a certain age, you start going, "When did I hurt that?" It's like, "I didn't even do anything." Yeah. You don't have to do anything.   Mark: Well, you know what? That's a good segue. Let's jump into this.   Mark: We're going to start with age 50. I turned 50 last year. First of all, the thing that sucks is you get the AARP card. I don't know about all that. That's annoying as a reminder that you're 50.   Mark: But the government does say, "Hey, let me help you out a little bit here if you need to catch up on some of the retirement accounts, help building those up." Talk to me about catch up contributions, guys.   Nick: Yeah. Essentially what happens is when you hit 50, there's two types of accounts that allow you to start contributing a little bit more money. The most basic one is an IRA or a Roth IRA, where the typical maximum contribution for somebody under 50 is 6,000 a year. You can add an additional thousand to do a total of 7,000 a year. The bigger one is in a 401(k) or 403(b) account, where you're able to contribute, I believe it's an extra 6,500 per year.   Nick: This is also a good flag for people to think about where, hey, once that catch up contribution is available, it's probably a good time, if you haven't done any sort of planning before, to really start to dial in and understand your financial picture a little bit more. Because if you talk to anybody that's 60, they'll tell you that 50 didn't seem too far back. So that's a good reminder to dig into that a little bit.   Mark: Yeah. It adds up. It's not necessarily chicken feed. You might hear it and think, "Well, a thousand dollars on this type of account over a year, or 6,500 on the other type of account, whoopedidoo." But if you're 50 and you're going to 67, let say, for full retirement age, and we'll get to that in a little bit, that's 17 years of an extra seven grand. It's not exactly chicken feed, right?   Nick: No. It's going to be big money down the road.   Mark: Yeah, exactly. So that's 50.   Mark: John, talk to me about 55. This one's really similar to 59 and a half, which most of us are familiar with, but most people don't understand the rule at 55. So can you break that down a little bit?   John: Yeah. We don't see people utilize this too often, but an example would be let's say you're 50, 55, 56, and for whatever reason, you leave your current job. You have an opportunity, at that point...   John: Let's give a bad scenario. You get laid off. If you didn't have a nest egg saved up in savings, there's an opportunity to actually access some money from your 401(k) plan without penalty. What you'll do is, basically, you take the money directly from the plan, and you just have it go to your bank account, and the 10% penalty's waived.   John: Now, some people need to be careful with this. Once you roll it out to an IRA, this 55 rule here, where the 10%'s waived, ceases to exist. It has to go from the employer plan to you directly in that situation. It's a nice feature if someone finds themselves in a bad situation, or they need access to money, and the 10% penalty's gone, but you still have to pay your income tax on that money [crosstalk 00:05:03]   Mark: Of course. Yeah. That caveat being, it's only from the job that you've just left, right? It can't be from two jobs ago kind of thing. It's got to be that one that you've just walked away from, or been asked to leave, or whatever the case is. That's that caveat.   John: Correct.   Mark: It's basically the same rules, Nick, as the 59 and a half. It's just is attached to that prior job. But 59 and a half is the more normal one. What's the breakdown there?   Nick: Yeah. Essentially what happens is, at 59 and a half, you are able to take out money from your qualified accounts while avoiding that penalty without any sort of caveats. One thing to keep in mind is that usually you're taking it out from accounts that...   Nick: For example, if you're currently employed, the process of taking it out of the plan where you're employed can be a little bit different, but it's pretty smooth and easy if you have an IRA or something like that outside of the employer plan.   Nick: One other thing that happens in most plans, for people at 59 and a half, is, and we've seen it a bunch lately, where a lot of 401(k) plans have very restricted options in fixed income and those sorts of things, where most or many plans allow people to take inservice rollovers, where they're able to still work at their employer, but roll their money out of the plan to open up some options for investments outside of the plan.   Nick: That's not always the best thing for people. Sometimes the plans are great. Fees are really low. Options are great. So it may not make sense, but oftentimes people do like having the option to be able to shift the money out without any sort of issue.   Mark: Okay. All right. So that's the norm there. You got to love that half thing. You always wonder what the senators or whoever was thinking when [crosstalk 00:06:56]   John: Finally, they got rid of the 70 and a half [crosstalk 00:06:58]   Mark: Yeah. They get rid of that one. Yeah. We'll get to that in just a minute as well.   Mark: John, 62, nothing too groundbreaking here, but we are eligible finally for Social Security. So that becomes... I guess the biggest thing here is people just go, "Let me turn it on ASAP versus is it the right move?"   John: Yeah. So 62, you're now eligible. Like you said, a lot of people are excited to finally get access to that extra income. You can start taking on Social Security.   John: Couple of things to just be aware of is, any time you take Social Security before your full retirement age, you will get a reduction of benefit. At 62, it's anywhere, depending on your full retirement age, roughly 25 to 30% reduction of what you would've gotten had you waited till 66 or 67.   Mark: They penalize you, basically.   John: Yeah.   Nick: Yeah. Actually, if you do the math, it ends up breaking down to almost a half a percent per month reduced.   Mark: Oh wow.   Nick: Yeah. It really starts to add up when you think about it that way.   John: Yeah. We always harp on planning, so important if you are thinking about taking it early, once you make that decision, and after a year of doing that, you're locked into that decision. So it's important to really understand is that best for your situation.   John: Other things to consider at this age, if you do take early, Social Security does have what they call a earnings penalty slash recapture. If you're still working and taking at 62, a portion of your Social Security could be subject to go back to them in lieu of, for a better term, [crosstalk 00:08:27]   Mark: It's 19,000 and some change, I think, this year, if you make more than that.   John: Yeah.   Mark: Yeah.   John: Yeah. Anything above 19,000 that you're earning, 50% goes back to Social Security. [crosstalk 00:08:36]   Mark: Yeah. For every two bucks you make-   John: 5,000 goes back to Social Security. So that's really important.   John: Something that I just want to make, last point on this, is that earnings threshold is based on someone's earned income, and it's based on their own earned income, not household. That comes up quite a bit, while people say, "Well, I want to retire and take at 62, but my husband's still working. Am I going to have a penalty if I take it?" The answer is no. It's based on your own earnings record.   Mark: That's where the strategy comes into play too. Because if you are married, then looking at who's making more, do we leave one person's to grow, as we're going to get into those in just a second, to grow towards that more full number.   Mark: Again, that's all the strategy. It may make sense for one person to turn it on early, and the other person to delay it. That's, again, part of the strategy of sitting down and talking with a professional, and looking at all the other assets that you have, and figuring out a good move there.   Mark: Nick, let's go to Medicare. 65 magic age.   Nick: Yeah. Actually, my dad turns 65 this year. So we've been planning this out for him. He is a retired fireman, so he has some benefits that tie in with his pension.   Nick: One of the things that came up, and just something that people should think about or remember, even if they are continuing to work past 65, is it oftentimes makes sense to at least enroll in Medicare Part A. You can usually enroll as early as three months before your birthday. The Medicare website has gotten a lot easier to work with over the last year or two.   Nick: Part A, the tricky thing is that you want to check with your employer, because usually what happens for the areas that Part A covers, which is usually hospital care, if you were to have to be admitted or certain procedures, it's figuring out who's the primary payer, who pays first, who pays second. So making sure that you coordinate your benefits. Check in with HR, if you're going to continue to work.   Nick: If you are retired and are coming up on that Medicare age, make sure that you get your ducks in a row so that you do enroll. Most likely you're going to start saving some money on some healthcare premiums.   Mark: Technically, this starts about, what, three months early? It's a little actually before 65. I think it's three months when you got to start this process, and three months before and after.   Nick: Yep. Yeah. You can typically enroll three months before your birthday, and then through three months afterwards. There can be some issues if you don't enroll and you don't have other healthcare, at least for Part A. There can be penalties and that sort of thing.   Nick: Frankly, with Medicare and healthcare in retirement, this is a space that we typically delegate out. We've got some good resources for clients that we refer them to, because there are a lot of moving parts, and it can be overwhelming, especially when you start to move into the supplements and Advantage plans, and all these different things.   Mark: Oh yeah. And it's crucial. You want to make sure you get it right. A lot of advisors will definitely work with some specialists, if you will, in that kind of arena. So definitely checking that out when we turn 65.   Mark: Again, some of these, pretty high level stuff, some of this stuff we definitely know. But we wanted to go over some of those more interesting caveats.   Mark: Let's keep moving along here, guys. Full retirement age, 66 or 67. John, just what? It's your birthday, right?   John: It is your birthday. That's the time that you can actually take your full Social Security benefit without any reduction, which is a great thing to do. Then also that earnings penalty we discussed earlier at age 62, that no longer exists. Once you hit your full retirement age, 66 or 67, you can earn as much as you want and collect your Social Security. There's no penalty slash recapture.   John: When that happens, people have some decisions to make. If they're still working, they can decide to take their Social Security. I've had some clients that take it, and they use that as vacation money. I've had some other ones take it, and they take advantage of maxing out their 401(k) with the extra income. Or you can delay it. You don't have to take it. You get 8% simple interest on your benefit up until age 70.   John: So full retirement age, you got a lot of big decisions to make, depending on your situation. But you want to make sure you're making the best for what you want.   Mark: Definitely.   Nick: Just as a reminder to people that that 8%, and you had mentioned it, but it does cap out at age 70. So there's no point in waiting past 70, because it doesn't increase any more.   Mark: Right. Thanks for doing that. It wasn't on my list, but I was going to bring it up real fast. So yeah. People will sometimes email and they'll say, "Hey, I want to keep working past 70. How's that affect Social Security." It's like, "Well, you're maxed out, so you got to just go ahead and get it done." You can still work if you're feeling like it. Your earnings potential is unlimited, but it's just a matter of you're not going to add any more to it. So I'm glad you brought that up.   Mark: John, you mentioned earlier, they got rid of the other half. Thank God. The 70 and a half thing, just because it was confusing as all get out. They moved it to 72.   Nick: Yeah. Required minimum distributions, as a reminder for people, are for accounts that are pre-tax, where you were able to defer taxation. 401(k), traditional IRA, that sort of thing. At 72, you have to start taking out minimum distributions. It starts at around 3.6, 3.7% of the balance. It's based on the prior year's ending balance. It has to be taken out by the end of the year.   Nick: An important thing for people to understand is that, many times, people are taking those withdrawals out to live on anyways. So for a lot of people, it's not an issue at all. However, there are a good amount of people that it's going to be excess income.   Nick: Earlier mentioned, hey, at age 50, really time to check in and start making sure that you're planning. One of the benefits of planning and looking forward is to project out and see, hey, are these withdrawal going to cause you to have excess income at 72, where maybe we're entering into a time that tax rates could be higher, tax rates could be going up, which is fairly likely in the next five to 10 years. So if we know and we can project that, then we can make some adjustments to how we save, should you be putting more money into a Roth versus a traditional, and how we make adjustments on the overall planning.   Nick: So making sure that you understand how those work, and then the impact that it has on other decisions to take into account for that situation, is a huge part of planning.   Mark: Definitely. Those are some important birthdays along the way. You got to make sure you get this stuff done. 72, there's the hefty penalties involved if you don't do that. Plus you still got to pay the taxes. All this stuff has some crucial moments in that retirement planning process, so definitely make sure that you are not only celebrating your birthday, but you're also doing the right things from that financial and that retirement planning standpoint along the way.   Mark: Again, if you got questions, stop by the website, pfgprivatewealth.com. That's pfgprivatewealth.com. You can drop us an email question as well, if you'd like. That's what we're going to do to wrap up the show right now.   Mark: We got a question that's sent in from Jack. He says, "Hey, guys. I've thought about meeting with a financial advisor to plan my retirement, but I've never used a budget or anything like that before. So I'm wondering, should I budget myself for a couple of months before I meet with a professional?"   Nick: Based upon experience, putting expense numbers down on paper is one of the biggest hurdles for people to get into planning. But with how this question is phrased, I would be concerned, because it's kind of like the situation of starting a diet. You start a diet. You're going to eat really good for two to three weeks. You're trying to hold yourself accountable. You're functioning in a way that isn't necessarily your normal life.   Nick: One of the things, as advisors, that we want to make sure that we understand are what are you really spending. It's great to use a budget, but if you're budgeting to try to look good in the meeting, which we've seen happen, you're painting a false picture, and you're not letting us know what the finances actually look like.   Nick: So I would actually say to put down the real expense numbers in place, let's see what it really looks like, and then if we need to create a budget after we've created a plan, then that's something that we can dig into.   Mark: Yeah. John, let me ask you, as we wrap this up, sometimes people associate seeing a professional financial advisor with a budget. Also, people have a cringe to the B word. They think, "Well, I don't want to live on a fixed budget," or something like that.   Mark: That's not necessarily what we're talking about, right? That's not probably what Jack is referring to. He's just trying to figure out, I guess, more income versus expenses, right?   John: Yeah, yeah. The first step is to analyze your expenses. That could be what he's referring to as far as, "Hey, should I take a look? Should I get my expenses down before I meet with someone?"   John: I'd agree with Nick, even if that's what you're looking at, versus the budgeting, I would say no. I think the first step is sit down with an advisor, because they can assist in categorizing the expenses correctly based on today's expenses, versus what expenses are going to be at retirement.   John: I think it's important just to get going rather than trying to prep. Because we've seen a lot of people that have taken ... They've been prepping for years to meet. That's years where they haven't done anything, and they've, unfortunately, lost out on some good opportunities, otherwise, if they just said, "Hey, I'm going to sit down first, see what's going on."   Mark: Yeah. It gives you that built-in excuse.   John: [crosstalk 00:18:26]   Mark: It gives you that built in, "Well, I'm not quite ready." Well, you might never be ready if you play that game. Especially a lot of times when it's complimentary to sit down with professionals, have a conversation. Most advisors will talk to you, no cost or obligations. So why not right? Find out. Just get the ball rolling. That's the first step. It's usually the hardest part too.   Nick: Yeah. One thing that we typically tell people is that we are not the money police. We are not here to tell you that you can't use your money the way that you want to use it.   Nick: The way that we view ourselves, and what our role is as an advisor, is to help you understand the impact of decisions. Whether those decisions have to do with spending money, saving money, whatever, it's to make sure that you understand the impact of your decisions so that you make better decisions. That's it.   Mark: There you go. Yeah. It's your money, at the end of the day, your call, but certainly having some good, well, coaches in your corner, if you will, advisors to help advise, that's the whole point. But I like that. Not the money police.   Mark: All right. That's going to do it this week, guys. Thanks for hanging out. As always, we appreciate your time here on Retirement Planning Redefined. Don't forget. Stop by the website.   Mark: If you need help before you take any action, we always talk in generalities, and try to share some good nuggets of information, but you always want to see how those things are going to affect your specific situation.   Mark: If you're already working with John and Nick and the team at PFG Private Wealth, fantastic. Then you already have a lot of this stuff in place. But if you have questions, or you're not working with them, or you've come across this podcast in whatever way, or maybe a friend shared it with you, definitely reach out and have a chat. pfgprivatewealth.com. That's pfgprivatewealth.com. Don't forget to subscribe on whatever podcasting platform app you like to use.   Mark: We'll see you next time here on the show. For John and Nick, I'm your host, Mark. We'll catch you later here on Retirement Planning Redefined.

On this episode, we'll breakdown a recent CNBC article that analyzes a recent Morningstar study. The study found that most of us have at least one money bias, some of us more than one, and that those biases are very possibly costing us money in our checking, savings, investing and retirement accounts. Listen to see if you might be impacted by a specific money bias and for strategies to get it back under control. Helpful Information: CNBC Article: https://cnb.cx/3KKXSHf PFG Website: https://www.pfgprivatewealth.com/ Contact: 813-286-7776 Email: info@pfgprivatewealth.com Disclaimer: PFG Private Wealth Management, LLC is a registered investment adviser. All statements and opinions expressed are based upon information considered reliable although it should not be relied upon as such. Any statements or opinions are subject to change without notice. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investment involve risk and, unless otherwise stated, are not guaranteed. Information expressed does not take into account your specific situation or objectives and is not intended as recommendations appropriate for any individual. Listeners are encouraged to seek advice from a qualified tax, legal, or investment adviser to determine whether any information presented may be suitable for their specific situation. Past performance is not indicative of future performance. Transcript of Today's Show: For a full transcript of today's show, visit the blog related to this episode at https://www.pfgprivatewealth.com/podcast/ ----more---- Mark: Hey, everybody. Welcome back to the podcast. It's another addition of Retirement Planning - Redefined with John and Nick from PFG Private Wealth. We got to fun and interesting podcast this week to talk about, money biases and what those are, and are they costing you a little bit? If you have a money bias and you're going to be probably surprised to find out that you indeed do most people, I think do have biases about a lot of things. So, that's going to be on the podcast this go around. And of course, if you've got questions you need some help, always reach out to theguys@pfgprivatewealth.com. That's p-f-g, private wealth.com. John, what's going on, buddy? How you doing?   John: Hey, doing good. How are you?   Mark: Hanging in there. Doing pretty well. We were chatting a little bit off air and just talking about life, moaning and groaning a little bit, but overall you're doing okay? Hanging in there?   John: Yeah. Yeah. We, we just wrapped up a golf tournament that we hosted with Bern's Steakhouse. It's our second one.   Mark: Nice.   John: Yeah. Finalizing the numbers, but looking like a pretty decent donation to a couple of local Tampa charities here, which are Blue Star Families and then Jackson In Action, 83 Foundation, both a military base. So, so we're excited. It was a great event and we look forward to delivering the check soon.   Mark: That's fantastic. Awesome. Nick, how you doing my friend?   Nick: Doing pretty good. It's been a little bit of a crazy month, but have some vacation coming up, which will be nice, although I'm going to Key West and it'll be my first time going there, so...   Mark: Okay.   Nick: I'm looking forward to seeing what that's like.   Mark: Well, I don't know how you're getting there, but I filled up my truck yesterday and it cost me triple digits for the first time. It was over a hundred bucks.   Nick: Yeah. Luckily I'm flying. So...   Mark: All right.   Nick: We're good to go.   Mark: Well, the inflation numbers came in for February 7.9%. I don't know if you guys saw that at the time we're taping that they just came out this morning, so yay. Right? So people are definitely frustrated and we're kind of concerned. There's a lot going on, obviously the stuff in the world and the market's been reacting to that inflation is up. And so I thought it would be interesting to kind of have this chat. And we were talking about these money biases and how we feel about some of the different things. And I thought maybe it'd be a good idea to share some of this stuff with the listeners. So what we'll do is we'll also put a link to the article. This was a CNBC article guys, that was based off a Morningstar study. And I'll let you guys talk about Morningstar if you'd like to, just to explain that to the folks in a second.   Mark: But the study found that most of us have at least one money bias, some of us more than others, and that biases are very possibly costing us additional money in our checking, savings, or investing in retirement accounts. So, we'll see how this kind of impacts you and you'll kind of learn a little bit about this along the way. So a couple of key points before we dive in is that everybody has different attitudes about money. No real shock there, right? We know that, but that new behavioral financial study from Morningstar found that 98% of the respondents exhibited one or more. So when we say just about everybody has one, that's pretty true and that they are likely costing them some money. So we'll jump right in and get going here and with take away number one. Nick, what are the four main biases that they talked about and that you guys see?   Nick: Yeah, we really wanted to kind of focus on this with this chaotic as the beginning of the year has been. we think that people taking a little self inventory on, on how they might make some decisions would be beneficial. So right. The first bias is called a present bias or really kind of like present time. So really what this focus is on is kind of the tendency to go for immediate rewards over long term goals, or, the good old instant gratification. I would say that, what's interesting is, this can definitely be different for different age bands. So for people that, kind of like in that baby boomer era, they have their toes in this, for sure, whereas younger clients definitely. I would say it's a little bit more dominant just because of the things that they're used to and convenience and instant gratification.   Mark: Sure. The world we have. Yeah.   Nick: Yeah, for sure. And I think this is something that's real important because this become a stronger and stronger bias just with things that we're used to like news cycles and stuff like that. So, so that's, that's the first one.   Mark: Well, let, let me ask you a follow up on that real quick, Nick, before you move on. So with that present bias basically like it's that idea of, I feel like I need to do something now. Right? So like we'll use the market falling as an example. Right this minute we're down about 10% I think in the S&P or into a correction, I guess officially. So I must... I must need to do something now, so I can see the response, the immediate response. That way I feel like I've done something that's really what a present bias is.   Nick: Yep. Very much reactionary.   Mark: Okay.   Nick: Typically, and usually for most people, taking action at something like this, it's oftentimes too late. So that can really turn into this kind of yo-yo effect of, waiting where this is one of the things that lead people to buy high in sell low, which is kind of the opposite.   Mark: Which is the wrong. Yeah. Okay.   Nick: Yeah.   Mark: So that's the first one.   Nick: Yep. And then second one, is what's called base rate neglect. So really what happens is, this is kind of focused on how you judge the probability of something happening based upon new information, while you essentially ignore your original assumptions. So this is something where, for example, the whole concept of best laid plans. So this is where planning can really come into play, where might get a call from a client that, maybe it's a certain sector of the market. Hey, I want, I really want to jump into this certain sector of the market and they're not taking into consideration that maybe they already have exposure to that.   Nick: Or again, maybe it's a little bit too late and they're forgetting all of the effort and all the time that has been put into kind of creating the overall plan and then overreacting to good or bad news. And, this is definitely something like, for example, for myself, right. That I have to have, people remind me, I know that this is something that happens to me where it's like, because I do try to consume a lot of information and process, a lot of information and news where, dependent upon what's going on. This can kind of throw me a little bit for it.   Mark: I gotcha. So let, let me, John, let me of get you in here on this for a quick second. So for example, what I'm hearing then, so the NASDAQ for example, is technically into bear territory now, cause it's down 20 plus percent. So people calling up and saying, Hey, I need to get out of tech might be an example of this base rate neglect because they're seeing the current situation and they're reacting to the news versus does it make sense for their overall long term strategy?   John: Yeah. A hundred percent. It's the whole, kind of going into behavioral finance where it's, you're selling out when, when you shouldn't be, in reality, now's the time you know, if, as Nick mentioned, it's probably too late at this point.   Mark: Sure. Right.   John: It may be best just to stay of the course and stay in it, but a hundred percent that's kind of what we typically see.   Mark: Okay. All right. Go ahead Nick, what the third one for us?   Nick: Sure. So third one is overconfidence. This is an interesting one. Also, one that I know that I have a bias, where it's the whole concept of putting too much weight in your own abilities to make good financial decisions.   Mark: Sure. Yeah.   Nick: So, another way to think about this can be, is wanting to be right. And we tend to all want to be right. But then sometimes we will, double down or not take into consideration a concept of like a sunk cost where Hey, we're not always going to be right. And sometimes it's okay to make mistakes. You just want to learn from that. Oh definitely. And not double down, triple down, that sort of thing. So understanding that there's law of large numbers and there's efficiencies in different areas of the market and or planning. So being over confident, and again, this is something where if you look at the pie, you want to have your plan, your investment strategy, all that you want that pie to be, around 90% or so of the very strong part of your fundamental long term plan.   Nick: So sometimes having some of these biases on a small portion will help you really learn, usually people don't, they try to do it on a much larger portion. So that's a little bit of a takeaway too, is in moderation. Some of these things can be good because there are places where you can have a lot of upside that if you do it with the right amount of money and you take a little bit of risk with a smaller amount of money can help you kind of work through some of these biases without over overacting over correcting.   Mark: Oh, definitely. And if you think about the overconfidence bias here, Nick, I mean, we've basically been on a 12 year run, 12 plus year run with the market. So everybody's been feeling pretty confident. I mean, 1920 and 21 all finished up with double digit years.   Nick: Right.   Mark: So it's easy to feel confident when, when everything's going up, everybody's a genius, right?   Nick: Oh yeah.   Mark: So it's when it's going down that you start to get a little more concerned and maybe that overconfidence comes into play. And since we mentioned down, go ahead and go to the fourth one, which is the final one.   Nick: Sure. So the fourth one is going to be loss aversion. So a classic case of this is, because there's different types of risk as well. And one of the risks that we talk about sometimes are inflationary risks, which we're seeing now. So in other words, for people that might be way too heavy in cash over prolonged period of time, or they're afraid to take any sort of risk, they don't necessarily think about the trade off. So they, again, this is the concept of having a plan and having balanced, not only in your investments, but in your strategies and your overall planning is really important because as we see, sometimes people's thought processes, well, hey cash, if I'm in cash, it's okay. I just don't want to lose my money while, in times of massive inflation or just compared to other areas of the market, there can be significant downside to, the concept of what some people may think is no risk can actually have quite a bit.   Mark: Okay. So those are the four biases then. So you've got the present bias, the base rate neglect of the overconfidence bias and the loss aversion. So John here's the interesting part to me about this whole thing is take away number two, is that 98% of people are exhibiting at least one of these, what they found was the lower, the level of bias, the better your overall financial health. So if you only have one let's say of these four, then you're probably in better shape than someone that has two, which again, it kind of makes perfect sense, but there was some interesting statistics and information in this. So why don't you talk to me a little bit about that?   John: Yeah, yeah. That is pretty interesting. Basically the lower level of bias you have, the better financial health you end up having. And it's one of the ones here is like the present bias where basically research showed, if you have a low level of present bias, you were three times as likely to spend less than the money you that you make. So basically you're going to be saving more money. So again, it's kind of... You kind of look at this in life. You don't have that instant gratification. You're kind of looking at the long term of, Hey, I don't need this today. You know, if you go to the store and buy something, do I really need that now? No, I don't. I can hold off on it. You know, just making better financial decisions all around when you kind of break it down. Another one that was interesting with, with that, with the present bias was there's seven times more likely to plan for the future.   Mark: Yeah.   John: So, so I get... [crosstalk 00:11:36] go ahead.   Mark: I was trying to say, so what I'm hearing there is then, is if they don't re... If you don't react, if you don't give into the instant gratification bias, you typically were a better saver. Sounds like.   John: Better saver, better planner, just not reactionary to what's going on. So it's really the long term goal seems to be in mind with these type of people.   Mark: Seven times more likely. That's pretty good.   John: Yeah. It makes me think I need to... I need to be a little less into gratification for myself.   Mark: There you go.   John: You know, it's, I'm getting off topic here, but it's funny. I was talking to my wife the other day with, we got Disney plus for the kids.   Mark: Sure.   John: And it's like, oh, I want to watch this. And I started thinking, I'm like, man, I just remember just sitting there looking at the guide until, a TV show would finally pop on or a move I wanted to watch because you couldn't watch things right away. You back in the late eighties.   Mark: And in those places, it's great. Right. We enjoy that kind of stuff. But then what happens to this kind of this point is next thing you know, you've got 12 subscription services and you're not using them all. So yeah.   John: Yeah. So anyhow, starting off on a tangent.   Mark: No, you're fine.   John: But yeah, another one would be, overconfidence, lower level bias there. They found that people would have basically more savings. So again, back when Nick was staying with overconfidence in and I fall into this quite a bit, it's like, ah I have some time I can build that up or whatever. And I've seen this quite a bit with some retirees. So, if you're not over, you tend to save a little bit more and last one is the loss aversion of having lower 401k balance, the less bias you have towards that, the more apt you are to take a little more risk and save more into your 401k. And just as Nick mentioned here, not sit in cash and try to outpace inflation.   Mark: I gotcha. So yeah, if you, if you're a bit more overconfident, you feel like you can kind of well, I'll take some chances, right. Because I can get it back. So therefore I can build that savings back up or whatever the case is. So really interesting takeaways from that standpoint, when you think about it, because we all fall into one of these, whatever it might be. And so the lower level of money bias, typically the better financial health. Nick, so talk to me about some of the solutions Morningstar offered because they called it build a money life that fits your priorities, which makes a lot of sense for what you guys do as advisors to kind of find that right mold or fit for the individual.   Nick: Yeah. So it's pretty interesting in... We joke a decent amount of time with clients and among each other that, our business is probably 20 to 30% finance and 70 to 80% therapist. And really it's helping people with these sorts of things. So some of the things they talked about as far as what they call building a money life is kind of put some speed bumps or have a process in place for your decision making. So, one of the things that we try to get our clients to do as an example is that we have the... Because we are a planning focus firm and we use planning tools and software to help people model out different scenarios, we try to get them to start thinking through that realm because a lot... People have often like the quite, well, what about this?   Nick: Or what about that? Or should you know, one of the most common is, do I put extra money towards the mortgage or do I save some money? And the answer for everybody is different based upon what they've done up until that point. And so, for those that work with us, what we try to get them to do for those speed bumps is to say, number one, number two; number one, if there's something that you're concerned about, walk us through, what is the scenario that you're concerned about? So for example, if you're concerned about, the cost of fuel, cost of inflation, those sorts of things, in what way are you concerned about how that applies to you specifically? So not just the world and everybody on the news and all that kind of stuff, but how does it involve you specifically?   Nick: And so, okay. So, sometimes what people realize is that it's not going to impact their life in a dramatic way. It could have some sort of impact on, the economy and those sorts of things. But most of the times it's not going to have a massive impact on their life. And then we take it. So maybe, we figure that it could have some sort of impact. So then we can kind of go to the planning software and kind of model it and say, okay, well, if these things happen, let's take a look and see what it looks like. And okay, so now that you see what it looks like, here are some of the decisions that you can make to bring that sort of risk down and have a little bit of clarity. And then we can go ahead and try to implement those decisions.   Nick: So instead of just these open-ended concerns of things that are not in anybody's control, let's look at the things that we do have in control. And those decisions that we can make to impact and make it easier. And kind of referring back to what we talked about earlier, where that kind of high level of base rate, and then the overconfidence for lower savings and checking, sometimes what ends up happening is that, and we try to remind people of this is, having a solid base of savings, cash savings is your permission slip for a lot of different things. So when people look at and realize like, Hey, that this is... These are exactly the times that we emphasize having this cash handy because we can deal with these fluctuations in the market. We don't have to make irrational decisions because you've built this buffer and you've given yourself this permission slip to deal with these different sorts of circumstances.   Mark: That's a great point. Yeah.   Nick: Yeah. So that can be interesting. And then if, you're doing it on your own, maybe making some sort of process where, hey, you've got a couple of rules that you take into consideration where once you get to certain gains on an underlying investment, you're okay selling, or you sell with half and maybe you let the rest of it ride. Or you just kind of give yourself a buffer time. You know, sometimes people will joke that they have rules for emails, like when they're mad. So, give it an overnight, you're ready to fire off an email, maybe it's to a coworker it's to a family member, whatever.   Mark: Right. Yeah.   Nick: Or text message.   Mark: Wait till you cool down.   Nick: Yeah, wait to cool down. And, or maybe haven't had an adult beverage and give it a little bit of time because oftentimes, when we sit on it, we see that maybe even though we didn't think we were, maybe we were a little over confident in what our thought process was previously.   Mark: So yeah. I like that idea, John, what do you think? Like one of the things they had on there, and I think this is a good idea was the whole, wait three days to make an important decision. I'll use an exam... I mean, you've got the little ones there. That's great advice to try to, raise kids on as well. My dad used to do that with me. Hey man, if it's a good idea, on Monday, it's still going to be a good idea on Friday. Right. But if something changed or you don't feel like it's a good idea, then it's good that you waited before you took action. I've been thinking about buying a muscle car here recently. And of course, gas prices have got me second guessing that. So I went and looked at one last Friday and I still haven't made a decision because I wanted to take that time to make sure I was making that right choice. Right. Don't... That's that instant gratification, I guess, take a few days... [crosstalk 00:18:48]   John: [crosstalk 00:18:48] A hundred percent.   Nick: [crosstalk 00:18:49] Or you might be getting a really good price right now. I mean...   Mark: Well, that's true too, but.   Nick: So if you really want it...   Mark: What do you think, John?   John: I think it's always best to wait a couple of days to see if that's something you really want. I think, like you said there, it's going to be there, and the price could jump up in three days in this environment. But I think it's always best kind of way it a little bit before you make financial decisions. So you ultimately feel comfortable with decisions that you made. That it wasn't kind of an impulse buy or decision...   Mark: Right. [crosstalk 00:19:20].   John: That could affect the rest of your life.   Mark: So, well, the speed bump idea was really good, right? The Morningstar, they called it speed bumps to place your... Slow down your decision making as Nick alluded to. And if you think about the stock market, right, they've got those circuit breakers in place. We saw that with COVID right. When the circuit breakers would kick in to prevent any more trading because it was falling so fast. So if you want to kind of use that same analogy, have some speed bumps or some circuit breakers in place for your decision making process. So lots of different ways we can look at it.   John: Yeah, another one in the article I was reading through is really, and it goes back to what we're saying here, and what we always say is having a plan, a sense of direction and to tune out the news and really stop taking advice from your friends where it's basically, "hey, I did this", or "I'm buying this." And especially with, we don't advise on crypto, but you know, "I'm buying some crypto" and stuff like that. It's really, have your plan and stick to what your plan is for versus listening to what other people are doing. That was also in the article, which I thought was an interesting point.   Mark: Yeah. Very good points. Well, I tell you what, like I said, we're going to link this into the, to the show notes and information there. So if you'd like to check that out, you can. And as always, if you've got some questions, we'll wrap this up this week about a money bias, your own money bias, which one you may be affected by. You should be able to tell if you suffer from the present bias that give me now thing, that base rate and neglect where you just react to the news, the overconfidence of feeling like you've got it all figured out, you've mastered it all. Or maybe just the loss of version where that fear of losing money, just really kind of cripples you either way, it could be costing you money. So reach out to the guys, if you've got questions on how to control this.   Mark: And I think that's some of the value that an advisor brings to the table is they're not going to have those biases about your portfolio plan because it's not their money, right? So they're there to help guide you and be that sounding board and be that coach. So reach out to John and Nick, if you some questions at PFGprivatewealth.com, that's PFGprivatewealth.com. Before you take any action, you should always check with a qualified professional, like the guys, they are financial advisors at PFG Private Wealth. Don't forget to subscribe to us on Apple, Google, Spotify, or whatever platform you'd like to listen to. And if you'd like to learn more about some of those charities that they were... John was talking about earlier in the show, or maybe attend the next time they do one of those events, again, reach out to them at PFG Private Wealth. For John and Nick, I'm Mark, thanks for hanging out with us. We'll see you next time here on the podcast, Retirement Planning - Redefined.

Droves of workers are retiring early or taking a break from work as they change career paths. It's become known as The Great Resignation. On this episode, we'll highlight some of the key takeaways of a recent Forbes article and explore a lot of the impacts on retirement planning from across different age groups in the wake of this massive workplace shift that's underway. Forbes Article: https://bit.ly/3JtbbeQ Helpful Information: PFG Website: https://www.pfgprivatewealth.com/ Contact: 813-286-7776 Email: info@pfgprivatewealth.com Disclaimer: PFG Private Wealth Management, LLC is a registered investment adviser. All statements and opinions expressed are based upon information considered reliable although it should not be relied upon as such. Any statements or opinions are subject to change without notice. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investment involve risk and, unless otherwise stated, are not guaranteed. Information expressed does not take into account your specific situation or objectives and is not intended as recommendations appropriate for any individual. Listeners are encouraged to seek advice from a qualified tax, legal, or investment adviser to determine whether any information presented may be suitable for their specific situation. Past performance is not indicative of future performance. Transcript of Today's Show: For a full transcript of today's show, visit the blog related to this episode at https://www.pfgprivatewealth.com/podcast/ ----more---- Mark: Hey everybody, welcome in to the podcast. Thanks for tuning in to another edition of Retirement Planning Redefined with John and Nick, as we talk investing, finance, and retirement. And we are going to discuss the Great Resignation on this podcast. And if you're not familiar with that, well, that's been all the mass exodus of people leaving work over the last three to four to five months. And we've got some interesting key takeaways here to talk a little bit about this. Droves of workers retiring early, or taking a break as they consider this career path, that's been called now the Great Resignation, and there's a Forbes article, we'll probably take a link and put that in the show notes as well. But guys, what's going on? How you doing Nick?   Nick: Good, good. Staying busy, kind of getting rocking and rolling to start off the new year. So, you know, I think a month or two ago we had hoped that maybe it'd be a little less chaotic from the standpoint of the whole pandemic thing, but I think everybody's just kind of plugging away and recovering from the holidays.   Mark: Yeah, definitely. John, how you doing my friend?   John: I'm good. I'm good. Doing good.   Mark: Yeah. Nothing, nothing too crazy going on. Into the new year all right?   John: Yeah. Yeah, it was quiet. So just hung out with family locally here and in Tampa area. So it was just a nice little break and like Nick said kind of excited to be back to doing some work here and the holidays it's always nice, but at the same time, I'm kind of ready to get back at it.   Mark: Yeah, exactly. So have you guys heard this term, the Great Resignation, are you guys a little bit aware of this and what's your thoughts? We'll get into it here, some data here in just a second, but just have curious if you've heard it or not.   Nick: Yeah, I definitely have. I think it's interesting. I think depending upon who you talk to, their interpretation of it is a little bit different, but in my mind it's really, it's kind of, to kind of think about it from the perspective as almost like a real estate market, there's a buyer's market and there's a seller's market. And I think that really what's happened is not all, but many companies have been slow to kind of improve wages and pay and benefits and things like that and so this has kind of put things into kind of the worker's hands a little bit more and given them a little bit of leverage from the perspective of competitiveness from a company standpoint. And that obviously, that doesn't deal with the people that are in between or are waiting to kind of figure out what they want to do with their whole life, that sort of thing, but more specifically, the people changing jobs and how difficult it's been for employers to keep employees.   Mark: Yeah. I mean, it's definitely all over the map and John, we're going to talk a little bit about it from the different age groups, but for the most part, we're going to look at it as it affects retirees and pre-retirees, but have you seen some of this stuff? Are you familiar with it?   John: Not necessarily the term itself, but yeah, we've seen a lot of this with our own clients that are basically doing some job changes or just outright, just retiring early which I know we're going to get into. But yeah, we're seeing quite a bit of this. And then we see it when we're trying to personally and work wise trying to get service work done. It feels like-   Mark: Big time.   John: Feels like no one's working anymore. My local Dunkin' Donuts here, I can't go in to get a coffee because they don't have enough workers, so everything's drive through. But it just [crosstalk 00:03:23] seen across the board.   Mark: And that's part of it. Yeah. And that's part of it. So a lot of times, I think, when we think about this what's happened in the pandemic, we automatically go to the lower paying scale jobs, the fast food type jobs, and that's definitely a big piece, but for an example, 4.2 million people quit their job in October of 2021. So just a couple of months ago and there's been a lot of other people quitting. So there's been, I think somewhere now around six, six and a half million, I think over the last four to four and a half months. And it's not just the lower end stuff. And of course it's also unknown how long these people will stay out of work. Some of it could be retirees or pre-retirees that are just like, you know what, I'm not going back.   Mark: I'll use my brother as an example, he's 63 and he's like, as long as they keep me working from home, I'm going to stay. But the minute they tell me, I have to go back to the office. I think I'm going to pull the trigger and retire early, even though his plan calls for him to wait till 60, his full retirement age, which I think is 66 and seven months or something like that. So let's talk about it from that's kind of standpoint, guys.   Mark: I've got three takeaway categories here, or actually four. I'm going to kind of give you guys the headline and let you guys roll from there a little bit on this. Okay. So we'll dive into it, hit it however you'd like, not just the lower income scale, but also the upper end, or people just closer to retirement things that you might be seeing or hearing. So number one, if you are going to step away early, taking a break from Social Security, whether it's short term, long term or whatever, don't sell short that, the impact that, that can have to your long term benefits.   Nick: So, depending upon how long you are out of work, it's important to keep into consideration that when you're not earning an income, you're not building up your Social Security credits and so that's something that can impact you down the line. And I've actually had this come up a little bit lately where people don't quite grasp the impact, the positive impact of Social Security, or how much, or how important it is to their overall plan. So it is a big deal and you want to make sure you still have your 10 year minimum work history. It's important to remember that, really the benefit that you receive is a cumulative kind of record of your highest 35 years of income.   Mark: Right.   Nick: So every year that you have a higher year than a previous year, adjusted for inflation, that's going to knock out the other years and you really kind of help bump that benefit up.   Mark: Right. And if you're stepping away in your fifties because of this Great Resignation type of thing here, that's some prime earning years. So that's where I say you could be putting a big dent in that.   Nick: Yeah, absolutely. And realistically it always does kind of go back to the whole plan concept of that we really try to harp on people about, is we have had some people retire early because we have had a bull market for the last 10 years and they've done a good job with saving and those sorts of things, but we kind of verified it through the planning, the whole retire really early on a whim or not really looking at it from an analytical standpoint can definitely be pretty, pretty dangerous.   Mark: Yeah, for sure. So you definitely want to make sure that if you are stepping away from Social Security, you're looking at what it could do to your long term strategy, six months, a year, retiring early, whatever the case might be. Just make sure you're strategizing that with your advisor.   Mark: John, talk to me a little bit about takeaway number two, the 401k isn't a rainy day fund, is kind of the category I had. Because over the last two years, and even the last six months, there's some pretty interesting stats about what people are doing with their 401ks.   John: Yeah, yeah, for sure. I mean, during COVID 2020, there was some ability to actually access for 401k funds or retirement funds without any penalty.   Mark: Right.   John: And not even have to do a loan and that's gone away. So now, not that... Fortunately for our clients, and I think we do a great job educating them, we haven't really seen too much of this where clients are taking out 401k loans. But I have had conversations with some individuals that have done that. And it's just kind of like, "Hey, how much can I pull from my fund? I did this, what are the impacts of it?" So it's just important to fall back to the plan. And we do a... One of our biggest recommendation's to make sure that people have an emergency fund and whether it's three to six months or a year of emergency savings, because, as you know the pandemic hit in 2020 and no one saw that coming and you just don't know what's going to happen in the future. So it's important to have an emergency fund to help out in certain situations like this, so you avoid pulling from the 401k loan because you really want to let those assets grow for your retirement and not access it for rainy day funds- [crosstalk 00:08:10].   Mark: Kind of a stop gap.   John: .... on things like that.   Mark: Yeah, yeah, yeah. What's some negative impacts of doing that though, John? I think one of the things people get lost on is just the compounding of it over time, right?   John: Yeah. So you take out 40 grand out of it, basically, especially, let's say you did that in 2020, let's say you took out $40,000 there, you just lost the compounding over the next year and a half, two years of which has been really excellent in reality [crosstalk 00:08:33] with what the market's done. So not... You're just not losing that $40,000, you're losing what that $40,000 could have grown to, which is the importance of having, again, the rainy day fund, so you can let that money in there, let that money grow for you and earn and work for you.   Mark: Yeah.   John: And then nevermind then you're paying money back into it that are after tax dollar. So there's a lot that goes into it that you really need to evaluate it. Sometimes it's you have to because you have nothing else to pull from.   Mark: Right.   John: But it's always important to plan and make sure that you... This is the last resort.   Mark: I hear a lot of advisors say taking that loan against it is usually the later, like if it's kind of like the last in the line, if you really need it, okay, here's where we can go. But let's try not to. Just simply from a multitude of reasons, especially with the resignation, right? If you take a loan against your 401k and you leave the job, you have to pay that back. Correct?   John: Yeah. That's a great point that you bring up. Most companies will give you 30 days to pay it back. So example, you take out that $40,000 and all of a sudden it's, "Hey, we're downsizing," and you get a pink slip, and not only you got, now you all of a sudden you got to pay 40 grand back to your 401k within, a 30 day period, maybe 60 day period. And if you do not pay it back, you're going to be paying taxes and penalty on that, on those dollars.   Mark: Pretty stiff. Yeah.   John: Yeah.   Mark: Yeah. So that's another takeaway for that. And Nick, let's stick with the 401k for a minute for the next one. If you are in this kind of nomad thing where you're jumping out of one job, you're waiting a bit, maybe going into another, looking for a better option for yourself, seeing who's hiring, whatever the scenario is, take that 401k with you, right? Don't just leave it back behind at the old place.   Nick: Yeah. It can be, realistically the more accounts people have, the more places, the more often things are overlooked, not checked up on, not taken care of, so we definitely are fans of consolidating. Whether it's rolling it into the plan at your new employer or rolling it into an IRA where you can control the assets yourself or work with an advisor to manage them for you. Just like so many other things, it's one of the things that former or past employer 401k plans are oftentimes one of the most overlooked and non-adjusted things that we've seen people kind of not take care of.   Mark: Yeah.   Nick: And then they lose a lot of long term money on it because of that.   Mark: Well, you got to think about the vested portion too. Right? So if it's, let's say you're 50 or something like that, and you're pondering this, make sure you under... that you're getting the fully vested part before you jump on. There are some people that could say, well, all right, maybe I'd better stick this out a little longer or whatever the case is.   Nick: Yeah, absolutely. There are some people that... It's much more common for people to move from one employer to the next these days. Especially in certain industries where they can be almost more of a tech role or consultant role, things like that. And sometimes, because of that, their employer has put in a decent amount of money, so an employee's contributions are always vested, it's always their money, but they could have substantial employer matching that vests over three to five years. Or some other sorts of benefits, even if it's not exactly the 401k, but maybe there's a stock plan that has vesting. It's important to take those things into consideration because we've seen people leave tens of thousands of dollars on the table.   Mark: Right.   Nick: Not realizing that it was a factor they should have taken into consideration before they switched employers.   Mark: Yeah. Don't leave that behind. Right? So definitely take it with you, whether you're rolling it from the old one into the new one. And if you do it properly, it's not going to, it's not an issue, right, Nick? So if you've got it in the old one and you roll it to the new one, you just go through the proper channels and there's no taxable event and so on and so forth. Same thing if you move it to an IRA, correct?   Nick: Correct. Yeah. The goal is always to make sure that it's rollover, it's not taken as a lump sum distribution-   Mark: To yourself.   Nick: Yeah. So you always want to make sure that when the rollover happens, it gets paid directly to the new custodian. So it's not written out to you. It's written to the new custodian, whether that's a Fidelity or a Vanguard or whoever it may be, it's paid directly to them, the funds go over and that avoids there being any sort of tax liability or penalty if somebody's under the age of 59 and a half.   Mark: All right. So let's go to the fourth takeaway here, guys. I'll let you both kind of jump in and out on this. John, I'll start with you. It seems like this whole resignation thing is kind of tailor made for those early retirement dreamers. Kind of go back to my brother's conversation there about, Well, if they... I'll retire a couple years early, if they make me go back to the office kind of thing, but I'll work from home." So it's enticing for sure, but point out some challenges to just ponder if you are retiring early, ahead of what you originally planned, you guys kind of divide up a few of these, if you would, but John go ahead and start with a couple of bullet points to think about.   John: Yeah. One of the things that I think about is qualifying for Social Security. The earliest you can draw Social Security is age 62. So, if you're retiring at let's just call 57, you got a decent gap of where you can't take any Social Security. So you really have to evaluate are there any other income sources coming in like a pension or maybe some real estate income or whatever it might be. And then if there isn't, is your nest egg able to sustain your plans. [crosstalk 00:14:06].   Mark: Five years, yeah.   John: Yeah. Is it able to work if you're using your nest egg to basically live off of for that period of time. So those are one of the things. And then you always want to of look at as one, we've had situations where one spouse might retire early and the other one's still work and they say, "Hey, we could live off of just one income for the time being. And if we need any extra money, we have the nest egg that we can pull from as needed." So that would be a big one to really look at.   John: Another one that we come across quite often is healthcare coverage. I'd say one of the main reasons that people don't retire. From our standpoint, what we see is really healthcare. So they wait till they're 65, so they can draw on Medicare. And prior to that, they just kind of look at the cost of going to the Marketplace and say, you know what, this is probably a little too rich for my blood, so [crosstalk 00:14:55] kind of hold off.   Mark: And if you use your example of 57, I mean, you're talking eight years, what are you doing in that gap? Right.   John: Yeah. And we've seen everyone's situations different in what their premium is, but I've seen some premiums for individual at that age at $10-11,000 per year. Nevermind, the coverage isn't as good. So that's [crosstalk 00:15:12]-   Mark: And that's not per person too. Right. So if you and the spouse.   John: Yeah, yeah. Yep. That's per person.   Mark: Can your retirement accounts handle that for that setup that we just talked about or whatever the case might be and then realizing that that's also, that your retirement is now going to be longer, right, because you've retired early, so it's the kind of great multiplier. So those things just kind of compound and go up from there. Nick, do you agree with that and what's some things you see?   Nick: Yeah. For sure. It's definitely a slippery slope when you start to factor in. We've got some clients who work for large employers, their total health premiums for the households can run $2-3,000 a year for both of them. So when you go and you take... You go from $2-3000 for both of you while you're working to somewhere between $8-20,000 a year before Medicare age, it can be pretty substantial. And oftentimes, for many people, there's going to be a price increase, even when they're on Medicare from if you were working for a company that was a larger employer and had pretty inexpensive health benefits. So that makes a huge, huge difference.   Nick: And one way that some people have managed things from that perspective are with some of the Marketplace options out there will kind of connect people with specialists that can help on the medical insurance side of things. And you may be able to take money from taxable accounts that don't have large gains to put your income lower so that you don't pay as much, but in reality, to be frank, usually the only people that can do that are ones that have saved substantial amount of money into a non-qualified account, which usually means they have a lot of money. So, it's less of an issue. So really looking at that, looking at the different types of accounts, when you create your withdrawal rate, and figuring out, hey, how can we keep your income taxes low, not a only for a short period of time when you're in retirement, but kind of building flexibility throughout your retirement, where you're not just letting this tax bomb grow, or you're not using all of your Roth money first or leaving it all for the end.   Nick: It's usually kind of a bit of a balance. So we harp on it a lot, but this is really where there's so many factors and things like this. That this is where kind of software and the tech tools that we have today really help us tailor make a plan, come up with a really good income and liquidation strategy, help us figure out what kind of gaps are we going to have between the time that you retire and when things like Social Security are going to kick in to help supplement the income, and then when Medicare's going to kick in to help reduce expenses. So, it's definitely a puzzle and fortunately we enjoy putting the pieces together.   Mark: Right. Well, look, if you're on the fence, well, if you already did the resigned and walked away, hopefully you had a plan in place, but if you're not, if you're among some of those folks that are still considering, I've heard some interesting stats that they think that's going to happen. Again, early on the first half of 2022, make sure you're talking with an advisor about all the different things that could happen if you do step away early. Most people, hopefully do, but sometimes you just get frustrated or whatever the case is. And a lot of it does have to do with this kind of going back to work, staying working from home, it got good to us, we really kind of, in some ways, very much so enjoy being able to work from home, in other ways we kind of missed the camaraderie. So there's a lot of different things to just kind of take into account before you pull the Great Resignation.   Mark: And with that, we're going to wrap it up this week. We're going to knock out an email question here real fast. Whichever one of you guys want to tackle this, but we've got one from Rebecca who said, "Guys, every six months or so I tell myself, I need to start saving more for retirement and I pretend like I'm going to get serious and actually do it. But then I can't stay motivated to increase my savings. I'm putting a decent amount in the 401k and I have a pretty nice balance there, but it feels like I could be doing more. It's the beginning of the year, I want to be more motivated. How do I do it?"   John: This comes up quite a bit. And I'd say the easiest way to save is probably the 401k, because it's done through payroll and you really, once you start saving in to it, you really don't miss the money coming out into it and you can always adjust it. And we've had some people where they say, "Hey, I'm putting enough into my 401k, what else should I do?" And the first step is just really just setting up an account and you can start with as little as $25 a month, or $50 a month, but once that account's open, it's much easier just to say, hey, let me up this. So I would say the first step is look at the 401k and if you don't want to continue contributing to that, just open up an account somewhere with your advisor or on your own and just set it up monthly, and then you can always adjust it as needed.   Mark: Yeah. Or maybe a Roth, right? If she wants to look at a tax, something more tax efficient. So...   John: Yep.   Mark: That's another way to look at it. But yeah, I think if you automate it and you just put it in play, Rebecca, that should hopefully get you... You just, if you don't see it and you don't think about it and it's just happening in the background, then that's the beauty of it, so then you don't have to worry about necessarily getting motivated. But another way might be to sit down with a professional and start getting some advice. It doesn't matter really on your age, the sooner, the better. So if you got questions, need some help, reach out to John and Nick, go to the website, pfgprivatewealth.com. That's pfgprivatewealth.com.   Mark: Don't forget to subscribe to the podcast on whatever platform you like to use, Apple, Google, Spotify, iHeart, Stitcher, just type in Retirement Planning Redefined, or again, just find it all at their website, pfgprivatewealth.com. If you got questions, need some help, John and Nick are here for you.   Mark: Guys, thanks for hanging out. I appreciate it. Talking to me about the Great Resignation and we'll talk about it in a couple of weeks here, we'll see what's going on.   Nick: Thanks, Mark   John: Thanks.   Mark: I appreciate your time as always. Guys, thanks for hanging out with me. We'll see you next time here on the podcast, with John and Nick, this is Retirement Planning Redefined.

Maybe you're close to retirement and think you don't have nearly enough money saved. But let's talk about some reasons that the news might not be as bad as you think. Helpful Information: PFG Website: https://www.pfgprivatewealth.com/ Contact: 813-286-7776 Email: info@pfgprivatewealth.com Disclaimer: PFG Private Wealth Management, LLC is a registered investment adviser. All statements and opinions expressed are based upon information considered reliable although it should not be relied upon as such. Any statements or opinions are subject to change without notice. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investment involve risk and, unless otherwise stated, are not guaranteed. Information expressed does not take into account your specific situation or objectives and is not intended as recommendations appropriate for any individual. Listeners are encouraged to seek advice from a qualified tax, legal, or investment adviser to determine whether any information presented may be suitable for their specific situation. Past performance is not indicative of future performance. Transcript of Today's Show: For a full transcript of today's show, visit the blog related to this episode at https://www.pfgprivatewealth.com/podcast/ ----more---- Mark: Hey, everybody. Welcome into another edition of the podcast. It's Retirement Planning Redefined with John and Nick, Financial Advisors at PFG Private Wealth. You can find them online at pfgprivate wealth.com. That's pfgprivatewealth.com. A lot of good tools, tips, and resources there as well as a way for you guys to find the podcast, listen to past episodes, subscribe to it, all good kind of stuff. We are going to talk about opportunities for late bloomers in retirement this go around on the podcast. [inaudible 00:00:28] what's going on? John, how are you, buddy?   John: I'm good. How you doing?   Mark: Hanging in there. Not doing too bad. Hope things are going well for you. Nick, you doing all right, my friend?   Nick: Yep. We've had some nice fall weather here lately, so I've been enjoying that.   Mark: There you go. Humidity finally-   John: Yeah, I get to put a hoodie back on and no humidity   Mark: Vacation [crosstalk 00:00:47].   John: By enjoying, Nick means he's just open up his balcony door versus going outside.   Mark: Gotcha. Let the wind in. All right. That's all right. Hey, I'll take it. That's good. Let's talk about these late bloomers here. Maybe you're close to retirement and you think you don't have nearly enough money saved. We mentioned that on the prior podcast a couple of weeks ago. That's often the case with people. They feel automatically like well, I know I don't have enough, even though you have no idea because you've never sit down and done a plan and gone through a process to try to find out, but let's just assume that you don't have nearly enough or you think you don't. There's some good news. There's some places we could actually gain some ground pretty quickly.   Mark: Guys, I've been using this analogy for this. I turned 50 this year and Memorial Day is kind of the unofficial kickoff to summer. It's not actually summer, but everybody just kind of treats it like it is. It's kind of how summer starts. 50 seems like the unofficial kickoff to retirement because it's when you start going, I better get serious. Right? When people turn 50, they start to think about this a little bit more. Catchup contributions is a great way and you can make some serious dent in the savings that you need with some of the things that government allows us to do once you turn 50. Talk to me about that.   John: Once you turn 50, you can do catchup provisions, which if you have a individual or retirement account, AKA IRA, you can put an extra 1,000 into it if you're above the age of 50. If you got yourself and a spouse, it's an extra two grand you can put in there. Most people, where we kind of maximize the strategy is in the 401k where you can actually do an additional 6,500, which is a nice way to not only save, but also reduce your taxes. With the 401k, it's pretty easy because you just contact your payroll provider or go online where your investments are and a couple of clicks and there you go. As we say, once it's done through your payroll, it's easy to just set it and forget it. You just adapt to what you have as your net income moving forward. Definitely once you hit age 50 something, you need to start consider just saving more to hit your goals in retirement.   Mark: Oh, yeah. I mean, $6,500, that's not chicken feed, especially over, let's say, 15 years. If you're 50 and you're planning to retire at 65, that can add up. That can make a nice dent in catching up from being behind. Now, I know you don't have kids to speak of. John, your kids are too little just yet, but kids coming off the payroll, this is something you guys still deal with. You have a lot of clients that, when you get 50 plus, hopefully you're making the most money in your life that you have. Usually that's the case for a lot of people when they're in 50 plus. As my dad used to call us, biscuit snatchers, come off the payroll because we're no longer doing things like the car insurance, cell phone. As a matter of fact, my daughter's out working and doing things as a young adult and she's actually paying the cell phone bill for her mom and I, so how about that?   Nick: This is interesting. I would say that over the last, probably six, seven years, we've seen this get pushed back a little bit where it tends to be the kids start to come off the payroll with clients that are in their early 60s, but it's substantial and it's usually a huge relief. We've got clients that have been able to bump up their savings by 1 to $2,000 a month with kids graduating from college or whatever it may be. It makes a huge difference, whether it's saving more money, whether it's using that additional money to maybe help you achieve the goal of paying your mortgage off by the time you retire. Recapturing those funds is a really, really big deal. When they come off the payroll, just figuring out a way to try to recapture at least 50 to 60% of that could make a huge difference to help somebody catch up.   Mark: John-   John: You like that term biscuit snatcher, don't you?   Mark: You like that?   John: You used that in one of our workshops, so...   Mark: That's what my dad used to call us because he loved his biscuits and I was always running and snatch one and take off with it. You're going to get this at some point, John. Obviously, you do this for your clients. You help them navigate this now, but with your two little ones one day, you'll be having all these extra things and then they'll come off the payroll. I mean, it could be sizeable. You could be paying their car payment, their cell phone, car insurance, maybe some health insurance, so it adds up.   John: I actually just experience some of that because... And my wife works. She's just actually wrapped up her master's program for nurse practitioner, but we had a nanny for that period and that just stopped. That just freed up some cash flow, which was pretty significant for us, but so I know the feeling of it.   Mark: A lot of places and a lot of opportunities for "late bloomers" in retirement to gain ground if you're behind. Another one, guys, is disappearing debt. Maybe you've got some things... Again, we're going to use this analogy of the 50 range, like 50 to 60. You're getting into that pre-retirement stage. You're trying to make sure you've got enough. My wife and I just got our boat paid off, just I think last month or two months ago, something like that. She just paid off her car. Now, she'll probably get another one between now and the time we get to retirement, but still, you get the idea. Credit cards, things like that, that stuff's really starting to dwindle down. [crosstalk 00:05:56].   Nick: Being able to recapture those is a big deal. The car thing is still an interesting thing just from the perspective of growing up up north and you have to deal with rust and the wear and tear of winters have on cars and all that, whereas down here in Florida, they can last so much longer. That's a good example of something that people are able to leverage to help recapture some money to save. Like you said, that mortgage going away, getting that paid off or eliminating that credit card debt. I've had a few clients that in the last 12 to 24 months, they've been able to wipe out debt that they had had from... One was healthcare related and a couple of other things. Being able to redirect that money and that's always the key is to recapture and redirect. That can make a big, big difference.   Mark: Especially the credit card stuff because there's the whole bad debt, good debt thing. Take those high interest things first and get rid of those. Since we mentioned the home, that's another place, so maybe a downsize is on the radar. In this area, a lot of people doing the condo kind of thing. Maybe you don't want to do the big house. Maybe you're moving from up north, Nick, to your point a minute ago. The difference is maybe you want to think about it from a everything needs to be on the first floor because my knees can't handle the stairs standpoint. Either way, prior to recently now... Recently, the housing market's been pretty crazy, so selling it, you might get a lot of money, but you also might pay a lot of money for the next place, but it could be potentially a place where you could capture some more gains as well.   Nick: Replacement cost is high right now, but downsizing can definitely be something. We've had a few clients do that recently. We've also had some clients, and this is a good reminder of the... For example, we've got one client that has had a beach rental that they've been using to rent out Airbnb for a while. They're going to take advantage of the market by selling their primary residence at a pretty high number and then going ahead and no longer renting out the Airbnb rental and moving into that space. That's something that they're able to take advantage of.   Nick: Then not only that, but from a strategy standpoint, there's that capital gains exclusion that's out there where a married couple can exclude up to $500,000 of gains in a property. They're able to exclude the gain in their primary residence and then we went through and reviewed that if they then live in the rental that would've been previously the rental, if they live in that for two years and then sell to maybe shift into another property, that they can exclude the gains in that if they wait the two years. There's some strategy that can get involved in that space to help you on taxes and help you also downsize.   John: One thing with the downsizing, and we've run into this a couple of times where I would say just be careful with downsizing because we've had some scenarios where someone thought they were downsizing and when we started to really evaluate the costs of everything, it really wasn't much of a downsize.   Mark: Good point.   John: It needs to makes sense, especially when you take in account, property taxes here where you can homestead and when you move, you can transfer it over, but sometimes you don't get the biggest bang for your buck. It's just as important to really evaluate the new house. Does it need renovations? Things like that. The maintenance costs, and that's where you always go back to the plan when making these type of decisions because we've seen scenario areas where someone wanted to, we actually evaluate it and it's like that doesn't make sense to do it.   Mark: Another great point. There's so many reasons to consider it. Obviously, there's the financial potential as we're talking about this particular go around, but as I mentioned, it could also be something where you need to simply because you cannot physically handle the house anymore. You got to take a lot of those things into consideration, but right now, we're talking about how to use the money to gain ground. It's just another way you could potentially make up some of that if you're a late bloomer. Then the final one is maybe the twilight career. If you want to find a silver lining through all this pandemic stuff, it's the fact that the world has definitely embraced telecommuting from work, or just all kinds of different really, jobs and things that you could do remotely. Maybe you do need to make some ground and maybe you can't do the full corporate job or whatever it was that you were doing as your main career, but a twilight career could be there. You could be selling your crocheting stuff on Etsy or whatever. You could be consulting just from your kitchen.   Nick: We're in an era where workers have a little bit more power right now post and I guess still on the tail end of COVID. We've had clients that have been able to... Sometimes we call it the make my day strategy where they're important to the company. They know it and they go through and they negotiate. They've been working from home, at least for a portion and they've still been productive, so they've gone to their employer and said, "Hey, if I can work from home three days a week, I'll continue to stay here for X amount of time," or just using some of the stuff that's going on as leverage because companies are having a really difficult time hiring. It's become very, very competitive. We've had some clients go ahead and use that to their leverage. Then like I said, it's just they take advantage of that until they're no longer happy and then they exit.   John: We've seen a lot of people a little different where they start working part-time and really start getting into hobbies that they enjoy for income, photography, event planning, things like that. There's definitely a lot of different avenues you can go in this period of time here because we've seen quite a few people churn hobbies into income.   Mark: That could be a great way to not only offset the shortfall you may have or even whatever the case might be, but it's also just something to do. I mean, just keeps you active so why not "double dip"? Get something out of it. You're getting some activity, something you enjoy, but also adding a little something the to the income levels.   Nick: I was going to also mention that where one thing that we have found from some people is not having a purpose or a routine has been very difficult.   Mark: Oh, yeah.   Nick: Some people handle it better than others, but in general, people need some sort of purpose. Some people are able to take that extra time, spend it with kids, grandkids, travel, do all these different things and they're very comfortable or they have an active social life and it works out well. A lot of people got a lot of those interactions via work, and so not having them anymore, spending an extra 40 hours a week with their spouse, as much as they love them can be a little bit much. Whether it's volunteering, whether it's finding something, just having an open mind and looking for something that fulfills you and gives you purpose is a really big deal.   Mark: You got to have something to retire to as well, otherwise you just turn into a couch tater and you don't want to do that. Those are so some places where you can make up some ground if you are a late bloomer in retirement, meaning basically you feel like you started too late or you don't have enough put away. Of course, how do you know? Well, you know by getting a plan put together to see if you are even behind because again, you might not be. Reach out to the guys, to the team at PFG Private Wealth. Stop by the website, pfgprivatewealth.com. Get scheduled to come in for a consultation and find out, first of all, even if you are behind and if you are, then you can look at some of these options and some of these opportunities that we highlighted today on how to make up that ground, pfgprivate wealth.com. That is pfgprivatewealth.com. Don't forget to subscribe to the podcast while you're there on Apple, Google, iHeart, Spotify, whatever platform you like to use. You could find it all at the main website, pfgprivate wealth.com.   Mark: While you're there, you can drop a line as well and we take those from time to time here on the show. Let's wrap up with an email question from Elizabeth. She says, "Guys, I have a pension fund from a previous job in a different state. It's been sitting there for years, but I do have the option to take the lump sum and invest the money myself, or just leave it there and get the monthly pension once I retire. Thoughts?   John: This is coming up quite a bit lately with pensions offering these lump sum payouts for participants. It really important to evaluate if you take that lump sum, what type of income could you expect from it on a, basically, lifetime basis. What goes into that is really your risk tolerance. What could you expect to achieve from a rate of return based on how much risk you want to take? Again, you want to look at this from a conservative standpoint. What we've done in the past with clients, we might compare it to maybe doing their own type of guaranteed income stream through some other financial vehicles and see is it similar and maybe provide some more flexibility they're comfortable with, the financial health of the current pension. I wish there was an easy answer for this, a yes or no, but as always, it depends on your plan and your situation, and what works for you and, and your family if you have beneficiaries. There's a lot of different factors that go into this.   Nick: Testing it through the plan's so important, especially John alluded to the beneficiary aspect. For example, we've had a fair amount of clients that maybe they're single, whether it's widow, divorce, whatever, and their beneficiaries are their kids. The thought of having worked for a company for a prolonged period of time and what would be a substantial pension. Their kids not being able to benefit from that at all if they were to pass away early doesn't sit well with them. They'll look for alternatives. There are a ton of factors that go into that, but comparing and using realistic variables when you're making those comparisons is really important.   Mark: I mean, it's one of those things where a lot of times, you do have more controlling options if you take the money in lump sum and do it yourself, but it's not the right fit for everybody. Definitely a great question. Reach out and call the guys and have a one on one conversation or share some more details for sure. 813-286-7776 is how you can get ahold of them if you've got questions of your own, 813-286-7776 or again, stop by the website, pfgprivate wealth.com. That's all our time this week here on the podcast. We appreciate you guys as always, for John and Nick. I'm your host, Mark and we'll see you next time here on Retirement Planning Redefined.

Fire extinguishers, airbags in your car, and smoke alarms in your house are all examples of things in life that don't really seem to matter until they're the only thing that matters. On that rare occasion when you need one of those items, you'll either be very glad that you have one, or really regretting the fact that you don't. Let's talk about some of the things in the financial world that don't matter until they do. Helpful Information: PFG Website: https://www.pfgprivatewealth.com/ Contact: 813-286-7776 Email: info@pfgprivatewealth.com Disclaimer: PFG Private Wealth Management, LLC is a registered investment adviser. All statements and opinions expressed are based upon information considered reliable although it should not be relied upon as such. Any statements or opinions are subject to change without notice. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investment involve risk and, unless otherwise stated, are not guaranteed. Information expressed does not take into account your specific situation or objectives and is not intended as recommendations appropriate for any individual. Listeners are encouraged to seek advice from a qualified tax, legal, or investment adviser to determine whether any information presented may be suitable for their specific situation. Past performance is not indicative of future performance. Transcript of Today's Show: For a full transcript of today's show, visit the blog related to this episode at https://www.pfgprivatewealth.com/podcast/ ----more---- Mark: Hey everybody, welcome in to another edition of the podcast. This is Retirement Planning - Redefined, with John and Nick from PFG Private Wealth. And we're going to chat today about some things that don't matter, well, until they do. And I've got some pretty good examples of that, so we're going to get into that in just a second. But I don't know, Nick, I feel like I should pick on you a little bit. Things that don't matter until they do, is that the Buffalo Bills again this year or what?   Nick: Those are fighting words. It's a good thing we're in a different state. Now, what's your football team?   Mark: I just had to pick on you because of the whole Tom Brady thing. I was going to talk to you about it, so you just couldn't get away from this guy, right? He was kicking your butt in New England, then he comes down in your backyard and still knocks your team out. I actually felt for you this past playoff, so.   Nick: Yeah, it's all good. We've got a real quarterback now so I'm okay with it.   Mark: Yeah.   Nick: I'm not a complete...   Mark: My team is total garbage, so you can pick on me all day long, so it's no worries. My team is the laughingstock of the NFL pretty much on a regular basis.   John: Are you a Panthers fan?   Mark: That's close. You think I would be because, same thing with you guys, I'm next to the Panthers so you think I would be. But no, I'm a Cowboys fan. Yeah. It's the worst.   Nick: Nah. Trust me. It's not the worst.   Mark: We get a lot of flack for Cowboys fans. That's for sure.   Nick: Yeah, but it's not the worst.   Mark: Gotcha. John, what about you? Do you pull for anybody?   John: The Patriots.   Mark: Oh my God. Wait, what? Oh my gosh, you two must have really gone back and forth.   John: Yeah, I grew up in right outside of the Boston.   Mark: That's right, I remember that now yeah. So you guys have had some fun times over the last few years, haven't you?   Nick: John used to ask me to watch games-   John: He refuses.   Nick: I couldn't be around. I couldn't be around people in public watching the game, but now that they're a little bit better-   Mark: They had a great year last year, they really did, so.   Nick: They made the playoffs three out of the last four years.   Mark: Yeah, they did. They're definitely on the run. So I just had to give you a little bit of a hard time, but it's all good. It's all good.   Mark: So listen, things that don't matter until they do. So here's some real examples, like a fire extinguisher, right? Who thinks about a fire extinguisher until you need one? Or the airbags in your car or smoke alarms in your house, all these things we just don't pay any attention to until we actually really need one. And then we're awfully glad that they're there.   Mark: So I've got a couple of these financially speaking fellas. So talk to us about the importance of why these things can be kind of out of sight, out of mind. But man, we really need to have those ducks in a row. And let's just start with an easy one, legal documents, right? Won't matter until they do, but when you need it, man you're going to be glad you've got it in place, and right.   John: Yeah, this is a great example of that. And where when you're living and this happens is you have some type of health event and I just had a family member who just got an accident and healthcare surrogate had to step up and make some decisions and help them out during that process. So that's something that you really need to consider doing some of these things. Meeting with an attorney that's qualified to do this stuff, to make sure that your ducks are in a row.   John: And the unfortunate one where it's too late is if you pass away and then now your beneficiaries are dealing with whatever estate, whether it's trust, wills, documents that you did or didn't do. I'll tell you from Nick and I have helped a lot of clients kind of navigate that, if it's not done correctly it can be a nightmare for your beneficiaries just to figure out where everything is and who is responsible.   Mark: Yeah. And it's one of those things that's easily avoidable, right Nick? I mean, this is not that hard to fix. This is, of the low hanging fruit that can be out there, you can do this stuff pretty easy. Especially things like beneficiary designation, updating those, so on and so forth. Wills and trusts, sure, they can be a little more complicated, but even that it's not that complex. You've just got to get with an advisor and an attorney.   Nick: Yeah. What we've seen is that often times people don't personally know an attorney or somebody in this space that can help them. Or, if they do, they're private and they don't necessarily want them to know everything about them. Or we'll see people that just... It makes them extremely uncomfortable to talk about death, dying and, or being sick.   Nick: And so it's a classic avoidance behavior. And like we had talked about previously, time flies and all of a sudden it's five or 10 years later, and your mom and dad that you've had listed as the beneficiaries are no longer alive and kids are grown up or you had another child that's not listed anywhere. Or maybe you got divorced or remarried.   Nick: All these things happen and if the documents aren't in place or they're lagging and inaccurate, it can turn into quite a quagmire if something happens. And I'll say this too, is oftentimes when people think of the legal documents, they think of death and not necessarily what John referred to as far as healthcare proxy and a power of attorney, those sorts of things where there's a health event and you're still alive, but you need help making decisions and that can really get pretty squirrely.   Mark: No, I agree with you. And I think the other one we hear sometimes too as well, is, that's for rich people, right? A trust is for rich people or so on and so forth. And it's like, okay, that's not really the case. And it's really not as expensive to get some of this stuff taken care of as we often think it is. I think we build it up in our mind or whatever. We just kind of have this, oh, that's for rich folks or it costs too much money so I'm just going to avoid it. Pretty easy to handle this stuff.   Nick: Yeah, I would say that's accurate, as well as, and we've talked about the run-up in the markets over the last five or 10 years. There's a lot of people that, seven, eight years ago they maybe had a third of the money that they have now. And so they still kind of are in the same train of thought or the same thought process. And they don't realize maybe what they perceive... They still think of themselves in that same way as they did eight to 10 years or even 15 years ago. And there's a little bit of disbelief. And so it kind of leads into kind of procrastinating and you almost have to kind of take stock and realize, okay, hey, this is something I really need to get done.   Mark: Yeah, exactly.   Mark: Well, that's hopefully what we try to provide here on the podcast is there's a little useful nuggets of information that might spark that conversation. And speaking of which, John, life insurance, not something that you're really popping up at the dinner table saying, "Hey, let's have a rousing conversation about life insurance." Right? It doesn't kind of go that way. But, again it's one of those things that don't seem to matter until you need it. And it can be quite important and quite useful tool.   John: Yeah, a hundred percent. I'll say this is probably one of the most disliked conversations for people, is talking about life insurance and what happens after if they were to pass away or a spouse or whoever.   Mark: Right.   John: Especially with children, because when you have kids, and I have two daughters, one of the big things you look at is, I'll use myself as a scenario, I'm gone. So there's my income gone for the next 20, 30 years. So you really want to look at it from that standpoint when you're talking about needs planning for life insurance is... I'm no longer here. My income's no longer providing for my family. How do I replace that? And really life insurance is a great vehicle to go ahead and replace someone's income for a 20, 30 year period. And there's ways to back into what amounts are correct, but definitely something you need to look at when you're doing a plan.   John: And going into retirement can be the same way depending, and Nick mentioned it on the last session where everyone's situation is different. Well we've had scenarios where, there may be still is a need for life insurance in retirement because maybe one person has a heavy pension. And if that person passes away, that pension now is gone. And maybe that's a big requirement for the plan to work.   John: So everyone's situation is different. It's definitely something that needs to be considered. You just want to take a look at it and see what would happen if someone did pass away and there wasn't any life insurance. I'll say a lot of these things that we're going to go over too, I think it's easy to address, there's definitely people that can help you out. And it's just a matter of getting it done. And once it's done it just kind of provides a nice peace of mind that it's kind of like a bandaid, just do it, rip it off.   Mark: There you go. Exactly. I think life insurance too, I will be honest. It's a very important tool even for retirees, there's a lot of ways it can be used. It's not our daddy's Oldsmobile like those old commercials. There's just so many different nuances now to life insurance, where it could be a useful tool for various times of life, but I can't help but thinking of Ned Ryerson and the Groundhog Day movie, when he comes up on Bill Murray, that insurance guy. I think that's what a lot of times people think of when they think life insurance or life insurance agent, and it's just changed so much. But it is a great movie.   Mark: Lifetime income streams. We kind of talk about this fairly often, but I mean, look, it's one of those things maybe you don't think about. You think, well, I've got these accounts, right? I got all this stuff, but how do I turn it into money because I do need money all through my retirement? I need a paycheck coming in.   Nick: Yeah. So, one of the things that we'll say is that in retirement, income is king. Assets are great and assets are the thing that people love to talk about and kind of chat about, but income is king. And I'll say too that everybody knows about social security. They realize in theory it's important, that sort of thing, but many people, and this is something that we'll kind of review with people often, is that they don't quite realize like, well, hey, if your household is getting $60,000 a year in income from social security, which these days, a lot of people are. That is really equivalent to between one and $2 million of nest egg assets from the standpoint of generating a saving [column 00:09:37] , having it last your lifetime and getting inflationary raises.   Nick: So, building a portfolio or an overall strategy where, we've got quite a few clients that they have rental properties, that rental income, they purchased a property a little bit when they're younger. They get the house or the property paid off, and the rental income supplements their income in retirement.   Nick: John referred to pensions, that can be a big deal. Annuities can provide a guaranteed income as well. So, trying to balance forms of guaranteed income with assets can be really important. And just a little caveat to throw in there, although income is king, it is important to have assets. So the reason I say that is we have had some clients come to us that have been, whether it's between social security and pension, they've been income rich and asset poor, and that can also lead to other issues as well. So a good balance is really just like so many other things is really the most important part.   Mark: Well, balance is key, definitely balance is key to anything. And we all know we got to have these different forms of, or we have to have some income coming in, in retirement. But having the multiple streams and turning things on at different times, and whether you want to call it bucket strategies or laddering or whatever the case is, but just having these different various forms to be able to pull from at different times is going to make obviously all the difference in keeping up with our retirement. Because nobody wants to go backwards in their lifestyle in retirement. They want to kind of continue on the way they have been, or maybe even more so in retirement. So that's some things that- go ahead.   Nick: And let me jump in on that too, that point that you made about not going backwards or maintaining is important. Because there are times, and I've had this happen a couple of times, when it comes to retirement and income in retirement and when it comes to life insurance, two of the topics that we talked about, in people's minds they have an enormous amount of confidence that all of a sudden they no longer need any of the things that they've wanted and bought for the last 25 or 30 years. It's like all of a sudden they flip the switch and it's going to be the cheaper food, the cheaper restaurants, the cheaper car-   Mark: I've got plenty of clothes. I don't need to buy any new clothes.   Nick: Yes. And in reality, people don't live like that. And so that's an important-   John: In reality, it's typically the reverse. They have more time on their hands to go buy things.   Mark: Right, yeah. My dad always said every day was a Saturday when he got to retirement and he spends the most money on a Saturday, so, that always stuck with me.   Nick: Yeah most people live in a state of want versus need and it's often, that's a pretty common thing, so anyhow.   Mark: That always stuck with me. That's a great point. Well, I'll tell you what, that's some things that don't matter until they do so, again, whether it's legal documents, pretty easy fix, life insurance, certainly a worthwhile conversation to have no matter what stage of life you're in. And making sure definitely that you've got those income streams set up for life. Some key topics there that we talked about this weekend.   Mark: We're going to take some email questions and wrap up because we want to get back to a couple of these here. We haven't done these lately. And of course, anytime you submit a question, you're going to get your question answered, but to just talk about someone here on the show, we kind of do those from time to time. If you'd like to drop a line, go to pfgprivatewealth.com, that's pfgprivatewealth.com or call (813) 286-7776 if you've got some questions for your own situation that you need to get answered, and the guys will certainly tackle those for you.   Mark: But for right now, let's see what we got from Linda who had sent an email question. And guys, she says, "Fellas, my daughter just turned 18 and I'd like to help her get off onto the right foot with some retirement savings. What's a good idea for something to get her started with?"   John: Yeah, I'll take this one. So, we've had this come up quite a bit with some of our clients and their kids, when they turn 18, they want to just get them used to investing or just understanding it which we think is very important. Some of the things we've done, it just depends. If the child is working, we might do a Roth IRA where we'll go ahead and just open up a Roth retirement account. It's a great vehicle for kids because they can tax free money in retirement. They could use it for a first time home purchase, et cetera, et cetera. So we've done that. We've just got to make sure that they're working because you need earned income to contribute to a Roth.   John: If they are not working, there's definitely some kind of joint accounts you can set up, but it's definitely a good thing to do. Because I'll tell you, we've done that for some clients and we've had those kids become clients early, right when they graduate college. And they're pretty aggressive in saving. I have one where, as soon as he graduated he got in touch with me and then just started aggressively saving in his early twenties, which is very uncommon. And now he's early thirties and he has a pretty sizable nest egg. And now he's got kids and all this stuff and he can't save as much because he does not have as much discretionary income. But it really set that foundation for him to really start saving for retirement, understanding how important that is.   Mark: No, I think that's awesome that you're having some people do that, especially at a younger age. And so kudos to her for getting her daughter start off on the right foot. And for people that just in general kind of have that interest. I had a young kid that I knew for a couple of years ago that used to work for me. Same thing. Early on he was very into saving money for his future self, which is fantastic. I think because his parents hadn't done a very good job and so sometimes we see that mental shift, right? Where you see your parents do something and you want to do the opposite and so on and so forth. And in this case, that was a good thing.   Mark: So very cool question. Thanks so much for submitting that. Hopefully that helps you out a little bit and keep listening to the podcast. We certainly appreciate it. And let's do one more guys before we wrap up here, [just 00:15:13] go around, and we've got one from Patty. You guys got to put on your counselor hats here. Patty says, "My husband and I argue almost every day about money because we haven't done a very good job planning for our retirement and it stresses us both out. Is this a normal thing between spouses or do we need some serious help?"   Nick: So I'll jump in on this one. So, there's a couple of things here. So the first thing is that this points out specifically the importance of a plan. And what we mean by that is that when there's not a clear picture of what people actually have, what their life actually looks at, when there's a high amount of uncertainty on the future, that's when there's often anxiety and bickering, arguing those sorts of things when it comes to money.   Nick: And so, step number one is take an inventory, build a plan. So once that's done, if it is truly terrible, then you can fight, but at least let's figure out what's there. But all joking aside, so then the next step is to kind of come to grips with the fact that, hey, we are where we are today. There's nothing that we can do about it. If we can focus on the future and start making decisions that are positive and maybe make some changes that'll be helpful, then that's great.   Nick: From our perspective as advisors, one of our kind of golden rules, and we oftentimes tell clients this is that, we can't care more about your money and your situation than you do. So ultimately it has to start at home and then they have to be willing to take guidance and advice and make changes. And then really what we found is that in 12 to 24 months, the momentum can be significant in a positive way. And things can really swing strongly. And once that happens, it becomes kind of addicting. It's kind of like when you're in your early twenties, for most people maybe they're just starting out at the first job and the first time you started to hit a few thousand dollars in your account that stays in your account, maybe 5,000 is your threshold and you're like, "wow, this is great." I've never had this amount of money in here before.   Nick: And then maybe down the road you hit 10 and as you get older that number changes. And what's interesting is that it also becomes more stressful and you kind of get this hoarding mentality where once you hit these certain thresholds, 50,000, a 100 thousand in your savings account. Once get there and you realize the comfort and the peace of mind that it provides, you never want to go back. And so we like people to kind of get that, to taste that so that they can understand that. And then usually it's full speed ahead.   Mark: Yeah, no, that's a great way of looking at it. My daughter, she's still pretty young but is definitely, she kind of got that. She was constantly just spending her check and spending all her money when she wasn't making too much. And then once she got started getting a decent check in from the Navy and she got a couple of bonuses and she put it in there and she watched her account grow, she was like, "wow, this is-" and so now she's gotten bitten by this bug to kind of see what she can get the number to. She'll message me every so often, "The number is this now. And the number's that now." And so I'm like, "Hey, cool. You're 24 years old. You got a long time for that to grow and compound." So yeah, it definitely can be addicting.   Mark: And of course, if you're closer to retirement and obviously that sounds like that's the case for this question. I think that's a great piece of advice. Find out what you got, get an assessment, get a plan put together, look at it. And then see, you guys might be fighting over nothing too, so think about that. You guys could possibly be in much better shape than you even realize. And therefore you're fighting for [not. 00:18:55]   Mark: So reach out and have a conversation with the guys. Just give him a jingle and call them at (813) 286-7776, or stop by the website, pfgprivatewealth.com. And that's going to do it this week for the podcast. Again, don't forget to subscribe to us on Apple, Google, Spotify, iHeart, Stitcher, or whatever platform you like to use. You can find it all at the website, pfgprivatewealth.com. For John and Nick, I'm Mark, we'll see you next time here on Retirement Planning - Redefined.   Nick: Go Bills.

Elizabeth Overberg of Ankeny Centennial and Rachael Christmann of Ankeny discuss the Class 3A quarterfinal wins by their teams in the girls' state soccer tournament on the latest edition of the Ankeny Fanatic weekly podcast sponsored by Coldwell Banker Mid-America. Ankeny softball coach Dave Bingham and Centennial baseball coach Mark Hey also appear to preview […]

In this episode, Anna Jordan meets Mark Wright – entrepreneur, TV personality and winner of The Apprentice in 2014.  We talk about work-life balance and maintaining a strong online presence for your business post lockdown. You can also visit smallbusiness.co.uk for more on the pros and cons of business education. Remember to like us on Facebook @SmallBusinessExperts and follow us on Twitter @smallbusinessuk, all lower case. Don't forget to check out the video version of this episode and subscribe over on our YouTube channel! Would you prefer to read Mark Wright's podcast interview instead? Hello and welcome to Small Business Snippets, the podcast from SmallBusiness.co.uk. I’m your host, Anna Jordan. Today we have Mark Wright – entrepreneur, TV personality and winner of The Apprentice in 2014. Born in Armidale, Australia, Mark’s entrepreneurial family inspired him to go into business himself. He was backpacking when, with £172 in the bank, he decided to get to an English-speaking country to start earning. After coming to the UK, he found a job selling digital advertising services. Unfortunately, he was unable to secure a bank loan to start a digital marketing agency of his own, so a friend suggested he entered The Apprentice instead. Since winning the show, he’s launched five businesses and is the only winner to turn over in excess of £1m within one year. We’ll be talking about stress management and maintaining a strong online business presence post lockdown. Anna: Hi, Mark. Mark: Hey, how are you? Anna: Yeah, I'm really good, thank you. How are you? Mark: I'm really good. Thank you so much for having me today. I really appreciate it. Anna: Of course, of course. How is it down where you are? Mark: Listen, it's pretty good. We're pretty lucky considering everything that's going on in the world. I mean, not compared to my family in Australia. They think we're like aliens over here in the UK. Anna: Oh, I know. I’ve got a lot of family in Brisbane and they were just going about like everything's normal and I'm just going, ‘I’ve forgotten how that how that functions.’   Mark: I'm so jealous. People always say to me, ‘Why are you living over here? I've always had a good answer, but I'm not so sure right now! Speaking of you coming over here, there's a little bit I wanted to know. In the intro, we've talked a bit about you backpacking and you coming to the UK to start work. I know that this backpacking adventure has been pivotal to where you are now. But I'm wondering, what was the intention of it when you set out? Was it part of your broader plan to become a business owner? Mark: Well, it's a bit of a sad story really. I was dating a girl in Australia, and I had sort of found my passion for digital marketing, had my self-discovery of what I was going to do in life. And then I got my heart broken. I decided the best revenge was to go out and get out in the world. I got my backpack, packed it up with like three pairs of jeans, a couple of shirts, and off I went around the UK and around Europe, as a backpacker. And it started off as a well-intentioned holiday, with the view of being a tour guide, having some fun, seeing the world, seeing some different cultures. I loved it. I visited London, I fell in love with London, I love the UK. As I continued my travels, and started to run out of money, I decided I loved London, so why not go back there? I felt pulled, it had some good energy. I'm a big believer in getting those feelings. The best book I've ever read in my life in my career is called The Alchemist by Pablo Coelho. And there's a big thing, three set themes throughout the book, which is follow the omens. If you feel something, if you feel a pull towards something, if you get energy towards something, just go with it. You technically might not know the answers at the time but if you go with it, go with the vibes and you never know what's going to happen. And as they say, the rest is history. I got here. I was living in a hostel, a backpacking hostel, I had no money, I started door knocking for jobs, I got a job, worked my way up in the digital marketing community, thought I could do it better and took my idea on The Apprentice – and one thing just led to the next. I sit here today, and all these amazing things have happened. It kind of just feels like the click of the fingers or a blink of the eye. I'm Lord Sugar's business partner and I own all these companies. It's hard work, having goals, and almost it was preordained to a certain respect. Anna: You've talked about being a real goal setter, knowing where you're going to be 5-10 years’ time, but that seemed like quite a spontaneous move. Mark: Yeah, I think, how they say the biggest things happen outside your comfort zone? I think the biggest killer of people's success is comfort, staying in their mediocrity, getting comfortable doing things that don't necessarily challenge them, but make sure they stay safe. It's really easy in our society today. Particularly, what, in Australia, where I come from and in the UK and America, it's really easy to stay comfortable in the middle part of society. Every time I've gained any success in life, whether that's leaving Australia with no money and backpacking, giving up my job and my flat to go on The Apprentice, taking loans to start companies, whatever it might have been. Every time I've achieved something in my life, it's been from pushing myself out of my comfort zone. Just reflecting on that, Steve Jobs, who's the photo behind me, who I am in love with, basically. He always said you can – it's easier to connect the dots looking backwards and it's so true in my life, when I look back at any success I've had, yes, it's from setting goals and knowing where I want to be in life and focusing on who I want to be and what I want out of life, but also pushing myself to do things that I’m not necessarily comfortable with. With your jumping in and doing things attitude, where do you stand on things like MBAs and business education qualifications? What role could be play in somebody becoming an entrepreneur? Mark: It's an interesting question. I would much prefer the people I employee to have MBAs and the infrastructure and theory of growing and scaling and managing a business. As an entrepreneur, what I've found is that it's more the risk-taking the big-thinking and the strategy of the company that I'm responsible for. The funny thing is, most of the great entrepreneurs haven't written courses, they haven't written MBAs, and you can't teach what it takes to be a great entrepreneur, because a lot of it is instinct. A lot of it is huge, unsustainable risk-taking that wouldn't make sense if you saw it written in a course. I've never been to university, I don't have any formal education or degrees, or any of that sort of stuff. Listen, I haven't done it, but that's not to say that it doesn't work. I think knowledge is power and information is really key to success. Now, a lot of people do have degrees and have been successful, a lot of people don't, it's more just what's inside you as an entrepreneur: are you driven? Can you work consistently? Are you prepared to take big risks? Do you understand the industry or the business that you're in? That's the key – doesn't matter about what degree you've got. You can have a degree, you cannot have a degree, that's not a dictator of success. What is, is are you an expert in what your field is. If you are an expert, and you've got good work ethic, and you will stay in your industry long enough, you will eventually be successful. Great. You've said in the past that it's your bullish attitude that helped you get through The Apprentice. I wonder how your level of bullishness was at the beginning when you applied versus at the end of the show. Mark: I've always had a healthy distribution of confidence, I would say and that confidence, some would describe as arrogance. I would say healthy confidence has given me a bullish strength and approach in business generally, throughout my whole career, whether it's been in interviews, on The Apprentice, in business deals – and that confidence in either negotiating a deal, winning The Apprentice, is so powerful. I believe the key to higher performance is high self-confidence, high self- belief. Before you start working on other things, you need to really work within yourself to be confident. If you believe in yourself, and what you're selling and what you're doing, other people will buy into that, whether that's your employees on the journey, whether that's a banker to give you a loan, whatever it might be, that self-confidence is so important. I think I carried this air of confidence in from day one of The Apprentice through to the final and Lord Sugar and the other judges could sense it and I think also the other candidates could sense that and it's a pretty powerful tool in The Apprentice, but in business as well. And in your profile, when the series was broadcast, and under ‘what are your worst business skills?’ it says, ‘I have no bad business skills’. Would you see those still true now, with hindsight? Mark: Haha, you've really done your research. I mean, you do say some things on there that you look back and you get a bit of a tingle of embarrassment because you say some crazy stuff to be entertaining on the show. But, do I have any bad business skills? Listen, there's always things I can improve on. But I would say my gift in life is business. I'm passionate about business. I love business. I've studied every facet of it from small, medium, large, great entrepreneurs of all time. Listen, some people can play a musical instrument like you've never heard, some people can run 100 metres in ten seconds and under. My gift that I got was being brilliant at business. And that's my thing. I'd like to say I have no bad attributes – I'm sure other people would challenge that, but it's the thing I love in life. And I believe as well that you took forward this absolute commitment to business, to your business and to creating it and making it a success. But it reached a point where you were extremely stressed, burnt out, even to the point where one of the Lord Sugar’s aides approached you and said, ‘When's the last time you took a break, went to the gym. Tell us about getting to that point and how you felt. Mark: Listen, I think when you create a start-up business, I think the start-up journey is the hardest area of business. I own businesses at all different levels of turnover size, staff numbers and investment levels. For me, the hardest journey was that ‘zero’, starting a company, registering at Companies House, and going from zero to whatever. It's so tough. In the first two years of my business, I pretty much didn't have a day off. I wasn't sleeping enough, I wasn't eating well, I was drinking too much. It was because the work that was required in terms of stress levels, hours and just general demand of creating systems and processes in the business, signing up customers, keeping those customers happy, employing staff, getting equipment, getting investment. It was a very hard process. I gave up my life for the first three to four years for the business. The first two I wasn’t in existence to people who knew me. And I was working every hour that God gave, and it was tough. It was really tough. It wasn't good for my health. It wasn't good for my relationships. We talk a lot about work life balance, okay? You can love business, you can love what you do. But you do need to find time. It’s no good – as Lord Sugar's advisor told me – being the richest guy in the graveyard, and just dropping dead at work one day. You need to be able to create a life that you can live healthily. That was that was hard-hitting advice from a billionaire’s advisor. They’re saying that so it must be true, I thought. So, I've made more time to have a bit of balance in my life, so that the success is sustainable. Anna: I suppose it can be a cultural thing, especially in the UK. I mean, there's this real pressure from various different places, very much social media included in that, you need to keep going, keep hustling all the time. So I'd imagine that's not exactly helpful. Mark: You're right, we live in a culture of Instagram, of social media, where you go on there and you hear that if you work 100 hours a week, that's the way to get a million pounds and all of this stuff. A lot of the people that are saying this don't have a million pounds, point 1. Point 2 is you can work 100-hour weeks, but for how long can you do that? Oh, and Sugar is very proud of telling people that he is a multi-billionaire who is only at work Monday to Friday. He's never worked a weekend in his 50-year career. And I think that is really powerful because he's got the proof of the pudding. He is successful, he is famous, he is wealthy, but he has work life balance. And he'll tell anyone who listens. ‘I don't work weekends, I work Monday to Friday, and I work harder than anyone Monday to Friday.’ In my head, I know on Friday evening, as I'm driving home, that is it, my brain switches off, I spend time with my wife and my family. Then on Monday morning, I'm back to it. I think giving yourself in your brain that time to recharge, to relax, to create ideas, but also to spend time with your loved ones and just switch off. Burnout is a is a real thing. It's the same with a light – if you leave it on all the time, it'll eventually burn out. Your mind, your brain and your body are exactly the same. Sleep debt and all of those things are real, legitimate causes for business owners not making it. One of the things that we've noticed in this lockdown, and one of the things that's been key to many small business owners – often by necessity – is that when their physical buildings have closed, they've really amped up their digital marketing and their online presence. But now, as trading restrictions are beginning to ease, they're moving back into their bricks and mortar businesses. How would you recommend that they keep up that momentum of their online presence with their existing resources as they move back to bricks and mortar? Mark: Well, there's been a lot of good lessons in the pandemic, and I'm speaking purely from a business perspective. On the health side of it, it's been terrible, there's no doubt about that. But from a business perspective, it has shown us the good industries, the good businesses. It has also shown us areas where we can improve our business. It’s because a business that is reliant on a singular location that cannot trade because of something like a health pandemic, probably isn't a great business, so we need to be online.   Yes, having a shop and a store is a great customer experience, and something that we should never lose. But we need to have a blend of both. And when, if you've got good systems and processes, you can have the best of both worlds: a customer in-store experience, a high street experience, and also an online 24 hours, seven days a week business. You should actually be more profitable and more dependent with your business. But it comes back to systems and processes. The problem with online is that it never switches off. And that means as human beings where we can go in and check out an ecommerce store 24/7, we can check the Google Ads 24/7 and all of this stuff, but you've got to have people, processes and systems so that you still work normal hours. Anna: Absolutely. What kind of things do you have in mind? What kind of systems? Mark: I use tools for social media posts, scheduled tools, I use software to check all my marketing campaigns, suggest changes and do low-level stuff automatically. All my email marketing campaigns for my econ businesses are done weeks in advance, and it's all just scheduled into software. So rather than sitting there at eight o'clock, ten o'clock, nine o'clock on a Saturday or a Sunday, it's all done on the Monday ready for the Saturday. It's just using tools and technology to make sure that we're actually working. I hate this phrase, but I'm going to use it now: working smarter, not harder. Just making sure that we're doing stuff, just not working 24 hours a day because the internet allows us to. Is there anything else you'd like to add before we before we go? Absolutely not. I think it was it's great that there's podcasts like this. All I would say, to any business people out there that are listening to this is get yourself a mentor. If I've learned anything through my process of business, it is surrounding myself with great businesspeople that has enabled my success. Deals and success falls off other successful people, but to knowledge falls off them. And generally, when a business owner or an entrepreneur is failing, it's not through a lack of resource or finances – it’s lack of knowledge. And it's podcasts like yours and having a good mentor that really help people get over the goal line. So yeah, that's really it. And I think it's going to be a good time ahead. Where would you recommend finding a mentor? Mark: Well, there's this amazing tool called LinkedIn. Anna: Ah, yes – I’m familiar! Mark: And what I recommend is a good mentor is someone that's been there, done that and bought the T-shirt. And I always recommend someone that's either business or industry specific. You can go on to their LinkedIn, follow them on social media, see where they're speaking next, where's their next event, where's their next conference and go there, track them down and ask them to coach you, mentor you, even if that's through giving them equity in your business or paying for their time. Knowledge really is the key to scaling up a successful business. And if you've got the right people at board level of your company, it's very hard for that company to fail. And it's been a big lesson for me on my journey, and I hope that helps other business owners as well. How much equity would you suggest? Mark: It depends how great the mentor is. I mean, I've got Alan Sugar, and I gave him 50 per cent. I mean, the most amount of equity you'd want to give any shareholder is probably 50 per cent, 49 per cent, and you probably want to come back from there. For someone that's just going to attend board meetings, you're probably looking at five per cent-ten per cent. If you're looking at someone significant, that's going to be, taking an active role, 30 per cent. But it depends on the size of your business and the size of their input as well. Anna: That sounds like a good place to wrap up, so I will leave it there. But thank you for coming on the podcast, Mark. It's been fab. Mark: Thank you so much for having me. You can find out more about Mark at climb-online.co.uk. You can also visit SmallBusiness.co.uk for more on digital marketing and the pros and cons of business education. Remember to like us on Facebook @SmallBusinessExperts and on Twitter @smallbusinessuk (all lower case) and subscribe to our YouTube channel, linked in the description. Until next time, thank you for listening.

On this episode of the Quiet Light podcast, we talk to Phillip Rivers (not the quarterback). We get into why email is the unsung hero of E-commerce businesses. In his experience, thirty percent of your revenue should come from email connections. Tune in to her more on Phillip's thoughts about the power of email in E-commerce.   Topics: Phillip's background in E-commerce. Why email is still powerful despite expanded advertising options. The misstep of shooting from the hip. How to start out on the right foot. Offers Trust-builders. Content The efficacy of social media advertising. Getting past personal biases. Sharing a name with a famous quarterback.   Resources:  Phil@gotetra.co Phillip on Facebook Quiet Light Podcast@quietlightbrokerage.com   Transcription: Joe: Our buddy Mike Jackass did a presentation not too long ago on his product campaign product with Color It and what he does with e-mail in Klaviyo and did a presentation to I think it was the eCommerceFuel folks showing how much of his revenue came from his e-mail campaigns. And a lot of people were blown away because they felt like it's something that is dated and not an area that's strong in e-commerce anymore. Maybe those folks are doing mostly on Amazon and actually can't e-mail the customers. But in this case, when it's an off Amazon business, Mike presented a case, that e-mail is an important component of any campaign in growing up SaaS business or content business whatever you've got if you've got a list of customers to reach out to them. I understand you had Phillip Rivers on the podcast talking about this very same thing. How did that call go? Mark: Well, you can imagine my delight when I got an e-mail from Phillip Rivers. I thought he's finally returning my fan mail. All the e-mails that I sent to the quarterback of now the Indiana Colts as opposed to the San Diego Chargers; I'm sorry, Los Angeles Chargers. I was like I finally met; no, it's not that Phillip Rivers. I did have to ask him about that at the end. He has a funny story about people not believing it was his real ID when he was going into a bar thinking it was a fake ID. But that's at the end of the podcast. The bulk of what we talked about instead of football is e-mail marketing and the fact that it's the unsung hero of e-commerce marketing. And for all you buyers out there, this is one of these opportunities for where you can find opportunities for immediate gains after you acquire a business. Phillip Rivers at this podcast argues and argues very well that in his experience, an e-commerce business should have at least 30% of its revenue mix coming from e-mail. So if you're looking at where customers are being acquired from currently with an e-commerce business and it does not have a sizable portion coming from e-mail, this is an opportunity. And there are ways to do this with Amazon as well. I've known plenty of Amazon sellers who have healthy e-mail lists and use it to launch products. And that's a great avenue for getting those products to rank well on Amazon very, very quickly. So we talked a lot about his experience with this; with e-mail marketing, some of the best practices he follows and then some of the metrics you should be following in here. I joked at the end when you have a name like Phillip Rivers your open rate probably naturally gets higher than if it's just Joe Valley. Well, probably not Joe Valley, Joe Valley is recognized, right? Joe: In a very small circle of people, yes. Mark: Yeah, right. Anyways, good point. I think it's a bit larger than that. I open the e-mail when I see it, but no, good episode for just learning about identifying these opportunities for quick wins and opportunities that you're evaluating for businesses for sale. Joe: Excellent. Let's go to it. Mark: Phillip, thanks so much for joining me on the podcast here today. I'm really excited to have you on because you reached out to me. You talked about e-mail as the unsung hero of e-commerce and I have a special place in my heart for e-mail as I built my first business on the back of e-mail marketing. So welcome to the podcast. I'm really glad to have you here. Phillip: Thanks for having me, Mark. Mark: Hey, why don't you give a little bit of a background on yourself and why you reached out to me about e-mail as the unsung hero as you put it of e-commerce and why this is something that you want to talk about? Phillip: Yeah, man. So I've been in e-commerce for quite a while, about 15 years now, highs and lows. But in the early days, there was none of these wonderful tools that we kind of now take for granted. And so I sort of skid my teeth on e-mail; building audiences and nurturing them and figuring out ways to monetize creatively. And this dates back to; this is pre-Shopify, Facebook Ads, and all that stuff. And over the years, as the industry matured, I just got really leaned into and sharpening my sword on building audiences and communicating with people. And in doing so, I've had some successful stores and some unsuccessful ones. It's kind of how it goes in this game. Mark: I've only got successful stories. I've never had a failure in my life. Phillip: That's not true. I heard on another podcast a business you bought that didn't work out. Mark: All right, I have more than one of those. Okay, let's move on from my failures on to your successes. Phillip: And so, in any event, I think that to my time in e-com I notice that e-mail is this very unique special channel that the brand or the individual business has complete control over in terms of how they build that audience, how they connect with them over time, and what messaging they put in front of them to get whatever action they aim to get out of it, whether it be engagement or revenue or whatever it may be and so much so that in talking with friends or now clients that are in the e-commerce space, it's just e-mail is one of those things that kind of gets kicked to the curb or neglected in lieu of kind of faster or sexier channels. And so really, I'm here just kind of standing on a soapbox and tell people like this is an important channel for longevity and to have a clean, healthy business long term and an asset that you can own and control. E-mail is very important and vital to long term success of any business. Mark: And I would agree but let's go ahead and play some of the devil's advocate here with the different channels. Obviously, social media is where a lot of people are putting their attention. You're on Facebook for a long time some people are kind of weighing in on Facebook and saying Instagram advertising works really, really well for them. Influencer marketing, it's a matter of time before we get to the next big social media. I was just talking to somebody yesterday who was like I'm trying to figure out TikTok. It's the latest thing out there to try and figure out. With all these things happening, why does e-mail continue to hold a seat at the table in our marketing mix? And then later on, just for those listening, I want to get into the how later on. I think that's the mediary topic but before we get to the how let's talk about the why. Why is e-mail; why does it deserve a seat at this table? Phillip: Well, it's the one channel that you own outright. I think that gets kind of discounted or forgotten a lot. Any other social channels you're borrowing that audience and technically Zuckerberg or one of the other power players is who owns that audience and you can be sort of de-platformed or the cost can go up or the algo can change and all of a sudden you can't reach the same amount of people. So it's just they're not bad and they're amazing tools, you just don't have full control like you do e-mail. So I think for me that's the biggest thing. And the other way that I look at it is all these social channels are great at engaging folks and driving traffic but if you look at the analytics, at any store or any e-com store, the conversion rate; let's just say it's 5% which would be on the higher end of the spectrum. But that still means that 95% didn't buy on any given day and if you're not thinking about how you capture leads from as many of those people as possible and how do you communicate with them to communicate your value proposition and products etcetera, then you're really relying on luck and kind of paying for impressions to get people back again which is it leaves too much up to chance, in my opinion, or for my liking. And two, it just is a very expensive long term proposition and it's hard to build something sustainable that way. Mark: Yeah. With that, though, and again I'm still playing the devil's advocate here, should we own the channel? We own somebody's e-mail, we can hit them up but Google's gotten better at filtering that out. Our updates here at Quiet Light got thrown into the updates folder. Another company I have, things are getting thrown over in the promotions folder which is like spam with an asterisk; it's spam, but you should probably be looking at it. At least that's what I look at that promotions folder. Do we really have full control over e-mail do you think, or are we losing control, and what about the future of that? Is that something to watch out for in the future? Phillip: I think that strategy is the most important part. And so I think that this goes kind of back into the how, but based on how you set forth in terms of once someone pops in and you start to communicate with them, how do you do it and what actions do you ask them for. Doing some of those things kind of at the outset can dictate where your e-mail goes in terms of the Gmail inbox, for example, long term. If people aren't engaging with it, it'll be routed to promo. But if people engage with the early e-mails, that's kind of a way to work around it to land in the inbox. But to go one layer deeper, I think from an e-mail perspective, I don't worry too much about the mailbox tab or the promo tab. The only one I really want to stay out of the most is Spam and that's the one I can control. Whether it ends up in promo or one of the other tabs, there's nothing that I can do about it. As a marketer, all that I can do is think critically about how do I create the most incredible experience for the person that's going to be consuming this message? And if I think about them and value them, then the things downstream that I don't really have control over will tend to work out. Mark: Sure and I think this is a point that might get lost sometimes with e-mail, right? And maybe we can talk a little bit about the how, because I think we're just going to naturally end up there anyways. Phillip: Can I add one more point before we get there, Mark? Mark: No. No, I'm just kidding. Please. Phillip: I was going to say that the other thing is like you mentioned the dynamic changing or Google changes things meaning how that affects us in deliverability in the inbox. Facebook or the players and social are changing algorithms every single day and so increasingly of all of your audience there, fewer and fewer of them see your message unless you pay to play. So e-mail, if you look at them side by side on engagement metrics, e-mail would win far and above every single time from organic social versus e-mail. But the state of play on all platforms is always changing. But I don't look at that as to say like we shouldn't play the game. It's just like what are the rules and kind of where do I have to get creative and that to get the best result possible? Mark: Sure, yeah. And I think talk about a multiplatform approach makes sense as well. It's not an either-or sort of proposition. We can definitely enhance our e-mail marketing with other platform marketing. But for anyone curious as to what's the winner when you are looking at these different channels just do a Google search. I mean, the open rates and the attention that gets paid to e-mail versus social media is significantly higher with e-mail. I'm going to stop playing devil's advocate because it hurts me to do so. Because I do have a soft spot in my heart for e-mail but people do it wrong all the time. People really don't understand how to do e-mail right. And I mean, I go through every day and I unsubscribe from; I have no idea how many people I'm unsubscribing from every day. It just feels like I'm constantly unsubscribing because they're not offering me value. But there are some people in my inbox that I don't remember signing up for but they're adding value so I keep them in there. So let's talk about that. Let's talk about doing it wrong. Let's talk about doing it right, especially from an e-commerce standpoint where you're selling products. I'd love to hear where you start that conversation with people. Phillip: Well, I think that through the lens of e-com, what most people miss, Mark is the strategy first and foremost. So I talk to a lot of business owners on the phone and most of them when it comes down to e-mail, they have no clear roadmap or kind of treasure map, as I like to call it, in terms of what they're going to be doing week to week from a messaging perspective, whether that's value, whether that's offers or; not offers at percentage basis but talking about a product and offering something for sale and also segmentation. So pretty much what most brands do is just shoot from the hip, which is really hard to build a successful channel when you're just guessing and playing with borrowed time all the time. And so that's kind of the biggest misstep that I see a lot of people making. And then it's important with this channel just as any other just like with your Facebook ads where you're putting a lot of budget behind the ads that you're running is like, okay, how do I kind of think about what do I want to communicate to the audience and based on kind of where they are in the lifecycle so that one, I create a good experience for them, but two, I get to little by little move them along the lifecycle to ultimately converting or re-converting or whatever it may be. But that's the biggest thing that I see missing is starting off on the right foot. Mark: What is the right foot and what's the wrong foot? Phillip: Well, I think the wrong foot is sale, sale, sale all the time or just running with offers to people and just mass discounting to get sales which is the strategy or tactic a lot of people use. So I think the right foot is looking at what does your audience care about? The way I like to break it down is into kind of three different high-level kind of categories; offers where we talk about the product, trust builders, where we can pull things from social media or reviews, testimonials, maybe how our brand, our origin story or how a product is created, where we can tell a story. To me, that builds trust or connection. And then also content. That content, again, could be Instagram content, or a blog content, or just things that are important to the brand and they know it's important; the avatar that they can talk about. It doesn't have to be a blog post necessarily, but content. So ultimately, if we take a step back, that's a mixture of offers and value add stuff in one way, shape, or form. And they all sort of cross over it's like a then diagram you can make a content message and offer message and so it's kind of a hybrid, but you're still in that context leading with value and you're offering something for sale but the main point of that isn't an offer or a product. It's you're telling a story around some angle or narrative. So I think the right way to start is to; what we often do is group what things can we talk about from an offer perspective that apply to our brand, our avatar, same thing for trust builder, same thing for content ideas and put all those on paper as wild or crazy or simple or sophisticated as you think those answers or your ideas are. Get them all there and then it's a lot easier to cut things or group them together once everything's sort of out of your brain and onto the piece of paper. That's oftentimes the first step that I take and I recommend people take because that way it's a lot easier to see it. Kind of like akin to Minority Report. Mark: Throwback there to an old Tom Cruise movie for anyone that hasn't seen it. Don't watch it. Actually, it's an okay movie. Well, let's try to actually break this down into an example here because a lot of theory here as far as this. And what I've often found when we talk about marketing, whether it be e-mail marketing or any other type when we start talking about segmenting; it sounds great in theory, right? The idea that, hey, you want to segment your audience, you want to understand and kind of meet them where they're at and like, yeah, that's great and then you sit down and you do it. So how do I know where my audience is at? How do I know what they want to hear from content? And how do I move from that content to the offer? So let's make-believe a brand, we got a pet business here. It sells dog collars; custom dog collars, let's say with nice little chains around the neck or something like that, I don't know. We'll just say a pet brand we don't have to get that specific. You talked about breaking up into these three different levels. I mean, how would we do this with a B2C sort of brand for a hobby niche or a passion just like pets? What are some things to look at there? Phillip: So I'm talking through the lens of campaigns, not flows, just to be clear. And so through this sort of pet leash or pet brand that you mentioned, it's like, okay, what are some offers that we could talk about around the product? So there's obviously discounting, there's maybe product releases, back in stocks. There's a few ideas. There's design inspiration, why they built this product this way. That could also be kind of like a trust builder sort of thing. And again, reviews, even just pictures of dogs wearing your collar. Pet owners love that type of stuff and so that goes a long way. Again, this could also be content or slash trust builder. But I know it's hard to stay organized talking about this and through the lens of the people that are listening now, this is all over the place. But like pictures of other dogs wearing the collars, that could be used in all three of these categories; offer, trust builder, or even a content idea. So the way that I look at it, Mark, is you have these three overarching categories. In a month there is four weeks that you're going to be communicating campaigns to folks. And not to get too into the weeds on segmentation, but let's say you're going to send five campaigns throughout the course of the month. So one a week plus some sort of like wildcard campaign based on whatever's happening in the calendar or in the world that you could sort of ride the coattails of in any given month. So I would say two of those should be offer related e-mails. Two of those or three should be content or value-added. To make it simple it's something that people can sort of sink their teeth into. Like, okay, now I have a clear go forward in terms of what I should be doing each week. Mark: Yeah, you don't want to get into the weeds with segmentation. We're going to do that in a bit. But first, I want to know, does this change when you are going B2B or B2C? Phillip: The only thing that changes when I go B2B is it depends; like what's the underlying product that's being sold and what's the sales cycle and how is that product consumed? So if you're selling cloud hosting solutions for law firms, which I've done before… Mark: That's exciting. I fell asleep while you were saying that by the way but I'm awake. Phillip: So the sales cycle for that is long and they don't really repurchase it. They're repurchasing services from whoever installed the cloud hosting stuff for them. And so for them, one a week might be a little bit too aggressive. It might be a bi-weekly or monthly thing, but I think to answer your question, it's all circumstantial based on the underlying business and what they sell and how it's consumed. And so there's not a hard and fast rule that you have to send once a week even for e-com necessarily. It's what applies for one business won't necessarily apply to the other and I think a lot of people get sort of tripped up on that where they seek advice online and they think they have to do it that way. But it's not necessarily best suited for them or their or their leads or customers. Mark: Yeah, you do consulting for this, right? This is part of what you do. Phillip: Yeah. Mark: Okay, so let's say a new client is coming to you. And I want to just talk about the average client avatar that you have here, like the average client coming in. What do you often see with people's e-mail setups when they first come to you? Assuming that they have something set up what is kind of the most common approach they take? And then the follow up to that's going to be what do you do next once you see that and what are the steps to try and get it in shape? Phillip: Yeah, so what I often see most is there's no strategy like it's just sort of thrown together piecemeal and they send when they send. And therefore they don't know what they're doing with campaigns. There's no plan and there's no measurement because you can't track what you don't measure. So that's big mistake number one. The other thing that I see is people that do use flows; again, this is through the lens of e-com especially, more often than not they kind of just use like the templates that are given to them by whatever ESP they're using so it's like they put forth the least amount of effort just to have something there to cross it off the list. And oftentimes they do this because people don't realize the potential to e-mail has for their business and so because of their; what's the word I want, lack of experience sort of in this channel, they think that if they get 2%, 3%, or 4% a month from e-mail they think that's; their outlook is, oh, we're doing okay. I'm happy with it. Not knowing they should be doing at a minimum 30. Mark: 30% what? Phillip: Of revenue per month attributed to e-mail. Mark: That's a high percent. Okay. Phillip: So without a solid strategy, I would say it's like building a house on quicksand and if you do that, it's not going to be around very long. And so what they do is oftentimes there's no strategy. They do a little bit here and there, and they're quite happy with the results because they don't know any better. But they're also inclined to say e-mail doesn't work for my business. But it's not because the channel is inherently bad, it's because there's no strategy in place to make it successful. Mark: Right, that makes sense. So what's next for you then after you see this? They don't have a strategy in place. Is the strategy that you start putting together just what you were talking about; this kind of planning out the next month and these three different types of e-mails that you would send out or how do you go about dissecting that that strategy and building something for them? I mean talking flows, let's just make a quick point of clarification. Flows would be like automations, there's e-mail sequences, there's a lot of different names for these, but it's e-mails that are sending based off various triggers in sequence. Is that right? Phillip: Correct. So when I'm sort of looking at an account and I'm diagnosing what's currently happening, what are the holes in their funnel, if you will, or what are the pitfalls within an e-mail and how can they improve as fast as possible to start making; squeezing more juice out of this lemon? I look first at how are leads being captured on-site? Traffic is coming from paid social, organic social, TikTok, or SEO, whatever the traffic sources are. But they're coming in. Most people don't buy. So how effectively are leads being captured so that you can communicate with them? Most people don't track these at all. And just for those listening on the low end, anything that you're doing on-site with, like a pop-up, for example, should be converting at minimum 5%. We always sort of measure; our goal is to get to 10% conversion rate. So impression to conversion is 10% and if it converts to 10% percent I'm not touching it. It's like I found the unicorn. I just let it ride until it starts to diminish; the performance starts to diminish. But most people don't even know how the pop-up is performing from a lead gen perspective. So that's the first thing we look for. Second thing is in parallel, what's happening with campaigns is they're sort of a strategy or a framework in place for communicating with the audience, period. More often than not it's no. If they do have a strategy in place, it's like, well, how is it performing? How are they using segmentation to at least be sort of more precise with their messaging, making sure that it has audience message fit to move the metrics that they want to move. And parallel to that on the flow side, again, as you mentioned, Mark, these flows their purpose is to nurture people throughout the customer lifecycle based on their behaviors, attributes, or lack thereof. So if someone comes in and gives their e-mail; they come from paid social, they give their e-mail, they don't buy, you put them through a series of messaging that starts to evangelize them. They learn what's important to you, form some sort of a connection, a deeper one, than you had when they got there in the first place. And so these flows, by and large, there's four, I would say, critical or key flows that any business needs first before they start adding a bunch of sexy stuff afterwards; that being the welcome flow, like when you start to sort of indoctrinate or evangelize folks, browse abandoned flow, so someone's been opted in, they're shopping around, but they don't take an action to add to Cart, abandoned cart flow, which there's a lot of people that add to cart and never buy. So there's just low hanging fruit there. And then the other one that I think is the most important to have at the outset is first time customer. And so at this point, the reason I think that's so important, Mark, is getting someone to buy the first time is one of the hardest things in the world. But once they've converted they're five times more likely to buy a second time than a new person is to buy a first time. So this is really our first opportunity to start to make an even deeper connection with someone that's converted once and to communicate our values and what lies ahead for them when they receive their product in the mail, so on and so forth, so that we can start to then be in a place to position something else for them to buy at some point down the road based on what makes sense for the underlying business and what they sell, obviously. And so usually when I'm a buyer, those are all the things that I look at like is the core infrastructure of flows in place yes or no? If it is okay, is it performing well or are there holes in it that should be improved before moving on to something and moving on to kind of more sophisticated flows? Mark: I got it. Phillip: I know that's a mouthful but is that helpful? Mark: No, that was great. I mean I purposely was just not talking because I was soaking up a lot of what you were saying here. With flows a couple of just practical application issues here that I want to go over, one is do you recommend interspersing campaigns with flows and if not, how do you work in holiday specials and stuff like that? And my follow up to that is going to be how do you do this without interrupting things? For example, I've seen this flow set up before where you get the introductory e-mail, and then the next week you get another e-mail that's kind of more trust building, and then week three you have something that's sent out that's more of a promotion e-mail. And this is going to be everybody's experience when they become a new customer, right? They're going to have this sort of experience. Their clock starts the day they buy or the day that you capture them as lead depending where their starting point is. Do you recommend using campaigns as well and how do you not have competing offers or campaigns disrupting that flow? Phillip: So I think, quite honestly, I don't worry too much about cannibalizing flows with campaigns or campaigns with flows. Most businesses aren't to the point where they're that sophisticated from a marketing perspective, where there's that much going on, where it's going to hurt them to have a campaign sent and someone also receive a flow. So I think a lot of times they start; it's an outlier and people worry about it and it takes up time, energy, and ultimately it becomes a barrier for them ultimately taking action. So then what happens is they get into the weeds thinking about it and like oh, they end up not doing it because they're worried about somehow buyer implications that might happen if they were to do this. And they don't do anything, which is worse than just doing both. So I think it's a lot easier to keep it simple. But again, this is one of those things where it all depends on the underlying business and what they sell and how they communicate and all of these things. But to answer your question, I don't worry too much about if someone's enrolled in a flow sending a campaign. But what I will do depends on the ESP that's being used. But I'll talk through the lens of Klaviyo because that's where I spend most of my time. If someone is in abandoned cart flow, which is very high leverage flow and they're close to converting. And I also have campaigns going out that generally disperse; these people that are in the abandoned cart would also get this campaign. If I'm hypersensitive to it, or I want to make sure that people enrolled in flows don't want to see this particular; let's just say it's a deep discount, I'll just suppress that segment or anyone that received an abandoned cart e-mail in the last 16 hours from getting this campaign. So it's like an easy sort of fix but if you don't have to go write it all out on a whiteboard and see where all the dependencies arcs is it just becomes too confusing. It's just easier not to do it if you're going to go about it that way. Mark: Sure, and you don't think people are paying enough attention anyways to; not paying enough attention but you're not to worried about cannibalizing and having one interrupt the other not as problems. Phillip: Not really. A lot of what happens to is we have like our own world view, our own biases when we're thinking about stuff as the business owner market or whatever like I don't like this or I'm worried about that. But at the end of the day, to answer your question to this specific example, I'd rather look at the metrics of the e-mail to tell me what's working or what's not working or what I'm doing wrong or right. So, for example, if I just let it ride, people get flows, people get campaigns, and I start to see there's an uptick in spam complaints then that tells me, okay, I need to pull back a little on the aggressiveness of the campaigns. That's the first place I would look. But I'd rather know in black and white than me, just come up with something, not know what the upside or downside, but then I don't do it. But I also don't know how it affects my business in a positive or negative way. Mark: I got it. What's a good opening, in your opinion? Phillip: That's a loaded question because there's so many factors but what I would shoot for, at a minimum, I would say 25%. Mark: That'll be great. I mean, again, it's a loaded question and it's difficult. Every business is going to be a little bit different. If you're not at that, let's say that somebody is listening and they are 15% right now or 12½% or something like that, which I think is kind of common, depending on how long and how old your listing is. Lists in my experience tend to get old and sometimes get a little bit tired, especially with the older people on there. What are ways that you can increase that open rate and is it something that they should really be worrying about as well, in your opinion? Phillip: I think it comes down to a lot of the underlying business, but also like what do they care about most? From my perspective, revenue is the most important thing. The audience is important. I don't want to blow up a list and degrade the engagement metrics in favor of revenue because ultimately revenue is just a lag indicator of the engagement metrics anyways. So that's going to start to diminish over time if that's the approach that you take. And so to answer your question, if the open rate is 15%, I would look at how old is the audience to your point, how long have they been around for, what other behaviors or actions have they taken since they've been on the list that would tell me that they are interested in receiving more messaging from me. Sometimes I do this, too and you probably do also but I subscribe to lists. I open their e-mails. I don't necessarily consume them, but I don't want to unsubscribe because; this is e-commerce but I don't want to unsubscribe because there might be something I want to see in the future so I stay on but I also am not really engaged. So I think that on the one hand it's looking at kind of the age of the audience and are people engaged with your site overall? Like when was the last time this cohort of people has even been on your website? At some point, this is one thing that a lot of people don't think about is like, how do I start to clean my list or my audience or where do I draw the line in the sand to determine these folks who want to be here, these folks don't, and come up with a strategy to either ask them finally, do you want to stay or just suppress them or remove them altogether? But to get the open rate up, that's one place I would look. Also, if it's a new, relatively new audience, and your open rate is only 15% what that tells me is there's misalignment between the message and the audience. So there might be a bad resource or another example that a lot of people do these days in e-commerce is they run giveaways, but give away enrollees aren't necessarily the best subscribers because they're not there because they want to hear from you. They're there because they wanted something for free. And that has its own sort of implications and how do you deal with that but from my experience, the list that I see that are at 12%, 15%, there's a combination of not the best audience, not the best message for that audience, and also an audience that's probably decaying because the strategy for e-mail isn't buttoned up and so the audience doesn't know what to expect. Therefore, they're relatively unengaged. Mark: Yeah, let's close out with this question here, because we're getting up against the clock here on our time. What are some key metrics that you do look at with your list? Obviously revenue, and obviously open rate to an extent as well, depending on some other circumstances. What should people be looking at? If there's going to be one thing that somebody is going to look at as soon as they stop listening to this podcast and leave in a rating on iTunes because I know everybody does that; a cheap plug there. What is one thing they should go over into their ESP and take a look at to say, am I doing well here? Phillip: Okay, so I can rattle off a bunch if that's helpful. Mark: Please, yeah. Phillip: But I think starting with revenue at the top just to be able to assess overall performance of e-mail as it applies to revenue for your business is just look at what is the revenue contribution like from Klaviyo, for example, the last 30 days, 90 days and then breaking it up. What did flows contribute to that? What campaigns contribute? That'll give you a really good idea in terms of the heartbeat of the performance of e-mail overall. Like I said, I would strive for 30% so if that's at 6% there's a lot of room for improvement. If they're at 25% they're still upside but again, I don't like to quote higher than 30 because there's things about businesses. But let's just say you still have room to improve, but obviously not as much as the folks at six. So that's what I would look at first. On the campaign side, I look at open and click. I look at click to open ratio, which really tells me of the people that open how engaging was this message for them? Did it resonate with the audience? I'll look at revenue on a dollar perspective; dollar amount, and then also the percentage of the people that received the message that bought just so I can see kind of a take rate and placed order from this particular campaign. Mark: I got it. That's great. Anything else that you'd like to add and if people had questions or wanted to bounce some stuff off of you regarding e-mail marketing, where can they find you? Phillip: I don't have anything to add other than just think about adding e-mail to your marketing mix if it's not something that's a focus right now, that's all. Mark: Can I double down on that? I mean, if you're going to buy a business, we talk often about doing an acquisition, finding places where business is weak, and bringing a strength to that. That's an easy way to get a fast return on your investment. If somebody is not doing e-mail marketing with their e-commerce, then that is an easy opportunity to add more revenue to a company, especially if the target is 30% revenue mix. I mean, that provides a nice metric to take a look at to see what is somebody doing right now and maybe where can we grow this company. I agree with you 100%, e-mail is the overlooked channel. One of the few areas where I keep harping on this is and frankly if I see a business; if I'm selling a business that has a good, solid e-mail list for somebody to optimize that, I typically give it a higher valuation because I don't worry about the algorithms changing like I do on Facebook or any other social media network or getting overly crowded. E-mail is going to continue to be a champion for a long time and I know that other marketers agree with this, especially some seasoned marketers. Where can people contact you if they have questions about this? Phillip: You can find me on Facebook, just Phillip Rivers with two L's or on my site on the contact us form or something like that. But my e-mail address is at phil@gotetra.co. Mark: Awesome. Phillip Rivers with two L's not one. Phillip: That's right. Not the quarterback either. Mark: Not the quarterback. You probably get asked all the time. Are you a Chargers fan or now Colts fan is it? Phillip: By coincidence when he got drafted I was going to school in San Diego and I also turned 21 at this time so I would always get double takes by the bouncers. Like who is this guy with his fake ID. Mark: You don't look like Philip Rivers. Phillip: And I'm only six feet. He's like 6'7. But I was a Chargers fan for a long time. I kind of like just don't have as much time to watch sports. But yeah, I'm a Chargers fan, but I always appreciate him just because he's my namesake. Mark: And there you go. And I'll tell you what, it gives you a higher open rate because when I saw that I have an e-mail from Philip Rivers, I'm like, sweet Philip Rivers is contacting me. Hey Phil, thank you so much for coming on the podcast. I really appreciate it. Phillip: Thanks for having me, Mark.

In our second Ask Us Anything, Tom and Michael bring on guest host, Mark Woodling to tackle listener submitted questions on buying from wholesalers, the difference between auction and foreclosure sites, preferences between umbrella policies and LLCs, tax liens, how Roofstock selects markets and more.    --- Transcript     Tom: Greetings and welcome to The Remote Real Estate Investor. And today's episode, we're doing another ask me anything. And on today's episode, we have myself, Tom Schneider. We also have one of our hosts, Michael. Michael, say hello.   Michael: Hey everybody, how's it going?   Tom: And we also have a guest host today with some special expertise in the auction world, as well as some experience on tax liens of wholesales and all that good stuff. So we have Mark with us today. Mark Woodling say hello.   Mark: Hey, thanks for having me on.   Tom: All right, let's do it.   Theme Song ♫   Tom: Welcome back. We have another ask me anything episode, super excited about it and let's jump right into it. So, as we mentioned before, with some of these questions that we saw, you know, they might not be in our wheelhouse, so we wanted to bring in experts and that's why we are fortunate to have Mark Woodling on today. So, Mark, do you want to give the 32nd kind of pitch on all the interesting stuff that you've done in the real estate space to give a little bit of background? Uh, you've been on an episode before, but maybe a brief reminder to folks who haven't listened to that episode.   Mark: Sure, sure. Thanks for having me on guys. I work as the director of local market growth for Roofstock. So really it's a unique role where I work on opening up new markets and how we can really bring new supply into those markets, but it's kind of a unique role. So having a unique background was really why they picked me for this cause I used to go around the country, traveling to tax lien, auctions. I would go and bid for a private equity firm around the country about 26 different States every single year. So a young buck out of college really had no limits, I guess you could say, but learning the real estate game, I've also worked at Fannie Mae in the recession. I was there in their auction group. So we're selling about 18,000 properties a year, just through auction in all 50 States in DC. And then after that worked at a company called Xome X-O-M-E and was their chief auctioneer and with selling glide, the Countrywide portfolio that was kind of leftover toxic asset group after the recession. So, you know, became licensed as an auctioneer in 27 different States and it was doing everything online. So have a bit of a marketplace background as well as just a ton of unique kind of distress real estate background.   Tom: Awesome. Love it. Well, well, let's jump right into it. So our first question we have came in from LinkedIn. This is from Dave and Dave asks, what's the best way to scale your portfolio in the smallest amount of time. And let's see, Michael, do you want to take the first pass at this one? Or do you want me to lead the way?   Michael: Yeah, I would say just get a bunch of money.   Tom: Honestly. The way that I was thinking about this question is kind of twofold. It's like if you have a bunch of money, that's a different answer, right? So if you have a lot of money already, like, okay, getting into portfolios, just buying portfolios outright, or, you know, building a fund with an actual like employment of like acquisition folks like that works really well, but let's go ahead and assume this question is if you don't have a money machine in your basement and you're just scaling and scrapping, what would be your feedback on the quickest way to scale in the shortest amount of time with the limitation on funds?   Michael: I think that there's going to be no quicker way to scale than by partnering with people that have what you don't have. And so if money is tight, you don't have the money go out and make a name for yourself as someone who can put deals together and acquire doors. And I would rather there's this very famous, I don't know how famous it is, but a lot of people say, you know, I'd rather have 50% of one deal than a 100% of no deals. And so if acquisition scaling is the name of the game, go find people that don't have the time or the knowhow or the ability to put deals together and bring them to those people who are looking to get into the real estate game and have the money to do so. That would be my advice. Mark, what do you think?   Mark: I think you're right in line where going to portfolio route really is the easiest way, because then again, you're dealing with one property manager in one city, you know, if you're spreading yourself too thin, you can buy a lot of properties in different markets, but then again, you're having to manage all these property managers and that takes a lot of time. It takes a lot of resources of your own. So I think if you're going to get right to it, you really need to focus on a concentrated area of figuring out diversity, maybe within one market or a few markets, and really figuring out, you know, how to leverage your time when you only have so much time.   Tom: My last little tidbit I'll add on this is the best way to scale your portfolio. My recommendation is really tapping into your, any appreciation and equity that you have in ramping up your leverage as much as possible. Now there's some downsides and risks. If values go the opposite way. And you're only planning on holding these a short period of time. There's some risks for getting under water where the loan is worth more than the property. But if you're trying to squeeze as much dollar as you can into scaling and building acquisitions, it would be basically getting the most leverage that you can. So every single dollar of equity you can have, you're using to scale scale scale. So excellent. Let's go on to the next question. And we have a shout out to Michael on this question, Michael, why don't you read this question?   Michael: This next question comes to us from Ricardo from Walnut Creek and Ricardo is a good buddy of mine. So the question is what's up Roofstock, shout out to my boy, Michael Albaum. This question has to do with working with wholesalers, from what I've seen, you can get some pretty spectacular deals with less competition, but it seems you assume much more risk as far as condition of the property, as well as constraints with financing. What has been your experience working with wholesalers? And what advice would you tell to a new investor who are the wholesalers and what do they do? How do they make money and how do you find them? So, Mark, do you want to take a stab at this one with your background?   Mark: Yeah, absolutely. I go to a lot of mastermind groups and you know, these mastermind groups are really for more advanced real estate investors and many of them are actually wholesalers, but they also and hold. And then, you know, they have their fix and flip models and so forth, but wholesaling could be a very lucrative business because when you put a property under contract, right, you're tying up the contract, that buyer who tied it up under contract is then going to sell their equitable interest, right. They're selling that contract and assigning it to someone else. So they really don't have a specific range of, you know, how much they can make and they don't need to be a real estate licensee. So anybody could be a wholesaler. Really so if you want to get to really who the wholesalers are and what they do, you need to go find guys that are doing this for a living. They go really find great properties that are going to be marketable to the masses. And they will tie up that property. They'll sit down, visit the property, take pictures, you know, run some after repair value type values.   And then they present it to the market as off market deals. So, you know, their job is really go out there when I call bird dog, right? They're the boots on the ground. They're spending a lot of money on marketing and then tying up these opportunities to then sell it without having have any risk or money down besides a small earnest money deposit. So it's not that they own the property ever. They only have it under contract and how they make money. So they'll say at closing, I'm going to make a certain amount of money or they can say, Hey, you're going to have to put $5,000 down and I'll give you my contract. And so they're going to make money one way or the other. And the thing is, you're never connected to the person actually selling the property at the beginning. So, you know, things go a different direction, you know, it can get kind of sticky.   So you really need to know who you're dealing with and really have some trust and not just chase after deals because the property may not be in great condition. And you may never even see the property before you tie it up under contract by how you find them. I'll just finish up on that. You know, the interesting part about that is you can go to Facebook and get on investment groups and say, Hey, I am a qualified buyer. I have cash rate of spend in a specific market. And here's my email address, put me on your buyer list. So you're kind of putting yourself out there and into the worldwide web a little bit and exposing yourself, but that's a great way just to get on these lists and see what kind of flow comes through. But again, these don't sit on the market for very long. So you really need to be able to act quickly in order to take advantage of those opportunities. But yeah, wholesaling's a wild West game. So, you know, proceed with caution.   Tom: Sure. I'm going to paraphrase a little bit. So at a super high level wholesalers, they're out looking for distressed or people need to sell right away. That's right. And they basically get it in contract this wholesaler, and then they sell that contract and never actually take ownership. Right. They almost, it's almost like an arbitrage position. Am I accurately depicting that?   Mark: Exactly. That's exactly the way to put it.   Tom: Awesome.   Michael: Tom, have you ever bought a wholesale deal, a deal from a wholesaler?   Tom: I have not. You know, I definitely have been approached to sell to wholesalers. Their marketing is relentless.   Michael: We buy homes for cash!   Tom: We buy ugly homes. Those guys are all the wholesaler ecosystem. And it's funny, the list of people that they're looking to potentially buy from. It's a kind of a rough list. They're like looking for death divorce, like whatever, kind of like quickly to sell. So, you know, as an investor, there's some potential to buy some off market deals from wholesalers, but you know, to Mark's point, you know, you got to still have a really good diligence process and know the deal. Yeah, no, your buy box. Awesome. All right. So this next question we have is from Andy Dobbs in New Jersey. So Andy asks, does Roofstock provide property management or do we need to find one ourselves? Mark, do you want to take the lead on this guy?   Mark: Sure. So Roofstock doesn't actually provide the property management, but we do guide you through the process of how to find really qualified property management companies. So we take a significant amount of time when we bring on what we call our preferred property managers, we certify them and vet them to make sure that they really do work well with outside investors. So, you know, being an investor from out of state, you do have a different level of expectation with property managers because you will never see that property. You, you may not even be able to drive by it, right? So they can really be your eyes and ears. So we establish that network. So that really transitions to investors, having higher levels of confidence. So we will always guide you in that direction and have great profiles on our website, but you are always free to manage with an outside vendor, but you know, these are always great vendors that we're dealing with on a massive scale. So we do see, you know, how they're acting around other investors and that's great data to make sure that we're always working with the best.   Tom: Yeah. And you know, I think it's great that Roofstock does this initial diligence, but I highly recommend as an investor doing that extra step and giving them a call and asking for some references and making that decision and you don't have to use one of Roofstock's property managers that has gone through this process. It's just available for you as a resource. And if you want to, you can self manage or you can find a different third party, property manager, you have options. It's just kind of giving you a step ahead in that process. Excellent. So this next question we have is from Steve in St. Louis. So Steve asks, so he's seen auction sites, auction.com, an example Xome where Mark used to work at are these sites like actual foreclosure sites and how do they different? What are considerations if I were to buy on one of these auction site, could I use financing? Is there contingencies? What are some of the unique risks? So Mark, this is right in your wheelhouse. So do you want to spiel for a little bit on some of these different auction platforms?   Mark: Absolutely. This is an area that I stumbled into my first job, right out of college back in 2001. So, you know, there there's a lot of different types of auctions in the sense of there's tax lien, auctions. There's an actual foreclosure auction, which is what most people will understand what the courthouse steps. And then there's also REO options that even retail auctions. So kind of walking through, you know, the foreclosure and the REO, meaning real estate owned. That means the property has already been foreclosed on when it's an REO, it's typically bank owned, but what's happened in the last, last real decade is that, you know, after the recession that banks were realizing that there was less inventory available. And there earlier on in the process of buyer can kind of get the edge to buy that property the quicker they can get it off their books.   So again, if a property has been foreclosed upon it, typically in certain States will go to the courthouse steps and you can buy it as a foreclosure. The actual auction is like the final step of the foreclosure process, but in this instance that it doesn't matter there. Then it would go back to the bank and then they can sell it with full ownership. So let's just go into, you know, the foreclosure aspect. If you want to go to the courthouse steps and buy, I mean, it's a great time to be able to buy, but typically you're buying sight unseen. So you really don't know what's on the other side of that door and you cannot use financing. So there may be some really creative ways to get financing, but you're going to need to pay for that property, either at the courthouse step with a cashier's check or you put a certain amount down and then pay the rest soon after.   So that part you're going to have to be really buttoned up for. And these are nowadays being conducted even by auction.com, Xome or Hubzu, which are actually at the courthouse steps and working as a third party to really replace the attorneys who are doing these foreclosure auctions before. So you may see like the full on auction going on, where there's a big tent, big TVs, you know, there's a level of organization that's happened in the last, I would say five, six years to really make those more friend link to anybody coming in from the outside so that they actually have customer service representatives there to answer questions. So if you're really curious about those, I always suggest go, it is fun. It is really exciting. And there may be multiple auctions, like I'm in Dallas. So in Texas, they have what they call super Tuesday and you go to the courthouse steps.   There could be four different companies out there doing four different auctions. So it's really something that you need to get comfortable with and ask a bunch of questions that you'll meet people there they're wholesaling, you'll meet people there they're buying for their own. And then you'll have major institutions that are there and they probably won't talk to you about their strategy. That's kind of holding the cards close to the vest, but I would just say coming from an auction background, the risks, that's really something that you need to understand your own risk appetite because there's online auction portals, where you could go in and bid on properties that may have either been foreclosed upon or are just about to get foreclosed upon. And they're trying to sell it before it goes to foreclosure. So if you are going to take the risk, really understand, you know, what kind of websites you can go to and dig in deep, because if it's going to foreclosure, there may be other liens, whether it's federal liens or just other kind of sticky liens that you may have to navigate through.   So you really need to be prepared for that. But most of the time at the foreclosure, you know, any other liens are wiped out. So study, study, study, understand your risk, understand buying sight unseen, you know, have numbers in mind, don't get caught up in the auction. Cause that's something a lot of people get caught up in because it's that active bidding. It's a lot of energy. That's what the auctioneers do. I come from that background. I only have done online, but I have watched and studied the live auctions and they are entertainers. They want to squeeze money out of you. So go in, know your numbers, understand your risk, understand your rehab, know your numbers, know your numbers, know your numbers, and then proceed with that strategy that you've been putting together.   Michael: Mark, I've got a question. Did I hear you right in saying that the banks might want to get these things at auction before the final step of foreclosure, but did I miss hear you?   Mark: Yeah, well the banks have a few different plays sometimes. So if they bring it to foreclosure auction, they get to set a bid and they are the ones that say here's the amount that I would be owed and that I would set as the reserve. And so if they're going to go in and they are there and somebody is going to bid on that property, they need to meet that certain amount. And if that amount is not met and they can foreclose at that point on the property and then bring it to sell any other way that they would want, they could put it into a retail platform like MLS, or they could bring it to another auction site and try the auction again, because typically these are properties in distress situations, but the bank's goal is typically to sell the property as early on in the process. So they don't need to do all of these asset management post foreclosure, which means they have to have staff. You know, they have a lot of costs to get the property cleaned up and presented and ready for market. So they typically want to dispose of that as early in the process. And some of them don't even let it go to foreclosure auction. They'll sell alone in a 90 day delinquency just to say, Hey, I'd rather sell this off to someone else rather than have to go through this longer timeline, even though they could potentially make more money. It just makes more sense to them to take the money and, you know, let somebody else take care of the risk.   Michael: Got it. Thanks.   Tom: All right. This next question, I think is a good one for Michael here. Gilbert, from LinkedIn asked, what parts of the team should in can be local and what doesn't really matter in your, in your own state, or just thinking about locations of that real estate team that you have, where they should sit.   Michael: Yeah, that's a great question, Gilbert. So I'll just share kind of how my team looks on a personal level. And so I've got property managers and agents and insurance agents local to the property out where the property is physically located and my CPA and my attorney are in California. And so that's kind of how I've set up shop. Now. I was chatting with an attorney, uh, excuse me, with a CPA. We had Joel Jensen on from Tax Sentry on the podcast a few episodes ago, and he's out in Utah and prepares returns in all 50 States for investors. And so I'm realizing now that you know, more and more of your team can likely be remote. I think having an attorney local to where you live in your state, because you're going to be subject to local laws. If you're setting up LLCs in your state, I think it's important to have an attorney locally, but it could also be beneficial to have a local attorney to where the property is since if you are going to get pulled into a lawsuit resulting from that property, the local laws to where the property are, are the ones that are going to be applicable. So understanding how to cover your bases in that state is I think important as well.   Tom: I think an interesting point you make is having the insurance agent be local to the property. I'd love your thoughts on that. It's just, you know, being able to squeeze out the best deal on insurance or   Michael: Yeah just having access to local markets, which isn't the case across the board. So for example, I work with a company in California that doesn't write that, that doesn't write insurance in the Midwest. And so the, a lot of the Midwest insurance agents just have access to different carriers and these carriers are gonna know the markets inside and out. There's a reason why the California insurance companies aren't participating in the Midwest because they don't know the market. And so very similar to having a local lender to the property. They can often be more creative because they know the market better allows them to be more competitive. So again, that's another part, a team member that I left off is lenders. So I have lenders local to the property in which the property is located. I also have lenders that work on the national level and I give them both a shot at it and whoever can come up with the best terms and financing usually gets the cake. So I think it's important. Your property manager obviously should be local. Your real estate agent, I think should also be local, pretty much everybody else. It could go either way. I think it's very beneficial to have local people to the, so at least you can ask those questions as a comparison to the folks that you have locally to where you live.   Tom: That makes sense. You know, one of the markets that Roofstock operates in, in Florida and for properties that go through our certification process, we come up with an insurance quote that is an insurance quote. That will be, that is bindable, right? That a company is willing to agree to. But oftentimes we found that Florida, the national provider that we use is rates are a little bit higher than some of the local ones. So I guess in markets work and be a little bit more tricky and there's more potential liability on the insurance side really worth going in and getting the local quotes. And even if it's not that tricky, I like that. That's a great point. This goes in very nicely to the next question that Corey from Austin is asking. So, Hey, Roofstock a long time listener. First time caller. I'm about to acquire my third SFR with you guys. Awesome. Congrats Corey. And I'm wondering when is hazard insurance enough versus getting an umbrella policy, a related question that we got from somebody else as well, a good umbrella policy help replace the LLC. And I think kind of the hardest question is, you know, at what point do you start kind of bundling properties into umbrella versus like individual? So Michael this is right in your wheelhouse. What are your thoughts on this?   Michael: Yeah, I would say Corey again. Great question. We just recorded a podcast with actually my California attorney and we asked this exact question. So I would say, definitely give that episode of listen. That episode should be released in about two weeks or so, but so again, I'll just share kind of my personal anecdote. When I first started investing in single family homes, there was a couple thousand dollars in cashflow a year coming off each property and to have an LLC in California, it costs $800 a year just simply to have it. So that expense wasn't justified given the amount of cashflow these properties were generating. So I bought three properties prior to opening up an LLC and then put everything, wrapped, everything up, did a quick claim deed and transferred everything to the LLC. Now there's two very distinct camps. There's the pro LLC camp and the no LLC camp.   And the pro LLC camp argues that, Hey, if you can bundle everything, put it into a silo and segregate your assets from your personal stuff. That's really great. The no LOC camp argues that you can get that same type of coverage, that same type of asset protection with a high liability insurance policy and an umbrella policy. Who's right, will only be determined once there's a lawsuit. And so it's all comes down to your comfort level, your comfortability, you can get very high liability insurance limits on the underlying policy itself on each specific property policy itself. And couple that with an umbrella policy and umbrella policies are very inexpensive for the amount of coverage that you're getting. And so you've just got to decide for yourself, Hey, how much do I have personally? And how much am I going to be putting at risk with this investment property that will often lead you down the right decision path to what makes the most sense for you? But I think a lot of people really hung up on is, Oh, I need an LLC though, they're pro LLC camp. And they think I need an LLC before I ever start investing. I would say that soften backwards. And I would say focus on getting the property first, making sure that the property is a good fit, then look to see how that LLC plays into the picture. And what's important to note here on this long soapbox rant is that a lot of lenders won't lend to LLCs if they're purchasing single family homes. So have a conversation with your lender, have a conversation with an attorney about what's involved with setting up and maintaining an LLC in your state. And just look to understand what the implications are of having one and have not having one. And then look to make your decision because it's really not a one size fits all approach Michael out.   Tom: Well, you know that the benefit of the LLC is you can name it something. Cool. Did you name yourself a cool LLC Michael?   Michael: I named… no. I just, well, it's tough because a lot of the cool names are already taken. And so you've got to make sure that it's not a, you know, that name is available. All the cool ones like surfer dude23 was already taken. I was pretty bummed.   Tom: Sounds like your AOL chat bot.   Michael: That's how I got my inspiration from.   Tom: Awesome. Our next question is from front of the show, Bobby from Seattle asks, I've heard of investors making money, buying tax lien. What does this really mean? And is this a viable strategy for investing in real estate? Mark Mr. Tax lien? What are your thoughts there?   Mark: Yeah. Right up my alley. Gosh, you've teed up these questions very nicely. I'm going to sound like the smartest guy. Well, here's really what it comes down to a tax lien is, you know, a municipal tax lien means that you owe money to the government. And that's really what when tax liens are purchased, it's typically because somebody didn't pay their County taxes. Right. And what's interesting about tax liens is a tax lien is a municipal tax lien sits in front of any other liens, like a mortgage. Okay. Now, you know, there's a caveat to that. Like federal tax lien, that's a whole nother story, but most properties don't have a federal tax lien if they have delinquent County taxes. So really what happens is every single state has different state statutes of what they're supposed to do with delinquent taxes, right? Because the County needs money to pay for schools, to pay for police officers, to pay for so many more things.   So they need that money and they sell off those tax liens just like at the County courthouse. And the person that buys them basically is paying the delinquent taxes on behalf of that homeowner. And in turn, they're going to earn a percentage of interest off of those tax liens. And so when you buy a tax lien, you don't just buy the property, but you're sitting in that first position, even beyond a mortgage. So in the event, let's say the, what they call redemption period. It's typically one, two or three years when that redemption period goes by. And if you're still the tax lien holder, you have the right to foreclose on that property and own the property. So when you used to hear about all these old infomercials about buying properties for pennies on the dollar, I guess they would say that's what the tax lien buying was all about.   So what people don't realize is that probably 99.5% of the time, somebody has got to pay off those tax liens. And you can earn anywhere typically between eight to 24% on that investment. And so look at it as almost like buying a note where you're very passively investing in real estate, but the kicker is you may have the ability to foreclose on that property, take ownership and own that property for potentially pennies on the dollar. But again, those stories are the rare ones it's like watching Storage Wars and finding that, you know, old school Bronco sitting in, you know, if the storage unit, you're the guy that bought that yeah. That is made for TV, but it does have, so the tax lien industry, um, it can be safe in some ways, if you're doing your due diligence and really understanding, Hey, if this property takes two years to what they called redeem, or when that redemption period expires, is it going to be in good enough condition where they're still valuing the property? And if you feel comfortable, you can invest knowing they're going to probably get that interest. If not, you could potentially foreclose on that property and own it for very little.   Michael: So we should have a new segment on the show called confessional corner.   Tom: Yeah.   Michael: So I did this, I purchased tax liens, read a book and thought, Oh, this is easy. So I've purchased some tax liens out in Arizona. And the auction is while it was an online auction. And so I did some due diligence and understood, okay, what counties and, and Arizona, what States I should be looking at. So I decided on Arizona. And so I ended up purchasing a bunch. I ended up winning a bunch of these tax lanes and probably 80% of them paid us. And I was like, this is the easiest money I've ever made. This is so awesome. But so what I'm wondering Mark is, so the 20% that haven't paid off, this was probably three, three and a half years ago that I did this. The ones that haven't paid off, I think the redemption period in this County, Arizona is two years. What should I go do now? Because my understanding is that if I decide to for clothes in order to, for clothes, you need to pay off all the existing liens on the property. And so if someone had purchased the tax liens from four, five and six years prior to me, there are still these existing liens on the property that I would need to pay off in order to foreclose on the property. Is that accurate? Or do you know, what do I do now?   Mark: Yeah. So two things I would do. Number one, I would send somebody out there to look at the property. Number two, I would, you know, really understand what the timeline looks like and understand if it's a judicial or administrative state where, you know, when the foreclosure happens, you know, like let's say you can actually file to get the tax deed. You need to know, you know, what all those steps are. And sometimes it's an admitted straight of approach. It's just paperwork. But if you have to go to the judicial approach, it means that you would have to actually have to go before a judge in order to earn those rights and earn the tax deed, where did that person would lose the property? So for you, you just need to understand what positions are out there, where do you fit in? And so a title search would show what other liens are out there.   Or you could go to potentially, yeah, I would say run a simple type of report, but also understand the condition of the property because it's something that you're like, man, I do not want that property. I want to I'll even pay my own taxes off. You can get yourself out of that position. If you happen to be the front runner, I would say, or if you happen to be in a position kind of buried in the middle, you may end up getting paid off at somebody ends up foreclosing and taking ownership of that property plus the interest, of course. So I would just understand your position and then if you need to spend some money to go out there and take a look at the property, because there's a chance you may get it. I would know what you actually are holding the golden ticket to.   Michael: Sure, sure. And let's just say as a thought experiment that I'm in first position that they paid their taxes prior to when I purchased them. And, you know, I decided that I don't want to foreclose on the property. It's a mess. It's something I don't want to get involved in. Is there any risk to me having paid those taxes and kind of being that first position lien holder that I need to then do something or pay additional fees as a result of being that first lien holder?   Mark: Yeah. Every state's going to be so different. I mean, these are state statues written back in like, you know, this 17, 18, 19 hundreds, like early, like way back when, so..   Michael: Four score and seven years ago..   Mark: It doesn't hurt to pick up and review on your own and really get to know, Hey, if I am the first lien holder, you know, and there's no other mortgages and this thing is clear to go, you know, what do I need to do? Do I want this? So there's a lot of questions that come with it. But I mean, if 80% of paid off, you'll probably find as it gets closer to actually redeeming during that period where you could potentially take the property, most of the delinquencies get paid off. Right, right. At the very end. So it may turn into that 99% kind of statistic that I gave you before.   So there's a lot of who knows at this point, but as you get closer, I would definitely want to know more information about, you know, what the condition is, where you fit in, in the front runner position. And it could be something that you could be that a half a percentile that ends up really good. So you never know. I mean, the story I used to tell people was we ended up doing a tax lien in Hilton Head, South Carolina. And it was a condo sitting on the water. I think we had 35 into it with this private equity firm and the kids that they have just lost a father who owned the property. None of them wanted to pay the property taxes there. They were just had a fight. Well, it went all the way through the foreclosure process. We ended up with a tax deed to that property and had 50, I think it was 58,000 into a $700,000 property. It happens, but don't expect it to happen.   Michael: Right, right, right. I think there's a, I just had a couple aha moments. And the vast majority of them is that I had no idea what I was doing and for those listeners, but go get educated. Good. Don't do what I did.   Tom: What is it like, ready shoot aim?   Michael: That's right. That's right. Yeah. That was a good learning experience.   Tom: Gosh, love this tangent right here. All right. Well, we're going to jump into the question.   Michael: Great question. Bobby.   Tom: Bobby K the man. Last question we have from Jessica out of Boston is how does Roofstock choose their markets and a related question, why is restock not available in all States? Mark, do you wanna take a quick pass at this guy?   Mark: Yeah, absolutely. This is a kind of what I work on every day, just for those listeners out there. Uh, you, but Roofstock when we started, they really went to markets with a specific intention and that was around cashflow. Right? That's what most of our investors are always chasing is really quality cashflow. But what we're realizing is that, you know, appreciation may be a different play that other investors are more interested in and, or maybe even a blend of the two. So as Roofstock went to markets from like the st Louis is to the Cleveland's to Memphis and Birmingham, kind of the typical suspects, right? Those are just very highly demanded markets because investors require a certain amount of cash flow. You can get 10% plus cap rates in some of those markets. But what we're trying to do is really balance out different investment strategies for all the different, uh, investors out there. So when it comes to, how do we choose our markets? We want to go to markets where we feel the real estate economy is definitely going in the right direction. That not only from a macro level, but also from a micro level, that there's really healthy local markets where the risk and return really feels good from, you know, the areas compared to what you can make in that cashflow. But we're also looking at kind of expanding that logic where we're saying, Hey, let's just make sure we're going to markets where there's enough supply. Right. And there's some affordability because certain markets like here in Dallas, I mean, it's gotten really tight.   And so there's just not much supply that we can source because there's so many other exit strategies that I would say are more geared towards owner occupants, right? So fix and flippers are sourcing properties and going towards those exit strategies rather than investors, because they think they can get more money. So being a marketplace, we have to really grant it, we have to react to the market and let it ebb and flow where we're trying to be the guys in the middle where supply and demand meet. Right? So that just goes to the whole, whole logic of it. You know, we're not available in every state, you know, Washington state, Oregon, California. Those are very much appreciation markets and you're just not going to have the same level of demand from investors. So we're always trying to cater to our network, but please reach out, be vocal, tell us where you want to go. And it really is a conversation point between what Tom and I talk about all the time. And he gives me a lot of feedback where the demand is. So if there's enough demand, the markets make sense. Like we're about to open up and De Moines, Iowa in Richmond, Virginia. And we feel really good about these markets. They're kind of economics. Those are areas we want to go to, but we want to hear your feedback so we can open up in more States and cities like that.   Tom: Love it, love it. And opening up new markets all the time. Excellent guys. Well, thanks for the questions that everybody's been sending in and please continue to fire them in and don't be shy on how either advanced or how novice the question is. We're going to bring in the right folks. If we can't answer the questions ourselves, I think that's a fun thing about this network that we have. And Mark, thank you very much for joining us today.   Mark: Thanks for having me on always a pleasure.   Michael: No, the pleasure is ours.   Tom: The pleasure is ours. Storage Wars. That was such a great show. My favorite part is when they, that one guy Darren. Yeah. And he's like, Oh, that's a $3 bill or, Oh, that's a $50 bill or a nonsensical bill. $50 is a real bill, like a $45 bill. Anyways. Okay. Enough of that. All right.   Mark: I'll leave you with a good story if you wouldn't mind. So talking about storage Wars. So I had to go to auction school to become an auctioneer, right? And they actually have an auction school where you show up and for eight, you have to do 80 hours in Texas. And for two hours every day, we had to do tongue twisters and we had to do, you know, counting up, counting down five, 10, 15, 20, 25, 30 to 35, 40. What do you do around the rough and rugged rock, the ragged rascal ran, right. And do it all day long. And I'm just scratching my head like, teacher, I'm going to be an online option that really make a difference. So funny enough, but they always did a charity auction at the very end. And guess who walks into my auction school in Texas? It was Walt Cade of Texas storage Wars. I'm like, get out. This is, this is like living in a weird world, but the auctioneer world is really interesting, different real estate to watches, to tobacco and cattle. And there's all kinds of things you learn. But again, I kind of raised my hand, like I'm just here for the real estate online course. We don't have that. Get back to your tongue twisters Mark. So if you really want to talk about some funny stories, it's a great world. Auctioneer's are fun, but you know, there's kind of a new regime coming through more online auctions, which is a fun way for people to kind of get comfortable with, you know, buying from anywhere in the world. Very much like what Roofstock is doing with our marketplace. So yeah. Full of fun stories, but had to share that one.   Tom: Awesome.   Michael: So cool.   Michael: Alrighty, everybody. That was our episode for today. Thank you so much for listening in a big, big, big, thank you to Mark Woodling. Always a real pleasure to have him on as always. If you liked the episode, feel free to give us a rating or review, or even if you didn't like the episode. No, don't give us a rating review if you didn't like the episode, wherever you listen to your podcasts, we look forward to seeing you on the next one.   Tom: Happy investing.   Michael: Happy investing.    

On this episode of Quiet Light, David Newell talks about when a SaaS business earns a revenue-based multiplier. David is one of our colleagues who just wrote a guide outlining everything he knows about SaaS valuations. Tune in to hear his thoughts on how SaaS businesses have unique needs, the ideal scenario for revenue growth, and which valuation metrics to use when scaling.   Topics: Revenue-based multipliers. What happens when SaaS businesses scale. The ideal scenario for revenue growth. SaaS valuation metrics. Why there is a bias towards monthly plan revenue. Comparing scaling a business to dating. Takeaways from David's guide. Transcription: Joe: I understand you spoke with our colleague David Newell about when a SaaS business becomes a listed at a multiple of revenue instead of multiple of discretion earnings, how'd that go? Mark: Well, there's an interesting dynamic when it comes to SaaS businesses, right? E-commerce is pretty straightforward. We have some pretty good metrics that just show that vast majority of e-commerce businesses will be measured as a multiple of their SDE but SaaS businesses, especially on larger levels, we see transactions happen as a multiple of revenue even in some cases when you have a business that is not turning a profit or is currently EBIDTA zero or close to it. And so there's a big question out there, what are the criteria that allow you to apply a revenue multiplier versus an SDE multiplier to a SaaS business? Obviously, this makes a huge difference, right? I mean, if you're multiplying your revenue by five, that's going to be a much bigger number than multiply SDE by five, or four, or three, or whatever. So SaaS valuations can accelerate incredibly rapidly. I mean, it's breakneck sort of whiplash valuations that happen. So I talked to David; I sat down with David. He had just finished writing a 15,000-word guide that really picks apart everything he knows in SaaS valuations and that's a lot that he knows. And he goes into how do we first make this determination between a revenue-based multiplier versus an SDE multiplier? And then the second question, which is again equally sort of murky if you haven't been doing this as long as David has, is where do you then find the multiplier because the ranges are a bit broader than we see in other sectors. And so he goes over the approach he takes for it and then we started talking about some of the individual metrics as well, which are going to apply to all SaaS companies whether it be revenue based multiplier or SDE multiplier. If you are a geek when it comes to valuation talking this is the podcast for you. It's definitely meaty. We get into it pretty in-depth on this. But if you really enjoy this, take a look check out the guide that he wrote. It's now published. It's going to be available on our website. It's also available for PDF download. Share it. Discuss it. Reach out to David. Chris Guthrie would be another great person on our team to discuss these items with. He knows SaaS extremely well. And frankly, anybody on the team, we've all worked in this space ourselves but really, when it comes to our resident expert, we look to David first and foremost and part of it is because of the guide that he put together here. Joe: Let's go to it. Mark: Hey, David, thanks for coming on the podcast. I know you've done a couple of these before, right? David: I have, yeah. Mark: Well, cool. I'm glad to have you back on and I'm excited to have you on this week because you finally finished, and I shouldn't say finally because it wasn't even expected of you but you put together a very comprehensive guide on valuing a SaaS company. How long is it? David: It's a jargon. I think it's about 15,000 words. We shouldn't say that just in case that thwarts people from reading it. I think we're going to do a distilled down version of it. Mark: It's kind of like a mystery novel, how to value a SaaS guide. You know I wrote the ultimate guide to website value years ago when that was what we were really talking about is valuing websites and I think that was a 25,000-word guide. I started out thinking this should be something I can hammer out in a week and it turned out to not be a week. It was much longer than that. It took a while to put that together. And I know this took me a while to put together but the stuff in here is really an authoritative guide on the valuation principles behind a SaaS company. David: Yeah, it's a strange terrain this SaaS valuation conversation because unlike other business models that everybody's familiar with is not purely an earnings-driven model. It's not all about seller's discretionary earnings. And you see that so much in kind of public markets, they speak about SaaS businesses based on revenue multiples and then obviously in our kind of business brokerage landscape, you see it more around SDE multiples and so there's this kind of big confusion in this cross terrain between both buyers and sellers about what is my SaaS business worth and on the other side of the table is how much should I pay for it. And so there's a surprising amount of similarities in the valuation logic between both but what I wanted to point out was the crucial distinctions between them and why they're there to really help people understand that both buying and selling. Mark: Yeah, and I think this is an interesting conversation because we talk so much about valuations at Quiet Light Brokerage. And I've said in the course I put together on how to sell an online business for six, seven, or eight-figures I spent a lot of time on the valuation side and trying to dispel the myth that the valuation formula creates the value of the company as opposed to the valuation approaches and formulas and methodologies are really a predictive exercise more than anything else. And that really, when you boil it down into kind of a philosophical standpoint, it's really a measurement of expected return on investment for the buyer discounted by risk or mitigated by risk. And so you can have other valuation approaches that are completely valid. I know in the web hosting space, which is where I cut my teeth in the brokerage world, that was a revenue-based multiplier as well, because you had a lot of strategic sort of sales going on. It was typically 10 to 16 months of revenue was the average range that we were seeing so I'm interested to get into this. Because I know when I talked generally to people about valuations, I always have this asterisk of but SaaS companies are different and it's kind of a mystery box. So let's talk a little bit about that right there. We'll start with the revenue-based multipliers. Why are we using revenue with SaaS companies and are all SaaS companies going to be valued on their revenues as opposed to SDE? David: Yeah, that's a great question. You hit the nail on the head with what you said there which is that it comes all down to expected return on the asset. And I think the way to think about it is actually kind of in the life cycle of starting a SaaS business. If you imagine starting as many you do people SaaS businesses out of their bedroom; a lot of entrepreneurs see a problem, decide they didn't like it, wants to code a solution to it, put in their own money into it, then they might bring in a developer to start helping them out and they start putting their own money into start scaling it. They get friends as customers and sooner or later they are 10,000 in MRR or so forth and then they start to scale a little bit beyond that. And so initially you're in this period of scaling often with your own capital. And this is kind of a lot of the businesses that we see in the very early stages; kind of like homemades, bootstraps, sub million dollars in ARR businesses. They can remain focused for a large part on earnings and that's why they get they tend to craft some seller's discretionary earnings-based valuations. A lot of these SaaS businesses, for example, one doing 300,000 ARR might have about a hundred thousand in seller discretionary, slightly more multiple of that. Now, what happens? Typically a SaaS businesses look to scale particularly as they kind of arrive more towards a million in ARR and above is that typically what's the case is quite a lot more infrastructure is needed to be brought in to solve the biggest challenges of SaaS businesses which is churn. And that infrastructure is a lot of sort of customer success, it's a lot of additional development in terms of creating better onboarding, and it's putting a lot more sort of infrastructure around the business to really mature and allow it to scale from a small business into a much, much, much larger one, which can happen very quickly, arguably faster than any other business model. And so what happens it seems to me has been the case is that it has become acceptable and standard within the SaaS establishment to at this kind of sub million and arriving at a million in ARR level be able to say we're going to sacrifice our earnings in the near-term, in the short term in order to now chase absolute scalability in the business. And this is acceptable, more so in SaaS than any other kind of business, largely because we have a recurring revenue model with unit economics that are stable once you have churn in place that allow you to do that race up and scale and then cut back on that expense and immediately just be accruing very, very, very significant profitability in the business. And so the quid pro quo for you, reducing profitability of what was a relatively profitable small SaaS business to a now significantly unprofitable or flat profit business is that you'd have to start chasing revenue growth significantly. And so to your point, Mark, about having this kind of expected rate of return, buyers basically say we'll let you run to EBITDA or EBIDTA 5% margins in order that you're going to start sharing consistently 40% to 50% to 60% year over year growth or higher while still going between a million in ARR to five million in ARR, to 10 million in ARR, and 20 million in ARR and beyond. And so that is really the thinking behind why you get to a revenue-based multiple with businesses because the expectation is that eventually a SaaS business will mature and become extremely profitable. A great example of that is something like Salesforce which is now striking off enormous amounts of cash but for a long period of time before it wasn't. And so a lot of the businesses that you see come to market eventually even IPO still have this same kind of fundamentals and eventually, their hope is that they do become very profitable businesses. So it all kind of descends really back from that and I think that some of the question marks around valuation methodology is where is in this kind of hundred thousand in ARR to three million in ARR level which is, of course, where we do a lot of business and where a lot of other market participants are; people listening to this looking to buy and to sell often are is figuring out where are you in a lifecycle, the life journey of the SaaS business, like what is your aim and what are you trying to achieve? And that really informs what the valuation method is for the business. Mark: So as you said there, and there's a lot in there to unpack but the tradeoff or the requirement if you're going to be running at a low EBIDTA or a low profitability or even zero profitability, and I have seen this, by the way, we get these messages from private equity all the time saying we are actively seeking out X, Y, and Z with these characteristics. And I've talked to private equity that is looking for SaaS companies where they said we are not concerned about the EBITDA, we're not concerned about the profitability, but the expectation there is revenue growth at that. I would imagine, though, that there's got to be some other elements in there as well that; let me back up a little bit, we have the revenue growth, but I'd mentioned the expense structure needs to also look at this as being a growth-driven company where the expenses are being driven mainly towards growth. I can't imagine a scenario where you wouldn't necessarily see that but what happens if the growth is minor? So you have a company who is maybe a 500k ARR and they're growing and they're trying. So they're investing heavily in advertising, but their cost of acquisition has skyrocketed. Or they've invested in a large sales team to do onboarding, but they just have not figured that out yet. At what point can we start to say it's not working or is that a solution or somebody just needs to wait in order to sell the company, how do we start to make that discernment in that kind of squishy middle territory where we don't have the clear revenue growth, but we still have the low EBITA? David: 100%. That's what we call the struggle and there's a lot of SaaS businesses in that exact pocket. And the decision for the management team really is what do we do to grow or do we park this and move on to something else? And the former can involve all kinds of different decisions. Obviously making pivots within the business, like changing terms of software products, customer base, also looking to kind of raised capital, the venture capital or angel just to try and get into different channels or find capital to source it from there. And you more or less, Mark, have to push towards that fabled grace, because that's the only available kind of exit option to you from there. Or you go the other way, which is; and you see there is a lot of businesses we're promising and then they haven't reached the cap in the market or a competitor outcompetes them or management loses interest or whatever, and they start to trail off, go flat, and you end up with what's called zombie SaaS which is a not particularly affectionate side while it's probably still a lovely business. And then the option there is more or less you have to cut back all of that operating expenditure in the business in order to restore some earnings and try and exit at typically a much lower multiple of revenue still, but considerably lower that looks more like a normal of an EBITDA type sale and just cut your strings basically and move on to the next thing. And so many businesses, of course, we all know how hard it is to grow and scale any kind of business are in that struggle and trying to figure out that option. Mark: Yeah, I love going through with people the basic framework that we created of the four pillars of value. You want to mitigate your risk, you want to have good growth, make it easily transferable, and have great documentation. Well, that's second pillar of growth is so easy for us to say, right? You want to have great growth and everyone's thinking, well, yeah, of course, I do. It's a lot harder to do. Let's talk about the ideal scenario here. You have a company that is growing strongly and let's say that you're in that one to three million ARR range and we're seeing that ARR grow rapidly so we can apply a multiple to the revenue here. I know what people are thinking, what sort of multiples can we apply to them? David: Yeah, so this is when we flip into a slightly different structure but with very similar dynamics to how we think about business value at Quiet Light and the way we model multiples but the difference, the departure is the starting point. So whereas we in the private buyer side particularly the earnings businesses, we draw upon the several hundred previous transactions we have. We know where the average multiples are for businesses with certain characteristics in nature and we can call on that data set. To start with the revenue multiples side of things you have to again go find the data set and the data set to pull on is generally the public market. And so the best thing to do to start with is actually go look at like an index of cloud companies; SaaS companies that are publicly traded on Nasdaq and so forth, and use that as the benchmark for that kind of revenue multiple that normal publicly traded SaaS businesses are trading at. And that could be something like 10 times, 11 times forward multiple around probably what it is right now. And then, of course, naturally, that's a multiple that's appropriate for a large publicly listed company so already you're saying like, well, that's not really relevant to my smaller private business. So the first thing you have to do is make a public to private discount on that and so there are varying schools of thoughts around what that kind of discount is. It can be somewhat arbitrary. There's a lot of private equity companies out there that speak about what they do, and they have portfolios of private companies that they pour. The received wisdom is it's anywhere between 25% to 30% immediate haircut for being a private company. So you can come down off that 11 to something like eight, for example, and you have what feels like a large private company SaaS business should be trading at. And then we get more into the territory of what we do Quiet Light and what you're just talking about, Mark, in terms of the different four pillars of the business and you start to adjust based upon where this business is aware of the SaaS business we're talking about is relatively strong or weak compared to businesses of its size and businesses of its nature. So three million in ARR is a great example, you'd actually expect on average businesses at that level and this kind of valuation exercise to be growing probably at something like 50% to 60% year over year because it gets harder and harder to grow faster and faster, obviously, with scale. And so if it was much larger, say like a hundred million, you'd actually reduce it and say the average business at a hundred million ARR would be growing at about 30% year over year. And so already you need to compare what's the revenue growth rate of this business versus the paired average for other similar-sized businesses. And it's again a case of going through all of these different classic criteria that we normally do; revenue growth, churn, lifetime value, diversification, all of this classic operational metrics that go back in kind of normal business logic land and just comparing where does it look like versus businesses of its size and businesses in its same kind of customer segment of category and that begins the adjustment process down until you get to a multiple and that starts to make sense. Mark: Yeah, so I want to touch real quick on just the size of a business in general because I know we experience this across the board with all different types of businesses. And yeah, my alarm bells went off, and let's just start with the publicly traded companies. Because I can hear all of my e-commerce clients saying, well, fantastic; I don't know what Amazon is trading at right now as a multiple of revenue, but I'm sure it's a ridiculous number. David: Yes. Mark: But Amazon is also the largest company in America at this point. Actually, I don't know that for sure. I'm sure they're up there, though. They're top five. So sort of with the publicly traded markets is a starting point but there's a lot of discussions that are going to happen in place. So if we're looking at a publicly-traded company like a Salesforce, as we scale down in terms of revenue down into the seven-figure territory from the nine-figure, eight-figure, seven-figure, the discounts do come in pretty rapidly. Why is it that larger companies earn a higher multiple of either revenue or earnings, in your opinion? David: Well, there's a perception of greater stability with greater size. Additionally, just generally speaking if you were to say a business growing 30% year over year at a hundred million in ARR versus one at 10 million in ARR it's more oppressive to be doing a more valuable; you're creating more value at a hundred million than you are at 10 million and therefore, it's commensurate with so the business is worth a greater multiple. It's much, much, much harder to do so. And you see that very, very clearly if you just go and look at a size-adjusted scale in public markets, at businesses at scale that are growing very quickly, they're the ones that are trading at the highest value and that's why Amazon's ballistic valuation. But it's because it's delivering unbelievable revenue growth for business scale. It's already absolutely huge in size so it is very, very, very impressive. But you're right, you need to start discounting down quite significantly. But it's tempting to be like we're starting so kind of pie in the sky with these public numbers and public multiples like wipe off of there. They are the heartbeat of overall like macro SaaS macro sentiment and like it or not, that is where a lot of sentiment; investment sentiment, think about it like kind of customer confidence. It's kind of like investor confidence really does benchmark from public market tech valuations. Mark: I mean, it makes sense, right? Everything that we're talking about here, any sort of valuation is really a market-based valuation. Anytime we're valuing any asset, whether it be a business or apples, it's based off of market dynamics here. So that part makes sense. I want to dig into the business metrics though that we start to get into in more. The regular as we are characterizing it, the regular valuation metrics that we look at. Within the SaaS world, these are going to be somewhat different anyway from, say, an e-commerce business, right? On an e-commerce business, we're going to be looking at gross profit margins, we're looking at growth, we're taking a look at some qualitative aspects of the products that they're selling such as the intellectual property protections and everything else. What sort of business metrics are we going to look at for a SaaS company, regardless of whether we're looking at it from an SDE valuation viewpoint or a revenue multiplier viewpoint; what are some of the other metrics we want to look at? David: Yeah, it's a great question because it's both actually identical and this is where the commonalities between the two methods are huge which is that it's all very well talking about in a revenue growth way of SaaS businesses but you have to look at what's the quality of that growth. And the key barometer of quality of revenue growth in any SaaS business is churn, average revenue per user, lifetime value, a monthly versus annual plan split, and the gross margins on there. So clearly if you just take the first one, because churn is such a focal point for everybody, if you have a business with an outsized level of churn versus its size and category, then that's a major red flag in terms of the business. You see that quite a lot in terms of Shopify or Amazon plugin type add-ons, where largely because of the type of end-user which on Amazon can turn over quite quickly buyers and sellers come and go there. Those tools can kind of have quite high churn rates. And so it's an interesting one because they often have very fast growth rates in general, like a very sharp revenue growth rate because Amazon is an absolutely enormous space to be in. There's tons of new sellers turning up, signing up for new tools that they're churning away after three to four months. So you have to immediately look at can I appraise this tool that's going 100% year over year growth versus the 15% monthly churn? Because if it stops growing even just a little bit within 12 months, it's going to churn out almost the entire customer base and cut off all the growth. And so you have to look at those two. They're absolutely symbiotic. And it's the same with seller's discretionary earnings type businesses because ultimately that impacts the bottom line as it is with revenue multiple. And then the interesting one is looking at monthly versus annual plan split. Naturally, most SaaS businesses are an amalgamation of both and it's definitely favored and preferred that there's a much stronger bias towards monthly planned revenue if that makes up sort of 85% plus of your overall business. That's perceived as a very good thing. If annual is a bigger proportion of that, that's something of a concern. And that's really just because what you want in SaaS is predictability. That's what everybody loves with recurring revenue. Monthly plan revenue is more predictable than annual planned revenue, which seems psychologically counterintuitive, but it's not when you consider that every single month customers have the opportunity to churn away, whereas with annual planned revenue that only happens once every 12 months. So you have no idea what's going to happen in 12 months' time to a large cohort of any bias. Their whole lives could have changed quite a lot so the data set there is less rich and so it makes it more opaque for bias. And so they actually value that pop business generally lower than monthly occurring revenue. So they are just a few of a couple of the kind of revenue quality metrics that should be really important for both buyers and sellers. Mark: I want to talk about ARP but before that, I'm going to talk about churn and a concept of it. I don't know if you would take this into account an evaluation of an Amazon SaaS business, for example, that is supporting sellers. As you know, David, I have an interest in a dating website online and there's a concept in dating world called the good churn. It's somebody canceling their account because they met somebody. And within the dating world, you want to have good churn even though it does impede growth. I know with the site that I have interest in, the business I'm interested in, we have monthly turnover on 23%, which is massively huge and it does impede growth, but we want to have 23% be made up as much of good churn as possible because when people meet somebody they then talk to each other. So within the Amazon space, do we take that into account or with any sort of support service where you're getting somebody off the ground and they outgrow your product because it served its need, right? That's really the dynamic here. If your SaaS business serves a need that your users no longer need it that would be good churn. Would that be taken into account with that churn number very much or are we really looking more just the throttling on growth and the fact that you're chasing ever-increasing growth numbers with high churn? David: Yeah, it's hardly the latter, because if you think about it, I mean, SaaS valuations, in general, are higher than any other business model. And the reason for that is because for every single unit of revenue you're bringing in you can predict how long it's going to stay with you for and you can't with any other business. And so helping people out for a shorter period of time, even if they're then canceling for good reasons while still brilliant from a customer success standpoint, isn't something that a buyer would attach a higher multiple to. So you kind of want to help people for the longest amount of time to create the most amount of value and that's why I like businesses with very high lifetime values and their churn are generally speaking, the most valuable type of SaaS businesses. So, yeah, you've got yourself a beautiful paradox there Mark with your site. I think in that situation, you just have to turn into a massive marketing spend then. You need to post those numbers all over your website and say people are gleefully canceling because of what we do. Mark: Well, you know it bleeds out into the other metrics, I think. And I wish I could say our 23% was good churn. It's not but it bleeds into be other numbers, right? Because if you have good churn where it trickles into is your cost of acquisition becomes effectively lower. So the more good churn you have, the lower your effective cost of acquisition compared to people that don't have as good of churn because you have more social proof. Now, it may not be a very clear or strong relation, it's more murky but let's talk about ARPU and also a lifetime value of a user. When we're looking at these metrics, how much does taking look at cohorts in terms of time play into that? Because I know Chuck sold a business a while ago, it wasn't directly SaaS. It was sort of SaaS-y in its makeup, which it was pretty much awash for the first 24 months in terms of lifetime value and cost of acquisition. But after that 24 month period, everything was profit on top of that. And I look at that and say that's fantastic. That's great. I get it. But from a buyer's standpoint, the cash requirements for a business like that, especially if you're growing rapidly, becomes a constraint to growth. You have to be able to fund a business with a 24 month period lead time. How much does a cohort analysis play into a valuation? And I would assume kind of the logical conclusion here is the shorter period of time to be able to get from your cost of acquisition to your revenue is more desirable. But is that something that you look at closely? David: Yeah, I mean, from the challenges with LTV in many monthly recurring revenue businesses, is it's moving around so much. I just sold a business just recently where the LTV posted up and profit well is going everywhere from 2,800 to $7,000 month to month. So try marketing a business with that level of variance. So to your point, Mark, you do have to look at cohort analysis, I think to go back and be like, what's the kind of longer-term trend in the business here? Like what's actually evolving because that business is a great example, the same phenomena you're talking about which for two years, more or less, didn't really make any money and then started to hockey stick. Not so much because the revenue growth was absolutely phenomenal it's just because the cost base no longer needed to go up anymore to substantiate it. They kind of refined the products enough, spent enough on development, finally figured out the marketing channels, stopped spending really a lot of both and then it just started to fly. And that is the case in point for so many SaaS businesses, which is that it's kind of like swimming into the dock a bit for an indefinite period of time until you do hear those unique economics that makes sense. And it just flies from that point in many cases, anyway. Mark: I think that the whole world of trying to value SaaS companies, especially in this murky range, is a fascinating exercise. When we do an e-commerce valuation, so much of it is cut and dry and I think part of that is just due to the volume that's out there. It's also the nature of these e-commerce businesses as you buy an asset and you turn it around and you're selling it so your profit becomes kind of immediate as opposed to the longer periods of baking and growth with the SaaS company for the long term, which makes it more of a complex exercise. So let's talk a little bit about the guide. 15,000 words, you talked a lot about this idea of moving over to the revenue-based multiplier. I would imagine that there are some examples. And we joked about this before we started recording, I haven't seen the guide yet and reviewed it so I'm going to be speaking a little bit and guessing. I'm assuming that you have some examples in here and other information. Tell us a little bit about what's in the guide and what people could take away from it. David: Yeah, so the guide really breaks down how to do the traditional SDE approach valuation and the revenue approach valuation, and most importantly, how to discern the difference between case studies where you should do one or the other. And I kind of put a four-part test in there which is really the size test. Is it or around or above the million dollars in ARR level? The next thing we look at is where's the revenue growth trending towards, is it showing these kind of fundamentals we're talking about 40% plus year over year growth? The next thing is looking at is this still a business that's kind of a single owner-operator in a relatively thin personnel business, or is it starting to staff up with customer success, starting to wrap around some significant infrastructure to enable it to start going from one to 10 million dollars? That's a really important kind of qualitative factor. And then the last one, of course, is churn, because in reality smaller apps, generally speaking, have higher churn rates. So you'd expect to be seeing kind of an over tuned 4% to 9% in monthly churn in immature let's say, and to the immature SaaS apps. And as you start to get up to this million in ARR level you'd like to see that really dropped below 4% monthly churn. That's the big thing, because churn, as every SaaS business more or less in the world will tell you is the hardest problem to solve for because it is the ultimate barometer of whether people think you're creating enough value to not want to churn out and cancel. And so the more value you're creating, the more helpful you are to people, the less they're going to churn. And that's ultimately what anybody wants to pay for in any business. And so it being the most difficult problem to solve for makes it the most valuable one for a buyer to want to buy. So the lower the churn, generally speaking, the higher the value of the business all else being the same. So those are some of the key distinction points. And then, of course, I'm aware that there's both sellers and buyers looking at it. It's really useful information for both sides to see. Buyers are looking to buy to grow up and scale, sellers are looking to increase the multiples, everybody wants to increase value so I put in a bunch of additional kind of growth value; what I call value-centric growth levers. And what I meant by that is like what essentially the top three things that you can do that will most dramatically impact the most part of the business right away beyond just getting more growth which, of course, always helps. But like specifically one of the things that we've seen over the years in Quiet Light selling businesses, one of the things that we know dramatically increase the multiples of businesses. So I shared some of those in the guide as well for both buyers and sellers to look at. Mark: So if we want to just be trite, we can say if you want to get a great valuation, grow your business or reduce the churn, right? David: Yeah. Mark: All right, the guide is going to be available on the website. We will include links, obviously, in the podcast. You're going to be seeing some emails from us about the guide. We'll also have a PDF downloadable version of the guide. And of course, if anybody has questions about the valuation of your SaaS company and where you fall or questions, I'm sure David would be more than happy to answer any questions about this as well. David: Absolutely. Mark: David@quietlightbrokerage.com. David, thanks for coming on and enlightening me a little bit on this. And it's a complex topic, its super interesting, though. You know, I've been doing this for 14 years now, and it's sort of refreshing to look at different types of companies, different approaches to the same problem, and seeing where we can get some variation. So this is absolutely fascinating to talk about it and I'm looking forward to reading it, which I should have access to it. I'll be reading it here soon. David: My pleasure. Mark: Thanks David.   Resources: David's Article About SaaS Valuation Quiet Light Podcast@quietlightbrokerage.com

As some freedom returns to society following COVID-19, don’t miss out on potential opportunities to implement property management growth strategies. Today’s guests are Mark and Anne Lackey from HireSmart Virtual Assistants (VAs). Mark and Anne are broker-owners that manage almost 200 doors in Atlanta. You’ll Learn... [03:47] Trends: Property management pivots and changes during economic downturns. [07:10] Hire Virtually: Save money, get better employees, and increase productivity. [08:22] Wake Up: Don’t resist remote work; realize office space may be unnecessary. [11:14] DIY vs. Professionally Managed: Ramp up sales/funnels to serve customers. [15:26] Problems are always opportunities to grow business by offering solutions. [21:11] Customer Service: Don’t disconnect. Focus/follow up for retention/satisfaction. [27:02] Professionalism: Set expectations. Don’t badmouth landlords via vendors. [28:29] BDM: Do you need a business development manager? [31:33] Time, Energy, and Effort: Resources required to rent properties to tenants. {32:28] Referrals grow businesses. No referrals represents customer care problem. [35:29] Gamechanger: Save time and money to get things done or do more yourself?. [38:30] Wrong Person, Role, Tool, Time, and Money: Hire based on owner’s needs. [40:57] Off-the-Shelf vs. Customization: How to hire and build teams takes time. [46:50] Remote Challenges: Communication, operations, and management problems. [48:22] Key Performance Indicators (KPIs): Get work done based on expectations. [50:15] Think, Invest, HireSmart: Know avatar to grow property management business. Tweetables Opportunities are available to make sales and buy, manage, and invest in more properties. You don’t have to have your employees in an office. You don’t even have to have an office anymore. Property managers are immune to guilt and the heroes of the rental industry. Referrals grow businesses. No referrals represent customer care problems. Resources HireSmart Virtual Assistants (VAs) DGS 69: HireSmart Virtual Assistants with Anne Lackey NARPM Lehman Brothers Airbnb DoorGrow on YouTube DoorGrowClub DoorGrowLive Transcript Jason: Welcome, DoorGrow Hackers, to the DoorGrow Show. If you are a property management entrepreneur that wants to add doors, make a difference, increase revenue, help others, impact lives, and you are interested in growing your business and life, and you are open to doing things a bit differently, then you are a DoorGrow Hacker. DoorGrow Hackers love the opportunities, daily variety, unique challenges, and freedom that property management brings. Many in real estate think you’re crazy for doing it, you think they’re crazy for not because you realize that property management is the ultimate high-trust gateway to real estate deals, relationships, and residual income. At DoorGrow, we are on a mission to transform property management businesses and their owners. We want to transform the industry, eliminate the BS, build awareness, change the perception, expand the market, and help the best property management entrepreneurs win. I’m your host, property management growth expert, Jason Hull, the founder and CEO of DoorGrow. Now, let’s get into the show. My guests today are Mark and Anne Lackey from HireSmart. Welcome you two. Anne: Hey, good to see you. It's been a while. Mark: Hey, it's good to see you. Jason: It's good to have you back. I noticed you're displaying that beautiful logo in the background. Mark: Isn't that wonderful? Anne: Yes, that is of course a DoorGrow special. They helped us with that on our website. Mark: The logo, the renaming, all of that was a DoorGrow impression that was right for us and is great for our clients. Jason: Yeah, I like it. Cool. We're going to be talking about property management growth strategies after COVID-19. This Coronavirus is just starting to clean itself up. I just rode a road trip from Pennsylvania to Austin over the course of multiple days. People were not wearing masks anymore. We were eating at restaurants. It was awesome. It was like we are back to having freedom again. Most places are open here in Austin. I went to the hardware store yesterday, though. Everyone was wearing masks and I felt like I was in trouble. I thought we were over this already, but apparently not at Home Depot. Anne: Some places are, some places aren’t. Jason: I think the national chains and the national stores have to accommodate the lowest common denominator nationally. They got rules in place for everything. What are we chatting about today? Anne: First of all, I want to make sure everybody understands we are broker-owners ourselves. We manage doors in Atlanta. Mike: Nearly 200 doors in Atlanta since 2005 for other people and for ourselves, since 2001. Anne: We've been talking a lot to our friends who are in the property management business. We are, of course, NARPM members, affiliates, and affinity partners with them. We hear a lot around the nation of different things. Just like your trip from Pennsylvania. You saw different parts of the country where things were more open than others, so we want to talk about a couple of different things as we see them. For property managers that are thinking what's the next thing. I want to back up just a little bit and talk a little bit about historical trends and changes. Mark, why don't you get us started on that? Mark: This will show my age. That's one thing if I've mentioned this. In the 70s, we had lines to get gas. Not everybody out there remembers that, but there was an oil shortage. There was a gas shortage and at that point, everybody said we're going to run out of oil in a couple of years. It was a crisis, so out of that came what? We got into solar energy, more on to hydroelectric. Things pivoted, things changed. In the 80s, the savings and loans went down. Things pivoted on how we got mortgages. The dot-com buzz, the 90s, the tech blow up. All those things and what most everybody remembers is the meltdown that we had in the economy and mortgage market that occurred just 10–12 years ago. At that point, it required pivoting and Anne and I are really good at our business about looking to see what the trends are going to be. What's going to change and how to pivot. That's what we want to talk about today. It's not the end of the world like everybody said, March 15th or whatever date it was when everybody went to hibernation. It's like, it's the end of the world. Anne: Nobody's going to pay their rent. Mark: We thought that 12 years ago when Lehman Brothers shut their doors. It all seems like it's the end of the world, but it's not. It's an opportunity. It's learning to pivot. Look at where the puck is going. Anne: We wanted to talk about some of the trends that we see and the opportunities that property managers should be looking at in their business. You obviously don't hop on every trend and everything that comes along, but it is always good to put it in perspective. Mark, let's talk about some of the trends that we've seen in real estate in general. We're going to talk about how you can take advantage of that. Mark: In the last few months, we had property managers and friends that were investors that had Airbnb. They were making 5–10 times the amount of rent I was off of a property. Suddenly, they made nothing because all the bookings shut down. They’re looking. A lot of them said hey, let's sell. Let's go long term. A lot of things changed there. Through them and through those changes of people not having as much disposable income at this point because there's a slow down in jobs, second homes aren’t popular right now. Two, with all the laws that are coming about with the changes to protect the renters that are coming out of state legislators and the national, there's a lot of change and as property managers, we keep apprise to that. But these DIY (do-it-yourself) landlords don't. So, we're going to talk about some opportunities to make sales, to get some additional properties, to manage some opportunities for investing, too, if you're into that area. Jason: When COVID hit and it was March, March was brutal for us at DoorGrow. Sales stopped. Every property manager just tightens their purse strings, freaking out, there's this cash crunch. We experienced a serious cash crunch so we had to get lean. I think a lot of businesses had to get lean and in the long run, that is a really healthy thing for business. Everyone was trimming the fat and [...] was effective. Anne: We saw that in HireSmart because now everybody is a virtual employee. This is a perfect time to write stuff. People that have been hesitant to hire virtually have been in our doors now because they are like, wow, we can save some money. We can have better employees. We can have different strategies and approaches. Now, it was no longer important because it wasn't allowed to have people come into the office. Actually for us on HireSmart, it actually expanded our business. Mark: There was resistance before from property managers that wanted to walk down the hall and lean over Joe or Joan's shoulder and see what they’re doing, see what they're working on—literally, not figuratively—to be there, to have that conversation face-to-face. They were very hesitant about working and they didn't have the resources to figure out how to work remotely. With what’s come out of COVID-19 has become the realization that you don't have to have your employees at an office. You don't even have an office anymore. Jason: I've known this for well over a decade. Interesting to see that mass transition of people realizing they can use tools like Zoom and move away from having somebody right there in their office. I did some polls online asking people during this. I asked how many people would renew their business lease at the end of the term and a lot of them said they're going to, at the very least, downsize, maybe to a smaller office base, or they may even not renew. I also did some polling on what people have noticed as a result of people working from home. Some of my clients were saying that they've noticed that they were surprised that their team members became more productive. They're getting more done. I guess because there are fewer interruptions they were saying. There are fewer distractions. Maybe they're more comfortable. But some of my team members are doing better. I have heard some people say I hate it. My kids are there all the time. I'm going crazy. But in general, I think the world has to wake up and realize when you have to get work done, you can try this. Then they tried this and they're like, hey, this works. Why are we spending so much money on this brick and mortar location that is outrageously expensive to have all these people in it when we can eliminate that crazy expense and it's unnecessary. Mike: Yeah. It was shocking, like you, we immediately drew into our shell in March, and let's save. We don't know what's going to happen. People are going to let people go. But in April and May, we had the most requests for information about our services. The most orders we've had in five years. Jason: I'll bet. Anne: Without any [...]. That's the funny part for us [...] Mike: We’re not traveling. Anne: It's been interesting and we do a lot of community teaching and speaking even online. We always have to help people understand what opportunities are there. A lot of things that we're promoting or that we're seeing right now, specifically in property management, is now’s a great time to ramp up your sales and funnels. Again, because the DIY's are so lost. We already know that there are so many DIY landlords compared to professionally managed. Mike: Eighty percent of the US are do-it-yourself landlords. That's a lot of opportunity. Anne: That's a lot of opportunity. I know you talk a lot about that, but how do you reach them? How do you engage with them? How do you attract them? Of course, they outgrow a platform, obviously, as a key component to that, which is wonderful, but you have to have the human-to-human or human automation to back it up. I think where we're coming to as a society is if you don't have a physical office where people can walk in anymore because you're closing your doors. We've had a closed-door policy for 19 years. I think people are very surprised that we've never let anybody in our office ever. Mike: We have a small office of three. Anne: We've never let anybody in our office even when we had seven people in our office, we didn't have people in our office because it's a distraction, that interruption. What happens is you need to serve your customers. You need to be talking to them. You need to be serving them. Now, the residents and owners don't just want to be served 9–5. We're seeing that they want answers seven o'clock at night, eight o'clock at night when they're online. When they have questions they would like to have some interactions with someone from your office. How do you do that cost-effectively? Of course, we have the solution. A full-time dedicated virtual employee that works as the second shift or the split shift is there to take care of chat. They're there to answer the questions and help people guide them on applications. Mike: Then guide the people that are coming in to bring you properties to manage. Anne: Right, and to talk to owners about how I work with you. Because here's what's going on in the marketplace. Again, in a lot of places, you do have people that aren't able to pay their rent right now because they have lost their jobs. Do you have owners that are concerned about what I do? How do I do this? We've had an increase in our inquiries for property management recently as well because they just don't know the rules. They don't know the laws. Mike: It's not the time to withdraw. We're all sheltered in our business in place, too, and when we withdrew that opportunity to find new business went away. The companies, the far-sighted future thunking property managers, business owners, and the brokers that are now looking at making some investments. Not just sitting on their dollars, but actually making some investments in the right people, the right tools, business development people to help grow the business, doing outreaches. One thing we were talking about just the other day was—we haven't done this yet—we should have a seminar that we invite all the DIY landlords to share with them all the fears of all the new laws that have come out. [...]. We have that seminar and some of them are going to come out and say, okay, now I can do things differently because I have information on what I can and can't do. A lot of them are going to come out and say I just can't do this anymore. I'm tired of doing it. I'm going to hire—in case—us because we've been in that seminar. Making those types of investments, and granted that those seminars aren't always live, they're maybe at this point virtual but reaching out to those. Those are the ways now to grow your business for tomorrow because over the next six months until we get to the end of this year, there's opportunity abound for forward-thinking. Jason: That's what problems do. Problems are always opportunities. Let's talk about the problem. Here are some of the things I noticed. I won't say who it is, but I got a call from one of my business coaches and he has rental properties. He was like, what do you see in the market place right now because I got a small portfolio of properties and only 50% of them are paying rent. I said at least 98% of most of the rent is being collected by my clients. That's what I'm hearing. Also, what I noticed happening is my clients are saying that their owners were calling them and saying if tenants don't want to pay rent this month, we'll let them not pay rent. They're like no, they're going to pay rent. The thing is people felt guilty. They're almost ashamed but feel guilty, but property managers, you guys are over that [...]. You guys are completely over. You've heard all the excuses. You've heard all the stories. Some residents right now, due to the unemployment benefits and stuff that are going around, are making more money, especially the low rent markets. They're making more money than when they were working. But some of them are still trying to use the excuse that they need to not pay rent or whatever. The news kind of made it look like that. It made it look like people trying to collect rent are evil, bad, sick, or wrong. A lot of homeowners are just feeling guilty. Property managers are immune to guilt. Anne: That's because we've heard it all. Jason: We've heard it all. We heard all the stories, the excuses. You know how to help people. You know what programs are available because you guys are on top of this stuff. You guys aren't having trouble collecting the rent. In general, I haven't heard anyone in the single-family residential space or even multi-family having real trouble collecting rent. Rents have gone down just a little bit. You got people that most would have heard it's the same people that we're always troubled paying rent. We just couldn't evict them, but that's coming. Mike: Your coach needs to reach out to a professional manager. You see that, but he doesn't. Seminars, webinars, something. Jason: They don’t see the problem. That's the challenge I've always experienced in DoorGrow. I'm selling a solution to a problem that most people can't see. They can't see the leaks on their website. They can't see the challenges that their branding is hurting word of mouth. I have to educate people to see the problem. The same thing is what you're talking about. If you can create the gap and show the contrast between what challenges and problems they're dealing with and what they could be experiencing, what successes your clients are having, they're going to see this gap and that gap is what creates pain. People want to solve pain. People want a pain killer, not a vitamin. People will pay even more money to get out of pain. They want a solution, but they don't know a lot of them that there's a solution out there. I do think there is a massive opportunity. There's no scarcity in property management. There's no shortage of people that are in pain or have problems or challenges they are dealing with. Not only that, but I think property managers can hold their heads up high because good property managers, I really do believe as I said before, can change the world. There are millions of renters. Even here on my own property, I'm renting (I just moved to Austin), my kids were without a water heater for two weeks. The landlord sent out two different plumbers because he didn't like the feedback that the 13-year-old water heater should be replaced even though the pilot kept going out. I didn't even know my kids were taking cold showers because they got it before me and they can't get on Xbox until they take their showers, so they 're just doing it. All they're thinking about is can I get on the Xbox now? I'm like, yes, go ahead. But then my daughter's like, I haven't taken a shower in four days because the shower's freezing. I didn't know this and the younger ones, I went to them. That doesn't make sense because they've been taking their baths and their showers. I went to my son, Hudson, and I'm like, how's the shower been lately? He's like, cold. I'm like, what? Why didn't you tell me? Mike: It’s virtually a summer, right? Jason: Then I said to my daughter, she likes taking baths, you've been taking baths? She's like, Yeah. How are your baths been? She's like, they're really cold. I'm like, what? But you guys protect families. You guys also protect owners. You guys are like the middle person that makes everything okay and you take care of people. It lowers the pressure and noise. Property managers even do things like increasing the number of pets that families are able to have because you guys recognize that usually, it’s the kids that are causing more damage than the animals. [...] to get more rent because of pets. There are so many benefits to property management that positively impact families, homes, and lives. You guys are really the heroes of the rental industry. Property managers are the heroes of the rental industry. Mike: And unlike your property manager there that evidently has trouble with customer service. Jason: He's not the property manager, technically. He's just a landlord who doesn't want to do anything. Anne: You got a DIYer. Mike: Yeah, a DIYer. Anne: Sounds like a great lead. Mike: But that gets into the consideration of customer service. As property managers, we worried over the years about customer service to our owners but we haven't worried as much about customer service to our tenants. For retention and to continue to have tenants that want to refer people in, raising your level of customer service at this time specifically because I know I ordered something that didn't come and it was then delivered to Valentine, Nebraska instead of here where I am in Georgia, so I sent a response online and I got an auto-reply that says call this number. I call the number and it says we're too busy. We're not answering phones now. Just send an email. Customer service has failed specifically right now. Anne: I'll actually tell you something that we did on our property manager which I think has really impacted our renewals and we are getting increases in rent even now. Mike: On everyone. Anne: Let's just talk about it. Again, people pay for when they feel taken care of. One of the biggest gaps that we saw, this is probably two years ago, in our business was exactly what you're talking about. Tenant isn't taken care of, it's taking too long, the contractor is giving all kinds of excuses as to why they can't get there, tenant's going here, contractors going here. There's this big disconnect. Our virtual employee, Bonnie, is charged literally with every day every work order that comes in, she's calling the vendor and saying vendor, did you get it? Because we want to make sure it didn't get— Mike: Lost. You know how emails are. Anne: That's the first thing. Then the next day, she's calling the resident and saying resident, we assigned your work order to contractor B. Have you heard from him? Well, no. What happened? Jason: That's better than being ghosted and then eventually not having your calls answered, then eventually maybe getting a text or response half a week later. Anne: She says okay, you haven't heard from contractor B. Here's contractor B's information. We have already approved them to go out. Then she calls contractor B and she says contractor B, I heard that you haven't connected. Why haven't you connected? Oh, they haven't returned my call. Okay, I just got off the phone with them. They are available. Call them and they are expecting your call. She closes that loop, that hand-off because we assume contractor B is doing his job and we assume tenants are never wrong, they never change their phone numbers or anything else. Mike: Then the contractor goes out like he did to you and assesses the work. Many times there's not a follow-up, so what does Bonnie do then? Anne: Bonnie, as soon as she gets the date it was supposed to be scheduled from either the tenant or the contractor B, she follows up the next day and says my understanding is that contractor B was supposed to be there yesterday. Did they show up? Mike: Jason, did they take care of the water heater for you. Anne: Are you satisfied with the repair. Mike: And Jason says no. Anne: No, I still have… Now, we have another feedback loop. This is a maintenance process that we never could have done without having a virtual employee do this. It's too time-intensive and we have other work to be done. Mike: Then the flag goes up to tell the owner, owner, you got to provide hot water. You want an ACH or do you want us to loan you the money at an 18% rate? Anne: Yeah, put it on a credit card, however you want to do it. The reality for us is our tenant satisfaction has gone through the roof because we showed that we care, we're not letting it go, and literally, I as the broker get the list of not only what the outstanding work orders but where they are in the process and what she's done to move it forward. If we have a resident that we haven't been able to get in touch with, the contractor hasn't been able to, we have an escalation process. I don't manage, Bonnie manages. Again, total game-changer. Mike: The benefit out of all of that, we don't get pushed back when we're raising the rent. We started with our process in the middle of March. We do it in the middle of every month with notification of our rent increases and property. Most property managers that we know said you're crazy. We're either going to hold it. We'll tell them they don't have to pay an increase. We went out there and we got resistance from one tenant over the last, March, April, May, June. We got four months into our belt of increases and we have one pushback. Anne: Of course when you have rent increases, that increases our profitability, too. The owner makes a little bit more money, we make a little bit more money. It's still very reasonable. One of the things I'll say about rental rates is we don't do it arbitrarily. We do a full competitive market analysis. We make sure it's on the market. We don't raise all the way up to market if it's a significant jump, we'll do it at the average appreciation rate. Mike: We want to stay just below the top of the market. Anne: Correct because we don't want to give them a reason to leave. Mike: But we got happy tenants that don't want to leave. They go oh, I can't rent down the street for what I'm paying here because we always stay right below that. Jason: There's another hidden killer, too, I noticed in the scenario because when these vendors came to my property here and talked to me, they were basically bad-mouthing the landlord. They were like this guy is cheap. I've told them he needs to do this. In your scenario, the vendor is going to feel like they are getting taken care of. They are going to feel like they are on your team and on your side, and they are working with you, whereas these vendors feel more loyalty to me because they know the landlord isn't' doing the right thing. Anne: That goes back to having a contract with our contractor of standards of professionalism. Our vendors actually sign a document that says these are our expectations to be a vendor for us, and one of them is to not bad mouth as part of that. Mike: All these things combined, give us opportunities to shine. We get referrals every week. People come to us and say we hear great things about you as a property manager, and we're forward-thinking. We have opportunities there where we reach out to try to bring in business. Like what we're talking about earlier, a lot of the property managers are just sitting back. They are scared. They are afraid to do anything. That's the wrong thing to do. Anne: A lot of them are looking to bring on a BDM. Remember last year was the year of the BDM. Do you need a business development manager? Okay, maybe you do, maybe you don't. We tend to be our own. Mike: We are our BDMs. Anne: But again, we are high salary people like if you are paying somebody. Our time is very valuable, but we are seeing the smart property managers are supporting that sales effort through follow-up with the virtual employee, a virtual assistant that is literally a full-time doing this grinder follow-ups because we all know in sales—I don't care what industry you're in—you have to reach out seven, eight, ten times. Sometimes, property management specifically, it's pain point-related and some of the pain points only come up once a month. Some of the pain points come up once a year. Some of the pain points only come up periodically, so if you don't have a system to reach out to them, again it can't just be an email anymore. I think people are tired of tech, tech, tech. You need to have tech. You need to have a chatbox on your thing that's manned by a live person, in my opinion, but you also need that human-to-human automation. You need somebody that actually shows that they care a little bit about not only your company but the people involved. Having that sales support, a virtual employee to do that, really allows your BDM to be their most successful self and to do the things that they like to do. People don't realize that. BDMs don't want to do a whole lot of phone calling. They want to be in relationship management. If you can get them in front of the customer more times, if you can keep prospects warm and in the hopper so that when the prospect is ripe and ready, and your BDM can come and close, you are maximizing your ROI for that person. Mark: Yeah. They actually go to our website and ask for some of our tools or some of our information. It auto delivers but then they get a phone call, I want to make sure you got 21 questions or our technical information, and when they get that phone call, they're shocked. Anne: I'll tell you one other thing where people are going to have some issues. We all know about the Zillow. Zillow and they're charging for leads. That’s always been a hot topic. Zillow is rerouting leads. They're rerouting them to their call center in some areas, not to all areas, but into some. You don't have somebody actually calling those leads proactively when you get the email because even if you syndicate them, specifically if you syndicate them, you still get the email that says so and so is interested and they give you the phone number. But if the person proactively calls, Zillow is going to try to give them to people that are paying them, not necessarily to those of us who are syndications. If we're not actually outbound calling those leads as they come in, we are missing opportunities for tenants. This has been a big change probably in the last three weeks. This is fresh information that again if you don't have somebody in your office that has the time, energy, and effort to be calling in addition to responding back via email, you are missing an opportunity to get your properties rented. Again, we have literally five properties come on the market on June 5th, all but one are occupied now. That's how quick we are to get these things done because we have a dedicated resource and our virtual assistant. Literally, that is her only job to focus on. Jason: I want to touch on a couple of things you mentioned that you threw out that I think are important. One, you were talking about referrals. This is one of the number one ways to grow any business generally. I talked to a client I think yesterday, I was coaching a client and they were like our business is so great. We’re great. We got all this process dialed in and they said, but we're not getting any referrals. If a business is not getting any referrals, it's probably not as great as you think it is. Property managers have blind spots. We all do. For those listening, if you're not getting referrals, you got some customer care problems that are likely going on. You should be getting referrals. You should be getting referrals from your vendors. You should be getting referrals from your real estate friends. You should be getting referrals from your property management clients. You should be getting, maybe referrals from some of the vendors, but people should be talking about you. If they're not, there's some sort of blind spot that needs to be shored up. The other thing you mentioned (I think) is really smart. A lot of people, yes, they're like, I need a BDM. I need somebody to do sales, but they can't afford it. A lot of people can't just go out and afford to get some high-grade wonderful salesperson. But most business owners are not willing to also acknowledge that they are a part-time shitty salesperson. The time they're willing to dedicate or have sometimes is maybe an hour or two a day. That’s part-time. it's 10, maybe 15 hours a week, maybe they can dedicate up to 20 hours, but if you really want to grow and scale your business, there probably needs to be a little bit more time or you need just business being referred to you all the time, so it's super easy. One of the easiest hacks I implemented when I was a solopreneur and was doing all the sales, the web design, branding stuff, and everything myself, I got an assistant. I had that person operate as a sales assistant and an appointment setter. It immediately multiplied, not just doubled probably, but it multiplied my capacity to close deals. All I did was show up for appointments. I just met with people and sold. I wasn't doing any of the follow-ups. I was a solopreneur and my assistant was calling—she had a British accent—and saying hello, this is Helen, the assistant to the CEO Jason Hull of DoorGrow. He was wanting to get back together with you. It also set me in the mind of the prospect as something higher than maybe I actually looked like at the time being a solopreneur, sitting at home, trying to work in my living room. There's power in having a team. A lot of people say I can't afford to hire anybody. Maybe you just need somebody to start, just somebody that you can start with and they could be full-time or part-time, but they can start doing a piece of that thing that you need help with. They don't have to be able to do everything. Maybe it's the piece that you least enjoy. Maybe doing the follow-up, the cold calls, and whatnot. Anne: That's the great thing about virtual assistants and personal employees. You're looking at less than $20,000 a year for full-time dedicated help. That's a game-changer. You can't afford not to do that. I think that that's where people get sideways. Where we really help our clients in helping them define their staffing needs, and what's the best ROI for them to bring on board first. We’re talking about trends and the things that we see, but that's one of the services that we provide, helping them figure that out because sometimes it's like you said, sometimes this is a generalist. Somebody that can do a little bit of everything. Sometimes it's a sales support person. I know I need leads. Sometimes it’s accounting, sometimes it's leasing line, sometimes it's in marketing. A virtual assistant through HireSmart, because we're full-time, dedicated, and we specifically recruit for our clients. We don't have a room full of VAs that we go, here you go. I actually go and curate the contacts for you, and then I personally work with them for 40 hours afterward like that one-week job interview to make sure that they're amazing. Anybody that has hired and day two you're like, ugh, they just aren’t amazing. I take care of that for the clients. Mark: It frees up so much time. If it frees up 10 hours a week, how many deals can you close, how many new properties can you bring on in 10 hours? You invest maybe two hours where somebody else is making all the calls, set the appointments, you got that two hours invested. Your return on that is tremendous because you're going to make an offer that’s equivalent to $100, $200, $300 an hour for your investment of time. It goes back to, you've got to make those investments. You can't not hire now, you can't put your head in the sand or pull back in your shell and say, I'm going to do it myself. Especially if you're not happy doing it because if you're not happy, you're not going to get it done. Jason: Therefore, a lot of people that have been shifting to doing more themselves. I have to lay off team members now, I'm doing everything myself. Now I'm doing stuff that I don't even want to do. Let's touch on one thing that you just mentioned. I think this is really important for everybody listening to understand. I've seen this in hundreds of property management businesses and businesses in general, but one of the most painful or dangerous things I think a business owner can do is hiring the wrong person, the wrong role, spending the wrong money at the wrong time. A lot of people hire based on what they think the business needs instead of what they need in order to create more space and eliminate the number one bottleneck in the company, which is you the business owner, it's the entrepreneur. You taking the time to figure out what they actually need to get the best ROI is huge for them because they've seen lots of people, they hire the wrong person they didn't need. Now they're spending this money, or they just hired a bad person in general which not just cost them the money they spent on that person and the time they spent to get that person, but they're now losing money in secret places. I've had team members that stole from me. I've had team members that stole time. I've had team members delete and stuff after I fired them. These are problems that entrepreneurs learn painfully over time trying to build a team. A lot of property managers are in that first trap. They're the 50–60 door mark, they don't know how they can afford to hire that first person, and this is a solution for that. This is a very obvious solution for that. You can help them figure out who they really need right now and to take the next step forward, because if they spend the money on the right person, they make more money. It makes it easier. They then can reinvest. If they spend it on the wrong person, or the wrong tool, at the wrong time, it could be the right tool but it's at the right time, or they're getting software prematurely that they didn't really have to have at that point, or whatever it might be. If you spend money at the wrong time even though it might be the right tool for the future, you're hurting your ability to get to that future. Anne: I totally agree with that. Jason: Cash flow. If you run out of cash flow, the business dies. It’s like the Indiana Jones boulder rolling after you is the cash monster trying to get to you. If the boulder catches you, the business is game over. You’ve run out of money, run out of cash, you're dead. People started to feel that in March. You have to always be outpacing that boulder. If you spend, the boulder gets bigger and faster, but you can get faster if you spend it on the right people. Anne: One of the things I tell a lot of prospects that I'm talking to is most property managers (specifically) were never trained on how to hire or how to build teams. That’s not something we learn at school, it's only by trial and fire. A lot of property managers have fallen into it. Mark: There's not a hiring 301 class in college. Anne: One of the things that I tell them is, just like you're the expert in finding the right tenant for an owner because you've seen enough applications, you've gone through the process, you've done all that, you are the expert there, we’re the experts in hiring. I know I have a profile for hiring, I know what's successful, I know what's not successful. I save my clients from hundreds of hiring mistakes because it's not that they can't do it, a DIY landlord can do it, but they can't do it as well as a property manager. I say the same thing. You can hire. It’s going to take you more time, you don't have a process, you don't do it enough, I have done thousands. Just in the last six months alone, I have evaluated over 9000 applications. You say that gave me some data points. Jason: You know the BS, you know how to spot the scammers, you know which people are gaming the system, you know which people are feeding you a story, you know what questions need to be asked. In the Philippines, you got to ask about their internet connection. You got to, you can't just trust that they have one. You got to ask about where they're working. Where are you working at? Where are you working from? That was part of the thing that I really enjoyed working with you guys. I always look at everything through a certain filter, and I'm skeptical, and I want to see how I can help people. As I went through your process, I'm like, they do this. They already do this. This is stuff I've learned over a decade in my own painful experiences hiring in India, Bangladesh, Russia, the Philippines, Bolivia, and of course the US, which ultimately most of my team are in the US now. But I have Filipino team members. I can personally vouch for your hiring process making a lot of sense. It’s solid and it works really because it's very similar to my own. There are so many similarities. Okay, they've got this down, but you have some advantages. We talked about this in the previous episode. You guys should go listen to that where we talked about their processes and some stuff they do, but you have vetting, background checks, and stuff that people don't just have access to if they're just trying to DIY this. Mark: It’s like the difference, if you're getting married, you got the bride and the groom, and the bride wants a custom-made dress, not one off the rack. The groom really wants a tux that fits them. We are the custom dress, we are the custom tux for that couple versus walking into Neiman and pulling one off the shelves, this looks good, or getting a dress off the hanger and putting it on like, this almost fits, let's go get married. Jason: It looks like your dad handed you down a suit or something. Mark: Right. That’s the difference in what we do. We are custom for our client. We are not off the rack. Anne: Right, and outside of that is it takes time. It takes us 3–4 weeks to literally curate the right people. I always say if you need to hire somebody just the first person off the street, good luck. Jason: You guys are bespoke. It’s bespoke hiring. Anne: We have a guarantee and all of those things, and we can back up what we're saying. But again, if you're trying to grow your property management business right now, you need to look at your staff. Here’s the other thing. Not all staff members are coming back. You may think they're coming back. They're not coming back. You’ve got to look at who are your top liners? Who are the ones that you’ve got to keep? You need to be investing in a relationship with those people first of all. If you're not talking to them on a regular basis, if you're not feeding them, if you're not taking care of them, you need to take care of them now. Who’s part of your med tier? The kind of people that are like, if they come back, great. If they don’t, what's the impact that’s going to happen? What are the people that you really know you just need to not have come back, and you need to deal with that pretty quickly. Mark: For our best person, we got a VA to assist that person so that they can do even better at the best that they were. That’s the important thing that people need to take away from changes that are coming out of COVID. It’s supporting your staff and letting them work at the highest and best use. Maybe that's taking away some of those phone calls and emails by hiring an assistant for them and to give you the opportunity to grow. It’s an assistant to you for the business development to make those calls and to set up those appointments, so that you can just close. Doing those things is the job that Anne enjoys so much is finding the individual to match. What does Jason need exactly? Even though Jason doesn't know exactly, she'll draw that out of you, and I'm just picking on you on that. Anne: That’s a puzzle for me. There's nothing better than when I see my clients six months in, years in, we have our clients for five years now and seeing them and they’d say, Mitch has been the best thing ever in my company. She's really allowed me to be amazing and do what I want to do. Literally, these are comments that we get when we survey our clients. It has been a game-changer. If you're open and able to change. I don't know how much time we have, but there are a couple of things that you need to look at, regardless of whether you use virtual assistants, employees, or whether you are looking at that which are some of the challenges that come from working with a remote team, because remember, even if you're planning to go back to an office, your staff is going to want to have more flexibility. Let’s just call it what it is. Not everybody wants to commute anymore. There are some that miss being in that environment, there's a lot of guys that are like… Mark: We’re happier. Jason: Yeah, why should I spend time commuting? Why should I spend time driving to this? I think there are a lot fewer people doing face-to-face appointments, and they'll just do it through Zoom or they'll do it through Google Hangouts, Meet, or whatever. Anne: Whatever works. What we're finding is it is truly illuminating management problems. It’s illuminating communication problems. If you had a communication problem in the office, now you have a tremendous communication breakdown outside of the office. Mark: If you have an operations failure in the office, boy, the failures are even bigger. Anne: As managers, we need to look at what tools do we have on our tool belt. We help our clients with some of that because we understand years ago that we needed to equip our people to be good at this so that they would keep our people. Mark: It is in software, it’s tools, it’s technology. There's a lot of different pieces that go into that. Anne: Looking at your management style and we like to manage personally using key performance indicators (KPIs) because that takes [...] work out of it. I don’t have to worry if they're working eight hours as long as the KPIs are done and they can get their job done in six, I'm happy to pay them for eight and let them do what they want to do, as long as my stuff’s getting done to a level that I expected. That's the easy button for management, if you don't know about key performance indicators, I certainly encourage you to learn what that is, and how to do that, but it’s one of the things that we teach our clients to do very easily. There are some easy methodologies to do that, but we are seeing some communication breakdowns from people that don't use us. We’re seeing some issues with management. The manager that was the nice guy, that was able to get people rah-rah-rah in the office because she was able to see them, that’s now changed. Now, work is starting to do great. Mark: They can't hide behind the curtain. Anne: They can't hide behind that personality anymore because work’s not getting done. That’s one cautionary tale that I will throw out to your listeners. Jason: Results don’t lie. Anne: They don’t, but it’s difficult to have conversations if you don't have data, and a lot of times, people don't want to track data because they think it's too difficult. We teach our clients how to do it very simply, very easily, and very quickly. That's the other thing. You’ve got to be able to get feedback daily to keep on top of it. If you wait for weeks or months, you are now in this huge hole of garbage that is very difficult to get out of. Make sense? Jason: Makes sense. It's been awesome having you here on the show. Maybe we can take just a few minutes, let's talk about some opportunities right now and ways you think property managers have an opportunity to grow after COVID. We’ve touched on maybe doing webinars, I think you threw out there, the Airbnb. I think I have one client that added 24 doors in a month just from former Airbnbs by cold calling them and reaching out. Obviously, you got to convince them probably to get the furniture out of the place, and make sure that these are good opportunities to manage, and that it’s going to rent effectively compared to what they're paying because some of them were making a lot of money. Mark: They were. You can offer a turnkey for that. I know you've got furniture and all, I'll take care of making the donation, or I'll get the local company that buys furniture and resells it. I don't know if there's a market for that right now, but I'll get it picked up by Salvation Army or the kidney people, and you'll get the receipt. I'll take care of all of that and make it easy for you to let me manage your property long-term. The property managers that think that way are the ones that will be successful. We’ve been seeing that happen in Airbnb and a lot of them are coming back out of service. Anne: One of the things we always recommend when we're consulting with clients just in general is know your avatar. If you're a short-term rental person and that’s your avatar, then you need to create a different marketing strategy around that, like how are you going to deal with that. If your avatar is long-term rentals and you want to gain business by going after short-term to convert them to long-term like Mark said, have a package, have a system, get your relationships put together. Right now interestingly enough, we have investors that are scared to death and are selling, and we have investors that are super excited and are buying. Mark: [...] sales transaction. Though the property manager doesn't have a sales component in their business, they need to have an alignment with the referral program to somebody that does sales. I mean I'm selling two houses a month this year. Anne: Without trying, without marketing. Mark: Yeah, these are my investors. They just say I want to sell, and I’ll say I want to make the commission. No problem. Anne: It's about having a strategy, being able to implement that strategy. and figuring out what are the resources that you need to create that strategy. We think using virtual employees and virtual assistants is a great way to maximize all of that because right now, it is kind of intense. If you're going to do research for short-term rentals, there's not a database you can necessarily easily pull from. You’ve got to go search for them, talk to them. Having that marketing strategy based on what it is that you want to do, having a value proposition that speaks to the pain that the person is dealing with, all are very important. Having a website that actually can capture those leads and make you look professional which is what you guys do is also part of that. You have this well-rounded marketing plan. Mark: We have our VA do all the research. Maybe it’s calling everybody that's on Craigslist or ads out there and saying, you may be tired of being a manager, you should go to this webinar we have coming up. It’s how to be a better manager and how to deal with the current [...]. We can do all those invitations to get people into our webinars that are going to show them they don't need to be doing this anymore. There's a lot of different ways that property managers can grow their business right now, but they need to think smart and make those investments. Anne: And HireSmart. Jason: And they need to HireSmart. Awesome. It's great to see you guys again. I'm glad you guys are doing well there over near Atlanta. Keep me apprised as to your next idea. Anne: We always have them. Jason: You always have them. That’s as crazy entrepreneurs. We always are coming up with new stuff. I'll let you guys go and I appreciate you guys coming on. Your website is? Anne: www.hiresmartvas.com Jason: All right. Thanks, Mark, thanks, Anne. Mark: Thank you very much. Anne: Welcome. Thank you, Jason. We appreciate you. Jason: Awesome to have them on. If you are a property management entrepreneur, and you're wanting to add doors, and you're wanting to build a business that you actually enjoy, that you love, that is built around you, this is what we do at DoorGrow. Reach out, I guarantee that we’re going to make your business better in some way, shape, or form, and you're going to love it. Even if you feel like you hate it now, maybe you're thinking you want out of it, you're feeling like it’s uncomfortable, you're probably just doing the wrong things in that business, and you may need some VAs that might be a solution for sure. We can help clean up the frontend of your business and help you get the business in alignment with you. Reach out, check us out at doorgrow.com, and make sure you join our Facebook group. We've got an awesome community there, and people that are helpers, that are givers, and you can get to that by going to doorgrowclub.com. Mark and Anne are in that group. We've got lots of other really cool property management entrepreneurs that are willing to contribute and help you out. Until next time everyone. To our mutual growth. Bye, everybody. You just listened to the DoorGrow Show. We are building a community of the savviest property management entrepreneurs on the planet, in the DoorGrow Club. Join your fellow DoorGrow Hackers at doorgrowclub.com. Listen, everyone is doing the same stuff. SEO, PPC, pay-per-lead, content, social, direct mail, and they still struggle to grow. At DoorGrow, we solve your biggest challenge getting deals and growing your business. Find out more at doorgrow.com. Find any show notes or links from today’s episode on our blog at doorgrow.com. To get notified of future events and news, subscribe to our newsletter at doorgrow.com/subscribe. Until next time, take what you’ve learned and start DoorGrow hacking your business and your life. April Fools Day is coming. Prank your friends opening a never ending fake update screen on their computer. Sit back and watch their reaction.

On this episode of Quiet Light, we talk with Joe and Mike Brusca. We discuss Ecommerce and how they built an Amazon publishing business. It's a really interesting look at one Ecommerce business model and how it works. Tune in to hear us discuss the right and wrong way to drive traffic and why their business is such a success. Topics: How they got their start during the “wild west” period of Ecommerce. How to structure your business when you get paid “per page reads”. The Right Way and The Wrong Way to drive traffic. Building an algorithm-proof business. The “right” types of books. Delayed profitability and building your back-catalogue. How Joe and Mike are planning their eventual exit. The four pillars of value. Transcription: Joe: One of the cool things about what we do, Mark, is that we're exposed to so many different business models. There are a million ways to make a living both on and offline. You can do all sorts of things offline, but online, it's not just writing content and producing affiliate revenues or building a brand and selling it on Shopify or e-commerce or building on a SaaS business. And we have the luxury and privilege of talking to so many people and learning what they do and how they do it and how they make money. There's not just one model for everyone. And you had Joe and Mike Brusca, is that how you pronounce the last name? Mark: I believe so. Joe: On building an Amazon publishing business to sell. And, I talked to somebody a year or so ago that did a similar thing and wanted to sell. And unfortunately, folks, he didn't have his numbers together. He didn't have any financials. He just had a lot of high-level details and it's not something we thought we could sell because we want to protect both the buyer and the seller. In this case, these guys were doing a very similar thing; building out a lot of content through actually having books published and earning revenue off of that. How did that call go? Mark: It was fascinating. I mean like you said, we get the chance to see different people's business models and look they made no allusions to anything other than the fact that they are looking to build this business and eventually sell it, which is where it became a really interesting conversation for me to have. There are so many different business models out there and we know most of them that exist, right? There's SaaS, there's content, there's drop shipping and e-commerce in general but what they've started is a publishing business and leveraging a different part of Amazon, which is really how Amazon got to start and that is their publishing and selling of books. We dug into what that business model looks like; how are they making money from selling Amazon Books and primarily, this is where their difference is, right? They're not just selling books for the face value of $10 to download this Kindle book but they're utilizing Kindle Free Time, which is an Amazon-specific program that's generating, frankly, quite a bit of money. In fact, they mentioned the best month so far is $25,000 in a single month of revenue for content that once it's built, it's built and it's ready to go and their back catalog perpetuates itself. Joe: That's called cash flow folks. If you're building a product business, you're constantly putting money in inventory as the business grows. That's a beautiful model. Mark: These guys are classic Internet entrepreneurs. They've sold a few dropship businesses in the past. They have some other e-commerce businesses that they're building to sell as well. So if anything else, this is just a fascinating conversation about building a business that maybe you don't know exists out there. I didn't really know much about this and I'll confess after this I spent about half an hour researching what the top books and the Kindle Free Time library are on Amazon just to see is this something that anybody can do. And I think it is something anybody can do but if you enjoy kind of digging into somebody's business models, these guys are incredibly open about what they're doing and how they're doing it. They do have a coaching program and that was one of the things that they wanted to come out for the podcast but there certainly wasn't a sales pitch for that. This is more just kind of exposing what they're doing. I asked them some tough questions as well, and I think they appreciated the fact that I didn't just throw softballs. I wanted to really challenge them a little bit on this concept and what they're doing and just interesting stuff. Joe: Yeah, I'm looking forward to listening to it. Before we go there, folks, this is part of what we do at Quiet Light. We try to bring interesting guests on to help you learn different business models and different ways to earn a living and build a better business. If you've got a story that you want to share where you think you can help the Quiet Light audience, remember reach out to myself or Mark. You can reach us at joe@quietlightbrokerage.com or mark@quietlightbrokerage.com and let us know what your story is that you want to share, how you can help folks, and possibly we'll be able to get you on the show as a guest. With that, let's go to the podcast. Mark: All right, guys, I'm excited to have two entrepreneurs on this week's podcast in a little bit of a different spin on online businesses; an area that I haven't explored very much but is growing very quickly. And I'm interested in, first of all, this business model in general because I see it as a potentially interesting opportunity, but also in maybe some applications that we can leverage this type of business for. But in order to do that, we kind of have to dig into what is this whole niche and this whole industry that's kind of springing up. And so with that in mind, I have Joe and Michael on the line here on the podcast. Guys, thanks for coming on, I really appreciate having you here. Why don't we just go ahead and if you could just introduce yourselves real quickly and let us know who you are? Joe: Cool. Thanks for having us, Mark. And we're Joe and Mike. We're brothers. Joe Brusca, Mike Brusca, and we're from BuildAssetsOnline.com. We've been doing online business since around 2014. It's kind of when we got started. We had regular jobs and all that, and then we ended up and somehow fell into building online businesses. And, one of the first online businesses that we ever did was publishing books on Amazon Kindle. And when we first started it, it was a bit of a Wild West situation where it was kind of new and Amazon didn't really have their stuff figured out yet and a lot of people were exploiting the systems and their platform wasn't really fully evolved but now it's turned into a really viable long term business model. And in these past few years, we've kind of put together a process that allows us to build and make royalties pretty much on autopilot. And we've seen in the past few years some of these Kindle businesses sell for over a million dollars. We haven't sold ours yet but, yeah we're going to talk about that because it really is a great business model; very, very easy to do, very straightforward, and once you get it going, very passive. Mark: All right so you guys are selling Kindle books. Is that correct? Mike: Yes. We're selling Kindle books and like Joe said, it kind of fits into anyone who has an online business portfolio. It is a really great option to have because it's probably one of the most passive models that there is where there is royalties and so it's definitely a unique form of diversification. We've sold drop shipping businesses, we've dabbled in affiliate websites and so we've kind of seen the entire breadth of online businesses that you can do and it's definitely one that we are putting extra energy into long-term. Mark: Now, I want to dig into this a bit more, because I'll be honest, when you guys first approached me about talking about this on the podcast and everything else I was like Kindle, okay, sounds fine, whatever, it doesn't really fit with what we normally talk here but then when you started to get into some of the details, it was interesting just as far as what you're doing, you're getting royalties for these books, but it's not necessarily you just going on Amazon, listing a book for sale, and then selling it because obviously, that would be; I know a lot of people who have had published books that went up on Amazon and didn't do much there. Maybe they've sold a few and everything, but nothing to write home about. You guys are now talking about selling this for millions of dollars so there's obviously a twist here. I'd love to dig in a little bit deeper here into this. What are you guys doing that might be different from the guy who signs up with XYZ Publishing Company and they add the Kindle book and then they might sell 100 or 500 copies of their e-book? Mike: The main difference is that we're creating our own publishing company and what we're selling is essentially publication company or that pen name. And so we're going out and we're making these books under specific pen names, and it's all with the purpose of generating an audience. So like you said, you can put a book out there on Kindle and nothing's going to happen. What you need to actually focus on is building that brand. And so that pen name becomes a brand just like any other Clorox or whatever brand you could think of that people buy in private equity. It's kind of the same thing. So you're creating these digital products under this pen name. You're developing an email list. You're developing an author website. You can even put your books on ACX, which is Amazon's that's how you get on audible, so it's an Amazon company. And so, you have the Kindle version, the paperback version, and the audiobook version. You're doing this with the whole purpose of generating just a big customer base and that is really where the asset lies. Mark: When you're putting these up for sale are you getting money from the direct purchase of these books; how are you generating revenue from these? Mike: So you get money from the direct purchase of the books. But Amazon also offers something really unique, and that's the Kindle Unlimited program. So there's a huge readership for fiction books and so Amazon wants to accommodate this. And so what they do is for $50 a month or whatever it is now, you can sign up to what's called Kindle Unlimited and you basically can read as many books as you want throughout the month. And so any book that's enrolled into the Kindle Unlimited program, you can download it for free. The way that the publisher gets paid through that is by the amount of pages that get read. And so doing fiction books it's even more advantageous because you can publish novel-length books or you've probably experienced with any show that you've watched once you start watching an episode, you're going to go back through the entire back catalog. And so that's what we're trying to capitalize on in order to get the most page reads. Mark: Okay, so the model here is Kindle Unlimited, you get paid per page read so, therefore, you're wanting to create content that is going to be an easy page-turner, as it were, right? I'm not going to publish some Academia throw it up on Kindle Unlimited and do very well with that sort of approach, right? Mike: Correct. And yeah if you're doing something maybe non-fiction or something more academic, it may serve you better just to have it as a straight purchase option. So, 9.99 or even though we sell books at 2.99 those books can actually still do really well as long as they're part of a bigger catalog because people will decide to buy that book. So we kind of employ that as a strategy. We mix, regular sales with Kindle Unlimited, but Kindle Unlimited still makes up probably 80% of the income. Mark: Okay. Now, you guys have built an entire business around this. I'd love to dig into a little bit longer. How long have you been doing this? Mike: So we started it back in 2015. Joe, did you want to say something there? Joe: No, I was going to say 2015, but it's evolved a lot over time like I was kind of alluding to earlier. And I think we only may have resumed it. We kind of took a little bit of a hiatus when we started getting into other online businesses. We're mainly working with building high ticket drop shipping stores and building affiliate sites and content sites. So we kind of took a little bit of a hiatus but then I think around two years ago is when we really got back into Kindle; when we kind of saw that Amazon was really improving the platform and there were there was actually a lot of potential to build a long term business on it because like I mentioned earlier, it is kind people have been publishing on Kindle for a long time but in our opinion two years ago, that was really when it became the most viable thing to do long term and that's when we kind of start seeing these types of businesses pop up for sale. Mark: Yeah. So you got started at 2015 so about five years ago, but really in earnest over the past two years and would have spent some of those iterations over the years with the things that you've had to do to adjust to make this into an actual business. Joe: So I do want to clarify that over that kind of three-year hiatus of not doing a lot of publishing, we were still actually making money. So we're talking no hours a month into this business and it was still bringing in, probably a five-figure outcome each year. So, again, it's really something that's super passive, especially once you do it right. But we were doing things that; basically Amazon has an algorithm and so when you put out a book, you want to get us as high in the algorithm as possible. You want to get that best-selling status or you want to do something to have people on Amazon find you. And so that was kind of the intention in the beginning. It was more focused on like you said you're storing the books on Amazon and seeing what would happen. And so that's kind of how we started out doing it. We weren't doing any of this actual brand building or email list-focused marketing and stuff that. And like Joe said Amazon was kind of like the Wild Wild West, there weren't a lot of rules in place, people were kind of exploiting those rules. And then Amazon began to crack down on that in 2016 and they're always kind of tweaking the algorithm and trying to make things more of a level playing field and just encourage certain behaviors. So over time, the trend has really gone in the direction of having your own external traffic source that you can drive to Amazon and so they reward you for that. And your reward is increased exposure on Amazon so you get that internal traffic. But. If you're actually getting good books and you're focusing on building a brand, these people will come off of Amazon onto your list, and the cycle kind of repeats itself. Mark: All right. So I'm getting the general idea for it. You've got into a little bit as far as if you do things right, which is a loaded phrase; I mean you guys have doing this now for five years and if you do things right is the result of a five-year process of tweaking and figuring things out. Let's first start though with doing things wrong where it is just throwing it up on Amazon and hoping and praying which is no different than selling a product on Amazon. You throw something up on Amazon hope and pray, you're not going to have much success. You need to have a plan. So what are some of the wrong approaches and then what are some of the right approaches on starting up a Kindle business that can be a sellable asset in the future? Joe: Well, when we first started doing it. Yeah, like you said we were just throwing books on Amazon but the thing is we weren't really writing the type of books that we're writing now. So when I say writing, I mean publishing, because we don't actually write the books. But yeah, it was more about just; back then, Amazon's algorithm really rewarded more so than it does now things that were new. So if you put a new book up with the right keywords, even though it was a short book, as long as it was keyworded right it would show up in the right categories but now it's not really like that. So when we say the right way and the wrong way, that's pretty much the wrong way because it doesn't really work anymore. But it did work at a time and you can kind of see this and it makes sense from Amazon's perspective, is that they want that external traffic. I mean, they're always trying to drive people to Amazon and that's what they reward now. So the wrong way to do is it's at a different time and just taking advantage of how the algorithm was back then. But I don't really see it going back to that direction because like Mike said, it's been moving in the direction that we're talking about now, which is the right way for some time now. Mark: Okay, go ahead, Mike. Mike: Yeah. If I could just add one thing, really, what we've, kind of waited all those years to serve and hone in on now in terms of doing things the right way, is building the business back up in a way that's algorithm proof so that if we're throwing all these books on Amazon and they change something it doesn't completely destroy our business. So now when you have your own readership off of Amazon, it's kind of a win-win relationship for both platforms; good books, people enjoy reading them so they come kind of into your sphere but you give that back to Amazon and they reward you. Mark: Right. Yeah, I mean, it's no big shocker that Amazon likes it when you send traffic over to them. I mean, that's kind of a rule of Amazon, you want to play well with them, send them traffic. So let's actually dissect some of this here. And you talked about the right type of books, the wrong type of books, and then we've also talked about building traffic, and we've also talked about publishing these books. So there are three loaded questions in here which is what are the right type of books number one, and what are the wrong type of books and then second of all would be okay, drive traffic; how? What does that look like? Build a brand is easier to say, it's three words, doing that is no easy task. Building up a following of people is always difficult. And then the third question is writing these things; how do you get them written? So these are all big topics and I don't want to throw them all at you at once so let's go ahead and start with that first one. What are the right type of books, what are the wrong type of books, and what are the books that you just have no idea if it's right or wrong? Mike: Yeah, and to be clear, we hate platitude as well so I don't want to just linger there. So the right types of books would be; like I was saying before you get paid based on page reads. Back in the day, people used to just draw up short books just to kind of; you're kind of throwing as many pieces of bait out there, seeing if one rises to the top and then just kind of going from there. Now we publish books that are usually 30,000 words in length at least so that would be considered novel-length. People would go all the way up to 80,000 words and more and so we say that the right type of book has to be a length that readers can enjoy nut it also has to be a book that is written towards what the market is already demanding. And so what does that mean again? You actually need to do your research and go on Amazon and see; you'd have a very, very keen eye as to the trends that are going on; what types of covers are there, are there any similarities in the covers, any similarities in the titles, going through some of the content of the books? You're trying to pinpoint what it is that readers actually enjoy. And so by doing that, you're more likely to get better conversions, more read-throughs, more people actually subscribing to your email list, and that's what we mean by the right book. And so then you're talking about driving traffic. So it's like we said when people find you and they enjoy your books you can get them off Amazon by giving them say like a free book if they subscribe to your list. And so now you build up a readership. And there's also a lot of other websites where you go and collaborate with other authors and kind of do list swaps. So you're building yourself up that way and so external traffic with Kindle is always about the list. But also, you can take that and say even put it onto Facebook by doing something like a look-a-like audience and now you can kind of ramp up more traffic to Amazon. And a lot of times you do it with the purpose of, again, giving them more referral traffic so they can boost you higher in the algorithm. Yeah, there's other ways to capitalize on it as well by making your own publishing website or you're own author website doing things like blogging there to get traffic. And now, again, you have that audience pixeled, you can use them to drive traffic to Amazon. Mark: Right. Okay, so from your guys perspective and I'm not going to ask you to open up all the doors of your P&Ls historically here but when we're talking about building a network and building a brand and everything, there's a lot of expenses associated with this. So you talked a little bit about the passive revenue, which is great, people love passive revenue. But what goes on behind the scenes? I looked at ads and sites before where somebody fills up an ad on-site and they're like look at this thing it's generating $10,000 a month in passive income. But what they didn't show you is the $150,000 they spent on content and link building over the past year. And so you're like, okay, you're just getting started now you sure hope that that lasts for you. You guys seem to have the sort of cost of authors which we need to talk about at some point; how do you find the writers and how do they get compensated and then also building up this audience? Well, what does this look like from an expense standpoint compared to what you get from Amazon? I would assume profitable otherwise you wouldn't be talking about this but what are we looking at here? Mike: Well, I would say there's really two paths you can go down. So we talked about you can use Facebook and drive traffic that way and that would be more of a kind of accelerated approach to trying to get quicker earnings on Amazon. Or you can do more of a slow and steady approach, which is kind of what we do with a little bit of Facebook ads. So what this means is just consistent but relatively low cost. Just say okay, I'm going to invest in a book a month and if you're just consistent with that, say it costs you 500 to 800 bucks a month for all your expenses, your book cover, editing, whatever. Obviously, when you put that first book out, you're not going to be profitable immediately. You have to also do some list building expenses, maybe. But over time, over the course of a few months, you start to build up quickly. Okay, now I'm making $20 a day, now I'm making $30 a day. And so it's really a snowball effect as you build up that back catalog, as you gain more followers. And so now once you have a bigger following, you put a book out and then you get a return on that book pretty quickly. Joe: It's nothing like you illustrated with that ad sense example. So, again, I don't really have the numbers in front of me, but I can give you a rough estimate. So I think it was a few months ago when we usually make between; so there's a few months ago where we made over $26,000 in royalties and we probably got one book published that month where we spent the $500 to $800 and we probably spent 3,000 or 4,000 in Facebook ads that month. That's a rough estimate of what you would see typically. But again, it varies because sometimes you're not always heavily promoting on Facebook. Depending on what month it is, maybe you put out two books but we tend to put out one book a month. But, yeah, that's generally what it looks like for us now. When you're getting started, it's obviously going to be slower. But I've made affiliate sites and I made sites that rely on SEO and link building and the expenses are nowhere near that, not even in the same ballpark. Mark: Okay, you guys lost me a little bit here. $500 to $800, write a 30,000 plus word book, I mean, I pay $500 for a single blog post on our site. So let's talk a little about sourcing authors, I know you guys are in the fiction space here, are fiction writers that much more willing to write for $800 or $500 or what's going on behind the scenes there? Mike: Yeah. So it's definitely a bit of a different market than getting a blog post written or even a nonfiction book because there's really no research involved. It's just kind of a creative process. So comparing it at a cent per word basis, it's going to be a lot lower. And there are people that invest more into that, there are people that invest less. But what we found is honestly as long as the books are good then people will read them, the audience response to them well. We've kind of gotten to a nice, sweet spot there where you can invest more and maybe that has a better return; I don't know, we haven't really experimented too much but yeah, that's really you can certainly go on Upwork or even Craigslist we found writers or you could probably go on Indeed and find writers. But it's not an uncommon rate to spend say two cents a word or even less on a fiction book. Joe: To write a blog post for your company, Mark, I mean that's a lot more expertise required than writing a fiction book for sure. And fiction writers, think about it in terms of rarity; how many people love reading fiction, love writing fiction compared to how many people have any sort of knowledge about online business. I mean, the supply and demand there is just totally, totally different. Mark: Do you guys read the books that you publish? Mike: In the beginning, I did. I was kind of bootstrapping it but these days no, we just kind of; I mean, I'll read samples like if I'm hiring someone new just so I can evaluate if they're actually good at writing. But no, it's just they send it in, it goes to the editor, get the cover design, put it together, send it out. And so if there was any real issues we also have an advanced reader team so they get the book as well to write reviews because Amazon actually does allow you to give away your book for reviews. Right now at 2020 in May they allow it. And that is because it's a very common practice in fiction. You give people the book early to let you know how it is. You can't do that with a physical product. So it actually allows you; it's much easier to develop that social proof and you also are not giving away all of your 20, hundred thousand units to get reviews back like with FBA. Mark: Right, because it's a virtual product at the end of the day. I want to backtrack a little bit because I've had this nagging question my head. You talked about the number of page reads, they pay on the number of pages read, they're not looking at the furthest amount that you've gone in the book but actual time spent on each page is that right? Do you know? Mike: I don't know their exact process, but I would say it's kind of a combination of both. I mean, there's probably a number of time that they spend on a page for it to count and then it would be the amount of pages that they actually read for that number of seconds. Mark: Yeah, because my shortcut got to cheat the system mind was thinking, oh man, what you did to choose your own adventure, you could get them to go all over the book and… Joe: Do you remember when I was talking about the Wild Wild West? Mark: Yeah. Joe: I mean that's the kind of stuff that was going on. So they've spent a lot of time on perfecting and tweaking that algorithm. Mark: You're telling me that Amazon is smarter than me. Joe: Well, I'm just saying you were… Mike: Maybe they were not really paying attention and what people were doing was; so they actually have a cap now on how long the book can technically be. So even if a book is 100,000 pages Amazon will only count it up to 3,000 pages. So what people were doing was they're really abusing the system, they will just fill these books with just the most random things and they would have these books that were so long and then they would have something like to win a free prize just click to the back and then boom, they would make 150 bucks. Mark: Right. Mike: That was part of the reason… Joe: I got a lot of trouble for that. Mike: Yeah. That was part of the reason why we walked away from it actually was because it was almost like if you think about professional sports, everyone is taking steroids so in order to even compete because page reads wards you in the algorithm so you'd have these random books in the best-selling things; this is way back in the day so we never did anything crazy like that but it just seemed too; it was between doing stuff like that or not doing stuff like that and we did it. We always thought it was risky to go crazy abusing the system like that so that was one of the reasons why we kind of took a little bit of a hiatus until things evened out. Mark: Right. Okay, well before listeners wonder how far off track we're going to go from our core type of topics here, this is fascinating, I could talk about this all day. I think this is interesting. You guys are building this publishing business with an eye towards someday potentially exiting as well. I'd like to get into some of the things that you guys are doing internally to maybe plan for that. What discussions have you had internally about that? And I'm hitting you out of left field on this. We didn't prep for this before the call so understandably if you don't have ready-made answers, that's fine but have you guys discussed buildings up for sale and what sort of things have you done to maybe have an eye towards that potential exit someday? Mike: So really, the main thing that we've done to kind of have it focused on exit is to focus on having that separate publishing site. So that way we're really establishing ourselves as a brand. We're not just getting income just from these royalties. We actually get affiliate commissions. We have visitors that come to the website and then buy the books. And so, yeah, it's kind of we focused on what can we do off of Amazon like we kind of touched upon it's good to do that for the algorithm and just for your own sake but it actually does help kind of diversify what we're doing and make things a lot better when it comes down to selling it. I don't know if you have any insight there. Mark: So we have a very simple framework that we call the four pillars of value; it's the risk of your business, the growth potential, the transferability, and the documentation. So building up a brand is key; it helps protect against the risk and it's also aiding towards the transferability of the business, which is something that we would definitely encourage. Joe, were you going to say something on top of that? Joe: Yeah, I was going to say as far as the documentation goes, because I feel maybe that's what you're asking. Maybe I'm wrong, but the documentation is not really complex at all. If we were to put together something for someone that we're handing off the business to we would probably just give them; we have like an education course on this subject, but we would just give them that. But it's really just not complicated at all. It's not like handing off an e-commerce store to someone or even an Amazon affiliate site to someone that knows nothing about SEO or WordPress or something like that. When I say it's simpler, it's much, much simpler. Mark: Right. Yeah, absolutely. It reminds me a lot of the ads on publishing days, but through a more established platform of Amazon and utilizing that program. It isn't known much is my guess. Have you guys looked into; I know you're working mainly in the fiction field, have you played around in nonfiction? Because when we first talked about this, my head sort of went to what if we were to leverage this along with our existing business and add it as a revenue stream there? Your paid on a number of pages read, I'm not sure if you can create cliffhangers at the end of a chapter of a business book so much like is this P&L going to get murdered in the next chapter? I don't know. We'll see. What have you guys done, if anything, in that realm of nonfiction books or have you played with it at all and have you thought about using it with an existing business; you have drop shipping businesses on what you're your drop shipping but is there a potential play there, in your opinion? Joe: Well, we have done nonfiction before. When I first started publishing kind of similar books online, it wasn't Kindle, it was Create Space and it eventually merged, and Create Space became Kindle Paperback or whatever they call it. But at that time, I first started doing coloring books and we've done puzzle books and stuff like that. So I think that would be also classified as non-fiction. So I think there definitely is a play there to do that kind of stuff. And again, because that's something you can also build a brand around in the paperback space and you wouldn't approach it the same like we're talking about now with the page read and stuff like that. You'll have to put every book on Kindle Unlimited. It just really depends on the sector of books that you're going after. But as far as what you're saying I think it really is more of a; I guess any book on Amazon would probably be more B2C stuff. I can't imagine a B2B play in this area. There are people that sell non-fiction B2B stuff, but I don't know if it would be a great use of time for a company  yours, for example. I don't know. I don't really think so. Mike: What I would say is I wouldn't recommend doing that for the purpose of making money on Kindle. But the point is that by publishing a Kindle book, you're tapping into that audience and you're tapping into the organic traffic already on Kindle. So you're not going to make your money on page reads and you probably shouldn't be focused on making your money on sales either. What you should be focused on is putting up a good book that way it's almost like lead generation; the Seven Habits of Highly Effective People by Stephen Covey, I believe, think about how many millions of dollars off of Amazon that probably makes him just by building up his name because it's been an Amazon bestseller for who knows how long. So, yeah, when you're doing a non-fiction book on Amazon for business or for something like that you need to keep in mind kind of the back end funnel and it should be more of a complement to your business rather than the business itself. Mark: Right. Absolutely. And that's kind of what I'm getting at, right? I mean, any sort of content marketing play, in general, is just that, right? We bring a lot of content on the Quiet Light Brokerage blog, we have a podcast, I don't sell advertisements on the podcast even though we have a decent listenership. I don't sell ads on or put ads on the blog or ad thrive or anything like that because that's not the main goal. The goal is to build that audience. Although, if there was a way like with Kindle Unlimited it seems kind of a nice backdoor to make a little bit of money, I just don't know what the payouts are on that. How many books do you think you need out of a portfolio to be able to turn decent amounts of money; more than just 30 bucks a day or so? I can't imagine one book unless it's top of Amazon is going to turn in that much money on Kindle Unlimited, I would imagine you need to have a portfolio of books. Mike: Yeah. And I'd say we were kind of familiar with how to do things already because we were doing them in 2015 so we were able to start profiting really within a couple of months. And it does build but it's a lot easier to scale as well because if you're publishing one book a month and you want to do better, publish two books a month. So, yeah, it's hard to say how much you're going to make because it comes down to the execution of it. If you have a really good book that just takes off in the algorithm, if you do the Facebook ads right, and you can really have a pick-up steam then you can make a lot of more money off one book. And it also obviously depends on the length of it as well; so the term how much one customer can kind of give you off that one book. But, yeah, you'd be surprised honestly. Some books can take off and really, really do well. We've only been doing this kind of new way for two years I guess this month and we've really seen it grow quickly and it grows exponentially. Mark: Interesting. Joe: Yeah, and keep in mind that getting into the Kindle top 100 of all the Kindle store, which we have done; getting into top 100 is way different than getting into the top 1000. The top 1000 is still really good but once you break into the top 100, it just; like Mike said, the book would just take off in terms of page reads and everything. So that's something else to consider, is that you have the slow and steady approach and maybe you never have anything that breaks in the top 100 but with the slow and steady approach as that back catalog builds, it doesn't matter. So that is there is a variable there if the book takes off or not. Now, I think if you do it correctly, every book should do decent but like I said, top 1000, top 100, totally different ball games. Mark: Joe, I asked you this when we talked a week ago or so, why share this information? I'm loving the discussion. I'm super entertained. Hopefully, people listening are entertained as well. What are you guys sharing this information for? It seems like you guys would want to be just kind of be like hey, don't come in here. Don't do it. I don't want to compete against you. Joe: Well, actually to be fully transparent we do sell a course on how to start a Kindle publishing business; Passive Publishing Profits. You check it at BuildAssetsOnline.com. But the other thing is the reason why we started doing education in the first place is the guy that told us to do it, he basically said it's a great way to leverage your success. And we have a lot of different online businesses like we've talked about but the thing is, is we might not want to grow these businesses into billion-dollar companies because we enjoy the lifestyle. Me and Mike, we just work from home and we think that the courses are not so much a detriment, but a great compliment as well; teaching other people and getting paid for that. But you also have to keep in mind that especially with Kindle, we encourage our students that you're not competing against one another, because like Mike mentioned earlier, there's this factor of swaps and things like that. So these people who read fiction books, they are really, really avid readers and so if you're partnering with other publishers like we encourage and like we do in our community, it's a win-win for everyone. There's no doubt about that. And taking that back to even selling education products in general, I mean, it's been an amazing experience for us. I'm sure we've generated some competition for ourselves in some way but I think the amount of partnership we've made and things like that far, far outweigh the cons there. Mark: Yeah, fascinating. Well, I'm always a fan of transparency. I mean, that's the only way to do business and I appreciate that as well and it's linked to really fascinating stuff. Guys, I know we're up against the clock here. I've been talking for about 40 minutes; just a little bit more on that so is there anything else that you would like to cut around the discussion with anything that we didn't cover that you're like man, why hasn't he asked this question? Joe: I don't feel that way. I think you did a good job of really trying to hammer in and have us explain ourselves. Mark: Hey that definitely makes you my favorite guests. You said I did a great job. Joe: Well, not every show does that, to be honest with you. I mean sometimes; I guess we feel leaving a little bit empty because we didn't get asked the deep questions that force us to be on our toes. I definitely got that with this one. Mark: Yeah, absolutely. Well, guys, I appreciate you reaching out. I appreciate you coming on here; really interesting stuff. I'd be lying if I said I'm not going to go on Amazon and take a look at the top 100 on Kindle and see what type of books are there. And there's no time for me to jump on another project but that doesn't mean that my entrepreneurial wandering eye isn't going to spend a little bit time looking at that. So I appreciate you guys coming on. I really enjoyed the conversation. Mike & Joe: Thank you, Mark.  Resources: Joe and Mike's Website Quiet Light Podcast@quietlightbrokerage.com

It can be tough to see the silver lining in times of volatility, but when the market is down oftentimes there are some great investing opportunities. John and Nick give us some key tips on how to take advantage of a down market.Helpful Information:PFG Website: https://www.pfgprivatewealth.com/Contact: 813-286-7776Email: info@pfgprivatewealth.comFor a transcript of today's show, visit the blog related to this episode at https://www.pfgprivatewealth.com/podcast/Transcript of Today's Show:----more----Mark:Hey, everybody. Welcome in to this week's podcast. Thanks so much for tuning in to Retirement Planning Redefined with John and Nick from PFG Private Wealth Financial Advisors. Going to talk with me again about investing finance and retirement. Hopefully you've been listening to our series we've been doing the last couple of weeks on, well, really just what's going on in the world in general. And we're going to continue on with that theme by talking about investing in down markets this go around. First off, let me say welcome in guys. Nick, how you doing, bud?Nick McDevitt:Doing well, doing well. How about yourself?Mark:All right. Hanging in there considering all things. Hopefully everybody's safe and staying home and staying with the shelter-in-place and all that good stuff and not going too stir crazy. John, how you doing, buddy?John Teixeira:I'm good. I'm good. It's funny, as I'm quarantined here I'm taking a lot of walks so I'm actually meeting more of my neighbors now that I'm supposed to be stuck at home.Mark:Isn't that interesting? All the different things ... So many conversations had about how our life is so different. If you want to look silver lining, there's a lot of silver linings we can find in this. I know it's tough when people are getting sick and passing away and all, but there's so many things that we're slowing down and maybe realizing stuff that we didn't need or we didn't have to use or we didn't rely on.Mark:I was talking to somebody yesterday and they were ... This sounds like I'm joking, but they're like, "My Starbucks budget. I didn't realize how out of control it was." I know that's a minor thing but coming out of this, I want to think about how to be better about not drinking so much coffee, or at least drinking so much overpriced coffee.John Teixeira:You can ask Nick how he's doing with that. His Starbucks budget's pretty high.Mark:Was it? How you doing, bud?Nick McDevitt:It used to be until I bought myself an espresso machine ...Mark:Okay.Nick McDevitt:... About a year and a half ago.Mark:Yeah?Nick McDevitt:Yeah. I took care of that expense issue a little while back.Mark:But you can relate, then, to what they were saying, right? They were like, "It was out of control!"Nick McDevitt:Oh, for sure. Yeah. Especially because I typically drink lattes instead of just regular coffee.Mark:Right.Nick McDevitt:Those are a little bit harder to make at home.Mark:Six bucks a pop. Seven bucks a pop. Whatever it might be.Nick McDevitt:Yeah. Yeah. So, I brought that cost in-house and good machine pays for itself pretty quickly.Mark:Yeah. There you go. See, look, there's an investing tip right away!Nick McDevitt:There you go.Mark:Right off the bat. Boom! A bonus thing you didn't know. All right. Let's talk about investing in down markets, guys. John, talk to me about proper asset allocation. Let's just jump in and spend some time on some of these pieces, okay?John Teixeira:Yeah, yeah. I think we want to recap from our session the last time where we really talked about planning. We go from the standpoint of the plan really dictates your investment strategy. Once you have your plan in place, it tells you, "Hey, this is how you should be invested, whether it's conservative, moderate, aggressive growth for income." But once you determine that, you really need to develop the right allocation of investments within your portfolio. And once you determine that, hey, I'm going to be ... I'm just throwing this out there ... 60% equities and 40% bonds, you really want to stick to that strategy. And when you're building that portfolio you want to put into things like diversification as far as not having all your eggs in one basket and really develop a zig and a zag in your portfolio.John Teixeira:In reality ... It sounds kind of weird to say, but you always want something going down while the market's going up, per se, because what will happen is when the market's going down hopefully that asset class with be going up. And that's one that we do in our portfolios. We're really trying to make everything work together as a unit. And part of that is ... I'm going to throw out a term people probably haven't heard ... Is correlation of assets. And that's how we can determine exactly how are these assets correlated so when one goes up, is one going down? If one goes up, is the other one not doing anything at all? And when you structure and put that all together you can really build a good portfolio for someone to weather the storm a little bit in this type of volatile market.Nick McDevitt:Yeah. And zig and zag also happens to be John's favorite dance move as well. He really tries to tie into that as much as he can.Mark:Do the zig, do the zag. All right. There you go. I can see you.John Teixeira:Nick's just a little jealous. He has no zig and zag.Mark:Ah.Nick McDevitt:Yep. It's true.Mark:I would have pegged you as a stanky leg kind of guy, myself.John Teixeira:You got me right.Mark:All right. Nick, what's your thoughts here?Nick McDevitt:Really, from the asset allocation standpoint, really what you need to take into consideration to determine that the plan helps create the parameters and what makes sense from a planning standpoint. But then there's also the emotional aspect of it and people's previous and historical experiences with the market can play in. Any client that we bring in, we go through a risk tolerance process where essentially they're answering questions that have to do with risk. Typically, it's probably the process that people like the least ...Mark:Right.Nick McDevitt:... Because often times, they want us to tell them. "Hey, this is what you guys are here for, right? Is to help guide us through this." And they answer to that and the feedback on that is, yeah, we're going to tell you if you're not necessarily taking enough risk for the plan or if the answers you're providing are outside what your plan is telling us makes sense. But at the same time we want to make sure that the amount of risk that they are going to take is something that's comfortable to them, even during uncomfortable times, which, obviously we're in right now.Nick McDevitt:That work up front. One of the things that we really do emphasize with people that we work with is we do a significant amount of work up front. Our process is probably a little bit more in depth and tedious than a lot of other advisors out there that tend to focus on, "Hey, let's get the money in and then we'll dial in after that." Where we say, "Let's get the plan done. Let's do the work up front to make sure that we don't have to overreact or make emotional decisions at the time where we are the most emotional." We can kind of revert back and say, "Hey, remember, this is why we did what we did. Here's the process that we went through. We spent a lot of time doing this. This is why it makes sense."Nick McDevitt:Making sure that as we approach retirement we have a plan for adjusting the risk and early into retirement. But also, making sure that we're not getting out of all market risk. Not being in the market has a cost, an opportunity cost, and that's its own risk. That work that we do up front in determining that asset allocation and the risk really helps us weather through the tough times.Mark:That's really great points, here, as we're talking about investing in down markets. Again, proper asset allocation, risk ... Obviously, those are all key factors in there. What about just the value that an advisor brings? I've been saying for ... I do tons of shows and podcasts all across the country and I've been saying for a while now that as we're moving through this Coronavirus epidemic, never been a better time to have an advisor and, really, in so many ways you should have one anyway. But going through this, people aren't sure where they stand or they aren't sure how things are going to look on the other side. And I just think that the value of an advisor is immeasurable right now.Nick McDevitt:Yeah. We obviously have a little bit of built-in bias that we do feel that we add value and we are important, but the reality is that there's been studies that have been done and Vanguard has done a pretty good study and we'll talk about that a little bit, but the reality is that during times like this having someone to share concerns with, to be able to talk to ... One of the things that we really emphasize early on and when we work with people is the importance of communication, where we want to be heavy on technology, heavy on communication. We want to make sure that people are comfortable having difficult discussions and conversations with us because that allows us to really do our job.Nick McDevitt:We're really hamstrung when we don't have the information that we need. So, when we can be a sounding board for clients ... Even though I know all of these things, I will say I was still a little bit surprised how far a five or 10 minute conversation with clients over the last month went where, really, they just needed some affirmation, a reminder of what's going on, a reminder of what we're going through, and that although it's looked different we've been here before. And the feedback that we've gotten from people has been very positive and that's where some of these studies ... And John can talk about it a little bit more in detail, the Vanguard study, where the studies have shown that the performance that people who work with an advisor have versus people that don't work with an advisor ... There's a pretty drastic difference. And part of that is because of the work that goes up front. It's not just, "Hey, somebody picked better investments at different points of time." Really, it has to do with the plan and the overall strategy and having a game plan and implementing those sorts of things.John Teixeira:Yeah. And that study, Vanguard did it. It's called Advisors Alpha. And basically, the study came out to showing that having an advisor brings about an average of three percent increase in the portfolio over the years. And really, that's in a segmented time period where the market's doing really well or the market's doing really bad; where advisors help clients take emotion out of it. And if you here a dog barking, that's my dog. We really help take emotions out of it. And one of the things that I'd say ... When things are going really good, I'd say we have some people that ... "Hey, maybe I should get more aggressive." And one of our jobs is to make sure that they stay the course in what we initially set up out front.John Teixeira:And the same thing when the market's been volatile as last month, it's, "Hey, let me sell out. Let me get more conservative." And it's like, "No, let's go back to our initial plan, our initial strategy. Let's stay the course." And I think that's one of the biggest values that ... One of the values that we bring to our clients is really just helping them take emotion out and realize it's never as good as it seems, it's never as bad as it seems. And let's just stick to the plan and the strategy.Nick McDevitt:Yeah, and part of that, too, is depending upon how closely they follow things like the news or what's going on, the market tends to be a leading indicator in things. And so, this last month and a half has been a good example of ... Before people were seeing the negative impact in their communities of the virus and the things that were happening and as they were still going to work and, really, their day-to-day life hadn't started to change yet, the market was racing down. Now, we're pretty much 20% off of the bottom and from a societal standpoint and from a lifestyle standpoint, people's biggest impact is currently happening. They're currently living that. And yet, they're seeing that this market bounces back and that's really a good example of what happens. And when you let the emotions or even sometimes ... It sounds weird to say it, but sometimes logic, get in the way you can really have a negative impact on your overall investment strategy.Mark:No, and I get what you're saying about the logic portion of it as well because we ... If anything, logic seems to be going out the window anyway, right now, for a lot of things. All this new paradigm that we find ourselves in, it's very difficult sometimes to figure out which way is up and which way is down. And you're talking about the markets and, obviously, we've seen huge, massive swings. At the time we're taping this particular podcast, we've had a couple of decent days in the room. But that, John, does create buying opportunities or at least the conversation to have with your advisor. "Hey, is this a good time to buy? Is it a good time to look into this, that or the other as part of the overall strategy?"John Teixeira:Yeah. And one thing we like to look at, before we jump into that, is really, what's your time horizon with the money? Is this money that you're going to need within the next year? You may want to not consider buying in in a volatile market. But if you're looking at a five plus year time horizon, I would say this is an excellent time to really consider buying some equities. Looking back at 2008, and I'll preface it by saying past performance is not indicative of future performance, but there were a lot of stocks that, I'm sure, if you look back and said, "Oh, man, I wish I'd bought it at that price," just what they've recovered over two or three years after the 2008 recession.John Teixeira:We have had some people calling in saying, "Hey, this is a great time to buy. What do you think? I'd like to put some money to work for me and take advantage of some of these stocks that are on sale." And when you say it that way, it makes a little bit more sense because if you go to the store and it's like, would you rather buy stuff at full price or when they're on sale? That just brings it full circle to help people understand that a little bit more.Nick McDevitt:Yeah. I would just say that there's always a silver lining to any sort of situation and what John emphasized about the buying opportunities and that although things are going to continue to be difficult in the "real world", at least we've got a little bit of stability and a reminder for people of how these sorts of things play out in the marketplace; how they happen quickly. And really, the importance of having an advisor that can help guide you through it so that you don't make decisions that you're really going to regret in the long-term.Mark:And as we're finishing up with the podcast this week, guys, that's the message I've been trying to convey over the last couple ones. I think we're going to continue to push that message, as well, is that while so many things are out of our control when it comes to the virus and when we're off of lockdown or whatever the case might be and we feel like we're sitting on our hands, there's still a lot of things we can be proactive about. And thinking about our financial future, our retirement future on the other side of this is one of those things we can certainly do. We've got more time on our hands, so put some thought into this. Have some conversations. Talk with your advisor. Work with an advisor. Find an advisor.Mark:Whatever the case might be, there's a lot that can be done virtually in this time frame. And people will be saying, "Well, I can't go drive around and see people." No, you can't. But you can listen to podcasts like this one. You can listen to John and Nick, things that we're talking about. You can reach out to them and let them know you want to talk. They can set you up with a virtual Zoom Meeting like the whole world's doing. We're doing one right now. We're doing the podcast through Zoom Meeting.Mark:Reach out and let them know that you want to have a conversation about some of the things we've discussed here today on the show when it comes to investing in down markets. And give them a call at 813-286-7776. Again, 813-286-7776. That's the number you call. Let them know that you'd like to chat and they'll get you set up and taken care of for a time that works well for everybody. You can also go to their website PFGPrivateWealth.com. That's the name of the company. PFGPrivateWealth.com. You can subscribe to the podcast while you're there on Apple or Google or Spotify. Share it with those who might benefit from the message. And also, of course, check out and learn more about the team; about John and Nick, at PFG Private Wealth.Mark:Guys, thanks so much for your time. I appreciate you, as always. Hope you're staying safe and sane and not too stir crazy.Nick McDevitt:Thanks, Mark.John Teixeira:Thanks, you, too.Mark:All right, guys. Take care and I'm going to need to see some dance moves on the next episode. Just saying. I've heard about it.Nick McDevitt:We'll take that under consideration.Mark:We'll go video next time and we'll see some dance moves. All right, folks. Take care of yourself. Have a great week. Have a safe week, and we'll talk to you soon here on Retirement Planning Redefined with John and Nick, financial advisors at PFG Private Wealth. 

We talked last time on some of the financial impacts the Coronavirus had caused, but now we will discuss how to plan to get through tough times and market downturns. John and Nick will talk about a few suggestions they have when they see situations like this and how to withstand a volatile market.Helpful Information:PFG Website: https://www.pfgprivatewealth.com/Contact: 813-286-7776Email: info@pfgprivatewealth.comFor a transcript of today's show, visit the blog related to this episode at https://www.pfgprivatewealth.com/podcast/Transcript of Today's Show:----more----Mark: Hey everybody, welcome into this week's edition of Retirement Planning Redefined with John and Nick of PFG Private Wealth. Here today again to talk some more about the, well the coronavirus, like we can't not talk about it. It's the only thing going on in the world it seems like. And we're going to talk about retirement planning for this volatile market. Mark: So guys, welcome in. How are you this week? I'll start with Nick. How's it going bud? Nick: Oh pretty good. Just trying to be a voice of reason for people during this crazy time. Mark: Are you doing your part, staying safe, staying home, all that good stuff? Nick: Yep, I [crosstalk 00:00:32]. John: So let me jump in here. Nick's been doing his social distancing for the last three years so he's pretty good. Mark: Good stuff. How about you John? Nick: For at least three weeks, at least three weeks. Mark: At least three weeks? Yeah. Mark: How you doing John? John: I'm good, I'm good. I'm more upbeat today. I feel rejuvenated. I'm ready to roll. Mark: Well that's good. And that's tough, that's a challenge we're all going to face because a lot of us have been doing this for about three weeks already and we're looking at another month going through April at the time we're taping this. We've still got a few weeks to go, so we'll see how it plays out. But there's news every day, it's changing all the time. So we'll see how this plays out. But we thought it'd be worthwhile to at least go through some conversation about retirement planning through or during this volatile market. So let's just kind of jump in and talk about the overall importance of a strategy. Nick, I mean we talked about it long before this downturn happened and more than ever I think that it benefits to work with an advisor because it's a little bit easier some would say when markets are up and things are good and everything's going swimmingly well, than it is during downturns. And if you don't have that roadmap, it certainly can make things more cloudy. Nick: Yeah, it's been interesting. John and I both started in the industry in about '06, '07, so right at the kind of onset of the recession. And after we kind of got through that period of time, people were still afraid of it and what happened in that period of time for three, four, five, six, seven years. And since the markets have been going up for so long, planning has become more prevalent and people have understood that it's an important thing to do. It seems like some have done it almost because, okay, well this is what we're supposed to do, so we're going to do it. Nick: And now the feedback that we've gotten from clients is that it's really kind of clicked to them how important the planning is and how much peace of mind kind of re reviewing it and understanding parts that maybe they didn't quite get when we first set up the plan or in the first couple of reviews, realizing the importance of the plan as we move through times like this after having kind of a smooth sailing decade really. So we can't emphasize enough the importance of clarity and even just helping to avoid rash and unsmart decisions we can kind of put it that way. So the confidence level that we've seen for people that have a plan versus those that don't, from the standpoint of we've been introduced to new clients and we've gotten referrals kind of through this period of time and it's definitely a drastic difference. Mark: Yeah, definitely. Mark: Well John, let's talk about some of the things that the plan determines. Let's go through a few things to consider in there. John: Yeah. We like to say the plan determines what type of investments you should be going into and what strategy within those investments. And that's where Nick and I really try to focus on, "Hey, let's get an understanding of what your needs and goals are. What are you trying to accomplish?" And once we determine that, secondary always comes the investments and one of the things that with the investments go, we try to curtail or develop a comprehensive strategy for each individual person because everyone's different, everyone's risk tolerance is different. But the plan really dictates how much risk you should be taking. John: So we've had scenarios where basically we're doing a plan and the person when we first meet they're pretty aggressive and then when we do the plan it's, "Hey your plan works very strong at four to 5% rate of return, so why are we taking all of this unnecessary risk?" So really when you do something like that, you could be putting more scenarios where failing happens in the plan because there was a pullback. So we really have the plan dictate how much risk you should be taking, which with our clients, if we see it working around four or 5%. Not that we just aim for that, but we kind of scale back on the risk we're taking. Which I'll tell you right now, some clients are appreciative of that strategy, of just saying, "Hey let me gear what I'm trying to aim for a rate of return based on my plan."John:Other things that we really look at is someone's risk tolerance, which I think in the last month or so people's risk tolerance kind of shifted a little bit because they saw some real volatility because we've been almost in that 10 year bull market with not a lot of pullback. So we really try to figure out, "Hey, what's someone's risk tolerance and how much can they mentally afford to lose?" There are some scenarios where we might stress test the plan and that's a case by case depending on the individual. But it's important that you kind of take a look and just stress test it to figure out exactly how will my plan work with any type of market pullback? And then we're going to touch on this later in the next session next week, but importance of kind of building the right asset allocation in your overall investment portfolio. Mark: Well Nick, a lot of people had the question, especially with the heavy downturns, it came so fast, obviously in response to the virus and so on and so forth. You have people saying things like, "Why don't you just close the market?" Right? They want you to shut it down or whatever. And we thought, well we closed it a little bit during 9/11 but that was a little bit of a different scenario. But you're effecting liquidity by doing that and that's another key component to an overall plan is understanding liquidity as part of the strategy. Nick: Yeah. So the speed at which this happened, one article that I read had pointed out that this bear market happened in half the amount of days as the one during the great depression, which was kind of an eye opening sort of thing to think about where it really only took us about 21 days to get here. And so the speed at which that happened, literally when you think about it, in between the time that people get their monthly statements, they've lost a significant amount of money. So to tie into the planning, and this is something that we've tried to reemphasize with clients as something that we take into consideration, but I think it's also helped maybe shed a little bit of light on us spending a little bit more time talking about it with clients as we're putting together the plan is having a liquidation order and a liquidation strategy. Nick: And so what we mean by that is, people tend to look at their money as one pot of money and they don't necessarily think about it as, some people refer to it as the bucket strategy and a lot of times that makes the easiest way to understand, where we have short term, mid term, long term money and in understanding that even if you are two years from retirement or in your first couple of years in retirement, et cetera, we still have a long time horizon. And we don't just shut things down from the standpoint of the overall investment strategy and shifting the cash and those sorts of things. Nick: So we try to review and make sure when we have clients that are taking monthly withdrawals, we usually look to set up six to 12 months of expenses, dependent upon the client, dependent upon what they're comfortable with from a risk standpoint. Set up six to 12 months in their account of cash so that they know they have that income. The emphasis that we've made with clients on keeping a cash reserve where some feedback that we've gotten over the last few years, "Hey, interest rates are so low. This money's just sitting there. I hate not having it do anything for me," et cetera. Nick: And we've kind of tried to hold the line and tell them, "Hey, we understand but that money will come in handy." And really the peace of mind that people have when we go through it and we kind of walk them through. It's like, "Hey, look at between the money that you have in cash in your bank account and the money that we have sitting in cash to be sending you your withdrawals, we have a year to two years worth of income without you having to sell any of your other holdings, which gives your money time to bounce back and not realize these losses that we've seen," really starts to help people understand the importance of having that liquidation order and liquidation strategy. Nick: And then also, from the standpoint of having the big broad based game plan, having a premise or an idea of when we're going to start social security, but then understanding that, "Hey, when things change like they are right now," saying, "Hey, let's look at the numbers. Instead of us waiting another year and a half to start social security, let's go ahead and get it fired up now. Let's have that income start to come in that way you have a little bit more peace of mind, you have additional income coming in, we have to take less out of your investments." And as difficult as it is for people to think in the way of, "Hey, now's a good buying opportunity from the standpoint of your investments. Let's let that money work for you and try to get as much bounce back as we can over this period of time." So that liquidation order and how it fits into the broad based game plan has become really evident and important to a lot of people. Mark: Well, and speaking of importance too, one of the things that we're doing is we're all hunkering down in place and staying safe, staying home, all these things that we keep hearing now, but we can't just hunker down on our plan through this time period and just say, "Well I'll get to it after things start to get better." Right John? You want to revisit, you still want to have these conversations even during volatile periods. John: Yeah, and one thing we've tried to do during these last few weeks is really reach out to clients, especially the ones that are retired or are knocking on the door of retirement and revisit their plan and just let them know that, "Hey, even with this pullback, this is kind of where you still stand." And for the majority of them, they're still in a good situation. Again, partly because we had some strategies in place for a downturn in the market saying, "Okay, well now that the market's down, we have these other buckets, whether it's cash or whatever it might be, where it's not tied to the market and you can access it and let your investments recover." John: So I'll say in our reviews, when we show people their plan still works, it actually really provides a lot of peace of mind and it helps them make better decisions not to cash out where it's basically like, "Okay, you know what? Even though it's dipped, the S&P's dipped 20, 30% over this time frame, my goals are still going to be achieved so let's go ahead and stay the course." So that's where it's really nice just to have the plan in place. It's something you can always take a look at and say, "Hey, I know that the market's doing this, but how am I doing? And how is this going to affect my overall goals?" And when you evaluate it and say, "Hey, you're still okay," I think people feel a bit better about what they're doing. Mark: Yeah, I agree. And I think it goes a long way towards anything we're doing whether you're getting inundated with news every day on the virus and it's driving you nuts and you need a reprieve or you're getting inundated with market volatility or whatever. Sometimes having some clarity, having a calming voice, having someone to kind of talk you through some of these pieces certainly goes a long way. So it applies to your health, it also applies to your wealth. So reach out to the guys if you've got questions or concerns. That's going to do it for this week on the podcast. We talked a little bit about, again, how to plan through this volatile market. We're going to talk some more strategy on the next session. So make sure you subscribe to us on Apple, Google, Spotify, iHeart, whatever platform you choose. Mark: You can find them by simply typing in Retirement Planning Redefined, if you're using one of those apps and you enjoy a particular one versus another, just type that in the search box and you'll find it. Retirement Planning Redefined. Or go to their website, pfgprivatewealth.com, that's pfgprivatewealth.com and you'll see the podcast page there. You can subscribe that way and get all the episodes as they come out, check out past episodes. And of course, as always, before you take any action, if you have questions or concerns, please check with a qualified professional like John and Nick before you do so, and you can reach them at 813-286-7776 at PFG Private Wealth. 813-286-7776. Guys, thanks for your time this week, I appreciate you, for John, for Nick. I'm Mark and we'll see you next time on Retirement Planning Redefined. Nick: Thanks Mark. John: Thanks. 

We continue our conversation about the SECURE Act. Another big piece to this new law is the removal of the stretch IRA. Nick walks us through the things we need to know about this big change.Helpful Information:PFG Website: https://www.pfgprivatewealth.com/Contact: 813-286-7776Email: info@pfgprivatewealth.comFor a transcript of today's show, visit the blog related to this episode at https://www.pfgprivatewealth.com/podcast/Transcript of Today's Show:----more----Mark: Hey, everybody. Welcome into another edition of Retirement Planning Redefined. Thanks for tuning into our podcast about investing, finance and retirement with the guys from PFG Private Wealth. On this episode, just Nick joining me again. That's all right. I like talking to Nick. How are you buddy? Nick: Pretty good. Pretty good. Mark: Hanging in there. Hope you had a good week since the last time we talked. Nick: Yeah, absolutely. This is kind of my favorite time of the year from the standpoint of climate in Florida. Most people are in a pretty good mood overall, including myself. Mark: Well, I'll tell you what, you guys have in the weird weather we are? It's in the 70s in North Carolina. Nick: It's definitely warmer than I prefer, but I know that it's going to kind of cool back down. It's still at least not 90 for four months in a row. I'll take it. Mark: Well, the bad part about the warmer winters is it doesn't get a chance to kill the bugs. I'm showing my old man age there by that, but it's really true. Every year I get older, it's like, man, we do kind of need a cold snap during the winter to kind of kill off some of the stuff that is going to haunt us come spring in summer, right? We don't get rid of some of those bugs. It just makes it that much worse. Hopefully another cold snaps on the way. Nick: You must live near the woods. Mark: Woods or water, man. Woods or water. Nick: There you go. There you go. Mark: You'll get it with that. All right. Well, let's get into our show this week. As I mentioned the last time, we talked about the SECURE Act on our previous podcast. If you haven't subscribed to the show, please do so on Apple, Google or Spotify or whatever platform of choice you'd like. We're all over the place with those. We talked about the increase to the RMD age limit and also the contributions for IRAs with the new SECURE Act. The SECURE Act, as I mentioned before, for those of you who'd just be catching this, that is the most significant piece of legislation the government has passed for our listening audience since really the Pension Protection Act of '06. The SECURE Act is setting every community up for Retirement Enhancement Act. Mark: This was $1.4 trillion budget piece that they kind of snuck it into at the end of December there last year in 2019. This week we're going to talk about a really big component, Nick, and that is the elimination or the altering of what was termed the stretch IRA. Really a lot of people they're saying this is the big negative to this piece of its great for the government because is basically a tax generating... This is the way to create more tax income for the government, but not so great for folks who planned on using this as a generational tool, which is primarily what it was done for to leave wealth to their heirs. Nick: Yeah, absolutely. It's going to have a pretty significant ripple effect from the standpoint of people that were planning to leave their IRAs or maybe had adjusted the way that they were taking from their investments throughout retirement and trying to preserve the IRA to pass. That's going to have a pretty significant impact on that. Plus it's also going to probably cost some people some money in legal fees as they adapt and adjust their estate plans and legal documents to take these sorts of things into account. Mark: Yeah, absolutely. What was the stretch or kind of give us a quick overview and then what they've done to alter it? Nick: Yeah. One of the things I always kind of tell people is from the standpoint of a stretch IRA is that it's really kind of a nickname and it's a concept. A joke that I would kind of make is if somebody passed away and you had inherited funds that were in an IRA and you walk into the bank and you tell the bank teller that you want a stretch IRA, they may look at you cross-eyed. It's not an actual legal name for an account type. The real kind of legal name for the account type is an IRA BDA or a beneficiary designated IRA. Essentially what happens is if you inherit IRA funds or you're listed as a beneficiary on an IRA, there are kind of two classifications for how they look at or at least that's kind of been the rule up to now where it's either spouse or non spouse. Nick: The way that it would work is that if you were to inherit an IRA from a spouse, you could either put those funds into your own IRA, or you could put it into the beneficiary designated IRA. The rules for withdrawals would kind of dovetail from there. For a non spouse, you would also open it as a beneficiary designated IRA. But then the required minimum distributions that would have to be taken from that account would be based upon multiple factors, including your age, the year at which the person passed whether or not they had started taking distributions already, et cetera, et cetera. There are some different rules that went on with that, but in theory you could really stretch that over your entire lifetime by taking the minimum out, and you could also list a beneficiary yourself on the account. Mark: The reason for doing that was to if it was a larger account for tax purposes, right? Nick: Absolutely. Let the account continue to compound, avoid taking out in a lump sum and having to pay taxes on the entire lump sum amount. Because just as a reminder for people, when you inherited a traditional IRA or traditional IRA funds, the full account balance has... Taxes are due, federal taxes. If you live in a state where you pay state income taxes, income taxes are due on that full amount. That could be a pretty significant kind of tax bomb dependent upon what happened, especially if you made a mistake in how you had to take it out. Really this new provision essentially applies to people that are going to inherit these funds starting on January 1st of 2020 moving forward. It is not a retroactive rule. Essentially what it does is it says that you must deplete that account within 10 years. Nick: From what I've seen so far, correct me if I'm wrong, the rules on how you need to take out distributions within those 10 years are not as strict as they used to be. However, that account needs to be depleted within the 10 years. Mark: Right. Yeah. You can do it over like annually obviously, but at the end of 10 years, whatever's left, you got to pull it out and pay the taxes. Nick: But you can defer within those 10 years as well. Mark: Yes. Nick: Again, that could create a pretty big tax bond dependent upon the size of the account. There's a little bit of a flexibility and a little less accounting or paperwork on trying to track those required minimum distributions that would have to come out and the amount on are you doing it correctly, are you calculating it correctly, or some people most likely, and we haven't gotten into it yet with any clients with it being so early in the year, but my assumption is dependent upon the overall situation, people are going to probably take it out equally over the 10 years or try to defer and be a little bit strategic with how they take it out dependent upon maybe there's an impending retirement. Maybe a husband and wife are 60 years old and they both plan on retiring at 65. Nick: Wife's father passes away, leaves them money in the inherited IRA. Our goal is going to be that we're going to take it out post retirement where the income has come down, try to minimize the taxation, and maybe even let that fill in the income hole that they have between 65 and 70 or even 65 and 72 now that the RMD age for their own accounts has bumped up to 72, and they can let their own account kind of accumulate and grow and defer accordingly. It will definitely add another level of strategy and just kind of thinking outside the box a little bit so that we don't have to deal with that, but it's going to be interesting to kind of adjust and adapt to the new rules. Mark: Oh yeah, for sure. Now, for some of those folks listening who are thinking about this now, I do know there are definitely some exceptions I guess if you will, if you want to call them that. There are definitely some pieces to ponder when it comes to some exceptions I guess if you will. Obviously if you're a spouse, that kind of stays the same. This is really kind of targeting the heirs, so like basically if you were leaving this to your kids, but there are also a couple of exceptions there like chronic illness I think is one. There's a couple of others as well. Nick: Yeah, chronic illness is definitely one. If there's a disability, that changes and adds a different set of rules. Those sorts of kind of deeper details are the things or the aspects of the new legislation that everybody's kind of digging through. The attorneys are kind of reading through all the paperwork to make that everybody has a really good grasp and understanding of what those exceptions are and how those funds can be used. Attorneys typically do a good job of interpreting the new rules and laws and coming up with new strategies that allow us to work around them a little bit. Mark: Yeah, no, that's a great point. That's why it's really important to talk with your advisor about how this may affect you if you are planning on leaving. A lot of people do that. Some people are saying, Nick, with the way this whole SECURE Act is working together with the increase to the RMD limit at 72, age of 72, and then with this, a lot of folks, they're kind of looking at it saying it's a tax grab for the government, which of course, I mean, it's always something, but it's one of those deals where if you're living longer and you're putting more money and you don't have to take it out and you choose to leave it to your heirs, like these IRAs or whatever, then that's kind of where this is coming from. Mark: That's kind of how the two pieces of the puzzle in some people's minds are working together in order to generate more tax revenue for the government. It's certainly a piece where you want to talk with your advisor about how you can now be planning more efficiently. Nick: Yeah. As an example with that, just kind of a thinking outside the box and how people may adjust and those sorts of things, if there are substantial funds in the IRA and it's important to you to try to leave money to your beneficiaries, this change in the law may kind of push people to look a little bit more at using a tool like a permanent life insurance policy where they're going to use their own distributions that they're taking from their IRA in retirement, apply some of those distributions towards a life insurance policy that is going to pay out tax free after they pass on and avoid that potential tax bomb that the IRA would leave. Mark: Got you. Nick: There's different things. The fun part, and we can put that in quotes as far as the fun part, but the part that we enjoy the most as far as financial planning and retirement planning, et cetera, is that people are different. There are enough rules, laws, product strategies, et cetera, that there's usually something for everybody. It's just important for us to kind of get to know them, figure out what's most important to them, and adapt and adjust the strategies that we recommend so that it fits within their life and what they're trying to do. This is just another change that we take it into account. We adapt. We adjust. One of the things that we always preface, and this is a really good example of why is... Nick: In these classes that we teach, one of the most common questions that people will ask us is, should I contribute money to a traditional IRA or a traditional 401k or Roth IRA or Roth 401k? They start to understand by the end of the class together that we say it depends for a reason, things change. The only thing that we know for certain is that things will change. This is a great example. We always emphasize building in the ability to be flexible and adapt to whatever changes we do have happen to us so that we aren't all in on one certain strategy that we have no control over whether or not it changes. This is just a perfect example, and it emphasizes even more that it's important to have multiple sources of income in retirement, multiple account types. Nick: That goes for the funds that you're going to use in retirement, as well as the funds that you want to leave in retirement. Mark: Got you. Got you. Okay. That's why we kind of preached that on the show that anytime you hear anything, whether it's our podcast, somebody else's, a different show, a radio show, a television show, you may be hearing some information that kind of peaks up your ears there and kind of gets you to thinking about something. But before you take any action, you should always check out what's going to affect your specific situation by talking with a qualified professional financial advisor like the team at PFG Private Wealth, John and Nick here on the podcast. As always, we're going to sign off this week. Really good information here on the show. Mark: If you've got questions about how the stretch IRA, the removal of that or the changes to that are going to affect you or how the SECURE Act in general is going to affect you, make sure you talk with your advisor or reach out to John and Nick at (813) 286-7776 here in the Tampa Bay area, (813)-286-7776. You can also find this online and subscribe to the podcast via the website pfgprivatewealth.com. That's pfgprivatewealth.com. You can subscribe on Apple, Google, Spotify, iHeart, Stitcher, whatever platform it is that you choose. Nick, my friend, thanks so much for your time this week. I appreciate you. We'll talk more I'm sure about the other components of the SECURE Act and how it's going to affect things in the weeks to come. Nick: Thanks, Mark. Have a good day. Mark: You do the same, and we'll see you next time right here on Retirement Planning Redefined.

Mark (here on LinkedIn) talked at the DMSS 2019 and he is a professional outreacher. His presentation was called Building a lean, mean, lead generating machine with outbound prospecting. And he knows how to help others do it. He is the CRO at TaskDrive. We have his whole presentation here: Building a lean, mean, lead generating machine with outbound prospecting from Mark Colgan   Here is the transcript of the talk we had: Mark Colgan: HubSpot is the biggest advocate of inbound marketing, yet they spent over 60% of their budget in the first few years on outbound. Really, the answer is that inbound alone doesn't work, and you need to support it with outbound prospecting or outbound marketing. Intro: This is Time For Marketing. The marketing podcast that will tell you everything you've missed when you didn't attend the marketing conference. Peter: Hello, and welcome to the Time For Marketing podcast. The podcast that brings you marketing conference speakers from all around the world, and takes their presentations, smoosh it up into five minutes, and you have a small package of knowledge. My name is Peter, and I'll be your podcast host. If you would like to check out the previous episodes, timeformarketing.com, or you can also subscribe to our newsletter, and of course find all the links to the iTunes Google podcast, Stitcher, and every else places where you can listen, and review, and rate, and do all of the great things that you do with podcasts. Today with me is Mark Colgan. Mark is the chief revenue officer at TaskDrive. Mark, hello, and welcome to the podcast. Mark: Hey, Peter. Thank you very much for having me. I'm really looking forward to sharing the presentation. Peter: Thank you for being here. Mark, you are a chief revenue officer. What does that mean? Mark: Yes, that's a great question to start with. A chief revenue officer has a few different definitions, but in my understanding and interpretation, it's somebody who aligns the different departments within a business in order to achieve revenue. Those departments I look after at TaskDrive are marketing, sales, customer success, and product. I make sure there's no silos, and I make sure that our customer is first in terms of our priority. We do everything we can to increase the quality that the customer has with us, which helps us reduce churn, and also helps us increase new customers through the sales and marketing activities too. Peter: What is TaskDrive? What are you doing? Mark: Good question. TaskDrive is a service-based business. Our mission is to help b2b sales and marketing teams focus on high-value activities. We do that by offering an outsourced lead generation and data enrichment service. We help companies build new lists of prospects. We also help them enrich existing datas, then we also help companies that sell into enterprise with their account-based insights to helping them expand their reach and increasing their sales velocity by giving them a detailed view of the stakeholders within the decision making process. Peter: This was a complicated way to say you help companies with their prospects, with their leads, is that right? Mark: Yes, but it's not just leads because we help them-- A lot of companies are faced with the fact that they have a lot of data that they've amassed over the last few years which has gone fairly out of date, so we also help them with data enrichment. Yes, one of the use cases is lead generation for prospecting. Peter: Your presentation comes from the Digital Marketing Skillshare Conference that is organized every year in Bali. You were there this year. How was the conference? Mark: Yes, it was fantastic. A really great conference. They originally started out with an SEO focus but over the last few years, have broadened that out to other tracks. There's people talking about marketing, pay-per-click advertising, as well as email marketing. I covered the outbound sales and prospecting through the presentation there. Peter: What was your favorite presentation at Bali? Is there one? Mark: I personally really enjoyed Mark Webster's presentation. He's from Authority Hacker, and he spoke about building and selling online courses, or online IP, basically, your knowledge as a personal interest of mine. I really enjoyed that talk and got a chance to speak with Mark after the event as well. Peter: Of course, Mark is a big podcaster in the marketing world. I think we should go directly to the presentation. Mark, you spoke on building a lean mean lead generating machine with outbound prospecting. Here are your five minutes. Tell us what your presentation was about? Mark: Thank you for having open mic, Peter. This presentation was actually around 50 minutes, so I'm going to do my best to bring everything into 5 minutes. I spoke about outbound prospecting, and throughout the presentation, I covered a number of different sections. I started out with what outbound prospecting is, what the four stages of building a lead generating machine is, how you can then scale that outbound prospecting. Then I gave some bonus tips and additional reading, which are all in the slides for those who are listening. I'll start with outbound prospecting. It really it's a direct channel where you can identify and target customers and directly reach out to them, and introduce them to your company its products and services. The goal of this is to start a conversation, and it's also to position yourself as a trusted adviser. You're not going to sell- especially in the b2b space, you're not going to sell directly to consumers in a cold email, so you need to remember that. Also, you need to remember that it's just one lead generation strategy, so you've got search engine optimization, social media events, webinars, side projects. Outbound prospecting just fits into your lead gen strategy. It's not the be-all and end-all. It's part of the sales process. It's the beginning part because once you generate leads, you then need to convert those leads by sales calls, or from demos, or free trials, and close them into paying customers, and then you need to fulfill those needs. Fulfill those customers and deliver the value that you promised, nurture those customers, and ensure they're successful, and hopefully, they become advocates of your business. Outbound prospecting works for most companies who have achieved product-market fit. They have an average order value of over a thousand dollars per year, and you can also scale the delivery of your service or product. It's really important to distinguish those. Also, as we approach 2020, there's a couple of things that I believe personally you need to do in order to succeed with the outbound prospecting. These are, you have to come from a attitude of offering value and giving without expecting anything in return. You need to understand the buyer's journey of awareness consideration of the decision, and people within your prospects are going to be at different levels of that journey. Also, only 3% of your market are actively buying at any one time, so that means 97% of people aren't looking to buy right now. If you're selling and pitching to a hundred people, only 3 are actively looking and 97 aren't. You need to make sure that what you're sending in your messaging is building value, and position yourself as a trusted advisor, and not just sending a sales pitch. For the sake of time, I broke down the lead generation machine into four different steps. I'll just go through those in a bit more detail. The four steps are planning, research, message, and launch. Planning really comes down to understanding who you're trying to target with your ideal customer profile, as well as the individuals within those companies. Those are your buyer personas. The best way to create these is to look at your existing customers and any sales or prospects in the funnel and just identify what they have in common. What pain points do they share, what characteristic characteristics they share as a company? You then need to move on to understanding what their pain points are, what problems are they trying to achieve or overcome from a account level as well as a personal level. In their role, what are they trying to overcome? Then you want to split out your ideal customer profiles and buyer personas into different campaigns. That might be via location, by industry, by job titles or seniority. Then you also need to prepare your email for outreach. One of the most important things to do is not use your main domain to send out these emails because you run the risk of hitting the spam traps, and then blocking your email deliverability in the future. You also need to research, spend a lot of time personalizing the outreach, so you can research on an individual persona. On an account level, make sure that your outreach is personalized, and you can use merge tags for the outreach. You put those things that you find in your research into the emails which builds relevance with the individual, and also it encourages them to reply. You then need to find those leads. There's a number of places you can look at. LinkedIn, you can go to directories, you got to the podcast, you could use paid databases like-- discover. There are hundreds of different sources for the data, but you'll only be able to know where they are when you've done your ideal customer profile and buyer persona research. Again, skipping through quite a lot here [chuckles] to try and get it into five minutes. Then we're onto your messaging. Here, you need to understand what your strategy for cadence is. That is, how many touchpoints, how many times are you going to try and attempt to contact people, over which media or channels, what the duration of the outreach is going to be, how much time in-between each of the messages, and what that content is. There's a number of ways to select media channels. The easiest way is the cheaper or smaller. The shorter the cell cycle is, the less effort you want to put in. The more longer the cell cycle is, and the more expensive your product is. You'll want to use channels such as Direct Mail, personalized video, and personalized experiences because the effort is worth the reward. Then the final element after you've got the messaging is to-- Sorry, then the messaging comes on to these four elements of the cold email. The subject line whose job it is to get the email opened. An opening sentence, which shows that you've done your research and it's a relevant email or message for the person who's received it to read. The main body, which connects your opening sentence to the value proposition that you offer. Then a call to action. The simplest call to action can be, "Would you be interested in finding out more?" The last thing you need to think about is the launch. This is where you select the right technology that you can use to send out these emails. The most simple technologies for email outreach where it's just email, you could use outreach.io, Lemlist, Amplemarket, or Reply.io. If you're combining your outreach with other channels, like direct mail, phone calls, and voicemails, you might want to use a tool like SalesLoft or outreach.io. Once you have that technology in place, you just need to set up your outbound sequence. All of the tools out there will help you do this. What you can typically expect is if you're doing this right, you can get an open rate of 60%. A reply rate of 45%, a conversion rate of 20%. If you're good at closing those deals, you want to be aiming for 50% close one. Obviously, you want to aim for 100%, but it won't always happen. That really is the key to building a lean mean lead generating machine and how you scale this is that you learn, you iterate, and you repeat. Once you've effectively done this for one fiscal or one campaign, you can launch multiple campaigns at a time and add more leads to the top of the funnel. Peter: All right. Thank you, Mark. A couple of questions. Outbound versus inbound prospecting. I feel that we're mostly, in the last couple of years talking about inbound. What is the difference and even more important, how should people decide which of those two channels should be more important for them? Mark: Great question and one that I like to usually back up with a fact which is escaping me right now. HubSpot is the biggest advocate of inbound marketing, yet they spent over 60% of their budget in the first few years on outbound. Really, the answer is that inbound alone doesn't work and you need to support it with outbound prospecting or outbound marketing. That's really key. I think when it comes to inbound, you're relying on the fact that your content is going to be picked up. You've got the right keywords and you've got the right audience segmentation that they're going to read your content and then convert or contact you. `Whereas what you can do with outbound prospecting is because you know who an ideal customer is, and you know the particular triggers and signals that you look for or you can see when somebody is right for you. Say for example, one of your buyer personas has started a new role and you offer a product or service that would help that person in their new role. You could actually reach out to them at the time where they're starting a new role with a bit of content or with some value that you can share with them to start the conversation. That you can't really do with inbound because you're not controlling the process, whereas with outbound, you can control the start and the initiation of a conversation. Peter: All right, you said that outbound is for companies whose customer value per year is around $1,000. How did you come to that number? Why? Mark: It's a rough rule of thumb. I'm not saying it wouldn't work for customers who have a smaller lifetime value, but the more the better. The reason being is that there's often costs associated from a tools and technology process. Some of these tools can cost 70 or even hundreds of dollars per month, and that's to send the emails out. You need to spend time doing the research. You also need to verify the research and you probably want somebody doing it for you because it may not be the best use of your time as a founder or even as a marketing or sales director. You've also got to be prepared to play the long game because not everybody converts on the first message. Often you see that sequences have over 30 touchpoints. In addition, because email alone may not work, you might need to include phone calls and voicemails, videos and direct mail. There's just a lot more labor costs in it. If your unit economics don't work out, it may cost you more to acquire a customer than it does if your average order value is low. Peter: Do you have any tricks to write email subjects? Mark: Yes. I would say the best subjects are short. They invoke curiosity, you could potentially use humor, definitely personalize with an account name, the company name or the person's first name. Those would be my main tips. Also, I shared in the presentation on the day that the best performing subject line for open rates is, I've got your wife. That will always get a lot of opens,- [laughter] Mark: -but you will have a lot of angry and annoyed people because you've tricked them. Never trick, be honest, be sincere. Use humor only if it's right with you and your audience. Some audiences you'll be able to get away with more humor than others. Peter: I like that idea of not using the main domain for the email outreach, could you briefly speak about that, why and how that works? Mark: Yes, sure. The best practice really is to pick a domain which isn't your main one. Let's say that your domain is companyname.com. Try and find a domain which is very similar, but it's .io or .co or whatever variation it may be or you might want to say getcompanyname.com. What you want to do is, even if you're doing everything right, you're taking time to research your ideal customer profiles and understand your buyer personas, you really understand their pain point and you have a fantastic product or service that can solve their problem and you're not spamming people and you're sending small volumes out at a time. You've warmed up your domain, you can still get triggered as spam. You can do everything right, but send the message to somebody on the wrong day and they mark you as spam. Also, if you're not personalizing your outreach and you're taking a very template shotgun approach, you will also be sending the same message out over and over again. That's what the spam filters are looking out for and it reduces your chances of delivering emails in the future. The main reason why we say to use a spare domain is because whilst you be able to do the right things, you still might be marked as spam on your cold email outreach domain which means that it can affect the deliverability of your main domain if you're not using a separate one. That means that your internal emails to each other, to your team members, may not even be delivered because you've been marked as spam so much. I've seen personally, companies who have really struggled with this in the past. Peter: All right. One last question, everyone who is from the European Union and you being from the UK, still count. They would ask, of course, how does that work with the privacy laws with GDPR and others? Mark: What I'd always, first of all, is to say get professional legal advice. This isn't legal advice, but if you can find the email address and it's publicly available and you have legitimate interest to message them, then you should be okay in using their email address to send. Also, you could do the research on LinkedIn and connect with individuals on LinkedIn and not even have to do email for the outbound prospecting. That's what I see some of our European clients doing with the data that they're using. However, the majority of our customers are in the US and not affected with the same privacy laws. Peter: All right. That was very very interesting and a lot of great info. We will be able to attach your presentation to the podcast notes so that everyone can go into to check out for the whole presentation. Is that right? Mark: Excellent, yes, that's perfectly fine. Peter: Excellent. All right, Mark. What are your future conference plans and where can people find you on conferences or where can people contact you online if they would like to talk about everything that you do? Mark: Great question. We're planning our 2020 conference plans at the moment. There's still a bit TBC. I'll certainly be speaking on more podcasts and online summits, but if you'd like to speak to me in the meantime, the best place to find me is on LinkedIn, where you can search for Mark Colgan, that's C-O-L-G-A-N or you can email me at mark@taskdrive.com. Peter: All right, and I will, of course, add all of those links to the show notes so if you're listening to just open your podcast app and find all of the links to Mark. Mark, thank you again for being on the podcast. Have a great day enjoying the sun and hope to see you around. Mark: Thank you very much, Peter. It's been great. Thank you. Peter: Bye-bye.

Today's show is part 4 of our social security discussion. Our topic today is spousal benefit options. John and Nick will walk us through the ins and outs of this facet of social security and offer their advice.Helpful Information:PFG Website: https://www.pfgprivatewealth.com/Contact: 813-286-7776Email: info@pfgprivatewealth.comTranscript of Today's Show:----more----Mark: Hey everybody, welcome into another edition of Retirement Planning Redefined. Thanks as always for checking out and tuning into the podcast with John and Nick, financial advisors at PFG Private wealth. Gents, what's going on? John, I'll start with you. How are you buddy?John: I'm doing good. I'm doing good. How are you doing Mark?Mark: I'm hanging in there. How's the little one's doing? I know they, you had some cold running through the house. Everybody getting better?John: They're getting much better, which is good. No more getting coughed in my face a lot less this week, so yeah, that's a good thing.Mark: And Nick, how are you my friend?Nick: Good, good. Looking forward to the holidays coming up here and all kinds of good food.Mark: Oh yeah, yeah. Are you a Thanksgiving kind of guy?Nick: I have become more so after my brother started deep frying turkeys a couple of years ago.Mark: Okay, good. So no YouTube videos of that now, so just be careful. We don't want to see any flying turkeys.Nick: He's got it all under control.Mark: Fantastic. Awesome. Yeah. At the time of this podcast taping it is just about Thanksgiving. It's just about here on us. And so we're going to continue on with our a multi-part series we've been doing about Social Security. So hopefully you've been checking these out and if you have, great, if you have not, make sure you go to the podcast page, you can find it on their website at pfgprivatewealth.com that's P F G private wealth.com and you'll find the podcast page. You can subscribe to it on Apple or Google or Spotify. I think there's other couple of choices there as well.Mark: So make sure you do, a lot of good content that we're discussing. This is a multi-part series all around Social Security and part four here is going to be on Social Security, spousal benefits, not deep frying turkeys that'll come another day, but a Social Security spousal benefits. So guys, let's get into this and just kind of break down some information for us on, I guess, what we're entitled to or how this whole thing kind of works.Nick: Sure. So just kind of a recap on, you know, how eligibility wears for Social Security. Essentially somebody needs to work, you know, for 40 quarters, pay payroll taxes for those 40 quarters and they become eligible for their own benefit. However, you know, one of the common questions that we may get is one spouse stayed at home, one spouse worked. The spouse that stayed at home didn't get their 40 quarters. And they want to know are they eligible for any sort of benefit.Nick: So it's important to understand that, you know, as long as the couple is married, the person that has not qualified for the benefit is eligible for a spousal benefit. And that spousal benefit is essentially calculated by looking at the full retirement amount benefit for the spouse that was working and multiplying by 50%. So, that's the starting line. That's kind of how you understand how they calculate that. And the reason that they did create that was understanding that households, you know, it's not always cut and dry from the standpoint of one spouse is working. There's obviously value to the other spouse staying home, helping to raise a family and they want to protect that spouse in situations like divorce or other sorts of scenarios by providing them with this kind of caveat for how the benefits work.Mark: Okay. And yeah, so the simple way to break it down. So give us some more, John, give us some more things to think about here when we're talking about the eligibility of spouses, maybe some rules, things of that nature.John: Yeah. So basically, some of the rules before you can collect a spousal benefit, the primary worker must have filed. So wait until the spouse actually draws and then you can go ahead and take your spousal benefit. Spouses can actually start taking it at age 62, that's the soonest that you can start taking.Nick: So a kind of a good example of that is, so let's say, Mr. Smith has been the worker and Mrs. Smith stayed at home with the family and raised a family. And a couple of years ago, two years ago, she started working, you know, so she's not eligible for her own benefit. So Mr. Smith is going to continue to work and Mrs. Smith is trying to figure out, "Hey, I'm also 62, can I file for benefits?" So the answer is not until Mr. Smith essentially retires and fights for his benefit. So that's where the restrictions on the ages kind of come to play.Nick: And when John referred to that primary worker must filed for their benefits, there used to be some other rules in play where you can kind of navigate around, but they really cut down and things are a lot more restricted than they used to be.John: Yeah. And just to kind of give some numbers to that, let's say Mr Smith's full retirement benefit was 2,400, Mrs Smith's spousal benefit would be, as Nick mentioned, 50% of that sort of 1200. And again, so her spousal benefit is based off of his full retirement amount benefit and not what he actually gets. So example of that would be, you know, when she goes to draw, let's say if he'd started taking early and he get his full 2,400, she's not penalize by that. Her 50% is still the 1200, assuming she draws at her full retirement age.John: If she decides to take early at 62 she will actually have a reduction of her spousal benefit.Nick: It is important for people to understand that, you know, there's the dates on when people start to receive the benefits are calculated, or factored in I should say, for each person. Though it factored in potentially when Mr. Smith files and starts collecting and it's also factored in when Mrs. Smith files and starts collecting. And so there's a lot of different variations on how that works. And because there are some different variations, we typically recommend to people that, you know, I was helping you kind of walk through the different, let's test out different scenarios and figure which one makes the most sense because there are so many factors that go into the decision.Nick: We understand a lot of people like to just, you know, they want a cut and dry answer and unfortunately or fortunately, the positive to there not being a cut and dry answer is that, you know, oftentimes they can be strategic and find something that works better for them and if it were cut and dry. But it does take a factoring in a lot of other things to make the right decision.John: Yeah. At first the answers to certain questions are, it depends.Mark: Yeah, that's the case a lot of times I think.John: One question we actually get a lot and we talked about in the last sessions was, you know, if you draw Social Security after full retirement age, you actually get a percent increase in your benefit. That does not work for spousal benefits. So if the spouse didn't want to take or they want to defer their spousal benefit, they do not get the 8% increase on it.Nick: Yeah. So, we have seen that mistake happen, you know, the primary person has decided, "Hey, let's wait to collect the benefit" because they are under the assumption that not only will their benefit grow by 8%, but the spousal benefit that their spouse will take will grow, but that's not the case. Only their benefit grows, the spousal benefit does not. So when we run kind of break even calculations, it can often makes sense to just have them start collecting so that they can get both of them.John: Yeah. And then, you know, it's important understand also for to be eligible for spousal benefits, you have to be married at least one year. So can't be a just getting married and after six months started drawing on Social Security for a spouse.Mark: They're not going to just make it too easy for you anyway. All right, so that's some good rules. That's some good basic information there. What are some strategies? Give us a few things to think about when it comes to the spousal benefit options.John: Yeah. And like we said, everyone's situation is different. It really depends and it's important to customize what works for you. And I think we offered in the last session, but if anyone wants it, we actually are working on a Social Security machination strategy, which we're happy to do so. But one thing that we'll do with some spousal strategies, depending on the situation, we might have one spouse claim early and the other spouse, depending on the situation, you know example of that would be, let's say we have a high earner and they want to protect the spouse in case of a premature death. So we might go ahead and have the high earner, who's Social Security benefit is higher, actually delay theirs. So, if they were to pass away prematurely, that spouse can actually jump onto a higher amount, high Social Security benefit, which is nice strategy to protect the surviving spouse.John: I've used that a couple of times when there's an age gap on the spouses or if I'm there, you know, sometimes clients will come in and they're just concerned saying, "Hey, I'm really concerned something could happen to me. Is my spouse going to be okay?" We'll go ahead and implement some strategies like that.Nick: Another time where that can be used is if the primary earner has worked at in an occupation where they're eligible for a pension and they're going to receive a pension and they, you know, kind of through planning or whatever it may be. Or like the example of John mentioned where on of the spouses is maybe quite a bit younger, so when the other spouse is quite a bit younger, it pulls down the pension amount that the primary person would receive. So to offset that a little bit, we might recommend, "Well, hey, instead of doing a hundred percent survivor benefit on the pension, let's do a 50% so that you can have a higher pay out. But to offset that, what we'll do is we'll have you wait to take Social Security until 70." So the pension amount that the spouse would receive would be less, but we can offset that waiting on Social Security a little bit and still have more income coming in the household.Mark: Gotcha. Okay. All right. So a couple of different strategies there to consider and I think a lot of times people sometimes don't plan ahead for that part. It's like we're sitting there talking about different, when you're getting your retirement plan done, I think sometimes we look at it overall and say, "Well, we want to turn Social Security on as soon as we can and yada, yada yada." Instead of saying, "Okay, how can we most maximize our Social Security for both of us in an overall inclusive retirement plan?"Mark: So it's certainly important to do. And as John mentioned, you know, they can run that Social Security maximization if you have some questions on that. If you want to get that done or have a chat with them, give them a call at (813) 286-7776 that's (813) 286-7776 and you can also check them out online at pfgprivatewealth.com.Mark: As I mentioned before, there are financial advisors here in the Tampa Bay area, so if you have some questions about that, again, as always when you're listening to this show or any other show before you take any action, always check with a qualified professional about your specific situation because everybody's, it can be so different, so make sure you have that chat.Mark: All right guys, I think in the interest of time we can probably squeeze in a couple more things. Can you give us a few things to think about on divorced spousal situations?John: Yeah, so it is important for people to understand that they are still eligible for a spousal benefit if they were married for 10 years and they are not remarried. So a scenario that we may see with that is they were previously married to a high earner, maybe they worked a lower paying job, they were married for 25 years, became divorced, they went back to work to cover expenses, et cetera. They may be in a relationship currently, but they're not officially married and we kind of go through calculations and we determined that, "Hey, the spousal benefit that you could receive from you former spouse would be higher than the benefit that you would receive on your own and or higher than the benefit that you would receive if you were to marry your current partner." And obviously a lot of other factors go into that.John: But, from a purely financial decision, that could work out really well because again, you cannot collect that spousal benefit from a former spouse if you are remarried. We have had questions along the lines of, you know, "Hey, I was married twice. Both were over 10 years. Am I restricted to choose just the most recent one?" And the answer is no, you can pick the higher. We had a nice young lady one time that had four different ten year marriages and she asked if she could add them all up together and unfortunately you can't, it's just the higher.Nick: But she had a lot of options.John: Yeah. It's good to have options.Mark: Like window shopping apparently.John: So, yeah. So those are a couple of things to keep in mind.Nick: Yeah. And one question we get a lot with divorced clients, they say, "How soon can I draw on the ex-spouse's Social Security?" And really you can draw on an ex-spouse once that ex-spouse hits age 62. Unlike a kind of a normal situation, when we wait until the spouse draws Social Security. They put this rule in really to protect the ex spouse because we've seen scenarios where certain people might delay drawing to intentionally hurt the other spouse and so they can't draw on them. So basically the rule is once the ex-spouse hits over 62, you can actually start drawing on the spousal benefits for divorcees.John: Yeah. It does not matter whether or not they're collecting. And also some people are happy about this, some people are not. But when you do get that benefit from a former spouse, again it does not affect their own benefit. There is no negative impact to doing that to them.Mark: They don't even know about it.Nick: They would have no idea. And it actually wouldn't affect any new spouse for somebody. So we get that question quite a bit where it says, "Hey, an ex-spouse draws on my Social Security. Does that affect my new wife or husband?" The answer is no.Mark: Yeah, exactly. Yeah. And there's interesting on the time period on that, it's funny that you kind of brought that up. My mother, who's 78, actually was given that information and did a refile with the Social Security for her first husband. She was married twice as well. And so yes, she was able to do that and they hadn't been married in like 40 years, but they were married over 10 years. So they were like, "Yep, that's something you can do." So I was like, "Okay, well knock yourself out."Mark: So yeah, it's interesting. There's definitely some few things to consider in there. Different kinds of a spousal benefit options, divorce spousal benefit options. So again, a lot of it comes down to having a conversation about your specific situation with your advisor when it comes to Social Security, because there are a lot of things in Social Security obviously, which is why we're on a four part series, going to be a five part series actually around this.Mark: So with that said, I think we're going to depart this week on the program. I'll say John and Nick, thanks for your time. As always, we appreciate it. Folks, make sure you reach out to them, give them a call if you've got some questions at (813) 286-7776. (813) 286-7776, again, that number to call. And as always, make sure you subscribe to the podcast. Retirement Planning Redefined. You can find it on Apple, Google or Spotify.Mark: You can also just find it on their website at pfgprivatewealth.com and as I said at the beginning of this, that it was prior to Thanksgiving when we were taping this. Now we'll actually air it after Thanksgiving. So we certainly hope that everybody had a great holiday season. And we'll see you for more of our conversation around Social Security through the month of December, right here on Retirement Planning Redefined. For John, for Nick, we'll see you next time.

Do you want to grow your single-family portfolio, but not sure how? Don’t think you’re smart enough to be successful in real estate? Invest in yourself, get an education, and hire a coach. Today, I am talking to Mark Dolfini, founder of Landlord Coach and author of three real estate books. Mark shares how he ventured into real estate, property management, and landlord coach. He follows the VIP Paradigm: Vision, Infrastructure, and Process.  You’ll Learn... [04:40] Real Estate Education: You can learn, if you want to; even if you’re not smart. [07:21] Hospitality Industry: How to treat people, customers, and residents like guests. [10:37] Set up sustainable business by shifting to VIP Paradigm. [14:35] Landlord Coach’s favorite catch phrases focus on valuing your time and money.  [19:30] Better Business Owner: It’s not about the number of doors, but what you’re trying to accomplish in revenue and lifestyle. [26:40] Cycle of Suck and 4 Ds to Revenue (doors, deals, duration, and dollars). [29:10] Being time wealthy is more of a decision than a destination. [31:37] Bad communication is a symptom of the problem, not the problem. The problem is a bad infrastructure and/or process.  [36:35] Product to Produce: Consistency; sloppiness is your only competition. [37:35] Negative Feedback Loop: If you put something in place, make sure it gets done. [39:04] Company’s Compass: Define/develop core values to make business decisions. [41:55] Being your own boss is great, but get a coach to take you where you want to go. [44:10] Difference between mentor and coach: Invest in yourself by paying a coach to hold you accountable. Tweetables Real Estate Education: It’s about the want to; not the intelligence. Don’t do it all. Learn to fire yourself! There is no amount of money that will make time irrelevant.  If you don’t place a value on your free time, someone else will.  Resources Mark Dolfini on Facebook Landlord Coach The Time-Wealthy Investor 2.0 Marriott DoorGrowClub Facebook Group DoorGrowLive DoorGrow on YouTube DoorGrow Website Score Quiz Transcript Jason: Welcome, DoorGrow hackers to the DoorGrow Show. If you are a property management entrepreneur that wants to add doors, make a difference, increase revenue, help others, impact lives, and you are interested in growing your business and life, and you are open to doing things a bit differently, then you are a DoorGrow hacker. DoorGrow hackers love the opportunities, daily variety, unique challenges, and freedom that property management brings. Many in real estate think you’re crazy for doing it, you think they’re crazy for not, because you realize that property management is the ultimate high-trust gateway to real estate deals, relationships, and residual income. At DoorGrow, we are on a mission to transform property management businesses and their owners. We want to transform the industry, eliminate the BS, build awareness, change perception, expand the market, and help the best property management entrepreneurs win. I’m your host, property management growth expert, Jason Hull, the founder and CEO of DoorGrow. Now, let’s get into the show. Today I’m hanging out with Mark Dolfini of Landlord Coach. Mark, welcome to the show. Mark: Hey, it’s great to be here. That’s a heck of an intro. Jason: It’s our manifesto, I call it. Mark: I love it. That speaks directly to my heart when we’re talking about people who want to grow their single family portfolios. That gets me fired up. Jason: So Mark, I want to introduce you. I’m really excited to have you on the show. We’re talking before show a little bit and we have a lot of alignment. We both believe in coaching, we both believe in having coaches. It says Mark Dolfini is a veteran of the US marines—thank you for your service—and the author of three real estate books. He was first published in 2017, second book released in early 2018, and his third book, The Time-Wealthy Investor 2.0, came out in March of 2019. He received a Bachelor of Science in Accounting at Purdue University, worked for Marriott International before venturing out full time into the world of real estate investing. He’s a managing broker for property management company based out of Lafayette, the founder of Landlord Coach, sits on numerous boards, including the Better Business Bureau of Central Indiana, the National Federation of Independent Business, and is a training director for the Central Indiana BNI Franchise and Networking Organization. He spends his free time pistol shooting and kayaking, and lives in Lafayette where he and his wife, Jennifer, are raising their two sons, Leland and Logan. All right, so we got through your bio. Mark, let’s start out with you and I want to hear about your background. How did you get into the space of real estate, property management, landlord coach, all of this. How did this all come about? Give us a little backstory. Mark: Sure. Well, I’d love to say it was a straight line trajectory, but you know there’s your plan and God’s plan, right? That doesn’t and usually don’t always match up. Jason: [...] and then there’s reality. Mark: Exactly. Jason: [...] winds. Always. Mark: Right. I’d always wanted to do something entrepreneurial. I didn’t know exactly what that was. I mean, this is back me being seven or eight years old, I started with a vegetable stand, the vegetable that I grew in Upstate New York and sold them at a vegetable stand that I built out of out of wood. So I always started back from there. My first go at real estate was when I was actually in the marine corps still and I bought 40 acres of property that was in Northern Arizona. I paid a couple of hundred bucks an acre for it and that was really it. It was just a desert in the middle of nowhere that no one seemed to want, but I knew at $200 an acre was a pretty good deal. I ended up buying it for capital appreciation at that point in time. But having a piece of land that doesn’t generate income doesn’t generate revenue. I learned pretty quickly is not the way to wealth. Getting someone else to pay for it was really what I wanted to do. I was getting near the end of my time in the marine corps. Had a great time, it was good for me in a lot of ways. It was tough, but I’m glad I did it. I also knew I needed to get an education. So, I got out. Now, let me just frame this because I went to school in Upstate New York and graduated 352nd out of 354. Let that sink in, everybody. I was at the bottom of the class. Jason: Right [...] the class by any means. Mark: Right. Not even close. The reason I’m saying that is because people who are out there think that they have to have this high-level of intelligence and high-level of intellect to make this business work. If you know anything and you’re doing real estate, it’s about the want to, it’s not about the intelligence. Let me just put that to bed right away. Now, that doesn’t give you an excuse to not go out and say, “Well, I need to learn things and therefore it’s just too hard.” There are lots of things are difficult. Walking when you were two years old was probably difficult. Or 18 months when learning how to talk was difficult at one point. It’s the same thing. You can learn this if you have the right intention. Anyway, getting out of the marine corps and getting into college was a little tricky because with my “stellar” high school career. I had to figure out how to how to do that. I hadn’t sat for an SAT. I had to learn in high school all that stuff. When I got out of the marine corps, I actually got accepted to Purdue. I got a high-enough score on my SAT. While I was at Purdue, I started buying some rental real estate. By the time I got out of Purdue, I had about a dozen rental units altogether, which is roughly half a million dollars for the real estate. That really how I got started and that’s really where my real estate education really got started. Jason: Right, so you cut your teeth on in the real world with your own real estate deals dealing with tenants, toilets, and termites, I’m sure. Fast forward to now. Help us understand. We’re going to be talking about the VIP paradigm: vision, infrastructure, and process the acronym. Let’s get into it. Mark: Sure. Before I get into that, it’s important to know that the rest of the story, as Paul Harvey might say. As I was getting out of college and I was buying more rental units, there’s lots of property managers out there who are also investors, so now I’m speaking to them as well. As I was growing this side of the portfolio, I was working as an accountant—I have a degree in accounting—for the Marriott. Wonderful, wonderful company. I learned an awful lot from the hospitality industry in terms of how to treat people, how to treat customers, and really treat my residents like I would be treating hotel guests. There’s a lot to learn out there from the hospitality industry in terms of what they do right. It’s just a different approach. It’s almost like the paradigm shift that happened with the banks maybe about 20 years ago. It used to be you run into the bank almost when you were in trouble. Now, you walk into a bank and everyone greets you, throws bottles of water at you, says hello and they give you this. That wasn’t always the way. The old school guys may remember that. Now, it’s a different paradigm because now they’re welcoming customers. They want you to come into the bank. They want you to have that transaction at their location. I would love to see that shift continue into the property management side because now it almost seems like the residents are the enemy rather than they’re the ones who pay the bills. As I continue to evolve and I loved what I learned from the hospitality industry, eventually I got to a point where I was able to get out and start to do that full-time just managing my own portfolio. Unfortunately, I got very, very overleveraged, not only in money but in time. What was happening is every time a task would come on, rather than looking for someone to hand that task to, I just took it on and kept it. There’s lots of property managers out there that are doing this. They’re not valuing their time highly enough. What ends up happening is they end up taking on this job, they don’t factor in opportunity cost where they’re going to take every job that’s out there and they’re going to do it. Even though they may be worth realistically $20–$50 an hour, they’re still doing $10 an hour jobs. In essence, every time they’re doing a $10 an hour job, they’re costing their business $40 an hour or $30 an hour and they don’t look at in that paradigm. Learning to fire yourself is one of the biggest things and I’m sure we can get in that little bit later, but really where my transition in the property management occurred was almost out of necessity. That seems to happen for a lot of people and certainly I was no exception. Going into 2009, I had about $6 million worth of real estate in my own portfolio. I was working 16–17 hours a day just trying to keep all the balls in the air. When the economy fell apart, that’s when things really, really got bad for me. Of course I started working 20 and 22 hour days and kept catching naps wherever I could. I was doing it all and I was doing it all very, very poorly. Finally, where the camel’s back broke was I got sick and I almost died in the hospital from double pneumonia. From all that, is really where I really got very intentional about setting up a business that was sustainable and I started delivering to my cash flow by doing some property management for other people. I got my broker’s license, started doing some property management on the side, and that’s really where I also got very, very intentional about how I want my business to look, the infrastructure that I needed it, and also the processes that needed to run on that infrastructure. That’s the vision infrastructure process paradigm that you’re alluding to earlier is you’re getting a vision where I wanted to go, setting up the proper infrastructure for it, and then putting the processes in place on top of that. Jason: I want to point this out because this is a milestone that I’m wondering if every entrepreneur eventually go through it. It’s like a crisis of health where we finally realize that we are not invincible, that it’s not sustainable to just do the hustle and grind that’s trumped up, and it made to look beautiful and exciting to just work, endless work weeks and crazy amounts of hours. Looking back, I had my own crisis like this. I remember I was literally at the end of a sales call laying on the floor because I had slipped a disk in my back or something because I wasn’t eating. I was just working, I thought I had to work harder and harder, I was just do-do-do, and then I couldn’t work for two weeks. I was laying on the floor and it was ridiculous. That gets really expensive trying to recover from that. 5That was when I had this shift and this epiphany came to me that our health and self-care is the foundation for my ability to provide, to do everything in the business, and you need to have a business that serves your needs and be sustainable instead of becoming this robot slave that is going to wear your body out on the business. Mark: Right To that point, you have to understand that we work so we can live, not the other way around. There’s so many people who are out there living to work and property managers, you get that one or two critical pieces, or one or two critical people that are doing 80%–90% of the work, and then you get everybody else who just shows up and cares or doesn’t care, whatever. I know it’s a typical 80/20 rule where you get 20% of people doing 80% of the work. In property management, it’s more like 1% doing 99% of the work. Then you got those critical pieces and you cannot build a sustainable business on that. Lots of property managers are very small. They’re under 500 units and they’re one- or two-man shops. In the property management company that I have, definitely is a weird hybrid between management company, maintenance company, but it works and it works really, really well. We can get into that later, but I agree with you. You have to almost get to that crisis. You either get to that crisis and you make a decision or you just have enough for you to just walk away. In either one, I don’t think is good. A lot of people get to that point because they don’t value their free time. That’s fundamentally it. They’re just not buying their time. Rob: Yup. Time is worth more than money to me now. If people approached it from that standpoint at the beginning, that’s why you hire somebody. You’re buying time. That’s why you build the business. You’re buying time. Every dollar I spend should be hopefully moving towards buying me some additional time or collapsing time. That’s why I get coaches. It collapses time. I’m buying time. I love what you’re saying. A lot of times, we start out building the business we can have instead of the business that we want, and they’re two very different things. One you’re serving and the other one serves us. Mark: That’s exactly right. There are two catch phrases I use all the time. One of those is, “There is no amount of money that will make time irrelevant.” When you get your head around that, then all of a sudden you say, “Okay.” The other phrase I use quite often, especially when I’m signing-off on a live event or something like that is, “Not only is there no amount of money that will make time irrelevant, but if you don’t place a value on your free time, someone else will.” Usually the amount of value that they’re going to place on your free time is far less than what you're worth, and they know it. That’s why they’re calling you with that, right? Jason: Yeah. The, “You got a minute?” and, “Hey, can I just take you out to lunch?” these kind of things. Mark: Absolutely right. That’s exactly right. Jason: You need to value your time. I don’t know how you tell people to value your time, but I usually say, “Take your gross revenue of the company if you’re the entrepreneur and divide that by 20-, 80-, or a 40-hour work week. That’s a pretty good estimate of what you should, at least, value your time as a dollar if you were looking at it on a dollar per hour basis.” Mark: Yeah, and if you did it on a 40-hour work week, you’d be surprised that most property managers I know are working way more than that. When you come back into it just from that simple math, that’s a perfect calculation. In fact, that’s exactly how I would tell people how to put just a rough number on your time. Or even people that are doing property management on the side. There’s lots of property managers are also estate brokers. They all have to be brokers, but they’re also doing real estate transactions on the side where they’re showing properties and they’re selling properties. That’s all revenue and that’s where you need to determine your opportunity cost. I would say all of your revenue that’s coming in, divide that by coming up with an hourly rate in terms of a 40-hour work week or even a 50-hour work week, to be fair. If you’re coming up with the $50–$60 an hour rate and you’re doing a $12 an hour work, you’ve got to replace yourself from doing that task as soon as you possibly can. I have a driver that I hire when I go to Indianapolis. I go to Indianapolis a couple of times a week and people are like, “Oh, you’re mister big time,” and I’m like, “No, it’s not about that. It’s not about because I feel super important. It’s because I get three hours of windshield time that literally is purposeless. I might listen on audio book. I still like to drive, but it’s not about that. It’s so I can get that time back.” So when I’m done at the end of the day, I’m not completely wiped out and spent. I don’t have to spend an extra three hours at the office that I should be spending with my wife, even if just sitting on the couch with her. Or just sitting at home being with her, or being around my kids, or just being home, where I want to be. There’s lots of people who don’t understand that and I’m like, “Okay, I pay this guy maybe $50, $75, $100 to drive me there and back. That’s easily worth it because my time is several hundred dollars an hour. Someone wants to call me and coach with me, I’m like, “Yeah, that's what I’m going to charge you,” so why would it cost myself that money driving? Sometimes, I still do because I want the solitude and I want to listen to an audio book and just enjoy it. Sometimes, I just want road time. But lots of times, if it’s purposeless, I really want to try to eliminate those bottlenecks as quickly as I possibly can, so I can stay focused on what I’m really trying to accomplish. Jason: Yeah. It’s funny. You’ll see entrepreneurs, they say they have $1 million business. Their time is probably worth about $480 an hour by that calculation, say $500 bucks an hour, and they’re still doing stuff like sometimes you’ll see them doing their yard. If they love doing those things, great, but sometimes we’ll be so focused on one area that we lose sight. For example, there was a time period where I hired a house manager and a nanny because all the fake dad stuff was being done. [...] care about laundry. They don’t care who makes the mills. They want time. So if I can offload those thing to somebody and I’m not paying them $500 an hour to offload those things, then I can spend time. Ultimately, were buying time and that’s a critical piece to growing and scaling business. Mark: Yes. That’s 100% vision. A lot of times, especially whether I’m working with an individual investor or I’m working with a property manager, door count is really where a lot of people say that and I stop them. I know. For example, I got the moniker, Landlord Coach, but my goal is to make people not landlords. If I was going to be a property management coach, my goal would not to make them better property managers. My goal for them is to be better business owners. Even though a lot of times they say, “Oh, all I want,” if it’s an investor, “are 100 units,” or if it’s a property manager, “I want 1000 doors.” I’m like, “Okay, so 999 wouldn’t do it?” and they go, “Well, yeah maybe.” “Okay 997 wouldn’t do it?” I’ll go down this until they finally get that, “Well, okay Mark, what’s your point?” I said, “Look, it’s not the number of doors. It’s really about...” Jason: It’s not an ego number, not an ego goal. Mark: Right. It’s not about that at all. It’s about what you are trying to accomplish in terms of your revenue goals. It’s really about that. If this is about ego, I respect that, but that’s not toward your vision. A lot of times they say, “Okay, well let’s get towards a vision that’s really actually purposeful and usually after I beat him up a little bit and I go, “Okay, 997. How about 995?” After they go, “Okay, what’s your point?” A lot of times I would say, “Okay, so in other words, you’re saying to me that you need to get to a revenue or you need to get to 1000 doors at, say, $1000 apiece. That’s what you need, but you couldn’t get there with 500 doors at $2000 apiece? Obviously the math is the same and a lot less work,” and they go, “Well, yeah. Okay.” “So, is it really about door count? Because I can get you 1000 doors. There are not going to be anything in the world that you or anybody else going to want to manage, but you really want 1000 doors?” Jason: [...] ridiculously low, that you can get a lot of doors really quickly. Mark: And that’s what a friend of mine did. He’s in the area of the state that I wouldn’t go to for love or money, and it’s terrible. I feel bad for him because I see him, watching him get into a leaky lifeboat in shark-infested waters, and I’m just like, “Oh, my God.” And he’s a good dude. He grew overnight from zero to, I don’t even know he’s pumping maybe 150–200 now, but they’re units that I wouldn’t take for any amount. I literally go, “Well, the rent amount isn’t enough to cover my management fees,” because they still wouldn’t be enough. Jason: Ultimately, people really need to ask themselves the question, “What do you really want? What do I really want out of the business?” If it’s an ego goal, great, but maybe what you really want is usually some lifestyle or maybe you want to have some amount of time, you want to spend time with your kids. What do you really want? And maybe you can create that and have that without having 1000 doors or without it having to look a certain way that you may have thought. [...] really matter? Why [...] matter? Mark: Right. It’s really not about door count as much as people want to focus on that now to a certain degree. It depends on your business structure. Again, investors are a little bit different than property managers. In my case, we do a lot of our own maintenance. We have an in-house maintenance department. A significant amount of revenues come in from that. Having more doors enables us to have more opportunities to maintenance. So in that particular case, it does really matter, but we still want to manage higher-end properties. We don’t do a lot of low-end stuff anymore just because of the amount of banging your head against around. It just increases exponentially when you get a certain lower market. It’s just not a market that we want to court anymore. We got out of that probably maybe six years ago and never looked back. The level of drama that has decreased in my life has just been exponential. Not saying that’s bad. There’s other people who want to court that market and do well in that market. That’s certainly fine if that’s a strategy that’s working for you. I’m not telling you about to change it. But for me, I would really invite you to really focus on not even so much as a revenue goal, because then the revenue goal, it’s funny because people go, “Well, yeah. I would like to have $50,000 a month coming in free cash flow, Mike.” And then, I go back to my normal argument and go, “Well, okay. So you want $50,000 a month coming in. $49,990 won’t do it?” So, you have to tie it to a life output goal. That’s why I say to them, “What is this even about? What are you trying to accomplish?” When they say, “Well, okay. What I’m really trying to do,” and usually it’s after they start to fight back some tears, “honestly I just want to spend more time with my kids.” “Okay, does more time mean?” “Honestly, I would love to be able to homeschool them.” “Awesome. Now we’re getting to a vision that really frigging matters. Not some nebulous 1000 doors, or $50,000 a month, or whatever it is. That’s what you want and we can tie a number to that. We can tie a revenue number to that.” Or, “I want to move my aging mother into a house that’s just close by.” “Okay, what’s it going to take to buy your mom a house? Do you even need to buy it? Can you rent one? The next 10 years, your mom’s 80 now. Is she going to live another 10 years or you can budget 10 years worth of rent payments for that sort of thing?” Whatever that is, you can actually get a quantifiable life output goal that’s tied to that and that’s really what vision really needs to be. It needs to come from the limbic system of our brain. The problem with the limbic system is it doesn’t have a capacity for language. It can’t explain why you love your wife. It can’t explain why you love your grandmother. We come up with platitudes like, “Well, she bakes me cookies,” but that’s a thing. You just say, “I don’t know. It’s just the way she makes me feel,” and you get teary-eyed. That’s the limbic system activating your brain and that’s how when you get to that point of your vision and you start to think that way, feel that when you get the goose bumps on your on your arms, that’s when you’re close. And that’s when you know you’re starting to get to a vision that really, really matters. Jason: I like it. I like it a lot. You touched on a couple things. Some of the concepts that I share is the cycle suck. It’s like if you take on bad owners, you’ll have bad tenants or bad properties. If you have bad properties, you get bad tenants. If you get bad tenants, then you all have a bad reputation, and then you’ll attract more bad owners. By taking up on the crappy properties, you end up caught in property management hell, the cycle of suck. Another concept that resonates with what you’re talking about that I the shares the four Ds to revenue. It’s not just about doors. The four Ds, the first one could be doors, but the next one is how many deals. Deals is usually what I share first. You get number of deals you get in, how many doors per deal? It’s not just about the doors. One deal being worth one door, that’s the ratio, then you don’t have as much leverage. It’s not as easy, but if on average your deals have two doors, you double your revenue. It’s these four numbers that multiply. Then, you’ve got duration. How long can you keep the door on? A 1-year accidental investor versus a 10-year buy and hold, in your property management business there’s 10 times difference. That’s pretty significant. Then, there’s dollars. It’s just what your fee structure is like. Are your fees good? It’s not just about doors. There’s all these other variables that can create that. I love shifting it towards the life goal because the life goal is what really matters. I would imagine you found this with coaching clients. Sometimes the life goal and all the stuff they had trumped up in their mind, or built up, or that they felt they needed in order to have the life that they want, sometimes you can just jump right to life goal. You can just create that like, “I want to spend an extra hour with my kids.” “Okay, block out an extra hour,” and they’re like, “Oh, I didn’t think I could do that.” Sometimes it’s really that simple. We can just jump right to the life goal and the business will still be there and it will still function. Mark: Yup, that is true. One of the things I talk about in The Time-Wealthy Investor 2.0 is really about making that decision. A buddy of mine who’s got multiple units is just nauseatingly wealthy in terms of real estate. He’s a great guy and said to me, “You know? I read your book the other day.” He’s a guy who doesn’t read and he’s such a snarky friend. His name is Randy and he says, “I would never admit this to your face, but I feel I have to,” he goes, “I really got a lot out of that book.” I was like, “Okay. What’s the punchline?” He’s like, “No, there’s really no punchline. I feel I am time-wealthy,” he goes, “and funny, I could probably retire based on the life output that I want to define right now.” He’s like, “Really, time-wealth is really more of a decision that it is a destination.” I was like, “Yeah, it really is because right now I have all the time-weath that I want. I work about maybe two hours a week. Sometimes I’m working more, like right now, I’m pitching in more in the office just because we’re down a person,” but it gets me re-engage in the business and it makes me go, “Hey guys, why are we doing it this way?” and then they go, “Oh, because this this and this.” I’m like, “Okay, cool,” and I let them define the process. If they’re the ones that normally work the process, my job is really to come in, look and see what maybe needs tinkering with, maybe new or adjusting, giving them coaching, that’s the sort of thing. Working 2 hours a week, sometimes 4–5 hours a month in the property management business, but I have all this time-wealth to do other things like coaching, writing books, and things that I really, really enjoy. It really is just a decision. When you hire good people, you bring them in, you set up a solid infrastructure for your business, set up solid processes, and you let them run it. Stay the hell out of the way. When I’m coaching property managers, that’s where I see a lot of problems. They don’t have an established vision for themselves, they don’t have proper infrastructure, they’re trying to run on really lean infrastructure or none at all, so the process has to pick it up. What I’m talking about infrastructure, say property management software, or website, or things like that, when you have a weak infrastructure, it has to be picked up by a stronger process, which means people. A person has to pick up that extra process. Let’s just go from the really sublime to ridiculous level. Say you don’t have property management software. You’re running everything on Excel spreadsheets. That’s the extreme, but there are property managers out there doing that, so that means they have to have a lot of people managing that poor infrastructure. Here’s the thing. Here’s the one thing I hear all the time is that, “Oh, my property manager doesn’t communicate. They don’t communicate with me. They don’t tell me.” When you have bad communication, that is a symptom of the problem, not the problem. Let me say that again. When you have bad communication, that’s a symptom of the problem, not the problem. The problem is you have bad infrastructure, you have bad process. That’s where communication issues are going to show up. Let’s just use a very obscure example. We’ve all been to a restaurant where you had bad service. You’re sitting down and you can see that that waiter has nine tables and that waiter has one table. You’re trying to communicate to someone to take your order. You can see the problem because you’re sitting on the outside. You can see the problem, but you’re going, “Well, that waiter’s got nine tables, that one’s got one. Why isn’t the manager stepping in?” Bad process. “Why does that person have nine tables?” That’s bad infrastructure. That never should have happened that way. That’s just one very obscure example. Let me use another quick example here real fast. Have you ever walked up to a McDonald’s at a truck stop, where there’s basically four cashiers ready to take your order. You walk up, you look left and right, and everybody’s standing back away from the registers. the customers. You’re trying to figure out who’s next in line. You’re like, “Can I go? Are you next?” Because there’s no infrastructure, the customers have to decide who’s next in line. What’s a simple piece of infrastructure that you could put in place to manage that? Well, a simple queue, a simple rope line. That’s a piece of infrastructure that you could put in place that would manage the customer flow. Then, you don’t have to worry about that. Another example would be a bad process. Let’s pretend you go back to the same McDonald’s. This time it’s really busy and the customers are four and five deep at each line at each of the four registers. This time what ends up happening is you get a manager that opens the fifth register and says, “I can help the next person.” Then, you get somebody who goes from the bend of one line and then jumps in front of everybody else. Now you just base and created a brawl. It’s this mad rush towards this fifth line. That’s a process problem. What should have happened is, “Hey, I’m the assistant manager. I’m going to have you open that line over there but I’m going to direct some people over there. I’m going to go out to the crowd and direct some people over there first before you say anything.” Then you can manage the process. That’s process. That’s a broken process when they do it the other way. That’s why I’m saying infrastructure and process shows up in bad communication all the time. This means they’re not communicating work orders when they come in. They’re not communicating when a resident doesn’t pay rent. Owners need to know that. They need to know if they’re expecting the revenue to come in on a certain month and they don’t get communicated that. “Oh, by the way, the resident never paid rent,” and, “Oh, yeah. By the way, we’re going to go ahead and evict them.” They need to know these things and when you don’t have an infrastructure or a process in place to let them know that, that’s when communication falls. That’s when the bad communication issue show up. Jason: Yeah, it’s interesting. It’s really tempting for entrepreneurs to start blaming their team. This is like early entrepreneurs that they’re transitioning away from being a solopreneur, that having a team, they usually build the team around them as if they’re just the solopreneur still, and they try to micromanage them. They’re always complaining about the communication. They’re always complaining about people not doing things, “Why can’t they just do what I tell them?” and that sort of thing. I like what you’re saying is they have bad infrastructure and bad process. Things are not defined, there isn’t clarity, and that leads to challenges in communication. [...] built into the process. They can be part of the process. [...] you need the right tools to facilitate communication. I run a virtual company. If we didn’t have the tools that facilitate communication, there wouldn’t be any. We’re in different states, some of us different countries. Mark: That’s exactly right and they need to think about their business, about the product that they produce. I used somewhat as a nebulous example, but the product that they need to produce should be consistency. That’s the product that they need to be shooting for. When consistency is your product, the only competitor you’re going to have a sloppiness. When consistency is your product, sloppiness is your only competition. That’s the thing that is really hard for me to convey to lots of managers because we’ve got all sorts of products. We sell properties. We buy properties. We do all these different things. I don’t care what you’re doing. I don’t care if you’re making razor blades. You need to have a consistent product and I will not allow us to do anything in the business unless we can do it consistently. If they come to me and say, “Hey, you know what we should do? We should send out birthday cards to all of our residents.” “Okay, great. How are you going to do that consistently? And you need to tell me. Who’s going to manage it? Who’s going to do it? What’s the negative feedback loop if that doesn’t happen?” Let me talk about negative feedback loop for second. You put something in place, it’s like I send you an email expecting you to do something. What’s the negative feedback loop I’m going to put in place if that doesn’t happen? I’m not talking a negative feedback loop like someone complains, which is often what happens if something doesn’t get done. You go, “Oh, man. I don’t know. I sent that email off two weeks ago. I forgot about it. I just assume that they would do it.” What’s the negative feedback that you’re going to put in place to make sure it actually gets done? Are you going to list that [...]? Are you going to put a task? Are you’re going to put something in some task management software? What’s the negative feedback loop that you’re going to have to make sure that stuff gets done? That’s all part of process. Let me just boil this down into an example because I keep saying vision, infrastructure, and process. Think of vision as your map. Infrastructure would be the train tracks, and then the process should be the train that runs on those tracks that all stays in alignment with your vision for the future. Now, for property managers, they’re saying, “Well, why would my employees care about my vision?” They’re not going to care about your vision. They’re only going to work so hard, but they’re not going to work that hard to put a boat in your driveway, or a pool in your backyard. This is an extra step to goes in with property managers is once you have that vision for your future, then you go into developing core values for your business. The core values are just the things that you value. You may value justice, You may value efficiency, you may value lots of different things that are core to you, but now you get to identify what those things are and that becomes your compass for all decisions that you’re making. Once you have those core values defined, if you’re making improvement, you say, “Okay, is this in line with my core values?” If I’m going to make a hiring decision or a firing decision, are they acting in line with my core values? When I do my employee evaluations, I’m going to say, “Hey, when you did this, this was really in alignment with our core values and I really like what you did,” or, “Hey, when you did this, I was really upset because it wasn’t in line with our core values. I’m [...] say you. I’m just upset that your behavior because this isn’t in alignment with our core values.” One of the things I’ll coach them through, some are three, four, five, no more than six. A lot of people sometimes want to get, “Oh, we value all the stuff,” but usually it’s something that’s inherent to them as an individual and they value these things. They value justice, they value equity, they value fairness, and they can value profitability. There’s nothing wrong with that. It doesn’t mean you’re a bad person because we all need profits to grow, get better, and be a better company. Once you get those core values defined, then it’s easier to put infrastructure and process improvements in place. The infrastructure of the things I’m talking about there are websites, software, even the desks and chairs in your office. The process pieces are really about how you operate. It’s the rules of how much you operate, it’s your SRP, it’s your FAQs. Those things that really helped define how things are done in your office based on it that infrastructure that you have in place. Jason: A lot of alignment between what you’re doing and what I do with clients as well. I mean, 3–4 core values for their business, you’re helping them figure out their purpose, their why as a business owner. These things sound like woo woo and fluff to a lot of people until they implement them. Then, they’re usually pretty astounded because, like I tell my clients, “You’re the sun at the center of the solar system. If you don’t like what’s going on inside the solar system, you change the sun, everything changes.” Usually as business owners, we try to externalize everything and tackle everything farthest away from ourselves. If we work on ourselves. everything changes by default. Mark: That’s so good. I love that. That is so true. Jason: So, we talked about vision, we talked about the infrastructure, we talked about the process. Is there anything else that you want to touch on while we’re hanging out here? Mark: Yeah. I see a lot of people out there that are just working themselves. They’ve created a job for themselves and they’re not ever trying to transition themselves out. They think that there’s no end in sight. Jason: They’ve succumbed. They [...] to their fate. Mark: Yeah. I’m not saying I’m the coach for everybody and you would probably say the same thing, that you’re not the coach for everybody, but for God’s sake, get a coach. Get somebody that can help you get to where you want to go so much faster. Yeah, it’s great being your own boss because you didn’t want to be held accountable to anybody. But now you’re not accountable to anybody, know your life sucks. It didn’t turn out the way you want it. If you’re living the dream, your life is great, and you have everything that you want, that’s great. I don’t know that I can help you get much better, but get somebody to help you. We talked earlier about each of us having coaches. I spend a lot of money each month on coaches to help me in areas where I have blind spots and just to challenge me, just to say, “Hey, Mark. You said you were going to do XYZ by a certain period of time. That’s not done, so now what?” They already know how they’re going to hold me accountable and I pay a fair sum to these people, so it hurts when I show up. I know I’m going to be ready when the bell rings. It’s not about paying them the money just for the sake of paying them the money so that they can call and yell at me. They are a softer touch, but the thing is, I want to make sure that I’m being held accountable because we don’t have anybody that’s holding us accountable. That’s the danger of being an entrepreneur. I would really encourage people to look at that. It doesn’t necessarily need to be real estate-focused although it probably would make more sense. I have one that helps me in sales. I have one that helps me in marketing. I have one that helps me as a national speaker. I go and I speak at a lot of different places, so I have one that help coach me in that. And of course different masterminds of things like. I would really, highly encourage people that if they are looking or just flirting with the idea, get somebody. I am going to say this. The difference between a coach and a mentor, I would say a mentor is probably someone that you’re not paying, probably a friend. They are not going to hold you accountable to the level that you need. I say that this is someone you need to pay, it needs to hurt a little bit, and you need to have some skin in the game. You really need to be committed and you really need to be paying somebody to do that. Like I said, it doesn’t need to be me, it doesn’t need to be you. I’m just saying it’s someone they knew paying someone. Jason: Yeah. There’s some magic I’ve noticed, just psychologically, that happens in shifts inside of my clients or that shifts inside of myself when I am paying a coach and I’m investing in myself. It just shifts psychologically how we value ourselves and energetically it allows us to convince others to invest in us as well. It’s a hard sell to go out even as a property management business owner and if you’re doing the sales in your company, you’re the BDM and say, “Hey, you should spend money with us. You should invest. You should have us manage your rental property,” but I don’t even invest in myself. I don’t care enough about myself or my business to invest in that. I’m just trying to make money, then you’re going to ask others to invest in you. Psychologically, when you invest in yourself, I’ve noticed revenue goes up for me, lifestyle shifts. There’s something that happens energetically and psychologically when you are subconsciously investing in yourself. It shifts things. I love what you’re saying, everybody really deserves to have a coach, they deserve to be working with consultants, they deserve to have people above them. If you’re at the top of the org chart, there’s a problem. There’s a problem because everybody below in the org chart is hopefully being fed, getting some input, growing, and evolving, but if you’re at the top of the org chart and there’s nobody above you, it’s a scary place to be. [...] The Emperor With No Clothes, unless you get some input, unless you get somebody that you can place above you in that org chart like a coach, or mentor, or something that will feed you. Mark: I look at it exactly the way you’re looking at it except I flip your chart upside down. I look at those people as the direct supports for everybody above them because they’re carrying the weight of everybody above them. If you get somebody that’s not doing what they’re supposed to be doing—they’re coming in late, they’re wiggling around at the top, and you’re trying the keep the org chart balanced—it’s tough. Maybe it’s so far up that you can’t see what’s going on up there, but you have a coach that can stand back and go, “Yeah, that guy’s playing Galaga on his computer and you don’t even see it,” because you don’t want to see it or you just can’t see it. That’s where it gets tricky and a lot of times, you get too close to the problem and you can’t see it. It’s like you sitting back watching the waiter who’s got nine tables. You can see the problem instantly. Jason: [...] you can’t sometimes. They’re too close to the fire, they’re dealing with what they’re dealing with right at that moment, that’s us as entrepreneurs all the time. I can’t tell you how many times I’ve had a coach, I’ve sat down with coach or talk to one of my coaches and said, “Hey, here’s what I’m dealing with,” and they point, they say something to me, and I feel really stupid, then I say back to them, “That’s exactly what I would’ve told one of my clients.” We’re just too close to the fire. We don’t have somebody outside of ourselves because we are the one that created the problem. We’re at the helm. We are the problem. We are the biggest bottleneck in our company. We are the one holding everything back. We’re the one preventing growth. Us trying to solve the problem on our own is like trying to look at the back of our own head. Mark: Yeah. It’s like trying to put sunscreen on your own back and that’s the thing. If you don’t see yourself as part of the problem, you cannot see yourself as part of the solution. A lot of times when it’s educating them to say, “Look, your company has a very real culture problem. That one is not respectful, that one is treating customers anyway that they want. As a result, they’re treating each other very poorly and blah-blah-blah.” That’s because when you got ill-defined core values, you’re going to run into that. You’re going to run into culture problems. There’s a client that I really didn’t feel like I could help him as much as I wanted to, but he had a real culture problem is at his office. He didn’t really see it until he started letting some people go that were really some of the major problems. He had a live event that we don’t work together anymore, but I’d love to get him back on just to say, “Hey, how are you doing? How did things evolve for you in terms of getting those core values more well-defined?” and really start holding people accountable to them. One of the things that I do is we have an 8:07 meeting every day. The reason it’s 8:07 is people are rarely late to a meeting that’s got an oddball time to it. They always get there early. There’s not much I don’t do without purpose, but every meeting, we pick one of our five core values and we review it. They’re hearing these core values every single day. That way at their 90-day evaluation, guess what they get to roll over again? Guess what they’re hearing again? Our core values. They’re getting graded against those core values. It’s not just a shock like, “Oh, yeah. Okay, yeah. I never heard that core value before.” These are things that need to be repeated over and over. Jason: Yeah. I think we run our businesses probably somewhat similar [...]. Everything gravitates towards truth. We do our daily huddle at 8:45 every morning. I always have appointments starting at 9:00, so it has to be short and that allows our team to see each other because we’re virtual, but yeah, it’s an oddball time which does work, to make sure people show up. Mark: Absolutely. Jason: Cool. Mark, it’s really great to connect with you, to get [...]. How can people get in touch with you? Now, I want to point out like we were talking before the show, your area of genius, what you really can help probably our listeners with, is on the delivery, the fulfillment side, building out this portion of their business where they may be struggling, especially those that are graduating maybe from solopreneur to trying to build a team. That’s where they’re getting the systems and processes. They’re not the guy doing every single thing or the gal doing every single thing anymore and that’s a painful transition. How can people get in touch with the Mark and Landlord Coach? Mark: My website’s landlordcoach.com. I’m on Facebook @mylandlordcoach. You can find me easily. You can see the moniker in the back. I think where you and I differ is that I helped create capacity in the world. I helped create white space on our calendar. What they do with that white space is up to them. If they want to use that white space to grow their company from 300 doors to 800 doors, that’s fine. I don’t help them with the growth side. I just help them create capacity on their calendar, help create white space, so they can do whatever they want. Now, some people go, “Yeah. I’m happy with the white space and I’m making enough money now and I’ve gotten time on my calendar. I’m cool. I got everything I want.” Some people get to that point in their like, “No, we’re ready to grow.” I’m not the growth guy. It’s not what I do. I’m not from that piece of it. I [...] turn it over to someone you and say, “Now that you got this increased capacity, that’s the person that’s going to help you take your business from 1000 doors to 2000 or whatever.” That that’s not what I do. What I do is I help them create capacity on the calendar. To that aspect I just want to make sure I delineate myself there because I do work with a lot of individual investors. I also work with property managers and just helping them get their life back. That’s one of the biggest things that I do. Jason: Love it. Mark, I appreciate you being on the show. Thanks for being here. Mark: This has been great. Thanks so much and my best wishes to all your listeners. Jason: Thank you. All right, we’ll let Mark go. If you enjoyed the show, be sure to like and subscribe on whichever channel we’re on. We’re on YouTube, we are no iTunes, and make sure that you subscribe to our email newsletter. If you are property management entrepreneur that’s wanting to grow your business, add doors, and increase your revenue, then please reach out to us over at DoorGrow. We’d be happy to have a conversation and see if you are a good fit for what we might be able to do for you. Of course, check out Mark and his business over at Landlord Coach. That’s it for today. Until next time, to our mutual growth, everyone. Bye. You just listened to the DoorGrow Show. We are building a community of the savviest property management entrepreneurs on the planet, in the DoorGrow Club. Join your fellow DoorGrow hackers at doorgrowclub.com. Listen, everyone is doing the same stuff. SEO, PPC, pay-per-lead, content, social, direct mail, and they still struggle to grow. At DoorGrow, we solve your biggest challenge getting deals and growing your business. Find out more at doorgrow.com. Find any show notes or links from today’s episode on our blog at doorgrow.com. To get notified of future events and news, subscribe to our newsletter at doorgrow.com/subscribe. Until next time, take what you learn and start DoorGrow hacking your business and your life.

From surfing waves to making waves by fixing exploding toilets for tenants—how an entrepreneur and creative technologist leveraged design to streamline simple solutions.  Today, I am talking to Mark Rojas, CEO and founder of the Proper app that streamlines the building repairs process. Mark has spent his career creating positive user experiences and adding value by solving problems related to efficiency and human connectivity.  You’ll Learn... [04:40] Definition of Design: Viewing how something works in the real world and creating a corresponding experience to make your life easier and more enjoyable. [05:34] Proper app idea originated with possibility of becoming an accidental landllord. [07:13] Maintenance is the bain of their existence. There’s got to be a better way to fix building repairs process and problems. [09:30] Maintenance is more than one issue. It involves many problems for many people.  [10:10] Lack of Communication: Leverage “chat room” to create efficient and effective dialogue between contractors, property managers, and tenants. [13:07] What makes Proper different? Visibility and shared platform for centralized communication between all participating people and places.  [14:50] Building Repairs Process: Submit image, describe problem, create work order, send notifications, add contractors, diagnosis issue, complete fix, submit/pay invoice. [19:50] Property Management Platforms: Proper’s integration and import/export plans for increased visibility for systematic way to save time and money while simplifying lives.  [22:42] Common Questions and Concerns: Is Proper app intuitive? Is training provided? [28:15] Future Feature: Email integration and aggregation to avoid duplicate data.  Tweetables Every elegant solution involves some element of intelligent design. Design isn’t all about pixels. It’s applied via various mediums by viewing how something works in the real world. Maintenance is the bain of a property manager’s existence.  First Step with Proper App: A picture is worth a 1,000 words, so describe the problem succinctly. Resources Proper Mark Rojas on LinkedIn Venice Art Crawl Buildium AppFolio Propertyware Intercom Help Scout GatherKudos DoorGrowClub Facebook Group DoorGrowLive DoorGrow on YouTube DoorGrow Website Score Quiz Transcript Jason: Welcome, DoorGrow hackers to the DoorGrow Show. If you are a property management entrepreneur that wants to add doors, make a difference, increase revenue, help others, impact lives, and you are interested in growing your business and life, and you are open to doing things a bit differently, then you are a DoorGrow hacker. DoorGrow hackers love the opportunities, daily variety, unique challenges, and freedom that property management brings. Many in real estate think you’re crazy for doing it, you think they’re crazy for not, because you realize that property management is the ultimate high-trust gateway to real estate deals, relationships, and residual income. At DoorGrow, we are on a mission to transform property management businesses and their owners. We want to transform the industry, eliminate the BS, build awareness, change perception, expand the market, and help the best property management entrepreneurs win. I’m your host, property management growth expert, Jason Hull, the founder and CEO of DoorGrow. Now, let’s get into the show. Today’s guest, I’m hanging out with Mark Rojas. Mark, welcome to the show. Mark: Hey, it’s good to see you again. Jason: Mark is coming to us from a company called Proper Chat, correct? Mark: That’s correct. Jason: Mark, I’ll read a little bit of your bio. It says you are the CEO and founder and it says, “While you might not think of hiring a designer to fix an exploding toilet, Mark Rojas still might be the man for the job. From starting his own surfboard manufacturing company at 16 to founding multiple tech companies focused on creating positive user experiences, Mark has spent his career working to add value by solving problems of efficiency, and human connectivity. An entrepreneur and creative technologist from Queens, Mark is the founder and CEO of Proper, an app designed to streamline the building repairs process. He first began befriending property managers while producing the Venice Art Crawl, a passion project that transformed vacant properties into temporary art showrooms (aka fun, free open houses). Shortly thereafter while subletting his apartment in 2017, Mark was blessed with the invigorating experience of needing to manage repairs for a bathroom explosion involving multiple tenants.” Why don’t you take us from there? Mark: That’s a good intro. Jason: I’ll let you tell the rest of the story. How did you get into this from surfboards? Mark: Surfboards was a little I went to when I was 16 years old, but that did throw me into design and ultimately product design. Right after college, my career quickly became into web development, app development, and working with a lot of startups here in the Bay Area, which is where we’re based out of, to leverage design to solve water problems. It came with the advent of mobile, really becoming this fast-growing platform, where your everyday user now is expecting this very seamless experience that is solving various problems we’re on. That transitioned from building a product, starting a company, and then continuing to wanting to build products for others. I think one of those things that continues to be a passion of mine is finding a problem and leveraging design to simplify, streamline it, and make everyone’s life better. Jason: I love it. That’s entrepreneurism in a nutshell. We see a problem and we’re crazy enough to think we can solve that problem. We can make money solving that problem and create a win-win. You love that you say that you focus on doing it through design because really, every elegant solution involves some sort of intelligent design, whether it’s a system, whether it’s something visual. People think design, they think it’s like graphic design or something creative. Mark: Yeah. I don’t think of design as just pixels. There’s various mediums through which one can apply design. It’s really viewing how something works in the real world and seeing how can you create a corresponding experience that can streamline it, that can make it simpler, that can make it more delightful, more efficient, and really give you a lot of your life back, whether that’s time or even just joy. Jason: What problem then did you really see that you’re like, “I’m going to create Proper”? Let’s try to build this problem up. Mark: I’ve seen a lot of different thoughts to my life in being a tenant, but it really became a problem for me when I almost became an accidental landlord. I was traveling for an extended period of time, I have known my landlord for a while, and she was happy to actually let me sublet it. It’s like, “It’s okay. Go off, I trust you, and when you come back, it’s all good.” But there’s still a level of responsibility that was pressed upon me. As I rented out my apartment, I quickly realized that I have become a landlord. So, two days into it, the subtenant called me to let me know that there was a major problem. I was like, “What? What’s going on?” It turned out that the pipe above our ceiling under our neighbor’s bathroom had burst. To say the least, it’s quite a mess. This set up a flurry of emails, phone calls, text messages between the tenant and myself, the property owner, neighbors, contractors, plumbers, et cetera, and it was happening over phone calls, emails, text messages, WhatsApp calls, FaceTime calls. At some point, I was like, “Wow, this is rather ridiculous,” and my design mind immediately started thinking... Jason: Broken. This is flawed. There’s got to be a better way than this. Mark: Yeah. My wheels are just spinning and spinning and spinning, and I started designing it in my brain. Then, one day I just whipped it out of my computer, I just mocked it up, and I was like, “I’m going to build this.” I started building it and I think one thing that’s true then and now, and even more true now, is we spend a lot of time talking to our users and our customers, and really dissecting their problems or processes. I immediately started doing calls with property managers that I already knew. As you saw in my bio, I knew a lot of property managers. When I started the Venice Art Crawl, which is a crowd-sourced art event, we have 40 different art shows going on at the same time in Venice beach. The way I did it was I found vacant spaces, [...] the property managers and basically said, “I know I can bring high net worth individuals to these empty spaces and we can treat it almost as an open house.” That worked not only well—I was creating value for them—they all basically love me. When I started working on this idea, they were happy to talk to me for hours at a time. What I found is that maintenance is almost the bane of their existence. Jason: Oh yeah. We did a survey inside the DoorGrow Club Facebook group—property managers listening, you should be in there if you have a property management business—and we asked—just an informal poll in the Facebook group—“What’s your number one challenge in your business?” There were two or three items at the top of the list that were connected to maintenance. It was sourcing vendors, it was maintenance coordination. Maintenance is the biggest headache or challenge in property management. Mark: Yeah. It’s very painful to the point that I actually thought that I was becoming a therapist. Sometimes, they would talk to me for three hours at a time just talking about it, and I was like, “Wow, this is a very real problem.” I was able to take those learnings and turned it into a product that corresponded with it. What started off was really just a project. I didn’t think, “Oh, I’m going to become a billionaire off of this. This is my next big thing.” This is more, I was traveling, I wanted to start building a product, and I wanted it to not be something that I built in bane, but rather, to possibly solve someone’s problem. Initially, it was my problem, and when I talked to property managers, they actually laughed at me because I was building an app already and only dealing with a monthly maintenance issue, while they’re dealing with hundreds a month, if not more. Jason: Right. You’re building an app for one maintenance issue. Mark: Yeah, so talking to them totally validated that this is something worth pursuing. Then, I just went deeper. I kept talking to them. I started talking to the contractors, the tenants, and I realized that this is a problem on all sides of the equation and set out to start building a solution that could solve a lot of the issues with it. I think a lot of my history in design has been focused on communication, really making it richer and removing barriers. Essentially, a lot of friction and a lot of time wasted happens when poor communication happens. That’s why it’s proper.chat and leveraging chat as a platform to remove a lot of the bottlenecks that happen, like playing Whac-A-Mole between an email for this contractor, phone call for that tenant, and really starting to centralize everything where we could remove those bottlenecks and with the oversight of the property manager, the contractor and the tenant can speak with each other. Anything from scheduling, updates, “Hey, I got to go to Home Depot and get this part. I’ll be back tomorrow.” In the world today, the tenant would know. Three days could pass and that creates frustration and friction for the tenant because they don’t know what’s going on, and that means another phone call to the property manager. Jason: Right. Communication in a business, for any business, causes a challenge; internal communication. For a while, as I was growing from solopreneur to building a team, I have freelancers. I thought this was so great because I only have to pay them when there’s work. “Here’s the job, do this work.” But the challenge with that is the communication level was just not strong enough. I didn’t realize that until I started getting full-time employees. The communication level is dramatically different when you have somebody that’s dedicated because you’re reducing the number of people that you need. That person is giving more of their time. Two people that are doing 10 hours a week versus 1 person that’s doing 20 hours a week, I would take the one person any day of the week, especially if those two have to communicate. The communication back-and-forth wastes so much time, and there’s always a percentage of loss when there’s any sort of communication. If there’s communication between two parties, there are gaps. There just always is. It could be a misread and body language. It could be somebody doesn’t understand something. Somebody’s a poor communicator. There’s some sort of flaw. The more you can reduce that, the less friction there is. One of my recent hires was one of these unicorns that can do web development and design. The communication level is way shorter. He can get things done in such a short time. Normally, I want a specialist, but he’s able to create something so much quicker because he’s not having the communicate and negotiate between another party that doesn’t understand what they do. A developer and a designer are two different universes, right? Mark: Absolutely, yeah. Jason: [...] crazy guys setting you both. So, I get it. Explain how this helps reduce the communication and why is this better than the other stuff that’s out there, what other people have been doing? What’s unique about Proper that you’re noticing? Mark: A lot of it comes down to visibility and a shared placed for everyone involved with the maintenance, to communicate with each other. Where we really differentiate is that we started on mobile. We’re a mobile-first solution. We do have a desktop and a web experience for the property manager. In terms of being able to report, what we notice from a lot of property managers, whether they have Yardi, AppFolio, you’re still getting these maintenance requests from many different places. You’re getting from phone calls, emails, text messages. What we set out to build and we’re building right now is one place I can centralize all that. Not only centralize it but make it a more useful format. When someone writes you a three-paragraph email, a lot of it is frustration. Jason: Right. There’s all this emotion and they want you to understand their pain. They’re like, “I got to relate this. I got to paint this picture.” Mark: Exactly, and part of it is because they’ve waited too long to write this email. This frustration has built up and they want to write this email. With our application, which is native, you as a tenant are able to create a work order very quickly, and it’s very visual. An image is worth a thousand words and it really is in this area. Often, these emails don’t even include images, so a tenant is able to quickly snap a photo, almost like Snapchat or Instagram. You don’t train anyone. There’s literally billions of users on these apps who know how to use this and they’re able to create a work order in under 30 seconds. The format is not to write paragraphs and paragraphs. It’s to be succinct, 140–200 characters max and you choose a category. This gets fired off to the property manager, you get a notification on your phone or on your desktop, and then from there you have your contractors that you can add this this conversation. The idea is that it turns into a group chat at this point, with the property manager still being involved. Instead of trying to get back and forth between scheduling, instead of the contractor having to ask questions to the property manager to then go ask the tenant to further diagnose what’s broken, the contractor’s able to immediately see what’s broken because there’s always going to be a picture. We pretty much make that almost mandatory for the tenants. What we’ve seen from contractors is that they’re able to save time and cost by more quickly able to diagnose where the problem is, what tools to bring, what materials to bring. Everything just happens there. The property manager is still part of the process, but they don’t need to insert themselves. When they insert themselves now, it really takes up a lot of their time. Not only because they have to go back and forth, but often they’re fielding phone calls, they’re fielding emails, and then this really, really adds up. Jason: I love that it’s prompting them to take a picture. Mark: Yeah. The first step is to create a work order, take a picture. That’s the first thing. Jason: And a picture’s worth a thousand words. They’re not going to have to write a thousand words in order to get it across. You can see it and you go, “Okay, you can fluff it up or make it more dramatic, but I can see it. Here it is.” Or they might do the opposite. They might say, “Hey, there’s a problem with the faucet and it’s flooding the whole bathroom.” So, you can see it. They send you a picture. In a lot of apps, a picture’s an afterthought. They have to do some serious extra work in order to get a photo into something or to do it. I’ve had maintenance companies ask me, “Could you email me a photo?” or, “Can you take a picture so we know what to look for or what type of fixture we need?” whatever. It slows down the communication significantly. Mark: Totally and I think there are these added benefits that currently property managers don’t have the bandwidth to do. Because of the contractors there, they can easily provide updates themselves like, “Hey, I have this question.” “Hey I have to come back.” Right now, that has to go to the property manager, the property manager then has to tell the tenant, and then often this doesn’t happen. So, you have this built-in benefits of transparency that you have with the tenant that really builds trust, but also stops them from calling you, which once again takes up a lot of your time. The very nice thing is that at the end, the contractor is able to close up the job by providing proof that they’ve done it. So, they have to take pictures of it. Then, you have these records of the conversations that you have with everyone, the images at the beginning of the job, the images at the end, and it just creates a ton of transparency and documentation that you can have, that’s very easily searchable, filterable later on. One thing we’re starting to work on is really reporting. You can start to really understand the volume of workers that you’re getting, the stages that they’re at, the amount of time it took to complete it, and really how much time it’s taking up for you. Jason: It makes a lot of sense. If you can cut out one phone call, you’re probably saving your team, at a minimum, 15–18 minutes of productivity, simply because one interruption in a team member’s day, typically they say, cost about 18 minutes of productivity. Even [...] take 18 minutes, they got to rebuild the house of cards they were working on or go back to whatever project they’re trying to figure out. So, if you can cut down the phone calls significantly, even if you don’t have that large of a portfolio, it’s almost like getting a new team member on your team. It’s that significant. People are really expensive in property management businesses. It’s the highest cost in the PM business. I know what property managers listening to this are going to be thinking. They’re going to be thinking, “Well, that sounds great, but another piece of technology. How is it going to work with my Buildium, or my AppFolio, or my Propertyware? I got these, they’ve got maintenance requests built into them. How will this work?” Mark: In terms of the different platforms, there are ones that permit direct integrations and we’re starting to work with building some of those. Then, we’re also building a way for you to be able to easily export, search, and import this data at the end. I think the difference really is that the maintenance offerings that they have don’t create the same level of visibility and don’t save you the amount of time. Even if their integration is not there, the amount of time that we’re currently saving you and that we’re going to continue to increase, really starts to outweigh some of the cons of doing that. That’s the way we’re moving through with all these things. Jason: Can you tell us who you’re working to start integrating with yet? Mark: We have a couple of partners, mostly in the Los Angeles area. One has about 1000 units, another 2000 units, and we’re working with both of them. They’re both on different platforms and seeing what’s going to be the most efficient way. It’s not just integration of the maintenance, but also I think what’s really important here is their accounting. We’re really looking at accounting and how we can start to streamline with that because there is one of the things that we’ve seen with the contractors is a lot of them don’t have a systematic way of not just keeping track of their work orders or invoices, but even just generating invoices, so it takes up a lot of their time. On the property management side, you’re getting all these different types of invoices coming in, totally different formats, and then you’re manually doing double data entry into all these different systems. It’s kind of a pain because it’s like, “Why is it formatted this way?” You have this hurdle that you’re dealing with all these messed-up invoices. One thing that we’re seeing is there’s the ease of use of our invoice. A lot of the maintenance techs and workers are actually enjoying using it and starting to use it as a way to create a uniform way of generating invoices for their property managers. What we want to do is actually make that very easy to export so you can import so that you can import it into your accounting system. Jason: Cool. What are the big questions that people ask about this? What are their frequently asked questions, concerns? What are the big questions that they’re asking so that we cover all the bases here? Mark: There’s quite a few, but I think there’s this very chat-focused, very simple, clean design. There isn’t a lot of other platforms that we’ve seen in the space yet. They’re starting to show up, but really there’s very few. I think a lot of people are like, “Hey, do you provide training? How much is training going to cost?” Jason: You’re like, “Do you know how to use instant message?” Mark: No. We don’t want to be sending that at all. We really care about our users, so we offer like, “We’ll train you,” and then the funny thing here is that we do a demo and not for a minute we train them. Jason: And by the way that demo was the training. Mark: Yeah. If you know how to use iMessage or any of those things, it’s very intuitive. That’s really the core principle of the company is designing something that is not only beautiful, but it’s extremely easy to use because we don’t think that we should be paying and send somebody out to train you or that you need to hire some expert to use the software. Jason: All right. I’m going to go to the devil’s advocate on the other side here. It’s so easy, it’s just chat, it’s so simple, why don’t I just sign-up with Intercom or Help Scout and get a chat tool and take tickets? What’s different between those solutions and something like Proper? Mark: Proper is really geared towards maintenance. Even just the terminology, the flow, the understanding of the whole workflow of maintenance getting done, is what is unique to us. You could theoretically use text messaging to do. The reality is you can start to use that, but then very quickly it breaks down and it becomes cumbersome. For example, Intercom. There’s no mobile app. There’s no way to really add photos into what’s going on. There’s no way to categorize it into the type of problem that might be related to maintenance. For us, we provide all those things but then, you’re also able to search, filter, and zoom in on a property and be like, “Okay, these are all the work orders. This is how we spent maintenance on this property.” As we move forward and we start to integrate with other systems, that’s something that Intercom would probably not do. Jason: They’re going to put this chat tool probably on their website, so people coming there if they have maintenance requests, do they hide it like, “Go here for maintenance and then the chat is there”? Or is it [...] and if so, the maintenance coordination is one side, but they also have lead gen that they’re trying to do. They have sales. They’re trying to target owners and capture people with their live chat tools. How do you usually recommend they segregate that or can Proper help up with that other challenge as well? Mark: Good question. The way the application is working right now is that the live chatting or website, if you’re using something like Intercom, that is something that we’re not providing right now. Essentially, what happens is that property managers will announce that they’re using Proper to their network, share the app, then they’re able to install it, and then start reporting through there. It comes into our web app and mobile app. As a property manager, you can use the app from anywhere, but you could also use it at your desktop. From there, is where to start to field everything. Jason: So, Proper works more like an internal tool. When you onboard your new tenants, you can say, “Hey, get this. This is how you can communicate with us.” It’s probably not just functioning as the live chat tool that’s capturing leads on the front-end of your business, but you could always take that tool and put links into it or pre-written messages to say, “Oh, it’s a maintenance request. Go here.” [...] Intercom a button that they click, that I’m here for maintenance and it takes them to Proper to take care of that. Mark: Yeah and one of the really interesting things is that we’re starting to build email integrations, so the initial one that we built is that if you receive an email that’s coming in from a tenant and it’s maintenance-related, we build the Chrome extension where very easily just sends it to Proper and then it turns it into actual work orders. You’re not actually trying to do double data entry there. The next step of that is making it so that your tenants and contractors don’t have to join Proper. They can submit things via email, but then you have one place where it’s starting to aggregate everything, whether it’s submitted directly to Proper or through another channel like email. That’s one of the really exciting features for these next two months that we’re working on should be out. Jason: So, that will be similar to Intercom, which you can have a certain email address like maintenance@businessname.com and have that forward those emails into Proper? Mark: Yeah, it all vacuums it right up and then as it comes in, you’re able to categorize it and make it something that is not mixed with thousands of other’s emails but rather centralized and easy to find just like any of the other maintenance tickets. Jason: It sounds like it would make sense for them to have some sort of support solution and still use Proper for the maintenance portion for the back-end, and internally with tenants. Very cool. What other questions then do people tend to ask? Mark: One of the big ones is really that email integration that I just mentioned. That’s essentially what we’ve been doing is tons of user research and starting to find what are the biggest problems. Using that is like having it bubble up to the top and turning it into features that are usable to them. Jason: One of the challenges in maintenance is the communication between vendor and owner is getting paid, payouts. What if the vendor starts messaging and they’re like, “Hey, property manager, when do I get paid? Here’s my invoice,” and the tenants are seeing this stuff. How do you deal with that? Mark: I’m glad you asked that because that’s literally the feature we’re rolling out right now. We’re waiting for the upstart to approve and by the way, we’re on iOS, Android, and web. The next thing I told you, we make it really easy for your maintenance staff or techs to create invoices and generate them. We’re actually about to roll out payments where they’re able to get to pay through ACH and really it’s cut out a lot of time for the contractors to generate those invoices or even for the property managers to [...] and all these things which I still see very frequently happening. Jason: In the app, the contractor maybe see something a little different and they can submit invoice or something like this? Mark: Yeah. Basically, when the contractor closes up the job, they provide proof that they did it and they’re prompted to create an invoice. Jason: And one proof would be another photo, something along these lines? Mark: Yeah. You’re able to add multiple photos as the contractor. This then generates an invoice that the property manager receives. This is a separate view where the tenant is not part of it. They’re not anything around cost, they’re not seeing this. The property manager is actually able to pay via ACH directly to the contractor through the app. There’s no need to go elsewhere and try to cut a check, having anyone pick it up, or mail it, or anything like that. Jason: So again, it’s reducing a lot of the friction and communication challenges between the property manager or maintenance coordinator and the vendors. Mark: Yeah. That’s one thing that we’ve seen on both sides of the equation. A lot of property managers are still spending a lot of time just doing payments. On the contractor side, they are spending a lot of time generating invoices. They have a good support, so at the end of the week, they’re tying up all the work that they did. They don’t even necessarily have the good system to keep track of all the jobs that they did. So, they’re often once again spending this admin time where they’re not actually getting paid to do that. What happens now is that with the invoicing feature, although it’s simple and very intuitive, it actually reduces the amount of time that they’re doing this stuff, they’re able to get paid faster, and they’re able to spend a lot less time worrying about the stuff and actually getting more work done, which means your maintenance is getting done faster, which means your tenants are happier, which means you’re happier as a property manager because you’re hearing less from them. It’s really an interesting problem because you have these three different groups of people and you’re trying to design the simplest solution that takes into account their unique set of problems. Jason: If you imagine, what would be the ideal situation so that all three parties could communicate the most efficiently? You would just have all three of them sitting in a room face-to-face talking like, “Hey, you’ll do this. I’ll do this.” “Okay, I’ll pay you then. I’ll do this.” “Okay, team. Ready? Great.” Everybody’s there, it would be fast, but that’s not reality, right? Mark: Yeah. Jason: You’re trying to run a business and so is the vendor. The tenant should hopefully has a job and making some money to pay rent. There’s all this stuff going on, we can’t just all hang out, but Proper really creates a room that they can all hang out in and communicate. Mark: It’s great that you actually put it that way because that’s very much how I think about solving this problem. When you’re in person with sometime, it is the richest form of communication. If it’s a group of people, then the bottlenecks or the walls that exist, that is created through distance, creates all these inefficiencies. Essentially, that is actually how we think. That is what we want to be able to create these rooms and make this very efficient, yet rich way to communicate with each other, to eliminate a lot of these barriers that are currently costing a lot of time, which includes money, and often just frustration. One thing that I didn’t mention here is that I spent a whole year working out of a property manager’s office. You can call it extreme customer development and I really understood a lot of their operations and just so much of their time is spent on communication, but because they don’t have good tools for it, it just generates a lot of frustration on each side of it. Assuming that it’s hard to measure, the quality of life when you’re constantly doing frustration just really goes down. Jason: Yeah. Plus there’s a lot of turn-over. Among the property managers that are working for a property management business owner, it’s very difficult. Mark: What’s true of us as a company is to improve that quality of life because we know how gruesome the job can be, how hard it can be, how taxing it can be. If you use our app, it’s very colorful. We kind of joke around in the copy and we try to make it not just extremely efficient but fun. We want to make it [...] inject a little bit of fun into it. I don’t think that I see that very much in the space yet, which is one of the things I’m very excited about is that I want to bring that to the space. Jason: Some of the things I’ve seen in some apps lately that people have been doing to gamify things, which is really funny, that once you complete something or you finish something, you get confetti and balloon noises and stuff like this, like this is a little celebration. So, I’m just going to throw this is a feature request that after a maintenance is completed and somebody marks complete to get […] and they get this little celebration thing. It gives them that dopamine boost to get things done and they feel good about it. Mark: Oh yeah. That’s actually something that now that we’re starting to mature as a company and we’re getting ahead with the feature set and the road map, that’s something that we actually can bring into it. So, given my part of design background, I also know a lot of animators and illustrators. As you can see, we have a lot of illustrations. We very much want to use those opportunities. When you’ve succeeded at doing something, really just letting you know. Jason: Even rewarding a tenant for using the system. Instead of calling you, like they submit a ticket and you’re like, “You’ve done it! Good job!” All these little things just create positivity and they add a positive feel to the property management company. The tenants are usually pretty upset if there’s a maintenance request. The vendors are having to deal with that, the property manager. Anywhere you can add a little bit of fun and gamification into an app, I think is [...] world a little bit more fun. Mark: Yeah. There’s no reason you can’t have fun doing this job. I want to save you time, but like in this, get you to crack a smile a couple of times a day. It’s not just about saving time but it’s about being able to continue to do that job and be happy doing it. Jason: All right, cool. Mark, I really enjoy having you on the show. One thing that might be cool, it would be after a maintenance request is submitted, if we did an integration with GatherKudos, real super easy, super simple. [...] whether they’re happy or sad. Mark: I’m totally happy to talk about that. Jason: All right. That would be cool. It’s really great to have you on. How can people get in touch with Proper? How can do a demo? How can they find out more? Mark: We actually created a unique link for the show, so if you go to proper.chat/doorgrow, you can definitely learn a little bit about our products and then very easily set-up a demo with us. Again the tool is super easy to use, so we are happy to set-up a demo with you. It shouldn’t take more than five minutes. Once you start seeing the product it becomes very quickly evident how this can start saving you time and also maybe make you smile. Jason: Awesome. All right, everybody check that out. I appreciate you setting up that link. That’s awesome. Go to proper.chat/doorgrow and check it out. You get a little special perk for being a DoorGrow Show listener. Mark, really grateful for you coming on the show. I love hearing about new technology. I think this sounds really innovative and I think it solves a problem. I think that it will really be beneficial and I’m really excited to see what you guys do in this space and start hearing some feedback from my clients on what they think. Mark: Yeah. Thanks for giving me time and always a pleasure to talk. I look forward to checking in again soon. Jason: Cool. Yeah, we’ll be talking again soon. All right, I’ll let Mark out. If you are a property management entrepreneur and you’re looking to add doors, you’ve been struggling, you’re wondering why does it feel like there’s scarcity in an industry and 70% are self-managing. There’s no scarcity in property management right now. There just isn’t, but they’re not looking on Google. You’re going to have some trouble if your whole goal is you have people find you through Google. There are ways to go out and create business and we’re focusing on that. So, stay tuned with DoorGrow, keep an eye on us, and if you’re wanting to grow your business, if you want to short some of the leaks in your sales pipeline, you want to dial in trust engine, have generate more warm leads and warm business, it’s easier to close and have less conversations about price, price sensitivity, and comparison to other companies, that’s what we do. Reach out and talk to DoorGrow. We’ll be happy to help you add doors to your business, figure out how you can optimize your business for growth and creating trust. Again, I’m Jason Hull with DoorGrow here on the DoorGrow Show. I appreciate you tuning in. Please like and subscribe on whichever channel your hearing this on, whether it’s YouTube, iTunes, Facebook, whatever. Stay plugged in and make sure you get inside our DoorGrow Club Facebook group where we are putting out discontent. We have an awesome community of DoorGrow hackers like you. So, check it out doorgrowclub.com. That’s all for today, everybody. Thanks for tuning in. Until next time, to our mutual growth. Bye everyone. You just listened to the DoorGrow Show. We are building a community of the savviest property management entrepreneurs on the planet, in the DoorGrow Club. Join your fellow DoorGrow hackers at doorgrowclub.com. Listen, everyone is doing the same stuff. SEO, PPC, pay-per-lead, content, social, direct mail, and they still struggle to grow. At DoorGrow, we solve your biggest challenge getting deals and growing your business. Find out more at doorgrow.com. Find any show notes or links from today’s episode on our blog at doorgrow.com. To get notified of future events and news, subscribe to our newsletter at doorgrow.com/subscribe. Until next time, take what you learn and start DoorGrow hacking your business and your life.

Today is the start of a multiple part series on social security. We'll be discussing topics such as the state of the fund and reforms that are aimed to help the program and more, so tune in and catch up on social security.Helpful Information:PFG Website: https://www.pfgprivatewealth.com/Contact: 813-286-7776Email: info@pfgprivatewealth.com----more----Transcript of today's show:Mark: Hey gang, welcome into another edition of retirement planning redefined with the boys from PFG Private Wealth Financial Advisors, John and Nick, once again here on the program with me as we talk about investing, finance and retirement. Always go to the website and check them out at pfgprivatewealth.com that is pfgprivatewealth.com. While you're there, subscribe to the podcast. Give us a like and check us out and all that good stuff. Subscribe to it for past episodes as well as future episodes. And of course anytime you hear anything, you've got a question or concern, give them a call before you take any action. 813-286-7776 is the number to call. If you hear a useful nugget of information and you want to learn more, again, reach out to them at (813)-286-7776. Guys, I hope you're doing well this week. Nick, what's going on man?Nick: Yeah, we're doing well. Staying busy for sure. Today what we wanted to do is kick off a multi session on social security.Mark: Okay. Cool.Nick: And we just want to let everybody know. We know that some of the people that'll be listening to this will have become familiar with us through either the more comprehensive classes that we put on around town or via a financial wellness workshop. And social security has been one of the hot topics for a long time and it continues to be as it is more in the news with the different pressures and some of the funding issues and those sorts of things. And then obviously with everybody, so many people and so many baby boomers getting closer to retirement, although we will be getting into it fairly comprehensively in this session, we just wanted to make sure that everybody knew that if they were interested in having us come in, whether it's some sort of association or an employer based kind of program, we like to do the lunch and learns or some sort of financial wellness workshop.Nick: And we've got about a 50 minute session that we'll do on social security. And from the feedback that we've gotten, it's been one of the most positively embraced sessions that we've done. So we just want to let people know that if they wanted a more comprehensive overview on this or they thought it might be beneficial for their employer or fellow employees or coworkers, that that's something that's available.Mark: Awesome. Yeah. When we get into that we'll have this multi-part series on the podcast regarding social security. And again, as Nick mentioned, if you want to talk with them, (813)-286-7776, (813)-286-7776.Mark: John, how are you man? You doing all right?John: I'm doing great. How are you doing?Mark: I'm doing very well. Thank you for asking. And you know, Nick got us all set up there for the conversation. So what do you say we dive into it? How does it work? I mean, what's the crux of the whole social security situation here we're looking at?Nick: Most people are obviously familiar with the fact that they are eligible for social security and they pay into the system, but not a lot of people are familiar with how it all works and ties together. We always like to start off in explaining people how the program is funded. A lot of people have seen on their pay stub where it might say FICA and they're not really quite sure what that is. But out of that 7.62 that comes out of your paycheck for those FICA tax is 6.2% of that is for social security. And one of the things that we have found over the years is that many people are not familiar with the fact that the employer also pays in 6.2%. Some people have this idea that the program is fully funded by the government and really it's fully funded by them and their employer.Nick: Letting them know that about 12.5% of their income each year is going into the program towards them is something that is important for them to understand. And for some of the higher income earners, they may have noticed at a certain point of the year that their paycheck gets a little bit bigger. And usually that's because payroll tax is capped, so people no longer pay in on earnings over ... In 2019 on earnings over $132,900. And as we talk a little bit about some of the things that'll change over time with the program, one of the things that's in the news the most is that cap and removing that cap so that it's similar to Medicare where people will pay on, no matter what their earnings are, they will continue to pay into the system.John: That cap's actually been going up aggressively. You know, I think a few years ago it was $112 Nick, and I think now they've jumped it up to one $132.Nick: Yeah, yeah. They've definitely been indexing it up faster than inflation, that's for sure.Mark: Yeah. And depending on what happens in the elections coming up next year, you know, depending on who gets in, there's conversations that that 6.2 could be raised as well. So if you're still working, so that could go up substantially as well.Mark: How much can somebody expect guys? I imagine that's a big question that always comes up is, what are we looking at? I know you can get your estimates, obviously, from the website. They don't even send those little papers out anymore I don't think. They used to send them out every year, then it went to every five years. I'm not sure if they even still do that.John: They do occasionally, and I'm not sure the exact how often, but I know that from our classes we're starting to have guests say, yeah they're getting the statements. But it's based off of your earnings record. And one thing that's important to understand, it's actually your highest 35 years. So a lot of people when I first started working, I think the first year I was 18 I made like $12,000.Mark: That's pretty good for 18.John: You're [crosstalk 00:05:20]. Yeah, exactly. Your highest earning years are really later in life, once you hit your 50s and 60s. So that's important to understand if someone's thinking about retiring early to make sure that they look on the statement and see, Hey, what years do I have that are significant in here? Because if I stop working my last seven years, you know the benefit that I'm seeing on my statement's actually going to be less.John: Because when you get your statement, what it shows if you continue to work up until that age, not if you stopped. So that's important. Another thing we tell our clients and anyone that comes to our classes is to make sure that you look at it, see if there's any zeros in there. Because if you do have zeros in your highest 35 that will actually bring down your benefit and that's something you may want to consider maybe working a couple of extra years to make sure that you maximize your social security retirement benefit as best you can.John: And you're right, you can go on social security.gov and pull up your statement. They'll ask you a lot of funny questions. What was the color of your first car? Most likely most people get locked out unfortunately, but it's good to go check it out if you haven't done that in awhile.Nick: Yeah. Another thing to just make sure that people know from the standpoint of those highest 35 years is that's in relation to the cap. And so you know that cap that we mentioned earlier, that $132,900, it's in relation to that. Just because there may have been a period of time, we've seen it in some circumstances, where maybe somebody took some time off to stay home with the kids and then they're returning to work and before they took time off they were making a higher income. And although, from a pure dollar standpoint they may be making more dollars now as in relation to the cap, that may not necessarily be the case.Nick: That highest 35 earning years is in relation to that cap. And with how social security date change the mailing out of the [inaudible 00:07:04] and that sort of thing, we absolutely recommend that people, although it can be a little bit of a pain from the process, to really get logged into the site, make sure they understand how to access that statement, make sure they understand how to read that statement. Especially from the standpoint of people that we have that are self employed. We have them double check their statements to make sure that their income is being correctly recorded because they may be paying in their self employment tax, which is essentially payroll tax. Making sure that that's recorded properly so they're going to get the benefits that they're entitled to down the road.Mark: Yeah. Now guys, I've heard through the years that if you see those zeros on there like John mentioned that that's not really on the social security to fix that. That falls back on you in trying to follow up possibly with past and employers. Like if you know you earned something in a given year and you're seeing a zero, is that still how it is? Is that the way that it goes? Do you need to talk with the social security office about that or do you need to track down that past employer?John: You do need to reach out to them and Nick's, I believe, grandfather did that and Nick can share that story.Mark: Oh, all right.Nick: And this was years ago, so I don't know any details on it, but my grandfather was from Cuba and so he had a natural distrust for the government. And when he was a professor at the University of Rochester and when he went to retire and file for social security, he did not agree with the amount. And due to his non-trusting nature, he happened to have every pay stub that he ever had in the basement. And so he was able to figure that out. Luckily now we have things that are more electronic and we do have people try to keep some sort of record and haven't had anybody recently deal with that in any sort of deeper way.Mark: That's good.Nick: But usually a tax return will help. And tax returns are one of the things that we have people ... We've got a portal for clients and we have them upload those tax returns so that they can be a really good resource down the road in case there's any issues.Mark: Well that's cool. Yeah. I mean I'm 48 and I think about myself and I think God, if I had to go back and figure out who I worked for when I was 20 and what they owed me or whatever, or what I paid in, I don't know where I'd start. So that was awesome that your grandfather actually kept all that stuff. Because I know that for a lot of people that would be definitely a challenge. But that's just something I thought about and I wanted to bring that up and get your guys' opinion on that.Mark: So if you're talking about things that are really important to people, obviously a big question for boomers, and I'm sure you get this at the wellness events that you do and just in general is the constant question of the health of the fund. Is it going to be around?John: Yeah, that is a 100% the main question we get at the workshops and also when we're doing planning for clients. But as it states today there's actually a surplus and the fund is actually growing. There's roughly $2.9 trillion in it and when you say trillion it doesn't really in reality mean much, we have no idea what that actually equates to.Mark: It sounds like a lot.John: [crosstalk 00:09:56] Surplus, it is a lot. But the surplus is about $3 billion a year between money that's coming into it through the payroll taxes and also the interest earned on the balance. Just to kind of give some people some numbers because they're always asking. In 2023, 2024 that surplus actually will stop. So it's actually going to be going into a deficit and then in 2034 the fund's basically exhausted and then it's just going to be paid through basically money coming in through payroll taxes and then the money's going to come out. An then in 2034 when that happens, based on the numbers, the estimates, is looking like there's going to be a 21% reduction of benefits. So you're going to get 79% of the benefit owed to you. And again, that's if no changes happen, which we'll we're going to go into shortly. Nick will start it up where we're talking about some of the reforms that already have been happening and that will continue to happen.Nick: And we do tend to ... Some of these will probably be repeated throughout the series about social security. And earlier I mentioned the increase in max earnings, removing that cap. That's probably one of the lowest hanging fruit from the standpoint of people getting on board with making higher income earners continue to pay into the system. Right now, the earliest retirement age that somebody can collect benefits from is 62. So that's an age, especially with the longevity of people's lives and people just living longer overall, that 62 will probably start to increase. I'm sure people will be grandfathered in at a certain age or certain, your worth and before it will be grandfathered in, but-Mark: It seems like that's a really-Nick: John and I suspect that our-Mark: Yeah, that seems like the easiest one too for a lot of things. Right? Just push it back for people under a certain age, like 50 and under or something, just push it back.Nick: Yeah. And social security ... The trickiest thing and probably one of the biggest reasons that not much has been done with it is because, frankly politicians are worried about not getting voted back into office, so-Mark: Yeah, it's a political poker chip for sure.Nick: They [inaudible 00:11:53] can down the road and try not to tick people off at least to a certain extent. So raising that initial retirement age from 62 probably upwards of ... They'll probably ease it in, but I wouldn't be surprised if John and I, our initial retirement age is closer to 65 or higher.Nick: They've talked about doing means testing from the standpoint of if people have a certain amount of income on that they wouldn't collect their social security. I think that one will probably be a little bit more difficult because usually that's income focused and honestly there's a lot of ways around that.Nick: But another thing would be that cost of living adjustment, and that's been tinkered with a little bit really over the last decade as inflation stayed low for a little while and interest rates were really low. But that could be something that they adjust. But realistically what we think will be the easiest things to do will be to take up on the payroll tax, potentially have employers put in a slightly larger percentage than the actual employee. It's something that they can do. Increasing that cap or the earning cap or removing the cap in general, and bumping back that initial retirement age, are all things that we think will be a big deal.Nick: The other thing could be the, really the increases, the percentage increases that social security provides for people that defer taking their benefits. So if they wait, any year after full retirement age, there's an 8% increase. And so that's something that'll probably drop as well.Nick: The good news is that this is pretty actuarial and really all you have to do is math to figure it out. It's just going to take people being willing, people being the government, being willing to make the changes.John: Yeah. And they've already, in 2015 they actually closed some of the loopholes which we've been seeing a lot of in planning some strategies that people were using are going away, which helped the program out. They're already doing some things. And the big thing that ... One of the things Nick talked about was the cost of living adjustments. To me that's one of the ones we need to keep an eye on because when we're doing planning, it really helps out the plan when you have some type of guaranteed income that actually goes up with inflation.John: Historically, social security has gone up about 2.6%. It's been low over the last five or six years due to inflation, but that's actually a pretty nice benefit when you look at what you start with at let's say 66 and what you end up with that age 85. It's a big amount. When you look over that 20 year period.Nick: Probably the one people want to fight for the most to maintain from the standpoint of anybody that's likes to be active or have a vested interest in the topic, that cost of living adjustment's really, really important for them.Mark: Absolutely. Well, let's take that point and segue into an offer for you guys. If you're listening and you want a free maximization strategy and the social security guide to anyone who emails in, just email john@pfgprivatewealth.com that's john@pfgprivatewealth.com. Again to get that free maximization strategy and social security guide here on the program.Mark: And I that's going to do it for us this week on the podcast guys. Really good information to start this week, talking about social security here on the show. We're going to continue on, as Nick mentioned earlier on, and do a multi-part series on this next time here on the program. We're going to talk about integrating social security into your retirement plan, making that part of the plan and some things to look for and think about in regards to that.Mark: You've been listening to retirement planning redefined with John and Nick financial advisors at PFG Private Wealth. Again, that's PFG Private Wealth and that you can find them online at pfgprivatewealth.com and subscribe to the podcast while you're there. Don't forget to email John if you'd like to get that social security maximization or give him a call at (813)-286-7776. If you've got some questions about your own social security, get on the horn with them. Come in for a consultation and a conversation. (813)-286-7776. This has been retirement planning redefined for John and Nick. I'm Mark and we'll see you next time.

Are we seeing a plateauing of Amazon? Those who think that any type of e-commerce conducted outside of Amazon is a dead-end are dead wrong. Today we welcome back Andrew Youderain to discuss his third annual State of the Merchant Report for 2019. If you've never read or heard us talk about the report, it's a comprehensive report of all things e-commerce that comes from Andy's exclusive database of real entrepreneurs, all running physical product e-commerce businesses. With more than 400 qualifying merchants completing the questionnaire, the report covers an array of important topics including growth and conversion rates, profitability stats, advertising ROI, and even one surprise question about ways our members would fulfill their biggest indulgences. We'll go over all the questions, responses, and the surprising trends in e-commerce for 2019. Episode Highlights: What is providing the best return on investment in terms of advertising? The facebook marketing factor, why it's so different, and how can be tricky. A shout out to email marketing as a very valuable and viable advertising tool. The reality of advertising fatigue and the big three – Google, Amazon, and Facebook. The typical store owner makeup and whether dropshipping is coming to an end. Surprising gains in manufacturing of original merchandise. The impact of the new tariffs on the surveyed businesses. Does everything seem to be growing? We discuss general growth rates in the e-commerce industry. The surprising thing we learned from the survey this year regarding Amazon. The place for premium and niche products. Andrew's top three takeaways from the survey. A rise in Chinese sellers on Amazon and what that means for e-commerce merchants and counterfeiting. Andrew's view on the FBA nexus and the state to state tax impact for his community of clients. The fun and surprising final question in the survey. Transcription: Joe: Mark back in Savannah I think it was 2016 was the 2nd time I ever went to eCommerceFuel. In a great location because I could drive there and it was a beautiful, beautiful location. And I was so proud because I brought copies of my e-book some would call it a book called 10 Steps to Selling your Amazon Business and this is back in '16. We're talking years ago. And so I thought I was at the forefront of things. And then Andrew does his presentation at the beginning of eCommerceFuel events which was really the state of commerce back then and what we've had him on the podcast about what this podcast today is about. The 1st thing he talks about is how few of the eCommerceFuel attendees are using Amazon; like less than 10%. And it was a very small part of their business and that Shopify and other channels were much, much bigger. And I was slightly mortified. But then the next year, the biggest growth I think in 2018 that we saw—actually it was at '17 because we stated e-commerce from Andrew in 2018 and the biggest growth factor was Amazon. And now that you've had him on again I think that that's changed a little bit, right? Mark: That's right. In this year's State of the Merchant Report from eCommerceFuel, they've found that this is the 1st year that non Amazon e-commerce stores outpaced Amazon as far as new sales channels which is pretty amazing when you think about the impact. The quote directly is this was the 1st year non Amazon sellers grew faster than those on the platform. So there's more growth happening off of Amazon among their members than on the Amazon platform. That's pretty remarkable to hear that because it feels like feels like everybody's on Amazon. And we've often preached this idea of having diverse revenue streams and making sure that you're being multichannel with your revenue streams and platforms but you and I know a lot of Amazon sellers that have gone all in on Amazon so that they could just focus on the growth there to get as much sales blossomed there as they can because it's easier to do than trying to manage multiple channels. Those who think that outside of Amazon e-commerce is dead; it's not at all, not even close. There is a couple of other interesting things that came out of this report and I'm going to let Andrew really get into some of the things that he found impressive. But one of the things that that stood out to me was the effectiveness of Facebook as a marketing channel. It seems like everyone we talked to always says Facebook is such a great marketing channel and if we could just figure it out and what my experience has been is that everybody's trying to figure it out. Which means it's really difficult to actually do. I think those that have “figured it out” are doing well. But among the people that responded to this really lengthy survey that Andrew puts them through Facebook ads came in as the 5th most effective sales channel or advertising channel that people were reporting. And the ROIS, the media in ROIS was a full point lower than the next highest. And again we'll let Andrew talk about some of these things because I'm sure he has more insights than I do into the report itself. From just a general like where are you in the market as an e-commerce business or when you're looking to buy and identifying the right trends and the types of businesses that are going to be around for the next several years a report like this is just invaluable, right? You get to see where a business is going, where the industry is going, and maybe where the next opportunities lie. Joe: Yeah and it comes directly from the eCommerceFuel membership database. As far as I understand it Andrew sends a survey out and collects all of this data and all of this information so it's from real entrepreneurs down in the trenches running their businesses; physical product e-commerce businesses. So if anybody is out there that is looking to grow their business outside of Amazon this report can help. If anybody's buying a business and wants to take it beyond Amazon this report can help. If you're on Shopify and you want to learn the other channels, what number 2, 3, and 4 are before that 5th one that's most effective being Facebook this report can help. And it comes from Andrew. There are very few people in the industry that are as good character as Andrew and the folks at eCommerceFuel. Mark: Oh I was just about to say that now. A shout out for the good guys Andrew is certainly one of those. So let's get into this discussion between Andrew and I on this report and find out what some of the insights he [inaudible 00:05:59.2]. Joe: Let's go to it. Mark: Andrew, thank you so much for coming back on to the podcast. You were on last year and we talked about the awesome report that you guys do over at eCommerceFuel; the State of the Merchant Report. And this is where you survey a lot of the members of your community which we've talked about here on the Quiet Light Podcast, Joe and I talked about it quite a bit. One of our favorite conferences, one of our favorite communities out there for high revenue e-commerce store owners; it's a fantastic community that you built there. And you do this report every year. It's a really good pulse of what's going on in the world of e-commerce. So thank you again for joining us. Andrew: Yeah thanks for having me. I appreciate it. And good work with the podcast. I'm enjoying the Quiet Light Podcast. I kind of love your episodes and yes you're putting up good stuff; you and Joe. But your episodes seem to have just a tiny edge on Joe's. I don't know maybe it's just in my mind but regardless you guys are doing awesome, awesome stuff. Mark: Yeah I'm just going to record that. I'm going to put it on a loop and I'm just going to send it to Joe a few times so he can hear that over and over again. You need to submit at some point we've been adding these movie quotes to our intros at random so you need to listen to those and tell us what you think it is and we'll give you a shout out. I don't know what they are myself so I'm excited about this. I'm excited to talk about this year's report because you always come out with just some really fascinating bits of data. And I'm going to start with one that I've run across a decent amount because I think it really speaks to a lot of buyers are thinking about when they're evaluating an online purchase and also sellers who are looking to scale their business and this is what is providing the best return on investment at this point in terms of advertising? Facebook is often quoted you know if we could just unlock Facebook and this is something that I want to get into a little bit here but your report showed some surprising numbers with where the most value is and where some of the lowest hanging fruit is for advertising. Andrew: Yeah so there are a couple of things that are new this year. I wanted to take a look at what merchants are using the most in terms of promoting their business; so what's most popular and then also what's the most effective because often those are not the same thing. And so you look at the most popular marketing channels and we just ask people what are you using and in the number of popularity 1st was email marketing, 2nd Facebook ads, 3rd was Google AdWords, 4th was SEO, and 5th was Instagram. And so then we—of course, it was a popularity—to get a sense of what was most effective we looked at okay, of the people that are using every single one of these things we asked about which, how many, what percentage of them ranked that specific one as the most effective? And the one that came to the surface wasn't even the top 5 that we talked about. The number one most effective marketing channel reported by merchants was Amazon Ads. Over half of people running Amazon Ads said it was the best highest ROI marketing channel to use, number two is e-mail marketing, three was SEO, 4th was Google AdWords, and like a distant 5th not even like a close 5th, but a distant 5th was Facebook Ads. And another thing that we explored was the average return on Ad Spend for Facebook Ads versus Amazon and Google and they had the lowest return on Ad Spend at 3.4 compared to Amazon at 4.6 and Google at over 5. And they're increasing of the costs on the Facebook platform were growing up the fastest as well; almost 20% versus 16 for Amazon and 10 for Google. So that was kind of the Facebook—I think a lot of people, so many people are doing it and it's easy to have like almost some fear of missing out if you're not doing it or if you're doing it like you're not getting the secret when everyone else is. But I think it's a harder nut to crack than people like to admit. And those were some of the numbers based on the advertising. Mark: Yeah there's a lot that I want to get into on this here and let's see if I can remember all of it but I want to 1st talk about the Facebook ads because you put it in that way; it's a tough nut to crack. And I wonder if that's really maybe some of the secrets that's going on behind these numbers with the EBIDTA ROIS and also the effective marketing channel. We've had Ezra Firestone on the podcast here before. He's a friend of Quiet Light Brokerage. He obviously is a big advocate of Facebook advertising. I've seen some other people who have been doing Facebook Ads with a lot of effectiveness but and this is the big caviar, it takes a while to figure that part out. And a lot of these guys have gotten there where they're seeing these ROIS of five plus, they've taken months—literally months and lots of dollars down the drain to really get to that point. I'm wondering and maybe you looked into this a little bit with the survey; did you look into people that have tried Facebook marketing and maybe gave up after two or three months because they couldn't get it to work or did you not look that deep or ask that deep of a question? Andrew: Yeah I didn't go quite that deep. And it's always tough designing the survey because it's already like 50 plus questions and I'm trying to balance—making sure we get people who get all the way through it with you know what are the critical things we get. So sadly I didn't get that kind of data. A lot of the kind of the fox and the stories behind people getting into Facebook and having a hard time with it are more anecdotal that I hear from people. And so sadly yeah I wish I had some good numbers and data behind it but it's more anecdotal than anything else. Mark: I mean look there's a couple of things on here on your top; 5 Amazon Ads, e-mail marketing, SEO, and Google AdWords. So let's go through here with Amazon Ads, SEO, Google AdWords; those are all high intent advertising channels, right? So if somebody goes online and says buy shoes or buy cheap shoes or best running shoes; that's a really high intent search, Facebook Ads not so much of a high intense search, e-mail marketing side if they're on your list that already a warm contact. So it shouldn't be too surprising that we're seeing that but the other side of this too that I would say is like if you're looking to create a market and let's say you have kind of an odd channel, maybe you take a spin on a new type of ice cream scooper that doesn't get stuck ever. So the ice cream never gets stuck in that ice cream scooper and you've invented this and you're going to sell it; well nobody knows that it exists. So it might take a while to build that market and so Facebook Ads might be a good source for that because you can have that proof of concept and really kind of educate the marketplace. But it's also going to take a little bit more work to get people to really peak their attention. Andrew: Yeah Facebook is just a totally different mindset for advertising. It's really great if you're good at targeting if you're good at—the way you build a funnel is just totally different. It's more so about you get to be able to catch people when they're doing something else, get their attention, pull them off the platform or engage them for a while and then pull them off versus being able to drive a sale short term. I think it's a longer term game and just a different mentality you need to have if you're going to do it well. And targeting too with Facebook I think is getting trickier [inaudible 00:12:57.7] that some of the targeting the traffic that Facebook had been sending hasn't been converting as well for some members and some people I know. So that's a big part of Facebook performing well as them sending you people that are based on their intelligence they know are going to work well. So yes it's interesting. Mark: Yeah talking to crack I think is the best way to describe it. So I do think it's a viable source but you've got to have the right type of product and you really have to know what you're doing with it and be patient. I mean that's just a lot with these; Amazon I'm not surprised at all, still a very young marketplace so I think we're still seeing kind of those numbers equalize out. Talk about a high intent marketplace and high intent searches so I think that makes complete sense they're number one on the list. And let's give a shout out to email marketing probably the old man in the room there, right? Andrew: Yeah although it's funny I think about if you look at email and even email it's still of course you know the number two most effective marketing channel and it's still highly—super valuable but I feel like even probably it's getting harder. I think advertising, in general, is getting so much more difficult because we've had so much of it—a part of it is fatigue; just advertising fatigue. And you've got three main giants who control so much of it and they're kind of squeezing all of the juice out of it they can with rising ad prices but even my email inbox I don't know about you Mark but I'm way more ruthless now with my email. I've got a ton of filters set up. I have used like unroll.me to unsubscribe from a lot of stuff because you have to. Because I'm looking to change my email address in the next couple of months to just have a team address to really focus on because it's—the levels most of the messages coming at us are increasingly just –they just keep going up and up and up. And so I don't know, it would be interesting to see if anything comes up in the next two, three, four years where—that it makes it able to get through all of that noise. Because it's getting—just any advertising, in general, is just getting a lot harder because there's just so much out there. Mark: You know I really think it comes down to the personalization. Email marketing, you're right I mean email it's a complete mess and now I use Gmail, we use Gmail, Google Apps throughout Quiet Light Brokerage and they tab everything down in that promotions or updates or forums tab. And I'll tell you what I don't look at promotions ever. Basically, its spam light is what it is and so you just throw all that stuff away. I go through it every few days and select all and hit the archive. Coming through that though like having personalized messages, very, very hyper focused hyper personalized messages I think that's really the only way that people are going to be able to survive with that email marketing. That's tough, that's not easy to do. Andrew: You know I agree and I think—you know I did a podcast with somebody earlier this year and they have an antiques business and every week they send out an email on Saturday and at the click through rates are like 25%. I talked to him about how he was doing this, I mean trying to get some secret out of it and there wasn't any secret. It was that he spent hours and hours and hours on an email that was totally unique and it was amazing deep interest level to the customers and people open it. And like I look at the email that we have that goes out to our private communities [inaudible 00:16:34.2] it's not nearly as good as his is but just that so much smaller group only about a thousand people but we're able to get it. It takes a lot of time to put together but it gets generally open rates of close to 50%. Mark: Let's move on here to another thing. I want to talk about the anatomy of a store owner. You put together a really nice simple graphic on the link to the report and I will link to this report here in the show notes and we'll also throw it into an email as well. So people listening to this take a look at the email coming through from Quiet Light Brokerage but I want to talk about the makeup of the store owner. Drop shipping seems to be kind of on the losing end of things these days. Andrew: Yeah I feel like it's had some pretty strong headwinds for the last couple of years. And this year the number—every year we ask and we look at what percentage of store owners is a certain type of business model; drop shipping, manufacturing, private label, hybrid, or reselling products. And this year the number of drop shippers that reported got cut in half. So only 8% of people this year down from 16% last year were drop shippers which is a pretty huge—just a massive cut. And if you look at the number of manufacturers that we're reporting that reports for the survey that was up by almost a 3rd by 32%. So it seems like a lot of those—this has been a couple of narratives that have been talked about for a couple of years now but it's really playing out in the numbers. Mark: Yeah I think so as well. What's funny though is we had somebody on recently to talk about drop shipping and they were killing it. They were doing a great job with drop shipping. So I feel like it's one of these areas where for a while there were Ad Sense sites, a pretty number of Ad Sense sites all over the place, a bunch of those got wiped out and the general thought was this is kind of a dead business model. Well, I've seen some of them come by and those people that actually survived through that and how they got some strong, strong businesses. I feel that way with drop shipping a little bit. Like if you can survive these head winds you've got something good. Andrew: It's funny you say that Mark because when I looked at the revenue growth by business model and the income growth by a business model guess who was leading the pack on both of those metrics? It was drop shippers. And I think what happened is exactly like you said there's a little bit of a Darwinism at play here where a lot of the herd got thinned out and the people that were left were able to make it work well. And I think you're actually right it definitely can work in some models. I think it's much harder to get the things to all align and get a model where it works well for reasons that—I guess I don't want to get into on the show right now but if you can get it right I mean it's a great business model because no inventory, no upfront cash, no cash flow issues, location independent. If you get it to work right it's a pretty good gig. Mark: It really is but it seems to be so dependent on the product and also your relationships as well because obviously, the problem with drop shipping is competition. It's so easy just to spin up something and compete directly with you and you get the sort of you bicker with a sort of marketplace of every product that is exactly the same, same images and everything else. It's tough to work in that area. On the flip side—so like I like to think about this on a spectrum. On one side we have drop shipping where you can see the products sometimes you get into reselling which might be a little bit of a step away from that drop shipping where you're still doing with some physical product but it's not yours. And then you go all the way over to the other side of the spectrum and you get these unique manufactured products, some of them private labeled but the most extreme would be hey I invented something or I've created a product and you're seeing some pretty big gains in that area. Andrew: Yeah I mean the number of manufacturers like I mentioned was up a 3rd this year. If you look at also not just the number of people that are doing it but the benefits that they're seeing and the pay off, so we tracked gross margin, net margin for those—for all these different types of sellers and manufacturers and by far the largest gross margin at 53%, the highest net margin at 21% and those were up year over year too for each category. I think the gross margin for manufacturers was up from 45% percent up to 53 and the net was up as well. So yeah I think manufacturers are—it's a harder business, there's less of a roadmap, it's more capital intensive, it's more stressful but if you're able to crack it more and more people are going that way. It's really the only way I feel like you can play on Amazon these days because if you're going to try to go resell someone else's product on Amazon you're going to get destroyed. And it's where a lot of people seem to be going and getting paid for. Mark: Yeah I think all those things that you talked about; the stress, no roadmap, everything else there's a flip side of that. It's defensible, right? Because there's no roadmap you're not going to have everybody saying oh I know exactly how to do this. It is difficult to do and figuring out how to get that manufacturing [inaudible 00:21:21.3] done is tough. Did you ask people and if you only have just kind of from what you've heard in the community obviously China I would guess would be the number one sourcing location for most people manufacturing, what other countries are you hearing from some of the members on the community that—where people are sourcing products? Especially when we're recording this—I don't know when we're going to air this episode but when we're recording this we're staring down potentially more tariffs going on with China. Obviously, this is going to impact everybody selling from China so finding other sources would be great. Have you heard of any other countries that seem to be emergent? Andrew: That's a great question and the honest answer is no. I mean there are people in Asia—I hear occasionally about people sourcing in Taiwan which depending on who you ask is China or isn't. Vietnam is another one that comes up but apart—and you know some people I know occasionally hear their source from India or make their things in Canada or someone I met with recently is building some footwear in Mexico. So there definitely are some other places people get certain things but in terms of a potential runner up to China that could even remotely start to be an alternative to where people are manufacturing 90% of things I don't think of someone who's pulling away or even you know accelerating at all. It's kind of just a whole bunch of a lot of different options all over. So not really an emerging source for manufacturing that I'm seeing. Mark: That's a little disappointing but not surprising. I mean wouldn't it be great to have something on this side of the ocean where we could maybe just pull up from Central America instead of having to—I talked to some of these store owners and they're talking about three months plus lead times where you're committing capital and then that goes on the ocean and it takes—I can't imagine how difficult that would be. Andrew: Oh yeah it would be really hard and you know it's one thing we did ask this year was did tariffs impact your business and granted I know we're talking you and I are both in the States, I know a lot of people listening aren't in the States but probably the vast majority of 85% or so of respondents for the survey are US based or 75% rather but we asked did tariffs impact your business this year? And over a 3rd of people, the 36% said the tariffs meaningfully hurt their business this year. And like you just alluded to they are only getting more from slapped on. So it's a big deal and it'd be nice to have a silver lining; maybe be that sourcing out of some of the countries closer to us maybe, maybe get a boost. Mark: Yeah that'd be interesting. Hey if anybody has an idea on where we can craft and not let me know. That'd be great to get that part out. Let's go to like some of the Sunday news here and that is everything seems to be growing. You know I started Quiet Light Brokerage right before we hit that great recession so a lot of my entrepreneurial journey has been slogging through a difficult economy. It seems like from what we're seeing we're in a bull market right now. Andrew: It seems really strong. So we—looking at growth rates over time, and again these are the average merchant—the average e-commerce store owner reporting for the survey was right around 3 million. So that's relatively small when you look at the macro economy, if you look at e-commerce trends, in general, they're probably could be growing closer to 20% plus or minus but for this segment of store owners if you look at the growth trend over 3 years, 2017 it was about 25%, last year it jumped way up to almost 37%, and this year it's down a touch to 36% but still meaningfully about the same. So revenue growth is good, income growth has also remained real strong and if you look at the conversion rates too and it's just continued to go up the last two years. I mean the conversion rate we're looking at this year was over 3% up from 2.60% last year. And in terms of like our earlier margins are up so all in all for store owners things are good, growth is good, margins are good, the conversion is great and it's kind of a boom time is the right word. But it's definitely—things are robust and healthy out there for stores in this segment. Mark: Yeah that's fantastic. One of the surprising things that I've seen from the report and we talked about this last year and I know Joe tells me and we mentioned this in the introduction to this episode here that the very 1st eCommerceFuel Live that he attended he brought a book on 10 Steps to Selling Amazon Business. You asked at one point to raise your hand if you're selling on Amazon and it was only a small portion of the room that did so. And he was thinking oh man I completely missed the mark bringing this book. Well, we've seen this number increase over the years although this year from—unless I've got [inaudible 00:26:19.5] I'm not reading this backwards, it looks like you have a decline in people that are selling on Amazon and an increase in people that are not selling on Amazon. Is that really what you're seeing? Andrew: Yeah I wouldn't say a decline but I would say a plateauing of something in the report that I wrote I call it like a plateauing Amazon—I hesitate to use the word peak Amazon because every time that I think that they've peaked anything they blow up and accelerate to the moon. But looking at like three examples here, or three data points; if you look at the number of merchants who just sell on Amazon or they don't. A couple of years ago 49% last year, it was 55% so a fairly meaningful jump. This year that number barely budged; it went from 55.2% to 55.8%. So up a little bit but wildly decelerating. Along the same lines if you look at group sales from Amazon last year, two years ago they were up really sharply and this year they barely budged; 27.6 to 28.2% of the total sales that all of the merchants generate coming from Amazon. And this is maybe the most surprising number. If you look at just the revenue growth of stores that sell on Amazon versus don't last year stores that sold on Amazon grew faster than stores that didn't. And this year stores that don't sell on Amazon actually grew faster than stores that do by a small margin which is just really, really surprising. So I think that there's so much here. We could do a whole episode on I don't think Amazon is going anywhere, I think they're going to be shaping the e-commerce landscape for the next 5 to 10 years. But I do think a lot of merchants are starting to really struggle with counterfeit issues, with increasing fees, with loss of control, with feeling like they're totally beholden to Amazon, and a lot of host of other issues. And they're not getting off the platform but the number of merchants that are saying hey yeah let's go hitch our wagon, go to Amazon and sell there—and some people are just deciding to leave the platform altogether. So one of my predictions and here I'm almost certain that it could be wrong because I'm going out on a limb is that next year is the 1st year we see the percentage of stores selling on Amazon actually decrease year over year. So we'll see when that happens. Mark: Yeah that's interesting. I wonder if shopper's behavior is changing at all and just again you just can't draw any conclusions from this here but I know for myself I've become more of a diversified shopper than I have in the past. I still use Amazon probably like 4 or 5 times a week, I'm still a really heavy Amazon shopper but I'll actually look around a little bit off of Amazon as well. And if I get the chance to order directly from a store I do so. Now that's probably just because I worked with so many entrepreneurs that have these stores and I know the benefits for them. But there's something nice about that specialization, right? If you think about the big box stores and how they couldn't specialize in any sort of gear but if you want something high end and specialized, it makes sense that there is somebody that actually does specialize in that. It's pure speculation on my part of course. Andrew: No. I think you're absolutely right. I think we're going to see in the next 5 years a real hollowing out of e-commerce where you have Amazon; if there's something you'd know you want to buy it's more of a commodity or a fairly inexpensive product that I think Amazon is going to be the place you go to get it quickly and cheaply and efficiently. But I think for anything else, for merchants I think the place to really thrive and survive over the next 5 years is to have a premium product or a very niched product; ideally, one that you manufacture. Like just for example yesterday I called up and I was in the market for a nice bike rack for my vehicle. And I went into a lot of research and the company I ended up buying it from I ended up talking to him on the phone for 35, 40 minutes. They custom manufacture in the United States, they ship that to me and it's that kind of thing. They have an incredible product and they don't sell on Amazon surprisingly because they don't need to. Because everyone that wants the site or this product they go right to them and they don't want to give up the marginalized control and guessing. And I think those are the kind of merchants that are going to do really well in the next 5 plus years. And I think that's kind of the best place to be going forward if you're not going to be on Amazon. Mark: Yeah. I would agree 100%. I think just from a long term sort of defensibility mindset and that's what I've seen and I actually see it on Amazon as well, the companies that are doing really, really well long term Amazon really care about their products. And they're spending a lot of time on that product development cycle and doing their research and trying to make sure that they have something that's a high quality product. But then they're also looking outside of that as well and becoming specialists in that space which makes a big difference. With everything that you surveyed here was there any one or two things that really stood out to you as being surprising this year or would inform you if you were an owner of an e-commerce business yourself that you would definitely want to take action on? Andrew: I think the big things were the massive shift and we kind of touched on this but the massive shift of people going away from drop shipping and into manufacturing. And the benefits financially that those manufacturers we're seeing. That would be a big one. The other one was the Facebook ones we talked about where Facebook Ads really are definitely at the back of the pack especially relative to their popularity in terms of effectiveness. So those would be probably two of the big things and then in terms of Amazon just I think it still makes—it can make sense if you have a great product that's proprietary. It doesn't—if you do it carefully I don't think you shouldn't go on Amazon but just the fact that so many people are kind of hitting the brakes on that or at least new entrance in saying aren't rushing in as head long as they were before I think is pretty telling. So nothing new there Mark that we haven't talked about but three things if I was in the middle of kind of defining strategy or starting it from scratch I think would be things I would think really carefully about. Mark: You said earlier in the episode here with advertising how much more difficult it's become. And I generally think that what we're seeing with the Internet and Internet based businesses and we've been seeing this pretty much since the time I started as an entrepreneur 20 years ago now is this maturation of the businesses where I think they're all getting more difficult to do. And you look at this and you think oh man that's such a bummer. I know I talked to some friends who are entrepreneurs back in the early 2000s and we kind of reminisce about the quarry days of Amazon was a thing of the website waiting for the movie dance to happen and now all of a sudden they're making gobs of money. But what do we learn from all that? We learned that dries up and disappears pretty quickly. The people that are surviving are the ones that are embracing some of these challenges and looking at them saying I'm going to build something really sustainable, a real product and they're doing great. They're doing really good. And that bears out in some of your numbers. Andrew: Yeah and one thing—it absolutely, absolutely does and I think one thing for you to touch on in terms of Amazon and in terms of sourcing in more of a macro level, if you look at one of the things we asked it was what are your most common struggles, what macro changes are you seeing, and what are your future plans? And one of the macro changes that came up the 1st time this year on the top top list was the number of Chinese sellers that were coming into Amazon. And I think I saw a stat today that 40% of the top Amazon sellers in 2019 are Chinese sellers versus 26% two years ago. And so A. on one level you have just a lot more competition directly from factories who are the low cost provider. Which isn't a bad thing for consumers in and of itself but it's harder for merchants. And if those sellers don't have the same kind of quality standards; some of them do, some of them don't, and you also run into problems. But you also have a lot of—one thing I've noticed is a lot of counterfeit issues. This has been in the news. We've had a number of members in our community who have had problems with this when they had a product it got knocked off and then these people—you know a lot of overseas sellers started selling this product directly in competition with the original manufacturer which was really problematic because the quality wasn't as good. And so consumers got it and it really hurt the brand because they assumed it came from the original source when it didn't. And so you see I think this also ties back into Amazon and why people are getting a little bit more careful about that platform is because there are some meaningful counterfeit issues out there that again going back to the difficulties of manufacturing that merchants are having to face that weren't really as much of an issue two, three years ago. Mark: That would be interesting to see what happens with that platform. And also I'm going to touch on one last bit of the report here that you spent some time on and that is the impact of politicians and judges and we've covered two areas; we were already talked about tariffs briefly and how many were impacted by that. I think the other big elephant in the room and it's been there for several years and we've talked about it a ton here at Quiet Light Brokerage and that is the FBA Nexus. Do you have Nexus, are you filing those sales taxes in different states, and you still have a very small percentage [inaudible 00:35:49.6] to the speaking of your community that was paying those sales taxes. I think 21% is what I'm seeing is that right? Andrew: Yup that's correct. So the percentage of sellers who have Amazon inventory that is filing for sales tax, [inaudible 00:36:04.0] sales tax in any state that they have “FBA Nexus” whether or not you agree that [inaudible 00:36:10.1] Nexus. Yeah only about a quarter of merchants are submitting sales tax to those states. Mark: And do you have any idea why such a small percentage? I mean obviously nobody wants to pay taxes and that it's a pain to most people. I've run into sellers who make the argument that it's really not—oh there's no legal basis for it. Andrew: I think it's a couple of things. I think one it's it is potentially disputable whether or not and again this is something I need to personally do a deep dive on but from the very—this is where things get dangerous when I talk but from the very little I know I don't know if it's—I don't believe it's that very crystal clear, there's a whole lot of present presidents that said yes this does definitively give you Nexus. And it could be a state by state issue as well. So I think that's part of it. I think the 2nd part of it is thinking about—so because it's a gray area you can have more people who start thinking on a risk basis. What are my risks I submit? What are my risks if I don't? Also relative to the workload because it's not just about the tax; I mean if it was mostly about the tax and the administering this and the managing of it was really easy and you didn't have any you know long term liability or exposure to being audited I think most merchants would say hey it's a little inconvenience but let's go ahead and let's set this up. You can snap your fingers I'll collect the sales tax; it's not a big deal. If it is a federal level it's much easier to do. I think you'd see that number jumped to 25 to 50% plus but that's not the case. Like you've got—it's hard to administer. You potentially open yourself up to dozens, hundreds, maybe even theoretically thousands of different municipalities who can audit you. You run the risk of getting on a sales tax agency's radar to come after you and maybe it wasn't before. So I think those are some of the reasons why people are not exactly thrilled at the thought of jumping in and waving their hand at taxation seasons saying hey here I am I'm not sure if I'm actually legally obligated to do this but come check me out. Mark: I completely get it. I get the risk versus reward analysis and frankly if I were a seller I would probably be among that 75% that's not collecting. Not that that's what I would advise here in my role because I know that if you do want to sell you got to be doing that right. And most buyers are looking at that and saying we want you to be paying those taxes. We don't want that to come back after us [inaudible 00:38:31.9] later on. But I mean from my opinion I think it's pretty legally shaky ground to say that people do have that Nexus. But the best practice from a selling standpoint would be to be filing so we do—I mean that's our default position here at Quiet Light is that you should be filing for sure without a doubt. But I would love to see this resolved within the next few years because it as if Amazon sellers don't have enough things hanging over their head. There's this potential like you said of being audited by the state of California or all of a sudden getting a bill for seven, eight, nine years of tax—what a mess. They need to get it together and figure this part out. Andrew: There's a little bit of encouraging news [inaudible 00:39:16.5] different sales tax issue we're talking about the FBA Nexus tax issue but the wayfarer versus South Dakota Supreme Court case that opened up the doors for states to tax inbound orders to their residents even if you don't have Nexus in the state as a whole opened up a whole other can of worms. And California I believe just passed some legislation that increases the threshold for—I think that the term for that is economic Nexus. They bumped that up meaningfully to half a million when before it was really low at like 100,000 and 200 transactions. So there's a little bit of encouraging news on some of that fronts and I believe there's been maybe half a dozen other states that either followed suit or are in process of doing that but its sales tax right now in the United States is just an absolute disaster. And I agree with you, I think we really need something at the federal level to clean it up because it's just a nightmare. I know people and I know you have to Mark that have sold their business not entirely based on but this definitely was a large part of the calculation thinking through I don't want to deal with this. I don't want to deal with the stress. I don't know with the liability and this is making business harder than it needs to be and I'm ready to be done. Mark: Yeah absolutely. Alright, we got to get to the most important metric that you've got and then wrap this up because we're actually long already with the episode. And you know what it is, it's your KPI the thing that you're focusing on the most. And in the past, you've learned stuff about your community rather be attacked by a swarm of angry bees and a bear and you say that they're crazy. I don't know the bear sounds pretty scary. But this year you asked what luxury gift would you pick; unlimited use of a private jet, $300,000 in annual income, a monthly lunch with anyone, or a tropical island and a house. So that 300k of annual income is that like forever? Andrew: That's forever. Yeah and I think overly weighted this one. I should have been all stench here with the annual annuity that you got because 2/3 of people picked the 300k income which yeah it's hard to argue against that. That's a pretty sweet little set up for life but like 10% picked the jet, about 13% picked the monthly lunch with anyone. That was my pick. I think like you can—I mean to be able to sit down once a month with the likes of U.S. presidents, heads of state, Nobel Prize winners. I mean you can't buy that. I think that'd be cool. Mark: Do you have to buy lunch? Andrew: You do. I should have included that. That was probably what the deal breaker was. Mark: Right. Because it's got to be a pretty nice lunch if you're going to have lunch with these guys. You're not just going down on like [inaudible 00:41:45.4]. Andrew: That's a good point. And then the last one was a tropical house, about 30% of people picked that. But yeah I mean to me this is I feel like it's going to a cornerstone—I suppose we can lead with this one actually Mark. I think next time maybe we mix things around and lead off of the Kardashian performance. Mark: You like to always put the best content at the end so that people will listen all the way to the end. Because where would your day be today if you hadn't learned that most people would take 300k annual income over a monthly lunch with anyone. I actually think you make a pretty valid point there. That would be pretty valuable. You can't buy a monthly lunch with anyone. That'd be tough. Andrew: Buffet—I think you could buy lunch with Buffett for—I don't know it's in the millions I think to have lunch with him. And he's just—I can imagine he's a pretty cool cat but yeah to build it up monthly with anyone; that's pretty cool. Mark: Yeah that is pretty cool. Alive and dead? Andrew: No, I don't think—I think it has to be alive. I didn't put that in there. If we had some inane abilities to be able to resurrect people, that would be pretty sweet. I'd put that in there too. I probably would have bumped it up a touch but I don't know, that 300k was pretty [inaudible 00:42:53.4] people. People like their cash. Mark: I think I could probably make 300k a year with some inane abilities. I'd be like one of those fortune tellers but I'm pretty sure I could spin that off into a pretty desk. Andrew: I know you could too. Mark: Hey thanks so much for coming on; tons of really good information. Go check out eCommerceFuel.com and the State of the Merchant Report. We will link to it in the show notes. We will be sending out an email to every one of our subscribers here on this. If you're not a member of the community are you taking applications right now Andrew? Andrew: We are. Yes, we are. Mark: Okay. If you're not a member of the eCommerceFuel community and you are an e-commerce seller you definitely need to check them out. I don't recommend a lot of groups. I don't recommend a lot of people or sites. We do so very stingily here at Quiet Light Brokerage but eCommerceFuel is one of our favorite groups out there. So please do check them out. Anything you'd like to end with Andrew? Andrew: No. I think that maybe two quick things; one if you want to check out the report directly its eCommerceFuel.com/2019-report that'll link you right to it. And then if you happen to be a podcast listener which I'm guessing you are, we also do a weekly podcast, sometimes twice a week on e-commerce, e-commerce news, store owners, kind of cutting edge just whatever is happening in the e-commerce world and strategy. That comes out weekly as well so if you're interested in that you can check that out [inaudible 00:44:15.2]. Mark: Yeah and you guys also sent out really good emails. I know we talked about email marketing and there's not a lot of people I feel add value to my inbox. I think you guys do a great job of adding value to my inbox. So definitely check out the community, check out the podcast and the report. And once again Andrew thanks for coming on. I look forward to having you on next year for the 2020 State of the Merchant Report. Andrew: Yeah. Thank you, Mark. I appreciate it. It's always fun to come on and great work with what you guys are doing in the online space with businesses. It's always fun to talk and I appreciate the invite. Links and Resources: Andrew's website State of the Merchant 2019 Andrew's Podcast

Hosts can talk faster than they can type. Followers can listen while doing any number of other tasks. A business that comes with a podcast following of 15,000 is more valuable than one that comes with a 35,000-person email list. Podcasts are pretty hard to get wrong. They can diminish the laborious reading and writing aspects of emails and blogs by automatically offering content within the conversations with guests. Today we are talking with podcasting expert Craig Hewitt about ways that adding a podcast to your business can be beneficial both for a recent acquisition and a potential sale. Craig is the owner of Podcast Motor, a company that handles the end to end podcast production process for businesses. He's an entrepreneur in the podcast space, running two service companies and producing 35 podcasts. He believes, and we here at Quiet Light agree, that a good podcast is a great tool for building your business. Episode Highlights: How podcasts differ from blogs. Where podcasters should get started. Whether they need all the “stuff” to get up and running. Why podcasters use external services to create their episodes. Craig's solution for launching a podcast quickly and easily. Challenges hosts face in getting started and putting themselves out there. Why it's important to find the right guests and create relevant conversations for your business. How podcasting can be a fit for different types of businesses. Ways starting a podcast with a newly acquired business can help promote ownership. Why businesses need fewer followers for a podcast than for a blog. How a podcast can create repurposable content. Ways a podcast can benefit a business you are getting ready to sell. Whether podcasts are transferable. The basic technical tools you need to get started. How long you should test for success. Transcription: Joe: So Mark today's episode we're going to talk about why someone should start a podcast. Stutter, stutter, stutter, Chris edit that. Mark: Chris don't edit that just keep that in there. Joe: Yes let's keep it in because folks this is about podcasting and I was going to ask Mark a question … oh, man, did somebody put something in my coffee this morning [inaudible 00:01:34.2] in my coffee … it's a Northern thing. Do you have to be well spoken, intelligent, and an expert on the subject matter to start a podcast? Of course, the key is to have a successful podcast to build an audience and a brand and a reputation but what do you think? Do you have to have all of that to really begin? Mark: No absolutely not. And look at the risk of narrowcasting and just talking about what we're doing here which is running a podcast, I thought it would be interesting to have Craig Hewitt on the podcast here. Craig owns PodcastMotor. They do the editing for all of the Quiet Light Podcast episodes. He also has a podcast hosting service Castos.com which he's recently started. He's an entrepreneur cut of the same cloth that all of us are made of. He likes to start, he likes to buy, he likes to grow businesses and living in France actually. He's an expat living in France so a pretty cool backstory there which unfortunately we didn't have time to get into. But I wanted to talk to him about why anyone who's out there looking to buy or even grow your business and create something really unique and special might want to consider adding podcasting to the mix. And look I get it we're looking a little bit at our own experience here and how beneficial a podcast … the Quiet Light podcast has been at Quiet Light brokerage, but I asked Craig this question. Joe, I'm going to ask you and put you on the spot here again like I do on a third of these intros I try and ask you a question that we didn't prep for. If you're looking at a business for sale and it's got 30,000 e-mail subscribers, okay and that's one option and then there's another business in exact same niche but they have 15,000 podcast downloads per month, where do you put more value in your opinion? Joe: Oh without a doubt on the 15,000 because those people are listening. They're hearing your voice and they feel like they know you already. We've gone to events where people have come up and said hello and they joke and they say I feel like I know yo. I've heard Mike Jackness talk about that as well. But I think the number one thing that this podcast has done for us … and John Corcoran was a guest on the podcast as well where we talked about networking and how important it is to a business. And I think if you're a business owner, if you're launching your own products, if you're a SaaS product owner, you just look to prior examples of huge podcast success like Michael Jackness or Scott Voelker for instance. Scott has got a quarter of a million people that listen to him every month. You network and learn things from the people that you network with to grow your business and grow your brand and I think it's invaluable and it blows away the e-mail. Although the e-mail is something specific and different because you're probably trying to sell a product right then and there, I think on a podcast you're talking about the bigger picture and your brand. If you're a SaaS business owner I think it's a great idea because you can talk about what updates you've got to your product and the market in general. But I love the podcasting and obviously, I'm not very well spoken or eloquent so if we can do it anybody can. Mark: That's right. So this is a bit of an advertisement for starting a podcast and I feel confident in doing this because I know a lot of people out there probably will listen to this and won't start a podcast. You'll think about the technical challenges, you'll think about the fact that your voice has to be out there and Craig and I go over this. There is an element of fear because you're a little bit more intimate with your audience when you have a podcast. There's a third dimension that gets added, right? When you are just writing a blog post it's very two dimensional, you're words are out there, you can go back and edit it whenever you want, people don't hear your tone … your voice, they don't hear you screw up because you get to go and edit it. And of course you can edit a podcast but there's still … it's still you, a little bit more real and raw. So I know a lot of people are going to listen to this and not start podcast but I'm going to make a pitch to just say look if you're trying to build something unique, if you're trying to build something valuable, if you're trying to grow your existing business with the [inaudible 00:05:24.7] towards selling it down the road, there is some value to starting up a podcast which is going to make it different if you are able to grow a good sizable audience. And I think in the 11 years we've done Quiet Light Brokerage I can't think of a single business that we have sold that actually came with a podcast attached to it. Joe: I don't think I've ever had one. And as far as return on investment I would think that the podcast and the cost associated with it, the ROI would be huge and probably not measurable; an invaluable. But one other thing look this is we've got Craig from the podcast company that manages ours but we've talked to lots of people like Taz from the Amazon Entrepreneur. He launched his podcast, does two a week and he does it all himself. So it's possible to do it for very little or nothing at all if that's … if it's a budgetary problem and you still want to get started. Mark: All right let's hear it directly from somebody who's been in the podcasting niche for a long time. He knows all … a ton of what he's talking about, Craig Hewitt. Let's get to it and cover this topic and I'll hopefully inspire maybe one or two of you guys out there to go ahead and start a podcast with your business. Mark: Hello Craig welcome to the Quiet Light podcast. Thank you so much for agreeing to come on. Craig: Hey Mark thanks for having me. I appreciate it. Mark: All right you and I know each other from a ways back at Rhodium; do you remember the … I don't remember when we met each other at Rhodium, do you? Craig: Gosh yeah. Like I'm optimistic with my time projections these days I want to say it's three years but it might be four years ago. It will be four years in April probably yeah. Mark: All right my wife does this thing I call it Megan math where she'll … something would be 2 months away and she'll somehow compress that down to like just two weeks away. Craig: Yeah [inaudible 00:07:06.4] great exactly. Mark: Again full disclosure and I'm sure I probably said this in the intro. We always do the intros after … we record the intros after we record the interviews themselves but I'm sure I will say this just out of full disclosure I do pay you professionally. You have been doing the editing … probably it's your group that has been doing the editing for the Quiet Light podcast so thank you for that. Craig: No it's my pleasure. It's my pleasure, yup. Mark: Awesome, all right so we're going to talk about podcasting today and whether or not somebody should consider adding it to a business. And I obviously with Quiet Light I want to focus a little bit on does it make sense to add on to an acquisition like if you buy a business, does it make sense to add that on? What's involved in starting up a podcast? What are the impacts that you might see? And I also want to … if there's time allowing probably talk about the personalized aspect of podcasts and how that's going to affect the buying and selling of businesses as well. We can all just talk a little bit about SaaS. I know you have some SaaS work as well which could be an interesting thing to get into as well. But let's start off real quick with your background and your history and kind of how you came into doing what you're doing. Craig: Yeah so we know each other through kind of why my first successful online business and really the way I escaped the rat race of the professional kind of corporate world which is called PodcastMotor. So PodcastMotor is a product tied service that does podcast editing and production, really kind of like end to end everything from Mark records an episode, sticks it in Dropbox and an episode shows up in iTunes a week later. We really try to take care of every aspect of that whole process for our customers. And that business has been going since … it just turned four this year so a couple of months ago. So we've been doing it a long time in the podcasting world. And we have about 35 customers that we service on a regular basis. So weekly or every other week that they have a podcast come out. About two years ago I acquired a WordPress plugin also in the podcasting space called seriously simple podcasting. And on top of that, we built a podcast hosting platform that we now call Castos. So I run two different businesses in the podcasting space and it all happened just by chance. To be honest I started a podcast … jeez, four and a half years ago I guess and saw it really quickly like a lot of people that podcasting is really difficult. There's a lot of nuts and bolts and technical stuff and gear and all this junk that you need to start a podcast as opposed to like a blog where you just get a WordPress site and a keyboard or your iPhone and you could start blogging as good as anybody else. Podcasting there's a technique and gear and equipment and all this stuff that you have to have to be decent. And then to be really good is a whole other level. So we started offering the PodcastMotor service based on me seeing that pain I guess. Mark: Yeah and I don't want to scare people right at the gate but let's get into that kind of a scary different world of podcasting because it is a little bit different. Let's start with just the hosting side and you talk about Castos your podcast hosting service. Isn't it enough to just have a regular website? I mean I think one of the things that was confusing to me with podcasting when we got into it before we started the Quiet Light podcast was well why do I need all this stuff? Why do I need Libsyn? Why do I need all these other things? Why are we … why do podcasters use these extra services? And what are some of things that if somebody is thinking about podcasting what do they need to consider from a technological standpoint outside of the equipment just from the webhosting setup, the technical setup? Craig: Yeah so the logic around having a dedicated media hosting platform with you know hear, Libsyn, and SoundCloud, and Castos or whatever, the idea there is so you have a hopefully a very popular podcast and you have thousands of people downloading your podcast every Tuesday morning when it comes out right? Mark: Just like the Quiet Light podcast, thousands and— Craig: Yeah okay so thousands of people listening to your podcast and downloading this 60, 80 megabyte file every Tuesday morning. If you're a business like all of your customers are and a lot of ours the last thing you want is this enormous strain on your web server on Tuesday morning when customers are coming to your site and trying to buy your stuff or schedule a meeting or something like that because both the streaming and download of the podcast will be bad. And your website will at least be very slow if not crash. So you separate the resource strain from podcasting and serving up your website and have a dedicated hosting platform just for those audio files and let your website run on you know WP engine or flywheel or wherever it's running so that the two aren't using the same resource. That's kind of the logic around why you needed a dedicated media hosting platform. It's just like you don't put your video files under use Wistia or something like that. It's the same kind of idea. Mark: All right exactly. Okay so there's this whole other technological world with podcasting and then there's also the equipment side of it. And then there's the editing side of podcasting as well. Craig: Yeah. Mark: And then there's the distribution to the different podcast networks. And we're kind of jumping on the deep end or I guess we'll swim to the shallow end because I'm going to talk about listing the praises of podcasting here in a little bit. And specifically as kind of a leading tease here for anyone listening why I think it's a really, really good idea for any acquisition that you do, any business that you're looking at to potentially acquire to consider adding a podcast and potentially even on the sell side as well. But let's talk about the setup here a little bit as well and the equipment. Now I've got as you can probably see from the video that you can see and we do these podcast over video is just a little more personal. Craig: Yeah. Mark: I got the road podcaster and I got like three other mics back there as well. [inaudible 00:12:52.1] and everything else. And you, you got I see a pop screen of yours, there's pop screens, there's mics, there's the Vulcan power stuff, it's a whole different world, isn't it? Craig: Yeah I mean so it is totally a different world and this is the bad scary thing about podcasting is that there's more opinions and resources out there than are necessary honestly. And there's so much information that so many people get scared and they go and read five or six different articles just about the best podcasting mic and what web … what podcast hosting platform to use and there's everyone has an opinion about that and you know how long should you're episodes be and blah, blah, blah. Do you need a pop filter? Do you need a boom mount? Do you need all this stuff and so actually we created a resource to kind of counteract this and we call it launch in a week. And the idea is we're going to give you like one or two options not like all these million things out there that all these other resources give you is like they create the analysis or paralysis by analysis. So we … so castos.com/launch takes you to launch in a week and we give you like in a week seven day, seven e-mails and videos exactly what you need to launch a podcast to dispel a lot of that over information and misinformation that's out there a little bit. Like microphones I only recommend two microphones you know it's like this one that I'm using Audio Technica ATR2100 and another one is called the Shure SM7B. That's a really really really good mic. This one is $65 that one is about $500. And so it's like kind of whatever you feel like you want or need. We try to do a lot of that like you can do this or this and don't overthink any of it because you can get in way over your head. And the unfortunate thing is a lot of people never get started because they just think so much about all this stuff. Mark: All right let's talk about that point because I think this is the biggest obstacle to podcasting right? With writing a blog you can put it out there and you can get it up and going. Everybody knows how to write something even if it's not very good but there doesn't seem to be as much of a barrier to getting started. Maybe it's because of the technical challenge but I think there's also a mental challenge of getting out there. And I know for a podcast standpoint we toss around the idea forever. I actually had a false start at starting the Quiet Light podcast and I think I recorded three episodes, launched two, and then stopped because I didn't record enough episodes. I think one of the challenges people have is the idea of being out there and trying to get this audio presentation perfect from the get go. But like you said just get out there and start. You have to actually start doing it. Craig: Yeah I mean I think part of it is with writing you can write a blog post and save it come back two days later and edit it and tweak it and you haven't even be published by someone else on your team if you want maybe it's your name it's not associated with it. But like right now you and I are seeing and talking to each other and like covering a lot of the senses all at one time. And when you're podcasting your literally in someone's ear for 45 minutes every week or whatever it is. So I think it's just the senses that you're covering and the emotional connection you crave with somebody which is why it's so great if you can do it and get it right. But it's also why it's so scary to just get started and overcome some of this fear of putting yourself out there. You know I think about … I've done a little bit of video work and it's a lot harder because then you have to get the voice and the physical kind of presentation right the first time and there's no editing. You can't just edit out a flub in a video it looks horrible. And so I think in a way if you're already doing video podcasting is so easy because you can just cut it up a million ways from Sunday and it's no big deal. But it is so much harder than writing. Mark: Yeah and I think one of the other obstacles that we run into is written content can be repurposed in so many ways right? Craig: Yeah. Mark: And there's different focuses that we can really measure written content from an SEO standpoint. So you can definitely say hey I'm going to optimize for this keyword. And I know I'm going to get this keyword density out there and then I can actually turn this into a downloadable white paper. And I can go out and I can maybe use the same sort of topic and write you know 10 different guest posts and get involvings. So there's that other benefit as well but you actually lead into one of the benefits and maybe this way you could [inaudible 00:17:18.0] to segue into that. And probably the number one reason that we started the Quiet Light podcast and the number one benefit that we've received from it is that personal touch that having a podcast creates. I'll tell you a funny story. You'll actually like this because you listen to our podcast by default from doing some editing. Craig: Of course. Mark: And I know you're not doing all the editing yourself but- Craig: No I do listen to the show though, yeah. Mark: Okay well here we go … thank you for that. That makes me feel better. So obviously Joe and I host the podcast and we were at Brand Builder's Summit. And somebody came up to our table at Brand Builder's Summit and said “hey it's Joe here” I'm like “ah no Joe is [inaudible 00:17:54.7] right now” and they go “oh man I really wanted to meet Joe, I absolutely love his podcast” I'm thinking “wow that's great you love Joe's podcast, I'm so glad that you love Joe's podcast” and he goes “yeah I know I was really hoping to meet Joe”. And Walker was staying right next to me and goes “no this is Mark over here he also does the podcast” he goes “ah is Joe going to be back soon?” I'm like “yeah Joe will be back soon”. Craig: That's wonderful, that's wonderful. Mark: But you know one of the things that this podcast has been able to do is it gets us in people's cars. It gets us in people's ears for a certain amount of time and it really breaks down some of that barrier that I think can happen when you're writing. Like you said it's very two dimensional. Craig: Oh yeah. Mark: It's the words on a page, you don't have the voice of the person in your head. This is … it's not as full-on as video but it's a little more personal. And I'm sure you've seen that a ton with what you're doing because I know you work mainly with businesses right? Craig: Oh yeah I mean for PodcastMotor all of our customers are businesses like yourselves. You know like small, medium size business and entrepreneurs, startups. And I think that the medium of podcasting is unique in two ways. One like we're having right now it's a conversation. It's not you on a video and your YouTube channel talking and everyone else is listening. That's not so helpful. And it's not so helpful in a very particular way when it comes to businesses and that is rapport building and networking. And this is like the secret sauce I think when it comes to like B2B podcasting is you have this podcast to reach a broader audience of buyers and sellers … of buyers maybe but really probably to get sellers in the door right? And so like for PodcastMotor we have a podcast. If we're going to go kind of strategically and think about who we're having on the podcast it's thought leaders in the podcasting like B2B podcasting space. So they can say wow you know I had this podcast with Craig last week, we talked for like an hour and he really knows his stuff. Dean my friend over here who runs a coaching business who wants to start a podcast should really talk to Craig because he really knows what he's doing. He can help him be successful. Like that really like micro networking opportunity that you have in interviewing a thought leader in your space on a podcast is not something you can measure by like download statistics or something like that. But for a lot of people should be the reason they do a podcast. It's not your listeners that you do the show for it selfishly a little bit is yourself and the networking ability that the podcasting medium allows for. Mark: Yeah I would agree 100%. And this is one of the main ancillary benefits that we received from the Quiet Light podcast. One of the biggest benefits is that it just keeps us in touch with people in a very personal way. And in some ways it's a little bit weird when people do come up to you and [inaudible 00:20:44.9]. Craig: Yeah. Mark: But I shouldn't listen to my voice that's weird but kind of cool at the same time. But that secondary benefit of that micro networking that you talk about I know we've had this happen actually recently we had Ezra Firestone on the podcast. And sure enough I had opened up my e-mail the other day and there's an e-mail from Ezra promoting his podcast episode with Joe, Joe's podcast. And I mean just think about that, I mean he's just one of the biggest Internet marketers out there right now promoting this one episode. And how many extra people are going to be exposed to the business, to us in general just because of that one episode. So this is definitely a benefit and might not be my number one goal but it's definitely one of those goals of the podcast is to be out there spreading our network for referrals. I think any referral based business that's out there this is a fantastic medium and probably a must that you should do is having some sort of a podcast if for nothing else to be able to bring in that network and grow that small network. Craig: So just to pile on there a little bit for folks who might be a little bit outside of the agency or consulting world so like starting from really high dollar and down to more transactional type businesses the other thing I think that podcasting does is it allows you to showcase publicly your knowledge and expertise. So if somebody sees you on another person's podcast they're going to say “wow Mark really knows what he's talking about when it comes to buying and selling businesses”. It automatically boosts your credibility with that person if they're looking to do this thing down the road. Yeah, I think that's massive. It's kind of like your little online CV that you build along with your social media and YouTube and all this kind of stuff but podcasting should be a part of that for a lot of people. Mark: Well and that actually leads to my next question really well and that is what do you think about podcasting on the more just B2C side as somebody selling baby shoes online. Craig: Yeah. Mark: I mean how can podcasting fit into that fold … with that type of business? Craig: Yeah I mean there's really two … in my mind there's two ways to go and admittedly this is a bit outside of the wheel house of what we do at PodcastMotor but there's really two kind of schools of thought or areas that you would run into there. One is just hobbyists, right? And so like you're a hobbyist you like the Pittsburgh Penguins, you want to have a podcast about that. That's just a hobby and that's great but it also does the thing about like building your social proof in the world. And so you want to go do something with that later on. You have this bank of 200 episodes that you want to do something with. If you're thinking about like a B2C area I think that you can either provide useful content to … you have a show about being a parent, provide useful content to other parents about how to be a good parent, organic parenting and all this kind of stuff. Or you have what's called like sponsored content and this is where a company would pay a creative agency like I believe it's Pacific Media is the real big one in this to create a show like Serial. So Serial is the Gimlet Media podcast from a few years ago. They would create a podcast like that and it would just be you know this podcast is brought to you by Huggies Diapers or something like that. And it's this totally awesome show about parenting and motherhood or whatever but it's just sponsored by this B2C company. And you see more and more sponsored content out there these days where a business is saying look this is a massive branding opportunity for us. We're going to create this piece of content that we know our audience will love. It probably doesn't have a lot of like direct business impact, people are not going to go buy our diapers because of this podcast but they're going to know our name really well because every week the show they love the most has our name all over it. Mark: Yeah that makes complete sense. I also think of the episode we did with Mike Jackness from colorit.com and the show is on email marketing. So it had nothing to do with podcasting but we were talking about how often he was sending emails. They were sending emails to their subscribers every single day but the vast majority of what they're sending is ridiculously useful content that is not selling their clients in any way, their customers in any way. And the result of this is that people end up looking forward to communications from them. So I can imagine that impact as well if you have a B2C company and you're in this hobby, this niche, or you really have a very unified sort of product that you're selling. Or it can even be a type of service as well. You're growing an audience that is kind of a group of raving fans for what you're doing. And you're offering so much value that when you do offer that sale when you do go out there and promote something you have this group out there that's just super excited to hear from you. And that's a nice problem to have, right? Craig: Yup. Mark: Yeah all right let's talk a little bit about this from an acquisition standpoint. Obviously, we should bring this back into this and I want to talk about from an acquisition standpoint and also selling and we'll end with the selling question because I think there is a pretty significant question there. But on the acquisition side the one struggle I can see … I did an acquisition recently my guess and that's almost two years ago now and – Craig: It's not funny, math coming back in there. Mark: Yeah [inaudible 00:25:57.8] absolutely, time flies too. And you and I have actually talked about the starting up a podcast on this acquisition. It's a little bit weird though you know like Quiet Light Brokerage has started … I own, I've kind of grown with it so I feel like I own it. It is a little bit weird to start a podcast with something that you don't own. But I wonder if there is almost a sense of growing ownership if you start building something on top of that like a podcast with an acquisition. Craig: Hmm. Mark: Kind of an open ended thought but I don't know if you've had any experience with that or any thoughts on that. Craig: Yeah I mean I think that … so I had not run into this personally like with some of our customers having acquired businesses that they didn't want to start a podcast around. But having acquired several businesses the one thing that I think is really important and often times really difficult is for an acquirer to really know the business model and the types of people that kind of live and breathe this product or space that you're in. And there is nothing better than to say I want to go interview the 50 best people in Instagram for kids whatever … whatever niche it is you know than a podcast. Mark: Instagram for kids sounds like it should have some predatory laws about it I'm just saying. Craig: Yeah sure whatever it is right … it's underwater basket weaving. I mean you interview the 50 best people on underwater basket weaving. You're going to know basically everything there is to know about the influencers and the things that really matter to people in that business. So for me it's like someone who is always looking to acquire businesses and kind of dabbling as like a serial entrepreneur if I was going to get into a business I didn't know a lot about lot about starting a blog or really continuing a blog would be really daunting because I … there's a lot of opportunity to waste a bunch of time and money there. You can write a bunch of articles about things people don't care about but it's really hard to have a podcast that's bad if you will in a space you don't know a lot about because you just go interview people and ask them interesting questions. And what they have to say is the content it's not what you have to say, it's what the people you have coming on the show. So I'd say for people looking to … who have acquired a business that might be a little out of their wheel house just start a podcast, interview the thought leaders in that space and you have like the nexus of all the really interesting content for your audience. And you as the new owner know exactly what's so important to everybody in that space. Mark: Yeah and I'm going to compare this actually to the blogging world because I went from the blogging world pretty heavily into the podcasting world almost exclusively now. Libby has been writing blog posts on every one of our podcast episodes so we can keep up with some blog content. But in the blogging world, you would have to sit down. You would have to come up with your own idea for a blog topic. You would have to research that topic. And then you would have to write on that topic. And the way blogs are going you have to write more and more and more. I was writing 1,500 to 2,500 word blog posts. I was doing four of those per month plus four outside of Quiet Light blog posts per month. So I was doing eight blog posts on average 2,000 words a piece. And then best practices after you publish that blog post you should go out and you should do outreach. So you should reach out to the influencers and say hey take a look at this and how easy is it for an influencer to ignore your e-mail or give it a cursory look. I'd flip this around for this I'm doing my research right now on this interview with you I'm reaching out to you and you're an influencer on the podcasting world so I already got my influencer locked in as well. We're getting great content at the same time. It kind of brings all of this into one hopefully easily digestible format. So that's a huge benefit I think as well. And when you're looking at getting into a space like you said trying to network and get to know the influencers in a space that you don't know is one of the biggest challenges. And having a podcast I'll tell you what when I ask people to be on the podcast I'd get one of two reactions. One is no I'm super shy I don't want to do it. And two is yeah that sounds great because who doesn't want to be in front of a big audience and get heard. People like to be on podcasts. They'd like to think that they're important enough to be interviewed. Craig: They want to take their Joe Rogan. Mark: Exactly even though … you know I'm not going to tell them that there's like three people that listen to the Quiet Light podcast but they're still excited. Craig: So you brought up two things I really want to touch on quickly. One is three people listening to the Quiet Light podcast, one is not true right? But in a B2B sense and even a B2C sense in your niche, the number of people listening to your show doesn't matter at all. So if you have a hundred people listening to your podcast that is great. Those are a hundred really passionate people about what you have to say. As opposed to a hundred people reading a blog post that has almost no impact whatever. You need tens of thousands of people reading a blog post for it to really be impactful in the in the greater sense. But 100 people in your niche listening about your podcast is fantastic. So they're really high intent people for whatever your business purpose is. The other thing is talking about repurposing content. I think podcasting has the ability to repurpose content really easily right? We're doing audio, we're doing video, it will be created in to show notes for a blog post, you have it transcribed, you can syndicate the video to YouTube. Like you can do all of these things with one … what we're going to talk for 45 minutes today piece of investment and your time and you have a team or someone do all of the extra work to produce all that for you and you have two or three or four pieces of content you can syndicate to everywhere that people consume this media. As opposed to writing a blog post it can ever only ever be in your blog. You can't go create a podcast out of a blog [inaudible 00:31:29.4] could but that's just kind of silly. Mark: Right and you're absolutely right as far as the repurposing content. Again if people haven't checked out in a quick plug in the Quiet Light brokerage blog, I think it was last fall we brought on [inaudible 00:31:41.3] and she listens to every one of these podcasts. Hi, Libby thanks for all the work you're doing. And she's putting together awesome blog posts like I've been reading these myself and she's taking the information that we're picking up in the podcasts and then she's going out and supplementing it with outside research as well by putting together a full on blog post with quotes from the blog post as well but bringing out a slightly different narrative than what we cover in this this conversation. It's a great way to be able to repurpose this content and give it just a little extra layer and a little extra dimension. And so that is one way to repurpose the content. And again I can't emphasize this enough the amount of time it takes to do a podcast significantly less time than it takes to do the blogging side. Let's address the question of a podcast in a business that you hope to sell someday. And I think this is a question that is a little bit more difficult to answer here because we talk a lot … let me ask you this have you seen the Princess Bride? Craig: Yeah of course. I have an eight year old daughter, yup. Mark: Well I always like to say that getting a business prepared to sell is you have to follow the Dread Pirate Roberts rule right? You don't want to be actual Dread Pirate Roberts. It's the name that counts right? That's the quote from the movie; it's the name that counts. The actual Dread Pirate Roberts has been retired and living like a king in Patagonia. That's what we want to be able to do. We want to pass on the name of our business. We don't want to actually have to be tied to the business. Well, we just talked about podcasting, it's being in somebodies ear and being that personality in somebodies ear. And so from a standpoint of selling maybe, it's a little bit of a disadvantage on that when you go to sell. But I don't think it has to be a disadvantage but I'm going to put you in the uncomfortable spot here and see first have you thought about this much and what are your thoughts on it? Craig: Yeah so I guess two things; one, I know that podcast themselves have definitely been bought and sold more and more right? We're recording this in beginning of 2019, you hear more and more about people selling and buying podcast especially in a space. It's like buying and selling a blog in a space. If you're a business and you acquired this blog redirect it and then pour your content into your domain and you already have this audience that's seeing your brand. The same can be said for podcasting so people want to come in and buy a podcast in a space because it has a built in audience. I think it's a really good kind of audience and customer acquisition strategy for a business that already kind of exists and has their own podcast to look at selling the business and transferring the podcast to the new owner. I think that a lot of the standard knowledge and business process transfer things apply there. Like if you have a process around Mark how you identify the guests that you want to have and how you invite them and you send them a [inaudible 00:34:23.3] like an as a zoom thing in it and you have an outline you send them three days before and all this kind of stuff and you have a team behind it to edit and produce the podcast. Then someone buying your business that has a podcast in it is not nearly as daunting as just saying like I wing it every week. And the new owner is saying holy crap I can't imagine doing that. So I think that … I mean the truth is a podcast is not really hard. Like once you do a couple of them it's not really that hard. So giving the buyer of the business that would acquire this asset but kind of responsibility of a podcast, give them the tools to be successful and I think it's definitely a net win. The worst thing I can see though is you have a podcast and you have an audience and people that really enjoy and want to connect with you through the podcast and the acquirer comes in and drops the ball, obviously, a big negative. So if people have podcasts and they're going to be selling their business or business with podcasts I would definitely make sure like the rest of the business like you said with the Dread Pirate Roberts thing it's like make sure that it's totally transferable and that the person's going to be successful. That intimate nature of the podcast I think can transfer from one person to another pretty easily. You know the new person is going to have some level of domain expertise and you'll love a different spin on the podcast and that's cool. Yeah, I think it's definitely a net win as long as the person is set up to be successful. Mark: Yeah and I would agree. And the other thing I would point to is that when talking about an exit strategy when looking at what you need to do to prepare a business for sale there's going to be this push and this pull on various factors of the business. And when you're looking at this, when you're looking at the business holistically it's always going to be better for you to build a strong, loyal, happy, faithful audience right? Craig: Yeah. Mark: That's way, way more valuable than anything else. And is there maybe a little bit of a demerit when it comes to having something like a podcast which may be tied to your voice. Yeah, okay there's … I think just being honest yeah I think there's going to be a little bit of concern about the transferability. But that can be addressed right? That can be addressed pretty easily. You can agree to do the podcast and co-host with the new owner for six months and have a very warm hand off that way. That would be a very natural way to do it. I think the benefits that a podcast adds in building an audience, let's think about this real quick here what is the value of an online business when we actually look at it and when we do all the tax returns and everything else on it we allocate most of the purchase price towards goodwill. The sort of nebulous who knows what it is that makes this business successful. Successful and having a podcast is really a big part of building that good will. So if you take the time and build a lot of good will through a podcast and that's a good source and driving avenue for customer acquisition within your business that's going to be a net plus in the grand scheme of the things. So I think people that are out there thinking about podcasting thinking well I don't want to start that because it's going to hurt the transferability of the business. I wouldn't necessarily say that. I wouldn't necessarily say don't do in fact I'll probably say the opposite especially if you have enough time. If you're looking at a year, two or three years before selling and you're able to build that audience I think it actually makes more sense because it's really hard to replicate that. Craig: Yeah the value you can get in those two years is so much more than the potential drawback of the new owner flubbing it and your audience being upset which is basically the worst thing that could happen right? Mark: You're totally biased in this but I'm going to ask you this question right now. If I could give you a business with 30,000 e-mail subscribers or a business with 15,000 podcast listeners what would you take? Craig: Yeah I mean the podcast listeners are going to engage with your message a lot more. You probably also would get all of them on an email list so you're already halfway there to having both. I mean you're literally … and we say it all the time, you're literally in someone's ear creating like some kind of like different neural connection with those people. I get your e-mail; I read your e-mails fine. I hear you on the podcast; I hear you talking about your kids and the Dread Pirate Roberts and all these kind of stuff that like has a different level of meaning. And it is that personal stuff that in a situation where you're going to be transferring it to a new owner is a little different. But for the time that you have the business or you're looking in acquiring a business that has a podcast it is a huge benefit. Because a lot of people are scared, right? You didn't start the podcast for some period of time probably because you're like … I don't know this is an onerous task I don't know if I'm up for it right? I mean maybe I did sure like I didn't start a podcast because I was like I'm not going to talk into a microphone and then put it out on the Internet for anyone who wants to hear it to hear because I sound like an idiot right? Like a lot of people don't like the sound of their voice and you just have to get over that stuff because the net is such a huge win. Mark: Yeah. Craig: Think about like you're at a conference now and like you know Mark I heard you on the podcast right? Mark: Right well it was that conference question that actually led us to do the podcast because we've been going to so many conferences and conferences are expensive. You have to fly out there for sponsoring and now that the sponsorship fees are ridiculously high and … but the benefit of being there in front of somebody and having those little jokes here and there or just playing… we'll play it a game. Well, we've done golf, we've done jenga, we've done darts … or something like darts it was actually sharp objects that we're throwing out our booth but that'd be dangerous they wouldn't let us do that. But that actual physical presence being there it really relaxed people so much more and allowed us to connect on more of a one on one basis. And that's why we started the podcast and sure enough, I think that happened. Given that choice between e-mail list and podcast, I would take the podcast audience as well. I think you can mobilize a podcast audience much faster. I think they're more engaged. I think they're more likely to quite literally listen to you but be more attentive to what you're saying. I think there's … that's just different [inaudible 00:40:07.3]. Craig: Yeah I would say like that one look at guys like you know Gary Vaynerchuk right or Pat Flynn or whoever that you look up to in the business and marketing world they all have podcasts right? So like that says something I think. The other thing is the volume of information that we are relaying in this episode is massive. Like … you know we transcribe episodes for customers a podcast and a typical you know 45 minute conversation is about 15 pages in a Google doc. Mark: Wow. Craig: So you're like how are you going to relay 15 pages of content to anybody ever? That's impossible, right? No one is ever going to read that blog post or email but they'll listen to that podcast every week. Mark: Yeah absolutely, in fact, I have our director of content marketing now Chris Moore who also listens to the podcast, hey Chris how are you doing? He's been going back through every one of our podcasts and pulling up quotes. And he was telling me just earlier this week about how much volume is there that we put together in what feels like a very short amount of time of doing this podcast. It is a ton of information. Craig: Something … a bit of a carrot I think for both the buy and sell side you know of your audience is you can bet your bottom that Google will be indexing audio very soon. Mark: That's a really nice tease. Craig: Oh you know the SEO impact of podcasting ya-da-da-da-da, you're going to create like show notes that are like 700 words or whatever for an hour long conversation. 100% guarantee that there will be an audio tab in Google whatever soon in the next couple of years. Mark: Yeah all right so let's go to this. We're almost up with our time I want to end up with what does somebody need at a bare minimum if they want to test a podcast for their business? How long … we don't have to get in the details of the equipment like we don't … I mean you want to give a couple of recommendations there and what are the basic things they should think about if they want to get and test it out for say two or three months and how long should they test it? Craig: Yeah so I think that the basics you need a microphone. I mentioned the two microphones before. If you really just want to test use the Apple ear buds they're actually quite good. Mark: They are actually. Yes, I'll second that actually, yeah. Craig: Get in a quiet place; don't have your kids running around or the train going by with the window open or something like that. Do some kind of environmental safety measures for the sound quality. You need something to record and edit the audio with. A tool that does both of those is called Audacity. It's open sourced and free in cross-platform so Windows or Mac. So you can record and edit with Audacity. Something to record with select a microphone or the Apple ear buds perfectly good and then you probably want something to store the files on so like a podcast hosting platform like a Castos or Libsyn, or SoundCloud and then you need to create what's called an RSS feed. And that is the thing that places like iTunes and Stitcher and Spotify read. And then share information about your podcast like as a whole like the title and description and image and all likely stuff and about each episode. That's kind of how podcasting works is you submit this RSS feed to these directories and the directories read the meta information about your show as well as information about each episode as it's published. So that's kind of a 20,000 foot view of podcasting. How many episodes? I think if you can't come up with 20 good guest interview or topics to cover or something like that then you have a couple of problems. But you probably shouldn't get into content generally but you really, really, really need to think about at least having a couple of episodes to launch with. Two, three, four something like that and but you really should have a general idea of what the first 20 episodes is going to look like. Mark: Yeah and I recommend actually recording probably about two months' worth just to start. If you're running a business as well I know like the recent first … my first go with Quiet Light podcast didn't really happen as I recorded three episodes and then I got busy and three weeks goes by really, really fast. And we do this here at Quiet Light we will get like a nice buffer of about two months but next you know we're staring down an empty set again of episodes. So get a nice buffer set up for that first trial and see what happens. It's a great medium and I'm going to do a plug for you just like you don't have to come across self-promotion. Honestly, your service makes this whole thing dead simple. Like I don't think about it at all, I don't think about what I'm doing. The only thing I thought about was what sort of graphic are we going to use for the podcast. Outside of that everything was set up, everything was done, the introduction was done. It makes it really, really simple. And so if you are looking to go this direction don't add a bunch more to your plate. Go out talk to PodcastMotor I recommend your guys service highly enough. Craig: Cool. Thanks so much that's great to hear. Mark: Hey thanks for coming on. I really appreciate it. If you guys have questions feel free to reach out to Craig@podcastmotor. We'll put contact information in the show notes and yeah if you have any other questions or suggestions for podcast episodes send me an email mark@quietlightbrokerage.com. Thanks, Craig. Craig: Thanks, Mark. Links and Resources: Podcast Motor Castos Contact Podcast Motor

16.11.18 Soup Sessions with Tony Levene 2100HRS (UK) A Soup Sessions welcome return for Tony Levene in 2018, part two… “Greetings Earthlings I’m back once again for another Soup session on Radio Nova Lujon. For this one I’ve decided to follow on from the previous show in a similar vain, still with a funkier edge and dropping the BPM’s. Also going to try and keep the duration to around 120 minutes to render the podcast more user friendly. As usual I will be assisted by David at the controls for this broadcast.! The rather fetching photo of me playing somewhere (courtesy of my good friend Mark Hey) was taken about 1987! I know it’s a bit funny looking at old photos! I’ve always felt that when playing music out to people it should reflect positive attitudes and hopefully this will be evident in this selection. From day one of my Djing career I’ve always welcomed people from all walks of life and tried to let them see (through the music) how we can all have common ground and hopefully build on that and learn to live in unity. That may well sound a bit right-on but I make no apologies for that because Unity has always been my goal when playing music out to you the people. Words of the Furry One!” Live from 9pm (UK)! CONTACT THE SHOW DIRECT (E-MAIL) The post 16.11.18 Soup Sessions with Tony Levene appeared first on Radio Nova Lujon.

Brad Wayland may be the only QLB broker that was asked to join our team. Others amy dispute that, but they were not interviewed today, so they don't have a voice! Brad has been with Quiet Light Brokerage for less than a year now, and has already established himself as an honest, hardworking and driven entrepreneur and broker. Prior to joining Quiet Light, Brad spent his time focused on SEO for a custom t-shirt firm (Blue Cotton) where he is a partner. From there Brad built a portfolio of content & affiliate sites and eventually sold them to a private equity firm in 2015. In all, Brad completed 30 transactions between 2010 and 2016. Mostly as a buyer, with four sold. Brad learned quickly how to find the right opportunities and work out a deal that made sense for both the seller and himself. And he gained a reputation as the person to sell to, where sellers reached out to him to sell their business. Episode Highlights: [3:22] Who is Brad Wayland? [8:10] Why is the custom t-shirt business the most difficult ecommerce niche? [8:40] Buying and building a portfolio of content sites. [11:15] Wall street style negotiations, or nice guy everyone is happy? [11:45] Name dropping. Yep, Brad met Warren Buffett. [13:50] How to implement economies of scale. [14:45] Outsourcing and keeping things simple, streamlined and with little effort. [16:10] How Brad set up the corporate structure(s). [17:00] How to work with investors and set up a win/win. [19:40] Why having investors can turn pretty uncomfortable, quickly. [20:30] Brad's recommendation on deal structure for investors. [23:10] What interest rate do you pay investors? [23:30] How the multiple of SDE changes with larger net numbers. [27:15] Brad's view of PE monies and what's happening in the industry [28:40] Google “freshness” is critical to long term content portfolio success. [29:50] Content multiples are strong, the nich is hot and buyers are in abundance. [30:30] QLB closes a content site for just under $9,000,000 [32:30] Bryan @ QLB has a supplement business under LOI for $18,000,000. [33:55] The worst conversations we have as brokers are… [35:35] Near death accident: Wayland Falls – the newly named mountain in North Carolina. Transcription: Joe: So Mark the more we bring on brokers here at Quiet Light the less I feel like I've achieved anything in my life. I think you and I are just a couple of slackers compared to the people that have joined the company. Mark: You know I feel the exact same way. We were at the capitalism.com just a few weeks ago and I was standing next to Walker, you know the last picture he sent me was of him in the lineup with Bill Nye the Science Guy right next to him. And he's casually mentioning over a dinner about the different documentaries he's been a part of and all that right? But it goes for every single person on the team. Amanda, when we were talking to her there and I was just consistently feeling like boy I need to get my butt in gear. Joe: Yeah I don't try to have in-depth conversations with Amanda about business because I just feel stupid. Mark: Right, I mean she just starts going off and you're like oh okay I … everything I thought I knew yeah it could pale as in comparison. Brad though is one of those guys and I remember the first time we did a companywide call; we do this once in a while with Quiet Light Brokerage because we're all over the world. All over the country but all over the world and so I don't know maybe once a quarter we have a companywide Zoom conference call where we can see everybody and there was Brad on top … in his office overlooking his factory floor. And I think everyone was just kind of like oh this guy has actually done and accomplished some real things. Joe: Yeah Jason was calling from his kitchen. Amanda was calling from a car. Chuck was from home. I was from home. You, of course, have to get out of your house because you have got a basketball team and a half in your house … well, maybe not that much I exaggerated. I love to exaggerate about the number of kids you have by the way. Mark: Hey it changed since the last time by the way. We've had like four more kids. It's attractive to … you know and it's hard to- Joe: Completely different podcast right there. Mark: But Brad was somewhere in the world. We have no idea. I think he was in Cuba or Costa Rica or something. Joe: Oh right he's always somewhere else, some other exotic location. But yeah Brad is an impressive guy. A very low key but man he's sharp. He talks about his history, talks about what he did at the Blue Cotton T-shirt company. It takes 22 hands to make one t-shirt. It gets touched 22 two times but he stepped in, focused on SEO, and that company blew up after a couple years of him being there. But that's not really what the podcast is about. It's about him and his experience but I'd really focused in on his content portfolio. At one point while running … or while being a partner at blue cotton he built a small little multimillion dollar content portfolio on the side and eventually sold it. And he outsourced everything. He had a reasonably low workload and he used initially other people's money. You have to listen to find out whose money he used. It's kind of interesting and fun but he did very well. And he talks about that approach and I think it's something that any listener can get something out of it in terms of whether they're building their own portfolio of physical products companies, drop ship companies, SaaS companies, or content companies. And of course get to know Brad along the way as well which is kind of the purpose of the podcast. But I think there's so much more to it than just getting to know Brad Wayland. Mark: Yeah I think one of the things I love about this company is it seems like everybody that we bring on just seems to up the ante as far as their qualifications. I mean two or three years from now we're going to have Elon Musk asking us for a job. Joe: Okay, got to be very sad for all the investors of Tesla, sorry folks. Mark: I don't know maybe they'll kick him up and who knows. All right enough of me talking, enough of you talking, let's listen to Brad. Joe: Hey folks it's Joe at Quiet Light Brokerage and today we have one of our very own on the podcast with us. Now don't get bored he actually has a life time of entrepreneurial experience. He's bought and sold many businesses. He's kind of a big deal. I think he bought and sold more than I have for sure; probably more than most of us. His name is Brad, most of you folks listening know who he is. Brad Wayland welcome to the Quiet Light Podcast. Brad: Hey Joe thanks for having me on. Joe: How are you doing? Brad: I'm doing well. Joe: Are you ready to tell all of these people everything about you? Brad: I'm ready to tell them but I would contest your point that I'm kind of a big deal. In fact, I was on another podcast with Chris Guthrie that you had on the Quiet Light Podcast a couple of months ago and several years ago. He did an intro and he said most of you probably don't know Brad Wayland. He's what I call a silent baller. Am I right? All right well- Joe: He subscribes to HBO there. Brad: Yeah I would call myself pretty well unknown. But I have had a lot of experience and I hope that I can share some things today that will help our listeners. Joe: Well you are humble. There is that and you're part of the Quiet Light team because of that vast amount of experience that you do have. And you're one of the few … actually, maybe the only one where Mark actually said “hey maybe you should do this” versus the rest of us which reached out to Mark and said “hey can we do this?” that's right isn't it, Mark asked you to join the team? Brad: Well there's different versions of that story but I specifically remember that I asked Mark. I knew Chuck from the buying and selling world so I kind of made a joke at Mark about [inaudible 00:06:41.6] Chuck on I guess if things don't go well on the buying and selling world you might end up doing some brokering. And he was like I think you might be interested in doing some brokering with Quiet Light and that's where the conversation kind of started. And then over about a six month period he kind of showed me the Quiet Light way and I started getting more and more interested. And I really enjoyed my time at Quiet Light so far, it's good for people. And really every day when we get on the phone calls with buyers and sellers I'm just blown away by how impressed they are with the team we have at Quiet Light. Just the knowledge is there, its entrepreneurs. I tell everybody every day, its entrepreneur led. These are people that have bought, sold, built, operated in through hard times so I really do enjoy it. And I think brokers sometimes have like a little bit of a stigma attached to them. And I think that we are kind of definitely leading the way in kind of changing that. Because I find that people really look at Quiet Light as a breath of fresh air. Joe: Yeah I would have to agree. I was just at Brand Builder Summit down at Austin and really for the first time in a long time, I mean I started in 2012 the broker stigma had an icky feel to it. You and I have been self-employed for years … decades probably and people are starting to reach out to brokers for the experience and expertise that we do have. So it's good but let's talk about your experience and expertise. Who the heck are you? Tell us about your entrepreneurial history and when you started? Kind of how many things you bought so on and so forth. Brad: I started having some interest in the internet world around 2003 and I had graduated from college with a finance degree and was working as an accountant for a publicly traded company. And I really hated the work and actually thought you know what I'm going to get fired from this job before I can find another job because I felt like I was doing such a poor job. I just wasn't really built for the check in to your cubicle at 8 AM and checks out at 5 PM. I needed something a little more challenging for me and maybe a little less structured. And so I was thinking I would go into financial planning because I had a degree in it and had an offer. And a couple of friends of mine said “Hey would you like to come on and work on some business development for us in our t-shirt company?” And they had just crossed a million in sales and they have launched a website and it's called Blue Cotton. And so I came on and quickly I became enamored with search engine optimization and spent a lot of time trying to figure it out. And honestly I fumbled it around like four years and even to the point where I think they thought does this guy have any idea what he's doing at all? But around 2005, I started realizing what we needed to do and that was rebuild the site. It had not been built where it could really ever rank the way that certain things were structured and basically the site was just a giant image. So we rebuilt it. It took two years to rebuild it and when we launched it we were on the front page of Gizmodo within 24 hours from just people finding it. And back then there was- Joe: Gizmodo, what the heck is Gizmodo? Brad: It's a popular tech blog. I'm sure you probably heard of it. Joe: Clearly I haven't, so thank you. Brad: Well it crashed the site. And so that first day we launched it [inaudible 00:10:02.2] spent two years working on this project, it's never going to do anything. And that morning we got a phone call from the developers, our phones are ringing off the hook and they said something's going on. There's tons of traffic on the site. Back then you didn't even have Google analytics. We were paying for index tools back then. And so they … Gizmodo crashed the site, we had something like five million people trying to get to the site and it couldn't happen. Joe: Wow. Brad: You know it was just some crazy situation and there was no social media. So a lot of the traffic back then went through these popular blogs. That's how people … they have their RSS readers on their desktop and they would go through and read their articles and stuff. So they did that and then we had built a design studio where people would create their t-shirts in Flash. And a month later Adobe awarded us the site of the day which didn't crash site but it gave us a page rank 9 of 10 link from Adobe's website. Joe: Wow. Brad: Adobe was the most … at the time Adobe was the most went to website in the world. And the combination of Gizmodo … well because of Acrobat and I mean think of all the click here is that you have for Flash, for PDF reader, for all those things. It had tons of links coming in. And so the combination of those two things propelled us and we went on a crazy tier of growth. It grew up 50% a year for nine years on average. Joe: Woah, we'll let the listeners do the math on that unless you're going to tell us. 50% percent a year for nine years and you wouldn't want to know. Brad: Well we went … we grew from … I mean we were small. We were like a million dollars in sales but that ride took us from like, it probably took us to about seven million. I still own my equity in that company. I didn't start that way. We kind of after the web kind of took over the two owners came to me and said hey 85% of our revenue is coming through this thing you've helped us work on so we need to come up with an arrangement here. So we ended up doing that in 2008 and today Blue Cotton is still a thriving business. It's got … we're, I would call us a medium sized business now. We'll be considered a low eight figure business in terms of revenue. We've got 125 employees, 110,000 square feet of production capabilities which one I'm using all of that now. We use about 55,000 [inaudible 00:12:27.3]. So I did that and just to kind of quickly summarize that when you're in the custom t-shirt world you are making money in the most difficult way possible. A custom t-shirt has to be touched by about 20 people before it goes out the door. And if you order one for your family reunion then it's got Joe Valley's Family Reunion 2018, it's time sensitive. You've got a specific idea and you don't want to be the guy that ordered them and your family says “Man, Joe these are awful. You did a terrible job designing them.” So there's a lot of anxiety in the purchase and so I became pretty interested in content. And around 2010 a friend of mine who was … is a pretty big name in the vector space, like image vectors, he was looking at a blog for sale and it was on Flippa. And he … it was it was a $50,000 purchase price and he said you know what it's only worth 25 grand to me in high five. Man, that thing has content and ads like that's the most amazing business model I've ever seen. You don't have to do anything. Joe: Especially compared to 22 hands per t-shirt. Brad: Right. So I ended up buying that site for $50,000. And that started a new trajectory for me. From 2010 I started getting heavily involved into content and affiliate and just bought and sold a lot of stuff from 2010 and 2015. 2015 I divested a lot of it up to private equity but the- Joe: Can you ballpark how many you bought and sold in that time period? Brad: Yeah so I did 30 transactions between 2010 and 2016 and most of it was buying. I had basically four sales everything else was purchase. I kind of quickly … the space was the web design space so the blog that I bought … economy was kind of in the tank in 2010 and so the blog that I bought I quickly made my money back on it. It's a $50,000 purchase and I made the money back in like 10 months. And I thought this is like too good to be true. So I started kind of keeping my eyes open for opportunities and found another one that was for sale and overpaid for it compared to what I had done. So I paid 72,000 for the second one and it was starting on that same trajectory but after those first two, economy was really not doing well and I started having people reach out to me. And so I had a guy reach out and say hey I hear you're the guy that buys web design sites, you've bought this one and this one would you want to buy mine while I was tapped down on cash. I had spent all my kind of extra money that I had to kind of do something like that with and so I told him you know what I'll give you about 80% of what you made in the last year but that's the best I can do and I can do it today. Joe: And they said? Brad: And he said I'll take it. Joe: So let's talk about that on … just for a moment because you've got experience, I mean you bought 30 businesses, 30 transactions over the last several years. Was your process New York Wall Street walls to the wall top negotiating or was it nice guy that really likes you and you built a relationship and you made it work both in the end? Brad: I'm probably me there. I'm a quick decision maker. When I was in … when I graduated from college I had the opportunity to meet Warren Buffet at a finance event that went on in my hometown here at Bowling Green. And Warren Buffet said that he plays bridge, and he drinks diet Coke, and he takes 13 phone calls a day, and he doesn't have a computer in his office and one of the questions was how do you evaluate companies? He had bought Fruit Of The Loom which is why he was in town and they said how do you evaluate it? And he said honestly I don't spend a lot of time on it. I go with my gut. I look at the few things that I think I have but I usually make a decision within a matter of hours about whether or not I want to buy something, the price, everything which is not the way M&A is done. Joe: Wow. Brad: I know. He's a great capitalist in terms of what he does and that's not me. So I'm not trying to embarrass Warren Buffet but there is one element that is like me and that is I don't waste time. I like to put deals together. I'm not very patient. And that kind of benefited me in the buying and selling world. So I did things very unconventional. Like my transactions, I would never use escrow. I would try to do it as fast as possible, meet them in person, come up with an arrangement of I'm going to wire half here and then you're going to transfer this. Or I'm going to wire it all you're going to transfer these things at the same time. I just did a lot of things that weren't kind of the norms because I'm just not very patient. I kind of wanted to get my hands on it that second. I didn't want to wait 60 days for things to pan out. Joe: So no long drawn out contract negotiations on asset purchase agreements or SBA deals anything like that? Brad: No. Joe: Pretty simple. Brad: And I would say that I focused less on making sure I got this exact price that I wanted at that exact multiple that I wanted. And I focused more on trying to find things that I knew I could immediately do something with. When I got into the design space I don't know anything about design. In Blue Cotton, we have nine designers that work there. I don't know anything about it. I don't know anything about web design really. I know I can tell you some names of like what post would be like but I know nothing. If you put me inside one of those Adobe programs I'm totally lost, I know nothing about it. But what I did learn pretty quickly is that there are some economies of scale to having things that are alike each other. And so when I had one blog and an advertiser would come through it was like what would happen if I had five of these blogs? Or what I could do is I could leverage the advertiser for five times the amount and have the same amount of contact. And so I did a lot of that and I did it on the affiliate side. You know I couldn't negotiate better affiliate deals for my company because I would say well here's all the traffic I have in total and they would look at me and be like oh well if you've got that much then we want to do this size e-mail send or we want to do this size add by and so I started to feel that … and a lot of the … so about 15 of my 26 purchases were in the design space. Joe: And did you have writers that were consistently focused on the design space, outsource VA's, or did you do it all yourself? Brad: Yeah so in the design space there's a lot of writers available. You go to some of the popular sites like Smashing Mag or some of these other big names. You'll see a new name every day. And so I again I kind of always try to structure things in a way where I didn't have to spend a whole lot of time on them. So you know one of the things that I did is I found writers that were okay at being paid once a month because I didn't want to be jumping into PayPal 15 times a month to pay writers. So I found writers that could go across several sites that wanted to do like a substantial amount of work. And so I'd have four or five of them and then at the end of the month, I would just one time pay everybody for all their posts. I found people that knew what I wanted instead of me having to review every single post I found people and I was like okay you did these three posts for me this is exactly what I want, go down that road. Some of them would send me like here's what I'm thinking about doing this month, some of them were just like I know what he wants and they would just do it. And I just always try to streamline things to a … the most hands off as possible. I did not want to hire people to support the network. I didn't want to … I wanted to keep it very like the opposite of the teacher business. I wanted it to be something that I could do a lot with a little time. Joe: Did you put all 30 of the properties or 26 when you sold four off, did you put them all in one LOC did you have them separate? How did that work out? Brad: Well I had to … we hadn't gotten into how I built the portfolio so I will tell you that I quickly ran out of my own cash and had to start looking for help. So I did end up having three different LOCs total and that was because of the way I had to go find capital for the deals. Joe: Okay. Brad: And then I kind of got tired of that and so I basically rolled all of those partners up and blown and got them out and took everything over 100%. And you know the thing is when you're … there's guys that it was their pockets that are out there raising money and I had a conversation with one of our … someone who's buying a property from us yesterday about it. When you're trying to raise money from people instead of going out and asking for everything you think they could possibly muster up one of the best ways to convince people that you give them good returns on their money is to do something good with some … with a small amount of money, something that you know is not a big deal to them. And I didn't really do that on purpose. It's just that my deal started out kind of small. I started around this $50,000 range and by the time I was done I wasn't interested in $50,000 transactions. I didn't do anything that was all that large but I did a couple of three hundreds. I did two $500,000 transactions. And the thing about those transactions is I put that money together in a few days and it wasn't coming out of my bank account. So I had people that believed in what I was doing and I could literally pick up a fund and say hey I've got this opportunity and they would say I'm in. Joe: For those that are listening that have portfolio folks that might do that but for those folks that are investing that haven't ever done it before are they getting equity or are they getting return on investment and how quickly do you start paying them back? Brad: Yes. So the way that I was kind of pitched it I didn't have anybody that I was connected to that was like used to investing in tech … so I'm talking about people that have some extra income or extra savings but they're not people that were like highly technical. So, my parents, you know the first people I went to were my parents and I said “Hey would you guys want to invest a little bit of your money into an idea?” And they said, “Sure, what's the terms?” Well, my terms were terrible for me in my opinion. I said well if you'll put up the money I'll give you 50%. That's where I started. Joe: Oh. Brad: And I talked to someone yesterday he said that that was absolutely ridiculous. They are like you gave them 50%? I was like well I didn't have … I wasn't going to be able to buy it [inaudible 00:22:40.7]. Joe: They could praise you so that … you know they ultimately lost money on the flunk transaction called Brad Wayland. Brad: Still that's true. There are some things in our past, there's some car situations and things like that but it definitely cost them some money and a hard day. But I started with them and … but I became concerned also about … oh wait a second, they're willing to put a lot into this after we started going. They're willing to put more into this and I started thinking I don't really want to be responsible for my own livelihood and know that I could potentially tank theirs. Joe: Right. Brad: So I started to get kind of concerned about that. And they didn't have unlimited funds anyway. But around that time I started looking to partner with other folks and I partnered with some people that I didn't know as well as my parents. So people that had told me like hey I want to get in and my relative over here is willing to invest in me. So I did that kind of deal and I became pretty uncomfortable with those pretty quick. And the reason why is because when you're working with your parents or if you're working with a close friend you kind of know we're not going to end up in a courtroom somewhere. Joe: Right. Brad: You know that that's not going to happen. You know now you could ruin your relationship or you could have that little mark on your relationship where you're like well remember that time when I lost like $400,000 of your money? Sorry about that. You know like that's not a good situation. But I started getting uncomfortable with having partners at all in the space when I took on partners I didn't know. Joe: So how did you determine … you know once you've got beyond that experimental stage and your relatives and friends of relatives and giving them too much, what would you recommend to somebody that's listening that wants to build a portfolio of sites? Is getting money from people are not used to investing? What would you say? Look if I were to do it all over again with what I know I'd probably offer them X, Y, Z, and pay them how often? Can you summarize what you know? Brad: Yeah. So if I could do it all over again I probably would do it the same way. I understand that giving up 50% sounds like … I don't know if that sounds like a lot or not. One guy I talked to yesterday said yeah it sounds like a lot. It probably was a lot. They weren't doing anything. And I was … you asked a minute ago were they getting paid? If I took a check they got a check. And I was looking for cash flow because I wanted to build up and be able to go buy more and do things. So I wanted to realize real gains and kind of do something with them. So I would give a lot early but I would structure the agreements to where you control the situation. And that is one thing I did. I just … when you have all the knowledge and the other side doesn't really have an opinion, they're like hey I don't know really know what you're doing with the money over there. I just know that you're operating these websites out here and you're making us money. When you have that kind of arrangement those people are more willing to say well you tell us what the investment is going to look like? And so from my perspective I kind of went down the road of just saying look I want to … I still want to pay you your money but I don't want to have partners any more for various reasons. Like I want to structure this in such a way that makes sure that you get your return but also make sure that I benefit from it in the way that I think I should long term. And so I'd like to roll out … basically, I bought them out. I just came up with a structure and said this is how I would value the properties and I can [inaudible 00:25:59.2] the properties to pay this off. And so I rolled everything out into basically a Seller Finance note and I was able to get it done in 20, 30 days. As opposed to an SBA loan or trying to go out and raise … when you do a situation like that where people are giving you their cash and you're dealing with multiple investors, if you are able to call the shots then when you're ready for that change you can do it very quickly and efficiently. Joe: How many different investors did you have at that time where you had to get them out? Brad: So I only had really three people that had invested at that time but at the same time I was looking to buy more. So when I rolled it out into a loan I actually brought on three new investors but I brought them on as just debt. Joe: Got you, okay then you paid them a higher than normal interest rate. Brad: I did. So it depends on who it was but my interest rates were 6 to 9% on the deals that I did. Joe: Okay. Brad: So it just depends on who it was. And I never really nickeled and dimed people over the interest rate, I try to find people that I thought would be able, that would trust that I would do the right thing with the money and [inaudible 00:27:07.6] plus trying to get the exact interest rate. Joe: Let's talk about for those listening thinking about rolling up different properties into a portfolio. Let's talk about multiples and returns on investment. You know we talk all the time about a business that's doing 100,000 that's five years old with one employee is worth a certain multiple but an equal business with one employee and work load that same age that's doing a million in discretionary earnings not only is it worth 10 times more in terms of numbers but it's also that multiple goes up right? So instead of two and a half to three and a half times in terms of value, the multiple because of the size and breadth of the business that multiple might jump to four or five times. Did you find the same thing to be true when you rolled up essentially 30 small content sites, 30 small blogs into one portfolio and sold off to a private equity firm where they pay a much larger multiple? Brad: Yeah okay. So … just so you know the private equity firm that I sold it out to I sold it at four and a half multiple. So just to kind of … that was a high multiple, I was very pleased with the transaction. Joe: Okay. Brad: So in my sale, I definitely saw an increased multiple. Okay, so from my perspective I did transactions that were … I did a lot of them in the 50,000 range and then as I got further down the road I did a lot of 125, 300, a couple of 500s. And here's what I found from my perspective, the properties in the … at least in the web design blog space that we're selling for more were higher quality properties. So where we deal with every day like we're talking to someone who's selling on Amazon, we could find someone who's selling on Amazon that's doing $50,000 a year in discretionary earnings, it's got … doing everything but they're in a small category. Whereas you could find someone who's doing a million dollars in discretionary earnings that's doing everything perfect as well but they're in a broader category. So we would see that where it's like hey they're both doing great they're … you know but they just happen to make less. In the design blog space, it wasn't so much like that. It was like if you're doing great then you are bigger and you are earning more. And so they did command higher multiples. I don't know off the top of my head I know one of my 500,000 transactions was a two and a half multiple and … but I know that one of my $300,000 transactions was a three point maybe one or two. Joe: And you talked about when you purchased it. Brad: When I purchased; yeah. So [inaudible 00:29:46.2] a lot of that. Joe: When you sold it was all lumped together and one multiple was applied. They didn't look at the individual blogs and sites and say we'll give you this for that and this for the other one, it was all- Brad: Right and the and the private equity plays … I mean I'm sure that you've talked to people just like I have, the private equity world is … we're seeing some changes I think in the industry right now with private equity. I think there's kind of two things going on. One is private equity is scooping up a lot of sides, stripping out all of the cost out of them, and literally just let them die and because the return on the money is good even then. That's one thing that I've seen private equity doing and that's what happened with mine. It killed them off. I mean there's no way. Joe: It killed them off. Brad: Yeah but having said that, that company that bought it is thriving. So I think through the acquisition they learned some things about what they wanted to do and what they were good at. So I don't know that they would look at it as a failure because I think that if they were able to use the information to then go and build a much bigger company that's doing some pretty big things. On the other hand, I had mentioned the other way that private equity is going like we just had a transaction that closed this week that I … where you've got an operational group that is under private equity. So we see the private equity guys a lot of times, they're like hey we want five million on EBITDA. Well, we don't have a lot of sites that come our way that have got these big seller discretionary numbers. So what I think is happening in the industry right now is there are these operational groups that are saying hey we'll go deal with 10 or 15 of these things, we'll still get you your … whatever you're looking for, several million dollars in sellers discretionary earnings but we'll operate all these things underneath you and kind of keep them running. And I do think that they'll like hold on to the content and just let it die. I think that Google especially is fighting against that right now specifically. I think their Freshness algorithm has kind of taken over and kind of prevented people from being able to do that effectively. And so I don't think that strategy is advised or a good idea and I think it will go away completely. Joe: You mean in the algorithm updates or having those sites die off a lot faster if you're not doing anything? Brad: They do. They just … they track what you're doing and I've even done some experiments. So I analyzed it on a small content portfolio and I have a marketing firm that runs those forming. They basically do all the content and everything. And we have experimented and seen Google Freshness is a very real algorithm that if you fall asleep on a blog or something that has any kind of time sensitivity at all then you will pay the price and it doesn't take very long. Joe: Got you. So for anybody listening that thinks that Quiet Light is only a physical products e-commerce brokerage firm, Brad is obviously showing us that the experience that we have is pretty vast. Jason's been in the affiliate space. We've all done SaaS, affiliate, content, advertising, physical products, but Brad obviously I think probably the bulk of transactions that you've closed so far with Quiet Light as an advisor you had been in the physical product space. But you've got a tremendous amount of experience in content as well correct? Brad: Yeah but to me, the content is hard to come by. I don't know if you feel that way or not but I don't get them a lot. I did a transaction last month for a guy that I actually had bought three websites from in my buying days. And it was a really interesting dynamic because I was able to … when the buyer has been on the phone and saying can I trust this guy? I was able to say you know what I did three deals with him myself and I can tell you it went exactly like this [inaudible 00:33:21.0]. So that was kind of a neat thing. But you know he came to me and said hey I want to sell a content site and he was monetizing it through digital downloads, and not a big transaction, a couple of hundred thousand dollar transaction. And you know he said what should I expect? And I said you know what the content is pretty hot, we don't get tons and tons of content people trying to sell these days. People want to hold onto it because it's very low workload and it's very high earnings for what people are doing and they seem to be getting very good multiples for it. So we priced it out at a 3.25 multiple and we got about 96% or something of the asked within 72 hours, I think you sent me an e-mail and said both your listings this week are going to be under a lot. By the weekend you are right one was 48 hours, one was 72 hours that transaction was closed in three weeks start to finish. Joe: Yeah content is easier to do due diligence on as well. I just had a content site closed. What is … we're recording on I think Wednesday right? Brad: Yeah. Joe: So 10 days ago. Less than 10 days ago I had one sell and it's interesting I'll give you the details of it. Daily updates, hundreds of thousands of visitors to it and Google was rewarding it like crazy because of the vast amount of new content on a daily basis. And the revenue took off like a rocket. It was just under a nine million dollar transaction and a very very high multiple. Higher than yours but it was explosive growth. It was very big. A lot of … their discretionary earnings is obviously very high. So the bigger the discretionary earnings, perk of the growth that you've got there the higher the multiple as well. So content sites if you're out there listening and you've got a portfolio of them or you're an individual person running one and you think that you're hearing things that are not worth all that much, truth of the matter is that we saw lots. And there's lots of good buyers for them. Brad: And I think that's your point, you asked the question earlier. Are we seeing the multiples go up the same way? And I think across the board you just have a supply and demand issue when you get into larger sites. There's just not a lot of them available and we're seeing that our buyers are ready to go on larger transactions. You just don't get as many large transactions to come by. And the example that you gave, I'm pretty sure you had competing offers on that deal. Joe: I did. I had three offers and they kept … they update each other and grew it up. Bryan- Brad: Three offers on a nine million dollar property, that's something. Joe: Yeah. Bryan's got the physical products business; its nutritional supplements. It was listed at 15 million and is under contract at higher than that because there were multiple offers on it. So don't be afraid. I hear people tell me look I think I should sell before it gets too big because there's not going to be as many buyers out there. That's not what I'm finding. It's not the case. Would you agree that there's a ton of money out there for the right business? If it's a good quality business it's going to last. Brad: Well it will sound very counterproductive to what we're trying to do at Quiet Light but every week I talk to people on the phone and I just basically tell them if you've got the willingness to keep working on your business you should not sell. I mean you just shouldn't because you should grow it as big as you can. Because it's not easy to build a business that does what your business is doing. Whatever it is, anyone that we're talking to is having some level of success because they're talking about selling and they know they've got cash flow and things like that. And I just always tell them if you're done let's go. If you're ready to be done or you've got other plans or you want to travel or you want to do this or that or you want to … you've got a new venture that you're thinking about sure let's list it. Let's get it done. But if you've got the willingness to keep going then we're here when you're ready but honestly keep going. Go as far as you can take it. Joe: And Mark calls that reckless honesty because it's not necessarily in our best interest but it's what we all do. He did it for me when I sold back in 2010. The difference I'll tell you now for those that are thinking they're emotionally tired and done really you've got to sort of tap yourself in the chest and say do I have the heart? Brad: Yeah. Joe: Because the worst conversations I've had are when I say look, you want X value, your business realistically is only worth Y. If you hang on another 12 months and you reinvest your energies, you set some goals, you get that traffic back up, and you get that revenue going again at a higher level you'll get Y but it's going to take 12 months. The worst conversations I have are when they come back to me in 12 months and say you know I didn't do any of it. The revenue has gone down 20%, can I still get the X you talked about? And the answer is no because they didn't have the heart. Those were the worst conversations. Brad: Right. Joe: So always, I tell people tap in my chest if you've got a heart do it. But like you say, if you're emotionally done; if you're ready we're ready. I think some people … I've been doing this six years as you know and occasionally we tell people look it's in your best interest to hold off. Sometimes they'll interpret that as we don't want to list their business. That's not the case at all. Brad: Yeah not. Joe: When they're ready, we will do it. We'll get that buyer. And just from the few examples that we've talked about, there are buyers and situations where we get it under contract very very quickly. Listen Brad we are running short on time you shared a lot of information here that I think will give people good insight into you into building a portfolio of either content businesses or any businesses the way that they can sort of piece it together the way you did and then exiting which is fantastic. I do want to talk about one thing briefly though. Personal in nature if you don't mind, can we? I won't go too far I promise but say yes. Brad: Yes. Joe: Okay. So I understand you went hiking in North Carolina recently and they're renaming a mountain after you. Brad: Yeah. Joe: Do you … what happened there? Brad: Well my wife and I have five boys from range two to 11. So we're pretty busy living life. And for our 16th anniversary, we decided to go to Asheville North Carolina, leave the kids at home. My parents came to town to take care of them and we went to Catawba Falls … which you can Google it. There has been many fatal accidents there. In fact, there's been a fatal accident there since I left. Pisgah National Forest has many accidents from what I've come to learn. But we were hiking up a trail at Catawba Falls and then we entered a closed section of the trail. I didn't know it was a ropes kind of situation so we're climbing up ropes and going up a rocky kind of cliff. Joe: Let me just clarify for the attorneys out there that's thinking they can help you. You entered a closed section of the trail; closed. Brad: I didn't know. Here's the thing, I've got some lawyer friends that have reached out to me about it and here's the other thing the Pisgah National Forest is owned by the US government. So if you decide that you want to sue them just know that the US government does not take lawsuits kindly. And they take zero liability. So I had friends reach out to me and say you need to pursue this and then I was like I was in the Pisgah National Forest and they're like no, that's not going to work. You're going to lose that. But basically, it depends on the state. North Carolina does not have very friendly laws for stuff like that anyway. It's one of the least friendly states for that. But I hiked up, I saw a beautiful waterfall … actually and filmed in the movie The Hunger Games and that's why we wanted to go up and see it. So we went up there, saw the waterfall, we needed to kind of get a move on it because we had hiked a lot longer than we had expected so we're moving very quickly on the way down. Joe: You and your wife and kids or just you and your wife? Brad: No just me and my wife. The kids were at home. I vacated the ropes for a minute, I don't … I saw a path; it seemed like a reasonable thing to do. It was only going to be like 10 ft. and honestly I don't remember anything after that. I fell 40 ft. down a very rocky slope and I don't remember anything until the paramedics and the firemen were there. They tried to life like me up they couldn't do it. And I broke my arm, dislocated my shoulder, collapsed my lung, I had deep bruises and things like that. I did not have a concussion surprisingly. Joe: You got to thank God. Brad: Three and a half hours to get … yeah, I did. It took them to three and a half hours to get me out in to the hospital. Joe: Wow. Brad: And anyway thank God it was just a lucky situation, very scary for my wife. She was talking to me for a long time without me really knowing what was going on. For 45 minutes she thought she's lost his mind. Joe: Well the first thing I think we all did a Quiet Light was you know thankfully you're okay and we were doing little prayers for you and all that stuff. And then we start like man that guy is just not so bright going on the closed trails. For everybody listening, if anybody is foolish enough to do what Brad did, we bought him the inflatable … what do they call it, the inflatable? Brad: They're like these big bubbles that you get inside with your family. Joe: We bought Brad a bunch of those and I started a petition here in North Carolina to change Catawba Falls to Wayland Falls but nobody listened. Nobody listened at all. Brad: Unfortunately. Joe: I've been there and next time I go again I'm not going on the closed trails I don't think but. Brad: You may not know where the closed trails are. I didn't know it was closed. Joe: Okay. I've been there because I know that it was like oh look that's where the Hunger Games was filmed. Brad: Yeah. Joe: I'm going to bring a sign and I'm going to drop it in there. I'm going to take a sledge hammer and put it in the ground call and Catawba Falls and take a picture for you. Brad: Yeah. Joe: See if anybody takes it out. It could be there for- Brad: It was a crazy accident and I'm thankful for all the support I got. From Quiet Light, from friends of family, it was a … I recovered very quickly. I've got a pretty gnarly scar right here that is still … I'm hoping it's going to turn the color of my skin is it looks like I got really depressed or something. Joe: He's holding up his wrist ladies and gentlemen and it looks like he decided to take his own. Brad: Tried … that's what it looks like. Joe: Is there a pin in there now? Brad: Yeah there's a play and about a dozen screws in that arm but I've got full mobility back. I'm free of therapy. I can't do pushups yet but I'm getting closer. Joe: And you did it all while we started at Quiet Light and you had listings and not a single client really knew what was going on and they … I mean it's because you worked anyway which is amazing so that's awesome. Well again Catawba Falls, I'm going to try to get it changed to Wayland Falls but let's see if that happens or not. Brad: Good luck with that. Joe: Brad, thank you. I learned a lot. Brad: Thank you. Joe: I learned a lot about you and I appreciate your time. Hopefully, everybody here has did as well and we'll keep doing what we did here at Quiet Light. Thanks, man. Brad: Okay thanks a lot for having me on. Links: Brad's LinkedIn Profile brad@quietlightbrokerage.com About Brad Wayland on QLB

【微信公众平台】搜索“英语口语每天学”，每日获取笨老撕不一样的分享。【新浪微博】搜索“笨老撕”To have a thing for 喜欢I think John has a thing for Jessica, but he's too shy to admit it!我感觉John有点喜欢Jessica，但就是他太害羞了。The next big thing 下一个重大的突破是I think moon travel will be the next big thing.我认为月球旅行会是下个一重大的突破。Sort of thing 那些事Mark：Hey, do you like diving?你喜欢潜水吗?Josh: Sorry bro, but I'm not into that sort of thing! 不好意思，哥们。我不喜欢那玩意儿。Here's the thing 这样吧OK, here's the thing – Let's make it to 9:30 tomorrow morning. What do you say?好的，这样吧。我们定明天早上9：30吧，你感觉呢？

【微信公众平台】搜索“英语口语每天学”，每日获取笨老撕不一样的分享。【新浪微博】搜索“笨老撕”To have a thing for 喜欢I think John has a thing for Jessica, but he's too shy to admit it!我感觉John有点喜欢Jessica，但就是他太害羞了。The next big thing 下一个重大的突破是I think moon travel will be the next big thing.我认为月球旅行会是下个一重大的突破。Sort of thing 那些事Mark：Hey, do you like diving?你喜欢潜水吗?Josh: Sorry bro, but I'm not into that sort of thing! 不好意思，哥们。我不喜欢那玩意儿。Here's the thing 这样吧OK, here's the thing – Let's make it to 9:30 tomorrow morning. What do you say?好的，这样吧。我们定明天早上9：30吧，你感觉呢？

Tim takes on a recent initiative of Amnesty International to "Legalize" prostitution. His issue with their policy lies in the difference between "legalization" and "decriminalization". He argues that what they are proposing would endanger more children and ultimately undermine the efforts of many people to save kids from sex trafficking.   Tim: Hi! Thank you for joining us! This is a very special bonus edition of the Slave Stealer podcast. If you have been listening to us for a while, you know that there are a lot of aspects to human trafficking. So many drivers, so many factors. Sometimes we don’t always get the chance to elaborate within the context or whatever it is that we are talking about, but one big issue that deserves more treatment is this current push by Amnesty International to legalize all prostitution. What they are trying to do now is go out to all the countries and influence them to legalize this work. Now, there is some merit to parts of their argument, but I contend, and I contend passionately, that this legislation, if it got that far, would absolutely devastate millions of children who would be caught up in the wake of prostitution. They would be caught up in the wake... They would be caught up as victims, they would be rapedthemselves. So after we spoke with President Vicente Fox of Mexico, we got on the topic of Amnesty International’s plan, and I think I got a little fired up, so I want you to go ahead and hear what I had to say. So, let’s go and roll that.   Tim: And, people don’t believe us sometimes - "Oh bull crap, we don’t believe that"- or they will see a trafficking case, we will show footage and they see what looks like a victim going willingly into this place: "Well, they walked in. They weren’t dragged in by chains." And, I get it, but it is also very offensive because I know that these kids are slaves. I see them before and during and after. We could have Elizabeth Smart come in sometime and talk about that. Don’t say anything like that in her presence because she received that criticism: "When you were in captivity, why didn’t you just run away? Why didn’t you tell the policeman who you were when he confronted you with your captors in the library that day?" And she will tell you that a child’s mind doesn’t think like an adult’s mind, and it can be very easily manipulated and really brainwashed and rewired to the point that when Elizabeth was rescued, she didn’t even admit who she was. She was still denying who she was as she was even put into the police car and taken to her father, ok. And that’s the thing people don’t understand about human trafficking, and so they misidentify the victims. Police departments have been doing it for decades. I think...in the last decade or so, I think they are trying to get out of this where they treat all prostitutes as criminals. They didn’t even stop to ask the question, 'How did she get here?' Maybe she is 19 years old, but did you know that she was kidnapped at 12 and forced into this life? And yeah, now she is acting out, and she is yelling and cussing at you, and she "doesn’t want to be rescued." But she is a victim, and she needs to be treated as a victim until you figure out what is going on. And a lot more needs to be done there, but progress has been made where these women and children are not being seen as criminals anymore but as victims, but much more needs to be done in that area. Mark: That is a legislative issue, obviously. Are those national statutes that need to be passed or are they local? Explain prosecution of prostitutes. Explain that whole dilemma to me, I don’t get it. Tim: There is some legislative there, but there is also a lot of just how you administer or how the law enforcement administers or what questions they ask, right. Because to be prosecuted for say prostitution, requirements within that statutes have to be met. And part of that is willingly, and it was your intent to do these things. And it is easy just to make the assumption, 'that was your intent, you wanted to do this, and so you’re guilty.' So sometimes, it is not just the laws. The laws can be clarified, sure - you can always, you should add a requirement and say even if this prostitute, this person you have brought in...even if they are an adult, you have to prove that they meant to do this, that they wanted to do this, that this was the life that they chose. Mark: They weren’t coerced. Tim: They weren’t coerced into it. Mark: Ok. Tim: And so the questions, but the questions... The problem is, even when you have decent legislation and decent statutes, you don’t have law enforcement asking the questions, digging deeper: "Who are you? Where did you come from? How did you get into this? How old were you when you got into this?" And if they would ask that, then they would see that there is coercion here. They are not going to bust out their pimps.   Mark: No, they are scared to death. Tim: They are scared to death. Their pimps have been beating them for ten years, since they were ten years old. So, you have got to stop and ask the question. You need experts in the field - social workers, psychologists in the field - to be able to be there and take this victim aside and talk to them. Frankly, in my mind, every country, every jurisdiction - whether it is federal, state, whatever - they all need to have legislation that decriminalize prostitutes altogether, absolutely. Every prostitute, in my mind, should be treated like a victim. Mark: So, you are saying legalize prostitution? Tim: I am not saying... No, you don’t legalize prostitution at all. You legalize prostitution and that means that the pimps and the johns get away. Mark: Ah. Tim: You criminalize 100% for pimps, for johns. Mark: But you can’t criminalize the prostitutes... Tim: You don’t criminalize the prostitutes. Mark: I like that. Tim: Yeah, I mean, there is Norway and Sweden who have both adopted that, and it is very effective. What happens there, when you do that, is those countries and those cities stop becoming havens for sex, for paid sex. Because you are criminalizing the johns and the pimps, johns and pimps don’t want to work there. Mark: So what you’ll have are a few entrepreneurial women who are kind of like 'Ma and Pa' stores, but you wipe out the industry? Tim: Yeah. You would wipe out the industry because the pimps and johns can’t... They are scared to go there. Mark: Yeah. Tim: And this is a huge debate right now going on with the Amnesty International’s new policy this summer they came out with in August, I believe. They came out with the sex worker shield where they are basically wanting to decriminalize prostitution for everybody - pimps, johns, and what they call sex workers - and make it legal. The idea is bring it all out into the light, and then you can take care of the sex workers and treat them like legitimate workers. You know, it is all focused on helping the sex worker. That’s their choice - they want to be a prostitute, support them, help them. And to do that, you can’t criminalize the pimps who, in Amnesty International’s words... This is very controversial. I mean, this is Amnesty International who is supposed to be looking out for the victims. And they feel like sex workers - who they call sex workers, others might call prostitutes - have been victimized and demonized and not supported in their occupational endeavors. And the problem is, is by decriminalizing this - and I see this in my work - by decriminalizing the whole process so that the sex workers can be seen as legitimate workers, like any other professional in the world and be given all the benefits... Mark: I think the middle management and HR and marketing...they get all the departments wrapped around them: "Hey, go see the marketing guy!" Tim: That is right! Mark: "Make a brochure on this chick." Tim: That is the idea! That is the idea, like you are not letting them live their dream. Mark: Wow. Tim: And then the argument is this - let’s play with it a little bit because there is a strain of logic to it, right. So, the idea is you get them structured that way and then the government...because then my question is, "Ok, what about the kids?" Two million kids or more are being trafficked, sold. How do you protect them in this? Amnesty International says, "It is very easy!" All you do is you tell these jurisdictions and the police officers... These pimps get licensed; they are a licensed business. You go to them and they have to show that they are not selling minors: "We don’t sell minors. Here, look - it's all willing adults." Mark: "Look at our brochure!" Tim: "Look at our brochure! It is very clear." Mark: "No kids!" Tim: And I am thinking to myself, "Ok, you are talking about these underdeveloped countries that, at Operation Underground Railroad, we are filling up their gas tanks so they can drive from point A to point B. You are telling me that your police force is going to have enough resources, time, manpower, so forth, to go and regulate these legitimate brothels to make sure that there are no minors?!" Do you know how easy it is going to be if you are Fuego, right? Fuego, who is the guy… Mark: I remember Fuego. Tim: We met Fuego on the beaches of Colombia and... Mark: And you took his hat! Tim: I still have his hat. I still have his hat. Mark: That guy is such a douchebag. Tim: Can you imagine… Can you say douchebag on this show? Mark: Hey, if I put a little E next to the...we are now explicit. Tim: Ok. Mark: No, douchebag is not explicit. Tim: Is "Slave Stealer Radio" an R-rated show? Let’s just talk about this and figure that out. Mark: I think we are PG-13ish. Tim: I just want to know what I can get away with. Mark: In context, we’re probably considered like an X-rated show just given the general theme, but we don’t really get explicit yet until we get you on the wrong moment. Hopefully we edit that out. Tim: Ok! Mark: Yeah. Tim: So, Fuego... You imagine Fuego, right. How hard is it going to be for Fuego? This is Amnesty International’s plan - Fuego should be a legal vendor as long as they are adults. The kids will be safe because they are safe with Fuego, aren’t they? You spent time with Fuego. Would you trust a 12-year-old girl to Fuego? I mean... Mark: Friendly guy. Tim: Here is what is going to happen: he will line up his 18-year-olds and 20- year-olds, and he’ll say, "Here’s all I got!" And those cops are not going to go the two miles down the road into the little storage facility, right, or the tractor trailer with the ten 12-year-olds and the three or four 9-year-olds. Mark: And they are not going to check his phone to see... Tim: No! Mark: ...you know, all the 10-year-olds with pagers. Tim: Right! He will have those, he will sell those. They are premium! You are going to sell those for $1000; these 18-year-olds you are going to sell for $300. He is going to have those. The infrastructure to sell those little kids is now supported by the state. And he will be able to make money, he will be able to invest whatever he makes legitimately, he will pay his taxes and everything else. He will be a businessman! He is going to sell the premium because it is too easy and now you have just supported his infrastructure. How are you going to protect those kids? Amnesty International decided to ignore those kids. Those twelve kids in the back of the tractor trailer down the road - they have ignored them. And now, guess what? You have created an absolute sex haven. And let's say that they decriminalized it like this everywhere in Cartagena. Every gross tourist from America, Canada, and Germany, and everywhere else - they are going to go to Cartagena, they are going to enjoy the adult sex, and then they are going to make a deal with Fuego on the side and say, "Hey, where do I get the 11-year-olds?" "Well, you come to this other place down the road." And it is a booming business. I am absolutely just astonished and sickened that Amnesty International could be so incredibly short-sighted and idiotic that they don’t see that they are completely neglecting the children. They are creating safe havens. They are making it so easy for the johns and pimps to rape children. Mark: That is pretty inflammatory. Tim: It is inflammatory! Mark: You just called them idiotic. Tim: They are idiots! Mark: What if we need their help? Tim: Well, we won't need their help. Mark: Ok. Tim: But do you know who does need their help? Fuego needs their help, and apparently he is going to get it. Mark: So, an entire industry... You might shut down an entire industry. There might be jobless Fuegos all over Colombia, all over Mexico. Tim: How sad. Mark: Have you ever ordered the 'Sin City'? Tim: No. Mark: Smashburger. You go down, and it is kind of like In-N-Out burger. You can show up and there is the menu, right, there is a Smashburger menu (and they are not a sponsor of this show), but you can order the ‘Sin City’ which is not on the menu. And it is kind of a niche thing for people to go in and they give you the wink and they say, "I’ll take the Sin City." Tim: It is like In-N-Out burger, it is the same thing. They have their Animal Fries, Animal Burgers. Mark: Yeah, the Animal Style. Now, I see prostitution becoming like that. Tim: That is exactly right! Mark: Under the Amnesty plan. Tim: Absolutely! It is exactly what it is. Mark: I’ll take Sin City (wink, wink). Tim: It is exactly what it is. Mark: She is in the back alley. Tim: It is exactly what is going to happen. Mark: It is a brand extension. Tim: It is exactly what is going to happen. And we know this! I know this! I know these guys! I have negotiated with them undercover, I sit across the table from them. And if it was legal to sell, for him to sell adults - which it is not in Cartagena frankly, ok. But if it were, if we all follow Amnesty International, and if they make it legal, and I am sitting across from him... Think about this, just play it out in your head - I’ve been there a hundred times. "Hey Tim, come to my office with the sign that says, 'Beautiful women for sale,'" right, because this is a legal business. I walk in there... I mean, we have set him up, he is totally legitimate. And you don't think we are going to have that little 'Sin City menu' talk? Absolutely we are going to! Because he is going to make double or triple off this sick, horny American who is sitting across from him. Mark: Yeah. Tim: Right? It is so unbelievable! When I saw Amnesty International’s policy, I thought there is no way, there is no way they are going to vote. Sane minds will prevail here. And they didn't. Mark: Who voted for it? Tim: It is the board of Amnesty International. This is a powerful organization that has done good in the world - they are all about human rights. They have done good in the world to protect innocence. Mark: Well, traffickers are humans. They have the right to traffick. Tim: Traffickers have rights too, I guess. Mark: Apparently. So now... Tim: It is unbelievable.   Mark: So now, Amnesty International, for the uninitiated like me, Amnesty International now goes and lobbies the UN, they lobby Washington, they lobby... Tim: They lobby countries all over the earth. They will be going and saying, "You need to decriminalize prostitution!" And don’t get me wrong, I totally believe in decriminalizing prostitutes. They should all be treated as victims, absolutely, even if they are saying, "I’m here because I want to be - arrest me!" No, we are going to treat you like... We don’t know your story. I agree with that, that’s right. But what they do is, because the sex worker can’t provide her service if johns are scared to come buy them. So, who they are really protecting are the johns and the pimps. And they say that in their legislation, or in their proposed legislation. They say that... They don’t call them pimps, they are very careful with all the wording, but they call them 'security': 'security for the prostitutes'. Mark: They call them security? Tim: They need to have their infrastructure, they need to have their security, which means that there could be other people helping and facilitating in their business. So, it is unbelievable. Now, will there be a prostitute that would benefit from this? Will there will be a prostitute that would say, "I truly do want to be here"? Absolutely! I believe there are prostitutes who want to be there. And might they say, "We need this policy so that we can sell ourselves freely and be sex workers by choice," and all this, and this would help them. Yes, that would help them, but you have to weigh that against the twelve 12-year-olds who are sitting in the tractor trailer down the road from the legitimate brothel. Mark: Whom you have seen. Tim: I have seen them! They are everywhere! There are 2 million of them. And you have completely thrown them under the bus because you are so worried about the few prostitutes who want to be there, who love their job, and whatever. Mark: The company guys. Tim: I can’t say I am completely unsympathetic to that - maybe that is what their choice is and I am a libertarian in that way. I want people to be able to choose. But it is a balancing act and when you are choosing that over the children who will now be raped because you have provided the infrastructure for them to be raped, you are in the wrong. I mean, it is so clear that you are in the wrong. I know from our perspective, you know, we spend a lot time in the trenches and we see this. Perhaps the folks from the Amnesty haven’t. I have to assume they haven’t seen this, and see how easy they are making it now for children to be raped.

  Interview w/ Timothy Ballard Mark Mabry January 11, 2016 Final Transcript   Intro: You are listening to Slave Stealer. Tim: Welcome to Slave Stealer podcast, where we take you into the dark world of trafficking so you can help us find the solution. We are talking here with co-host, Mark Mabry. Mark: That’s me. And we did a little change in format. This is part two of our ‘Meet Tim’ series, because he has had a really interesting story. And what I found amazing in getting to know Tim over the last few years, is that sacrifice of peace of mind, sacrifice of kind of this level of innocence that 99.9% of the rest of us enjoy. And, to recap, we talked about Tim’s story a little bit, how he got into child crimes, and how he was invited by HSI to be on that team, and then we talked about his family. He has got young kids, and his son is now 15. And, the birds and the bees talk is awkward enough. What about that talk about what dad does for a living?” Tim: Well, you know, yeah..Let me say this first: I was scared to death some 15 years ago when I was asked to enter this dark world of child crimes. And the thing that scared me the most was the fact that I had kids, and I didn’t know how that would affect me. Would I see an image that reminded me of my kids, would that make me a paranoid father, would that turn me... My wife was scared to death that I would turn into just some cynical, just bitter old dude. And I was scared to death. I mean, you’ve got to wade through the sewer to find the crap. Mark: And what if the pornography took, I mean, worst case scenario, you turn into somebody that is actually into it? Not that that would happen with you knowing you, but... Tim: You know, what I have found that’s..a lot of people think that, and they go there, but... Mark: Those people are stupid. Tim: The people who had that suggestion are really idiotic. No, but it’s a logical conclusion. But what I have found is, frankly, kind of the opposite. Because when you are exposed to children - unless you are a pedophile, right - when you are exposed to that, it makes you want to distance yourself even more from all things pornography. At least that was my experience, and as I watched other agents who I have worked with, who have to be exposed to this. It turns you off so much to the whole industry, even the legal part of it, because it’s so, frankly, similar that it actually, at least for me, it has had the effect of major deterrent, even from any temptation my own part to even look at regular pornography. Does that make sense? Mark: Yeah! Tim: And, for the child stuff, it is just a punch in the stomach every time, and it is worse and worse every time. And you learn how to cope, you learn how to be able to see this stuff and still move on. But, like in the last show, I was talking about how the first thing I want to do when I saw particular images or videos, is just grab my kids and bring them to the safest place I know, which is my home, and just hold them. And so the whole concept, the whole idea to your question of how I bring together these two worlds, of what I do outside versus what I do inside - you have to factor in all these things. But my kids do start asking questions. I was addressing a group that was doing a benefit for Operation Underground Railroad just two nights ago. And they had the kids there and they wanted me to talk about it, and it was so hard, because I’m sitting there, and they say, “Tell us what you do!”, and I’m going, “All right, well I’ll start...”       Mark: How old were the kids? Tim: Oh, the kids were as young as five, six, seven, eight, nine, ten, eleven, twelve. Mark: Oh, geez.. Tim: It was like all these neighborhood kids. And their parents wanted them to know that there are kids who are less fortunate and that we need to help them. That was the idea. So, I thought to myself, “I’ll start with the software that we are building.” The software is called ‘Stars’. It’s a pretty name. Until one of the kids says, “What does STARS stand for?” And it stands for Sex Traveler Apprehension Retention System, right? So, I say SEEEE ugh...I can’t say it, I can’t even say the name of the software! Mark: Super Terrific Apprehension... Tim: Yes! So, I couldn’t, and it was so..it’s so difficult. A little kid raises his hand after I’m talking about slavery in general terms, and he said, “Why would someone want to steal a child? Wouldn’t they rather steal an adult because they’d be better at being a slave and a stronger worker?” I just looked at this little kid, I was like, “I know exactly the truth of your question, I know how to answer that, but I cannot answer that.” And so these issues that I was grappling with at this charity event, are the same issues I grapple with every day with my kids. When they see something on the news, and with my small children I just tell them, you know, I help kids, we help kids, we help kids who’ve been kidnapped. That’s all they know, and they seem ok with that. But as they get older, they start asking questions. And it intersects at the same time that I need to start talking to them about the birds and the bees. My wife and I are very open, I mean, I think my job has made me the most desensitized to all things sex, like I can say anything to anyone, because the conversations that I have had with people, with perpetrators especially during interrogations, where we were talking about things, or undercover, where they’re selling me kids. There is nothing that makes me blush, right. So, I can just take my kids and sit down, and say, “Hey”, talk about everything, embarrassing things, everything from pornography to masturbation to dating and all this stuff. It is rare that we talk about that, somehow it leads to the fact that - again these are my more adolescent, teenage kids - it always leads to some kind of an explanation that they are asking me for about, “Why would an adult want to do that to a child?”      Mark: When they say THAT, what ..I mean.. Tim: I mean they kind of..they know, I mean, they figured it out. Mark: Yeah. Tim: They do, because they know what is what we’re talking about. And so, I think, in the world of child pornography and sexual abuse of children, you don’t want to be graphic with the kids at all, even with my teenage kids. I kind of let them just figure it out and let their brain stop them where they should be stopped, because the brain will do that. Mark: Oh, adults don’t even grasp it. Tim: Adults don’t grasp it. I was sitting with my father-in-law - a brilliant man, PhD - we were in his kitchen, this was when I was an agent, and I heard him, he started talking.. What had happened was that I arrested one of his friends - not like a close friend, right, but... Mark: ”So, what did you do today, Tim?” “Well, I busted Larry.” Tim: Right! Mark: I have heard this story. Tim: He knew this guy, he had been to his home. So he knew this guy, and he started saying, “You know...I kind of feel bad for this particular individual, because it’s not really their fault. I mean, these girls dress in a certain way that is provocative, and it is not totally their fault.” And, I’m just dying. I’m like, “Wait, wait, wait, what?! You are telling me that a 5-year old puts on clothes, and now it’s not the pedophile’s fault that they look at the 5-year-old!” And his eyes almost popped out of his head! He says, “Five years old?! Why are you talking about 5-year-olds?!”     Mark: He’s thinking the 17 ½-year-old. Tim: He’s thinking 17, 16 years old, where you can’t really maybe tell the difference between a 17- and an 18-year-old, right. His eyes popped out of his head, and he says, “What?!” I said, “Yeah...Dad, you don’t know this, but what George was looking at was 5- to 7-year-old children, boys and girls, being raped, ok?” Mark: They sent a picture in the tub. Tim: Exactly. Being raped by adults. And he just kind of put his head down, shook it, and he said, “Now, that is weird..” I remember he said, ”That is just weird...”, and he walked out of the kitchen. He couldn’t handle it, and I don’t blame him. Our minds don’t even let us go there. And this is the problem. This is the problem that, frankly, is the obstacle to the solution. And the problem is we don’t want to see, we don’t want to believe it. I remember in the very beginning, in the early 2000s, when we were taking cases, child porn cases, to the judges, federal judges and state judges on pornography cases, on child pornography cases. And they were sentencing them to the most minimal sentences. Like this one guy had this collection that was unbelievable, categorized it by the names - he would name the kids in the videos, and create little files for them. It was unbelievable. He had hundreds of thousands of videos, images and everything else. And when the judge sentenced him, he sentenced him to four or five months in jail, but weekends only.            Mark: What?! Tim: And, I thought, “What is going on?!” The prosecutor I was working with, she said, “You know, the problem, Tim, is they don’t get it.The judges don’t get it!” They don’t get it. And we asked the judges if we could please show..during the sentencing they brought me in, and said, “Agent Ballard wants to show you the images.” He said, “I don’t want to see that junk! I don’t want to see that junk.” He’s embarrassed to even look at it. The human side of him doesn't want to even watch him looking at it, so he says, “I don’t need to see, I don’t need to see it!” So, we didn’t show it to him, and then that sentence came out. I guarantee you, I guarantee you that he doesn’t want to accept it. You know, the reports indicated that the kids were as young as five or four years old. His brain - my theory - wouldn’t let him grasp it, wouldn’t let him grasp it. And so he just gave him this super light sentence. But if I would have just opened that laptop, and say, “You have to watch this, you need to see this.” Now, I’m not advocating for showing child porn to people.    Mark: Exactly. Tim: At all! At all! Mark: But, maybe we emphasize, highly illegal: if you download this, even for altruistic, I’m-going-to-expose-myself, but...   Tim: You will go to jail. Don’t do it! Don’t do it! Mark: Yes! Tim: But what I’m telling you is, be aware that it is there, and we have got to talk about it. It hurts...You mentioned that when you talk about this, and this is why people don’t want to talk about it, you hit the nail in the head: you lose part of your own innocence. Mark: Absolutely. Tim: And every time you talk about it, some more of your innocence, even as adults, it goes away. You have to sacrifice that, but you sacrifice it for the kids. Because if we don’t sacrifice a part of our innocence to know this is happening, they have no hope, because we are the adults, we are the ones who will...if anyone’s going to save them, it is going to be the adults, that have the power and the influence and the ability. But if we don’t know about it, we are not going to save them. But to know about it, you must sacrifice some of your innocence. And so that’s what we ask people to do: sacrifice some of your innocence, listen to this show, go to our website, learn about trafficking. It’s the fastest growing criminal enterprise on earth. Two million children, and more, are being sold for sex, over ten million children sold for labor. Add all the adults, we’re on a 30-40 million range. I mean, wake up! Help them out! But it does require a sacrifice of innocence.     Mark: So, back to the question at hand, did you actually have, have you had a sit-down, “Ok, let me talk to you about this, son”? Like, let me ask it this way: have your kids seen the documentary? Tim: Here’s my policy and my wife’s, I mean, every kid is an individual, right. Every kid you treat differently, because it is not a ‘one size fits all’ solution to raising kids. Mark: You have how many? Tim: I have six kids. Mark: That’s awesome! Tim: So, our kind of general policy, guideline on the documentary, which is ‘The Abolitionists’ documentary, which films my team going into different countries and helping the police infiltrate trafficking rings and so forth... Mark: Catching you soliciting pimps for underaged girls. Tim: Right. Mark: Asking “Hey, will she do this, will she do that?” Tim: Oh, yeah. Mark: Your kids have to hear you saying that. Tim: My kids are hearing that, yeah. So, what we’ve decided is, generally speaking, if this particular video or this particular documentary includes children, who are being sold, who are, say, 12 years old, then I’m going to let my 12-year-old watch it. And that is because I think it’s important for him to see what he has and what someone else doesn’t have. “Someone your age is being trafficked. You get to play football; they are being sold for sex.” And, I think it’s important for kids to recognize what they have, and then it instills in them a sense of responsibility: “How can I help that kid, who doesn’t get to play football? What can I do?” And it makes them aware of the world and aware of what’s happening. So, that is kind of how we deal with it. And then again I let them watch it, I don’t rehash it with them, I don’t bring it up too much, at least graphically.           Mark: Yeah. Tim: I let their mind stop them where it needs to stop. Mark: Smart. I like that principle that you said with adults, with kids, with everyone - they will go to a point that they are ready to go to.   Tim: Right. But here’s the point that I was making too - once you are an adult and you have real influence to help, it changes a bit in my mind, right.     Mark: Especially if you are a judge. Tim: Especially if you are a judge. I don’t want it to stop where your mind wants it to stop. And this is our job at Slave Stealer podcast and other places, other people’s responsibility, who are in the know-how, who have seen it, you’ve got to say “No!” No, I’m not going to let you stop. I am not going to let you shake your head and walk out of the kitchen. I’m going to make you stay until your mind grasps this enough to where you are going to act. And that’s the problem, is people hit that point where their brain wants them to stop, and they shake their head and walk away. We can’t have that. If we do that, these kids will not be liberated.        Mark: If that happens in 1860, you have still got millions of slaves in the South. Tim: Absolutely! Mark: Because we have talked about it. Tim: Absolutely. That’s why, because people shook their head and walked out of the kitchen. Mark: Yeah. You have got to show it to them. There are so many questions - I’m trying to think of a logical order here. You talked about it with your father-in-law, and we are not talking about 17 ½-year-old girls.    Tim: Right. Mark: We are talking about kids that are groomed, And, maybe.. let’s define the term. We kind of need to have like a trafficking glossary on our site. But grooming, and, maybe in the case of Lady, that we talked about - that’s when you explained it to me, you know, when I was going to go be a scoutmaster. I had to go through the whole ‘how to identify a perv’, right, and one of the terms they used was grooming. And they’re like, “Well, when you prepare a child for…” whatever. But you really broke it down for me in the case of this 11-year old virgin, who was sold to you in Columbia. I was there watching, she was a virgin. Tim: Right Mark: However, she knew exactly what was going to go down. Tim: Right.. Mark: What do they do to groom a child and how were you made aware of it? Like, give me how you came to that knowledge. Because this episode is kind of about you and the topic. Tim: So I came to the knowledge the only way I think anyone can, and that is experiencing it firsthand. For me, that was going undercover, pretending to be someone, who is interested in that black market, and getting into that market, becoming a player in that market. So, in the case of this little girl, who they were calling ‘Lady’ - and that surely wasn’t her real name, it was a name the traffickers gave her - in that case, we were pretending to be solicitors of child sex. We were working with the Colombian police pretending to be Americans, who travel to Colombia to engage in sex with children. And what had happened in this case, because we were working in that capacity and because we presented ourselves as wealthy Americans, I hinted to the trafficker that we would be interested in sharing profits and investing in his trafficking business. The reason we did that was because that all of a sudden, if they believe us, that pushes them to open their books and open their business and explain the business plan. And that’s how we learn how they do this. I would say things like, ”Look, I could probably get you a million dollar investment in this, but I need to know how it works; I need to know how you get these kids; I want to know you maintain the kids, how you groom and prepare them,” and so on and so forth. And the guy was more than happy to tell me what he does. Mark: I have a photograph of your hands around this little pattern napkin. It was like a napkin business plan...     Tim: Sure, yeah. Mark: Of a sex hotel for kids. Tim: That’s right. Mark: I have a picture of that. I’ll post it, because it is so disturbing when you realize what those numbers represent, volume and quantity and velocity of children and child rape.    Tim: Yeah, it was the dirtiest, most evil business plan that anyone could ever dream up. Mark: Yeah. Tim: ..on that napkin. That’s right. Mark: I’ll post that. Tim: And that was like our third or fourth discussion about how their business operations work. So, what they explained to me was, “Look, it’s easy to get the kids. You find poor families.” You don’t want to do a hard kidnapping, you know like the movie ‘Taken’. Does that happen? Yes. Is that the likely scenario? No. Why? Because you kidnap a kid, a hard kidnapping - meaning go into their house, like what happened with Elizabeth Smart, go into the house, pull them out. Well, you are going to kick up a lot of dust around you. Why do that if you are a trafficker if you can instead make it a peaceful kidnapping. Not peaceful for the child, right.          Mark: Yeah. Tim: Hell for the child, peaceful for the trafficker. In other words, they can kind of do this without fearing much consequence. So, what they do is they go to poor families, and these guys had actually hired or were working with, contracting with, a beauty queen in Cartagena. She had won a pageant, a beauty pageant. So, kind of people knew who she was; she had been on the news, she showed up in music videos, and so people knew who she was. So, they walk into the house with this beauty queen, and they say, “Look, look at this beautiful woman. She doesn’t have a worry in the world. She is paid, she is wealthy, she is beautiful, she is famous.” And then they point to the 9-year old daughter, and say, “we focus” - they told us “9 years old is where we start”. And they say to the mother and father: “Your 9-year-old daughter is just as beautiful as this girl; we just got to train her. We can train her, and she can become a model and an actress.” And they fill the parents with all sorts of dreams that they never believed were possible for their child. And certainly this is legitimate, because they are looking at the star, who is in their living room saying, “I can do this for you. And we’re going to give you a scholarship. You can come to our school and learn how to be a model for free.” At that point, they bring them into the modeling school, and they teach them some things. And when they get comfortable, they say, “Now you are going to watch this video.” And the video will be pornography. “This is part of being an actress, it’s part of…you need to understand this world.” And when kids are at that age - nine, ten, eleven - their minds are still developing and forming, and if someone tells you this is right, this is right, this is right, eventually your mind develops as a 9- or 10-year old into believing, “Ok, this is right, this is right.” And so they start seeing that. We had evidence that some of them were being drugged, you know, threatened: “If you go back and tell your parents that we are doing these things, you are going to be in big trouble.” And again, kids are very… Elizabeth Smart, when we get her on the show, she can talk about this, where a police officer walked up to her, while she was in captivity, and said “Are you Elizabeth Smart?”. I mean that, it would have been over! Mark: Yeah. Tim: And she said, “I am not. I am not Elizabeth Smart.” Because she was scared to death because they, her captors, had told her, “If you ever reveal who you are, we will kill your sister, and your family.” And as Elizabeth tells it, everything they had told her they are going to do to her, they did it. They told her they are going to rape her, and they did it. They told her they are doing this particular thing - sex acts - and they did it. They told her they’d chain her up, and they did it. So, when they told her that they are going to kill her parents if she reveals who she is, why would a 14-year-old not believe that they are going to do it?                        Mark: They’ve got all power. Tim: All power. And she has received criticism for that, you know, like, “Why didn’t you run away? Did you want to be there?”, you know... People just can’t comprehend how the mind of a child works. And that’s what these kids go through - they are scared into not revealing what is really going on. So, they groom them, and they said it, it will be a year and a half, or more, while they are grooming them, all under the hospices of this modeling school. And of course they are being trained to be models as well, and then eventually they say, “Ok, so this is your test. You are going to this party on this island, and these men are going to come from America, and you are going to do the things that you have seen being done in the pornography videos, and do whatever they want.” In a nutshell, that is how it works. I mean, that is how it works, that is the reality. Mark: And variations of. Tim: And variations of that.   Mark: So, they can do everything up until the point that she is not a virgin to claim... Tim: Right. Mark: “Hey, it is a virgin.” Tim: And they can, and they want to do this because their virgins are premium, right.  Already, a child, in most black markets, a child will go for about a double or more than double of what an adult prostitute will go for. But then, if that child is also a virgin, then it’s quadruple, or more of that price. So, it’s a premium to sell a virgin child. Mark: Wow...Give me, you’ve talked about it - like pulling people’s blinders off, and those moments where people are opened up, and the one with I think your father-in-law, who gets it now - that was pretty dramatic. What about..give me another one. You don’t have to name names, I just like hearing about people’s response. Are there any high profiles that you are allowed to share, that, maybe change the name, change the whatever? Somebody that you have shocked, that should have known?        Tim: Yeah. I was in the office, probably a year or two ago, of a governor of a certain state. We were explaining who we were and what we did, and he was absolutely shocked. And, kudos to him for being honest, saying, “Wait, wait, wait, what?! There is how many kids? There is how many kids being hurt and trafficked in the world? And what does that mean? They do what?!” He didn’t know, he didn’t know anything! And again, I’m not blaming him for not knowing. It is not something you go seek out, right? It is not something that your advisors seek out to tell you. It is hard to talk about. And I don’t know that you know the answer - why aren’t we talking about it more? Why, why, why, why? I really believe because it is that.. it is so dark a topic. It is not even...you know, slavery in the nineteenth century - it was politically divisive. It was a political nightmare to get involved: go back to the Lincoln-Douglas debates and everything. I mean, it was a divisive and a political issue. This is not even a political issue. There is nobody standing on the side of the pedophiles - well there are some: NAMBLA, the North American Man/Boy Love Association, which deserves its own show someday.         Mark: Do they have a logo? Tim: Well, there are all sorts of different..Look them up: nambla.org. Mark: Is that weird? Tim: You might have cops knocking on your door tonight. Mark: That is what I am saying. Tim: No, no, no, you won’t. You can look them up. Mark: What are the pop-up ads I am getting after that? Tim: Yeah, be careful when you go: nambla.org. I mean, it is a legitimate organization, legitimate in terms of legality, right. And, they are just a group that is pushing for a.. Mark: Oh hell! Tim: What did you find? You got...I told you to be careful when you go to that... Mark: No, it is not...and luckily, I’ve retained that innocence: I have never seen child pornography. It is a cartoon on the front their page - it is an adult asking a little boy, “What can I do to make you happy?” And the little boy says, “I like hugs.” Tim: Boom! And that’s their whole message. If you go into...When I was an agent, I would go all into it and learn about it, what they believe in. And they actually talk about how kids, psychologically and emotionally, need sexual healing and sexual exposure from adults. And why not adults, who know what they are doing? And so they make it sound as though the kid wants to be hugged, the kid wants to be touched. Why is it so bad? And they bring up science, where they show that children are sexual beings based on this story and that. Of course, they are human beings! Their sexuality is attached to everybody; we are born with it. But that doesn’t mean you are ready to bring it out and force it on a child, because that’s what you would be really doing, forcing it on a child. Their brains aren’t developed to the point where they can make those kind of decisions, or comprehend the kind of consequences of that activity. I mean it destroys...I’ve seen kids destroyed over this. And here they are saying they just want to hug, “Just hug me, that is all I want.”      Mark: Oh, here’s the other one, right. They are just headlines and we’re not going to go off on NAMBLA forever, because it does deserve its own show. Maybe we bring one of these idiots in.   Tim: Yeah, bring them in, let them take it. Mark: Or, we bring in some of the people they are attacking. And I thought of this this morning, ok. I’ll read a couple headlines: ‘When Labor Loved Liberty (And Before They Changed Their Minds)’ about the labor unions formally supporting..whatever. ‘Remembering Michael Jackson’, and they’ve got the old black version of Michael, ‘Remembering a Lover of Boys’, ‘Michael Jackson’s Dangerous Liaisons’, ‘The Non-Wisdom of Crowds: Defender of Anonymous Outraged by our Lack of Passivity’. Now, this one’s interesting: ‘Hipster Vigilantism and the New Populist Attack on Free Speech’. That is what they are calling it: speech, right. And then, they say ‘Anonymous Decidedly Illiberal Campaign to Silence Us’. Dude, is Anonymous getting on these guys, because they would be an awesome ally.   Tim: I don’t know, but let’s check, let’s look into it - let’s absolutely look into it. But these guys have conventions; it’s a political movement to legalize this kind of behavior. Mark: They called Oprah a liar, by the way. Tim: And so... Mark: Saying she wasn’t, she wasn’t molested as a child. Ok, I’m off on NAMBLA. Tim: Ok. So, we’ll go back talking more about that, but the point is, that, except for these few total whackjobs, who think that this is a healthy thing for children, it is really just obviously serving their own selfish lust and pleasure and evil. Dark, dark souls...But, for the most part, this is not a political issue, right, it is not a political issue. Everyone will be on the side of solving this. So, what is the obstruction? It is simply, “I don’t want to know; I don’t want to see it.” It’s the ostrich, the ostrich effect, sticking our head in the sand: “I don’t want to see it, I don’t want to...I have kids, grandkids. I can’t think about it.” And that’s where we have to make the change, that’s where we have to convert people to look at it.    Mark: What are the more offensive things that people have said to you? Maybe on purpose or not on purpose. I don’t need the top three, because it’s hard to think in superlatives, but give me five offensive things people have said to Tim Ballard, unknowingly or knowingly.   Tim: Offensive, in terms of just this topic in general? Mark: Yeah, that you’re like, “I used to respect you three minutes ago, before that came out your mouth.” Tim:I think the one time I can remember where I got the most offended...and frankly, you actually just did it to me earlier today, accidentally. I wasn’t so mad. Mark: Oh, when I wondered if you would turn into a perv by looking at... Tim: Yeah, it was so...I felt really bad because... Mark: That wasn’t a personal attack, by the way. Tim: No, no no, it wasn’t. And I want to clear this up. I don’t have a whole lot of examples of people, who say things offensive in terms of why this should or shouldn’t be legal or illegal, right. I mean, I’ve had perpetrators during interrogations defended, you know. A guy named Ernst Luposchainsky, for example - you can look him up, we arrested him in Minnesota... And he was pretty, I mean he was offensive, but I mean, geez, he was just such a joke. You are looking at this guy and you are almost, almost...somewhere in between laughter and vomit. You know, you are just like: “Are you serious? You are saying this?” You know, but he would talk about like the benefits of child pornography and how it helps the poor kids. “These kids get paid, they get paid for their sexual services, and we are helping them, we are helping their families.” He would talk about the tiger and the meat analogy. I remember we talked about, and this is all during his interrogation, where he would say, “Look, you have got to feed the tiger meat. If you don’t feed the tiger meat, he will eventually attack human beings.” So, he is actually saying, “Children are being raped, that’s horrible! Now, a consensual sex with a child, that is a different story. But, children are being raped against their will, I’m against that. Oh, I’m so against that!” You know, he would say...       Mark: Just for the record, you were quoting him on the “consensual sex is a different story”? Tim: Yes. Mark: Ok, just making sure it wasn’t like... Tim: Yes, quoting. Mark: You, parenthetically saying “Hey, consensual sex...” Tim: I’m sure some out there would love to misquote me on that and accuse me. So, the tiger and the meat, right. “You have got to feed the tiger meat, you have got to feed the tiger meat, and then he will never rape the kids.” And the meat is child porngraphy. “Make it legal. Let them look at it, because then they will just look at it, and then they will get satisfied and the kids will be safe.” Mark: Oh, yeah, totally! Tim: Because it doesn’t, it certainly doesn’t fuel your evil passion by looking at it, right? Like for example, a man who watches pornography, he never watches pornography with an int to actually engage in sex with a woman. He just watches it for, you know, for the pleasure in itself. Yeah...baloney! Any dude, who watched porn will tell you, right, “I would like to translate this to my bedroom,” right. It is no different with child pornographers. They are looking at this, and they want to act out. So it is just the opposite - you are fueling the fire, not putting it out. But, I mean, that was offensive. And, by the way, that Ernst Lupochainsky case, we got to do a show sometime on that. That was the hardest case I have ever did. In the middle of that interview, ok, while he was telling me all this stuff, he would not break, he would not break, he would not break. So, what I had to do...because he believed that all men were closet pedophiles, he just believed that story... Mark: I love this story. Tim: He just believed that. It was his way to justify his own feelings, of course. But this puritanical society - that is what he called it - has stopped the natural flow of love between a man and young, little girls. But on this show, I have got to read...he had this postmortem message he put on all his child porn collection. We will prep and I will read his message.      Mark: Oh my gosh. Tim: It’s unbelievable. Unbelievable. But the point I am making here is, I had to go undercover - this is just a teaser - I had to go undercover... Mark: Don’t blow it, because I know the punchline, and it is unreal. Tim: Yeah..as myself. So, I pushed my buddy away, the other agent, who was interviewing the guy. I was still wired up undercover, you know, and I said, “Hey, listen man, listen Ernst, help me out. I mean you are right. Reading your stuff - it makes me trust you. I have got to look at this stuff all day long. What do you think that does to me? It makes me want that. But there is no one I can talk to. Can you talk to me? Can you help me?” Sure enough, his eyes just light up. He believed it! I couldn’t believe he bought into it. I was...I was...It is one thing when I am Brian Black, you know, or I’m some alias in an undercover operative.          Mark: That is a cute name. Did you make that one up? Tim: That was the name that I used to use, yeah...Brian Black. So, here I was, Tim Ballard, U.S. agent/pedophile. So it was a totally different thing. I was myself, and that went on for...and then you know, I reported it to my supervisors; they loved it. And that kept on for at least a month, until we could get all the information out of this guy we possibly could about his contacts and networks. And he opened up to me, thinking he was helping me enter into, you know, induct me into the beautiful world of pedophilia. So, someday we’ll do that story, because that is an amazing story. The guy is still in jail.     Mark: Good. Tim: So, that is kind of somewhat offensive, but the time I blew up...the sweetest lady on earth - she was, she was just...Lived down the street, sweet kind lady, and I was working in child porn cases, kind of mad - you know you’re just mad a lot, thinking about it. And she said to me, “So, how many agents, you know, end up…?” And again, the same thing you just said, but I didn’t blow up at you.    Mark: Good grief! I feel like such a schmuck, especially in context of the story you have just told me. Tim: Yeah, it was the first time... Mark: Because I know you are not susceptible to that. Tim: Right. And, I would honestly argue that unless you are predisposed and you enter the child crimes group so that you could access it, I think it is just the opposite. And, you know, she said, “So, how many end up pedophiles themselves, being exposed to this?” Mark: Legit question! Tim: Yeah...I mean it sounds like a legit question, unless when you are in it, you are like “Wait, whoa, whoa.” Yeah so, by the hundredth time I am watching a child scream in pain, by that time I am like, “I am digging this.” But, I went off, I went crazy. I said, “Do you think it is that?! Or maybe it is, ‘I can’t believe I have to watch this again! I can’t believe I have to subject myself again to this video, and my stomach is punched again and again and again.” It was so bothersome to me, because it is just the opposite of what she was saying. It is like, I have got to endure this. It is like saying this, here is a good analogy: someone who has been doing chemotherapy for a year, right, and every three months they got to go get another dose of chemo. It is like someone saying, “So, how many cancer patients become addicted to chemo? Even after the cancer is done, they still take chemo just because they are addicted to it?” Right?! That is analogous right there. Mark: Yeah... Tim: Ok? And, it is just like, “Wow, wow,” you know, it killed me. I get it, but it was just, it is...What they don’t understand is the potency of this. It is not! What they think is, she was probably still thinking 16-year-olds, 17-year-olds. I was like, are you kidding me?! It is not what we are talking about! If there is a 16-year old in a child porn video, we wouldn’t even prosecute that, unless you absolutely knew it was a 16-year-old, in like specific cases where, you know, uncles taking pictures or something. Mark:Yeah. Tim: But otherwise, you wouldn’t. You would be like “Eh...” If you can’t tell...The majority of the child porn cases we prosecuted: 5 years old, 7 years old, 10 years old, that range, right. I know, it’s just... it is just things the vast majority don’t have to see, and I don’t want them to see it. Mark: Yeah. Tim: I don’t want them to see it. But they need to know it is happening, so that they can be part of the solution. Mark: On that same thought of things that people unintentionally say that are offensive, how about this? And I have got this one before, even with my little bit of involvement: “Well, she looks like she wants it.” Tim: Oh, yeah...I get that quite a bit. In fact, right in our documentary, in “The Abolitionists”. Mark: Yeah! Tim: I have heard a couple of people say that. In an early screening that happened, and my wife who was in the room,  it was a very early screening, we brought some kind of influential people in to watch. Mark: I was there! Tim: Oh, right! You were there. That’s right! Mark: I was sitting by your wife. Tim: You were there. A sweet lady - I think you know her, I think you know who she is - totally innocent, you know, she just...she said, “Can’t you show like a little darker side to this, so that people know? Can’t you show us some kids who are not looking like they want to be here?” And, if you remember my wife, she’s like... Mark: Oh yeah. Tim: “Alright! This is tragic, what is happening to these kids! This isn’t a scripted film, this isn’t - we can’t make this up. This is real, and it is their hell. And just because you can’t see it, because you are not the spirit inside of that body,”... know, my wife just… bless her heart, she went crazy.   Mark: She is not outspoken. Tim: No. Mark: Right? For her to... Tim: For her to do that... it touched a nerve. Mark: Yeah.. Tim: And again, back to the misconceptions. Are you going to find cases of kids chained up and locked in closets? Absolutely, you are going to find that! The vast majority, the vast majority? No, that is not what it looks like. And in the documentary - most people get it, it is not usually a big problem - but in the documentary, I mean, you are watching the filmmakers put the ages of the kids - of course cover their identities - but they put their ages, their numbers like over their blurred faces. And so you are watching this 12-year old-girl, it says twelve, you know, and I remember that little girl, I remember that she actually had fear in her eyes. But if you weren’t looking straight into her eyes, she did walk into the party, and she knew what was going to happen to her.   Mark: And she was dressed like a 21-year-old prostitute. Maybe not her, but some of the others. Tim: Some of them were, that one wasn’t, but some of them absolutely... This little girl was wearing like long basketball shorts and a white t-shirt, and you will see that in the documentary. But others were, the 12-year-olds...    Mark: They are not picking their outfit here. Tim: Right, right. Mark: For the most part. Tim: And they are walking in and people say, “Looks like they want to do that! They want to do it! Look at, they... No one is forcing them to walk in.” And again back to Elizabeth Smart. When you will bring her on the show, we can talk to her about it, and she...If you thought Catherine, my wife, got passionate, wait until Elizabeth answers that question. And she says, because they bring it u, she had plenty of opportunities, in theory, to run. She did. She was in public areas, policeman came up to her, right, but what they don’t understand is trafficking, slavery, so much of slavery is mental. These traffickers enslave these kids mentally, emotionally, not just physically. In fact, they don’t want it; if they can get away with not enslaving them physically, all the better. Remember, they don’t want to kick up a lot of dust around them. So, if they can figure out how to enslave them mentally and emotionally, that is always the first choice, and they do it by the grooming process that we described earlier. They groom them, and then they control them. They control them! And this is why the rehab part is so important, because you have got to undo the damage, and that doesn’t happen overnight. It is a long process. I don’t know, I mean, I have talked to a lot of victims of trafficking, who are adults now and have families of their own, and they have told me, “You know, you don’t ever fully, fully heal.” I mean, there is always something there you have got to battle. And that is what happens, that is why when Elizabeth’s father runs to her, she still denies who she is for a second, and then she opens up. Because it is like a spell, and if you haven’t been through it - and I haven’t, so I can’t fully comprehend it, but I’ve been around it enough to know that you can’t comprehend it, unless it has happened to you. And a child’s mind is not like an adult’s mind. Children don’t think like adults think. Their minds are at different levels of development, they don’t have a lot of experience, they don’t understand the consequences like adults can and do. And so, it is not so difficult for the traffickers to play those mind games, warp them, brainwash them, and make them slaves.      Mark: Well, I think that...we’ll get into, I think, in shows down the road, we’ll have Throwback Thursdays. We’ll go revisit missions and do things, but I feel like that can give our listeners a little bit of insight into your passion, your feeling for what it is you do and how it affects your life. It is not a job you leave at the door, as you are hearing. And so if you have any parting shots along the lines of ‘Here’s Tim’, ‘Get to know Tim’, let’s go and leave our listeners with that.    Tim: You know I...I’d say this that I understand completely. We are talking about awareness, we are talking about people’s ability to see this problem. And I can’t sit back and judge and say, “Come on, open your eyes, open your eyes!” I was the worst of everybody; it was right before me and I was denying. I was denying it. I didn’t want to do it. It took me a long time to say yes, and even after I said yes, I was very apprehensive about how far I would go in this. So, I get it. It is a hard barrier to get around. And even when it is in front of you almost...you know, and then, when it is not in front you, of course, it is sometimes near impossible to get around. So, I get it, I get it, but I also understand that when you see it, when you allow yourself to open up to it, you become converted. And part of that I think is from God. I think God, more than anybody, wants these children liberated. I think he weeps more than anybody for these kids. So, if he can find an adult, who is willing to open their mind enough and not walk out of the room, he will help convert you, and put that passion into you, fill you with his spirit, and call you. He will call anybody, if you are going to help save his kids. And I just want people to go through the same conversion that I went through. I am kind of a missionary for trafficking, right. I mean, I am trying to evangelize here and get people converted to the cause, because that is who I am. I have been converted to the cause. And it hurt!        Mark: The cause of freedom. Tim: The cause of freedom. But it hurts to be converted, because you must leave something at the door, and that is your innocence. You must leave it. And who wants to give that up? But you must do that. You must make that sacrifice. And it hurts, and you cry, and you have moments that are embarrassing - and we’ll get into some of these. There were times, when I was like a child in my wife’s arms weeping and she is holding me, and I am just shaking. Still happens to me... I used to not talk about it, but I just talk about it now. It hurts, it hurts to get into this cause, because the cause of freedom requires you to fight evil, and evil hurts. But what we want to do here on this show is make converts, because I know this: converts to this cause equals liberty to children. And what greater thing can we do than bring liberty to children?   Mark: Thank you. And, because your last words were so good, I’ll sign off for you from OUR headquarters. Good night!