Transcript
Speaker 1: My hours are limited and so I also have to be patient with my people. I got to know when to push them and know when to give them grace, and I know that, if I can help 10 people become millionaires, that making 10 million was going to be easy for me. And now, as you start thinking about it, if you want to be worth a billion, whatever that is, then all you got to do is help enough people become millionaires.
Speaker 2: Welcome to the Action Academy podcast. Stand back while I celebrate freedom, the show where we help you achieve financial independence with the mindsets, methods and actionable steps from guests who've already earned their freedom. The flags of freedom fly. Choose to do what you want. What you want With who you want, with who you want, when you want, when you want, with another episode today. Now, here's your host, brian Lubin.
Speaker 3: What's up, ladies and gentlemen, welcome back to another episode of the Action Academy podcast, the show that helps you get rich, happy, successful and free with a capital F in your life in business. Today's episode, ladies and gentlemen, is one of my favorite that I've done on the podcast, and it's pretty nontraditional and wacky in the way that it came to be. And to give you context on how this is, i have to reference another previous show guest and a buddy of mine, j Scott. So J, like the guest today, is a large thought leader in the real estate entrepreneurship space And so he's on a lot of podcasts and he runs a podcast of his own. He's a published author And so he tends to run into the same questions over and over and over again.
Speaker 3: On podcasts It's the same questioning sequence to where, when you type his name on a podcast player, you're going to get the same episode over and over and over again. So kind of the same with today's guest. And so I was reading a Facebook post that Jay posted, and he says that he hates being on podcasts to ask about his back story and all this same sequential order. He gets really bored doing these episodes, and so today I did all this research and all this information on the show guest And I was really prepared to take him down this rabbit hole in his backstory and how he came up from nothing and how he made something of himself. And I realized that's every single podcast that he's on And I want to give you guys something unique. And so, right before the interview started, i completely scrapped all the questions I had and came up with completely new ones on the spot. So the interview that you guys get today is a very wide, arcane conversation on the philosophies of wealth building, on entrepreneurship, on business ownership, of contribution, of the meaning of life, of happiness all across the board. And since we didn't cover his backstory much, i'll give it to you guys here so you can see how effin impressive today's show guest is, who is none other than Mr Ben Kinney. Ben is worth well over a hundred million dollars, bringing in an excess 30 million dollars to take home income each and every year. He has so many companies that he's running that I have no idea how to start, so I'll just read his official bio and give him my best shot.
Speaker 3: Ben Kinney is a nationally known entrepreneur, speaker, trainer, bestselling author, innovator, mega real estate agent, but he prefers the title. A nice guy from humble beginnings in a 300 square foot shack to a flourishing business empire. Ben's story proves that systems, integrity, relationships and being a lifelong student can yield incredible results. Ben owns and operates the Ben Kinney training organization that has helped millions of people learn about entrepreneurship and business Multiple real estate franchises across three countries. So Ben is essentially at the top of the Keller Williams work chart. He rubs elbows with Gary Keller himself, up there with Jay Papa's on, who is a mutual friend of ours. He's also the one responsible for taking Keller Williams international. He runs all of those offices. Ben is the co-founder of a holding company called Place, a real estate technology and business platform with 250 locations throughout North America. His other business ventures include coaching, mortgage title escrow in several software companies, three of his companies recently ranked in the Inc 5000 list of the fastest growing private companies in America. In the last few years he has personally trained over 150,000 business owners via conferences, classes and webinars.
Speaker 3: That, my friends, is Ben Kinney. Did Ben come for money? Did he come for privilege? No, he came from a 300 square foot shack and abusive family situation. He was a cable guy, then a real estate agent, then a real estate brokerage owner, and then that just yielded more and more and more of his snowball of success here.
Speaker 3: So I'd invite all of you to listen to the episode all the way through. Ben is an absolute wealth of knowledge in having 45 to 50 minutes with a guy like this is very few and far between. So I'm very honored and privileged to be able to provide this to all of you guys at scale for 100 percent free. So, in closing, remember information is not the answer. Implementation is. So if you want to be around other rock stars that are trying to leave their nine to five through real estate and business acquisition, apply to be a member of the Action Academy community in the show description. And lastly, this podcast is free on paper but not free in practice. Remember you have to pay the fee, which is share this episode with one or two people that you think would really get value from it. And with that, ladies and gentlemen, mr Ben Kinney. Ben Kinney, long time coming, buddy, how are you.
Speaker 3: I'm great Thanks for having me on today. I'm really excited to have you on. You and I were just speaking and back. I think it was maybe when you launched your show Win Make, give and Gear Brand. there it was maybe what? 2019, 2018? It was the end of 2019. And the 2019, i remember I was driving on my car, i was in my corporate job and I heard your voice And I heard your story and you started sharing your underlying principles and philosophies of wealth building. That was my first transition from going from the sales podcast to more of the entrepreneurial podcast. So, before we jump into you and what you're doing today, first specific question you just said that you're redoing the wealth series for Win Make Give your podcast, which people should check out. What are some differences between you today and recording that segment when late 2019? Have there been any realizations or changes in your philosophies since the original airing?
Speaker 1: I put on a live event probably 2016, something like that And we called it Win Make Give and we were doing it once a year and all the proceeds from that event we gave to charity. That particular year we replaced a freezer unit for our local food bank And the next year we built a house for dads that are currently homeless with children. But COVID came and we had scheduled this event to do the next Win Make Give and I just had a feeling that everything was going to get shut down. So in February of 2020, i pulled the plug on my event, which was going to happen in April, and I didn't want to leave everybody hanging and not have that lessons that I had taught in Win Make Give about wealth building and leadership and investing in taxes and so on. So I said I should probably build something for people to do when they're locked in home right at the start of COVID, when everybody was afraid to leave the home.
Speaker 1: So I did. We decided to make a course about money and that's what the wealth series was, and it's transitioned over the years of the same philosophies. But I think we get better at explaining things to different audiences so that they can digest it and understand it. And we even had, i don't know, 50 or 60 kids take the wealth series this time and they won prizes and then another I don't know 50 or 75,000 people went through the complete wealth this second time that we just did.
Speaker 3: Yeah, casual man 50, 75,000 people.
Speaker 1: It kind of speaks to the scalability of giving back We had 160,000 go through the first section of it the first month and then people lose commitment to go through and do the homework and actually finish it about half finished.
Speaker 3: That's still pretty impressive, honestly, when you think about that in terms of I like that. You mentioned that you had children go through it, because a lot of people think that they're really smart and they can explain things really well, but can you explain it to a 12 year old child? And if you can't, you don't truly understand it. So that was interesting. That actually brings up a really interesting point which I think some people have this mental hang up with how much money they deserve, which you came from very humble beginnings and built a large business enterprise for yourself, but that's a really cool demonstration on how making more income and growing larger businesses can impact at larger scales. It differs between donating $10 to being able to replace an entire freezer unit at the food kitchen. Can you talk about your experience with scalability and wealth and giving back?
Speaker 1: Sure, i think that a lot of people say things like this. They say, man, once I get this thing figured out, i'm going to take a month off with my family, i'm going to go travel or at some point I'm going to create a nonprofit. Once I get all these things done, i'm going to do this nonprofit. Or once I save this, then I'm going to quit my job. Everybody gives these end goals and they never start doing any of it. When I talk to somebody and they say I want to get to the point where I can take a month off, i want to take a long weekend. Once you take a long weekend, why don't you take a long weekend every quarter? Once you're doing that, why don't you take a week? Once you realize that you can take a week and the world doesn't fall apart, then you can start taking a month.
Speaker 1: Same thing with giving. You talk to somebody and say, hey, i want to give a million dollars away, i said what did you give away last year? I'm not much, i didn't do anything. Start with a dollar, start with a thousand, start with 10,000. Like just the goal you've had my friend Jay Papazone, on your podcast to knock over a domino twice the size of the domino that you're doing right now. You just got to start. You can always knock over a bigger domino, but you got to start with the first domino that's in front of you.
Speaker 3: Yeah, how do you get an elephant? One bite at a time. We all come to this thing called binary thinking. Over and over again, each and every level, each and every stage, it smacks you in the face again. Then you say, oh okay, i'm either going to be a multimillionaire or a complete failure. I'm going to be the best that ever or a terrible husband. I'm either going to give away all my money or none of my money. The way that I've combated that is doing the percentage-based allocations.
Speaker 1: People underestimate how small contributions to things over time add up. You worked out 10 minutes a day every day. At the end of the year That's I don't know what that is, it's a lot. It's 50 hours. Then you'd be in better shape. Whatever that math is right, the secret to being a millionaire over a long period of time is a very nominal amount of money saved. It's almost insignificant, but we don't want to do the little things because we get so impatient. If I've learned anything over those 20 years of building my career, it's patience When to be patient and when to be impatient.
Speaker 3: The best implementation for that that I've seen is to be patient with the results in patient with the action. What's been your experience with patience? That's the biggest thing that I'm working on.
Speaker 1: Oh, i think that's really well said. I think it shows up for me in a few other ways. I believe that in my life, it's about success through people. My hours are limited. I also have to be patient with my people. I got to know when to push them and know when to give them grace. I know that if I can help 10 people become millionaires, that making 10 million was going to be easy for me. As you start thinking about it, if you want to be worth a billion, whatever that is, then all you got to do is help enough people become millionaires.
Speaker 1: You got to be patient and know when to push. Do you want to hit the billion? It's actually an irrelevant number to me. In fact, there's a number that we can all spend. Once you've spent it, you can't really spend anymore For me, funny enough, it was about a half million Once I was netting free and clear. A half million dollars I can have any car I want and buy any home I want and take whatever vacation and buy the kind of things and do the stuff that I want to do. Everything past that was just fun, playing monopoly and giving away and helping people. It wasn't a billion that gave me safety and security. The number is actually irrelevant.
Speaker 3: I think it's funny and it's important to highlight that more and more because a lot of people say they want private jet money, they want the billion, they want the 100 million. They don't realize the marginal utility of money actually decreases over time, just like you said, because an extra probably 5 million in your account doesn't really make a marginal impact on your life or happiness. Is that correct?
Speaker 1: Yeah, I want. I'll tell you what drove me to make more than a half a million was I looked up and said if that gives me peace, how much money would I have to make so that all my favorite people also made that? As you start thinking about here's a comment people make to me all the time then I don't want to have a big business like yours. I'm happy with my small business. That's awesome. No judgment. You're judging me right now, but no judgment to you. Let me ask you a question Do you have any employees?
Speaker 1: And they say, yeah, i have a couple of employees. I said, great, then you're being selfish. And they said what do you mean? I said you're happy with your small business basically means that you're happy with your employees making the income they're making and having the life that they have. Now, if you really care about your employees and you're going to let your business be as big as it has to be, so that your employees are 100% taken care of and they have whatever life they want to live, and if that's big, then that's what you need to do, and if not, just get used to employees coming and going out of your life all the time.
Speaker 3: That's interesting. So my coach said the same thing to me, where he said you need to go from me to we And that's what you're talking about, where it's talking about the team and giving back to other people. So I was like, okay, i left corporate America, i'll help a million other people leave corporate America, and this is what you talk about all the time with your businesses. How has that changed for you And how do you keep adding to your drive? Is it just continuing to pour into your team and promote them and make sure that they're living the lives that they want to live, or how have you seen this as you've gone about your journey?
Speaker 1: We talked about Jay Papasen already. But he wrote a book where he said first you need to think a million, then you can make a million, and then you can net a million. And one day Jay and I were hanging out somewhere fishing or doing something and I said we should really add to that equation that you guys teach net or give a million, because how much would you have to make so that you could truly give away that amount of money every single year? and it just raises the bar. But for me, as money has diminished my personal return on how happy it makes me, it's been about a few things And I took the time to make a list of things that give me joy. And if those things give me joy and make money, that's actually a win for me.
Speaker 1: But I don't want to spend my time doing things that don't give me joy. And for me, things that give me joy are I love negotiating, i love doing deals. I'm a deal junkie. Two, i love recruiting. I freely that. Every opportunity that I meet somebody I'm thinking how can I be in business with this person at some point doing something? And I just have that open mind, that open heart that everybody is recruitable into my world if I can make my world big enough, and so I love it.
Speaker 1: And then three I love teaching and training and coaching, but only people that do something with the things I share. There's nothing worse than a room full of people that enjoy the entertainment but do nothing with the lesson. That's horrible for me. And lastly, i really love creating things like having a vision in my mind of something that I want to build And it could be remodel in a house, or it could be a class I want to write, or it could be building a building, or it could be building a piece of software or starting a new company. I love this idea that I can have this idea, do something about it and then step back and look and say, wow, like there's something there.
Speaker 1: I love creating and building things And if I spend my time in those four areas, it moves the business forward and I enjoy it and I don't feel burnout. Which brings me to a side comment. Everybody always calls and they say I'm exhausted or I'm burned out and I need a vacation, and that's actually not true. Let me ask you a question, brian Have you ever worked really long day, like 16 hours where you kicked ass and everything went great and you came home and you still had a lot of energy.
Speaker 3: Most days That's like my normal day. Okay, great.
Speaker 1: Now I've also worked four-hour days where I got my butt kicked, where I didn't get anything accomplished and I got home when I was exhausted. So is it really the hours that we spend to make us exhausted or is it this feeling? are we winning or losing? Because I can work eight hours or 12 hours or 16 hours and if I'm winning and having a good time, i'm energized and jacked up when I get home. Or I can spend four or eight hours, get home and feel like I accomplished nothing, it was a big waste, and I'm exhausted and burned out. So all my friends just say gosh, i am exhausted. I normally look at them and say, no, you're just not winning, and if you were winning, you'd have energy. You'll find a way tomorrow to win, in whatever small way you can, because if you win tomorrow, you're going to have energy for the next day.
Speaker 3: Why don't people take the time to clearly define what winning looks like?
Speaker 1: That's a good question. They live in the chaos, they exist in the chaos and the emails and the text messages. They're trying to make everybody happy in their world and they haven't understood that, actually, the most productive and successful people let somebody down every day And every single day. There's people I let down. There's texts I don't get back to, or emails that I miss, or social messages or whatever that you don't get to, or somebody that wanted time and I didn't have time because my priorities were bigger, and what I found is I just have to be okay with that. I have to be okay with being committed to the priority of winning tomorrow, knowing that some other priorities or some other people are not going to get done or they're not going to get what they hopefully wanted from me.
Speaker 3: Such an important point because I feel, when people are starting their journey and once again I can only speak from the perspective that I speak from because I stand on the shoulders of my giants, just like you had Jay and Gary to mentor you along your journey. I've had the privilege of having a lot of guys like that and be buddies with Jay as well to where these guys are in my corner and they're helping me like they helped you. People think, when they start the entrepreneurial journey, that you add and you add on top of and on top of and on top of, but the reality is it's more a game of subtraction rather than addition. There's a limited amount of time and there's a limited amount of Ben Kenney to go around, so then it's a different game that you're playing instead of. I'm going to do this podcast than that, than this as well, and so it's all just a game of prioritizing who to say no to. So no is the more powerful lever to pull than yes.
Speaker 1: It's the undisciplined pursuit of more. Gary Keller, in his book The One Thing said every yes must be validated by a thousand no's. and Steve Jobs when he went back into the company to save Apple, he said innovation is saying no to a thousand things. So you take two billionaires that are really successful and built really amazing businesses and you realize the secret of their success is saying no, not saying yes, and you have to bring that into your own world. So what can I say no to tomorrow? so that I can make time for the things that matter? or, in so many ways, for the people that matter, or for the health that matters, or for whatever that you need to move your life forward?
Speaker 3: I love that and I'd help coach a lot of people out of corporate America right now in my community right now. And one of the things that we start with is people. The default right now is to focus on the vehicle, right, the money making vehicle. Do you want to do real estate? Do you want to buy businesses? Like, what do you want to do? And nobody focuses on the end destination. So the first thing we do is I'm like, okay, what the hell do you want, like in three years? wave of magic wand, what are you working towards? So I'll pose that question to you What are you working?
Speaker 3: I guess this would be a good time to introduce you to the people and say where you're at right now. And then we'll say because, hey, man, i could have started out this podcast and just been like tell me about your backstory, ben. But shit, dude, you've been on hundreds of podcasts like that and I'm not going to be one of the forgettable ones. So I guess we'll segue that and introduce yourself to where you are today. And then, what's your vision for the next three years?
Speaker 1: I would say my primary business today is I'm the co-founder of a company called Place and we are a Goldman Sachs backed company. We sold 8% of our company for 100 million to Goldman last year, but we're a platform for real estate professionals where they can get everything they need for their home or everything they need for their business all in one place. And then our vision is to also provide everything the consumer needs for their home all in one place, simply through technology, but bundle the services that we need for our home to make home ownership easier, and we're doing that through this company that we run, called Place. Place has about 600 W2 employees and a few thousand 1099 contractors and we'll do 375 400 million in revenue this year. That's my primary business Now.
Speaker 1: I own real estate brokerages and coaching and training businesses and a lot of real estate, a lot of doors and a lot of individual commercial and residential and sort of things, and I can consider that my investment strategy in case everything I'm working on doesn't go the way I wanted. But my core business is a company called Place.
Speaker 3: Over and over, i keep seeing this recurring theme when it comes to different levels of wealth building. I feel like the seven figure guy is a really good investor to where they are, maybe great value add, and I feel that to get up to the eight figure level, nine figure level, it's more like you said, where your ways of winning are recruiting and hiring and training. Was that something that you always had a proclivity for or is this something that was learned when you saw the impact of it?
Speaker 1: I think I learned pretty early in my career that I was going to be limited by the amount of hours in the day and if I wanted to really unlock the potential of my models and systems, that it was going to be through teaching other people to do what I've done in a way that's worked for me.
Speaker 1: I think that was an early lesson, but I think about this strategy of getting to this, adding some zeros to your life, or however you want to call it in two ways One, you got to build businesses that are worth something, that create free cash flow that you could use to truly build wealth, and then you got to take that free cash flow and you got to invest it in assets that minimize your taxable income and create residual income and long term equity. I think people sometimes they get caught up on building a business that doesn't actually cash flow and then it goes away one day because they thought they could sell it but it's actually worth nothing. Or they get caught up on buying a certain number of doors not actually having a certain amount of equity or a certain amount of cash flow. I want to find a balance where it's a tax efficient way to build long term wealth For me, my employees and my friends.
Speaker 3: I like that you led with the cash flow and then pouring it into the real estate for the passive residual income. I feel people start with such a focus on passive income that they don't actually work on building a business with active cash flow. and now active cash flow is almost the pariah, where no longer sexy it's how much passive income do you have? but then what happens on the flip side of everything you've ever wanted, when you're already financially free air quotes and you can do anything you want because you have enough passive income coming in. So what do you think about the relationships between active and passive income?
Speaker 1: because now we're 20 years deep into four hour work week and everyone's financially free now I remember meeting with one of my bankers once and I was felt proud about my net worth and my balance sheet and all that She said Ben, here's the problem. You've done good in your life but you're not very financeable. I want her to start working into buying larger apartment buildings or bigger projects or buying bigger businesses. You just don't have enough free income. That free income is what we are going to secure to make sure that we know that you can pay this debt back.
Speaker 1: I looked up and I thought, gosh, there's a way to get to this level. but to get to a bigger level, you have to think differently. That thing differently is you've got to have enough cash flow and enough assets that can be secured so that you can do bigger and bigger deals. I went on a little bit of a journey to say how do I become more financeable? I wanted to buy bigger projects. They have better tax benefits and better cash flow and there's less competition in those places. That's what I set off to do was to become more financeable.
Speaker 3: What were some of the main levers that you pulled to start When you start tracking your net worth.
Speaker 1: It's exciting to see that grow up and it gets bigger and bigger. I think that that has to be in proportional to two other things. It doesn't have to be equal, but proportional. Think of three buckets. The first bucket is your net worth. What's the value of your assets after you pay off all your liabilities? The next bucket is how much free cash do you have? As your net worth grows and the number of assets that you have grow, then you need a lot more cash because the world can fall apart and you need to cover that. The third bucket is available cash flow income coming in. If you can balance building all three of those at the same time, then it is like a snowball rolling down the hill. You're going to wake up and you're going to have more money and more opportunity than you've ever dreamed that you could do.
Speaker 1: If you only play with one of those three levers, you're going to have a problem. Let's take one, for instance. If you just build the cash flow lever, then you don't have any ways to offset your taxable income. You're going to give 40% of your net worth away every year in taxes because you weren't investing your cash in depreciable assets or other sort of tax vehicles that help you keep a majority of your income. If you just build up cash, then you're getting beat by inflation. You don't have really an asset that has the ability to compound and grow. It's not working for you. If you just focus on your net worth, you're going to wake up and one shift to the economy or one pandemic or one zombie apocalypse or whatever it is, and you're going to lose everything. I don't want to play the rich dad, poor dad roller coaster that so many of my friends have done, because they didn't proportionally build those three buckets.
Speaker 3: It's almost like a stool with three legs right, where each one holds it up. I love that. I haven't really heard it positioned like that before.
Speaker 1: It became a little easy for me because I put pressure on. When I my very first duplex I bought, my mortgage payment was $1,210. So I wanted four months reserves in that separate bank account for that duplex. So I put 4,800 there And as I got a business, i wanted four months reserves in that business And my personal account. I wanted four months reserves. And in every property and every business I bought I started keeping four months reserves and it started building up the amount of cash that I have. And people look and say, gosh, ben has a lot of cash. I actually have four months reserves and everything that I own. Now all my extra cash I put it in the stock market or that's what I use to buy more real estate or to buy more businesses. This year. That makes sense. So over time it works itself out. What was the significance behind four months?
Speaker 3: What made you settle on four months reserves? I think somebody had.
Speaker 1: I had read somewhere that you should have three months reserves and I just I felt more paranoid because I'd seen so many people get all their things wiped away in 2008. And I wanted a little bit more, and four months made sense. And really, what four months is? it's three months reserves plus one month of working capital, So it's this month's money and three additional. So that's another way to do it.
Speaker 3: Would you still probably give that advice. For somebody that's operating a business or starting a business today, that's probably a good starting point. You think six months, 12 months reserves is a little bit of overkill.
Speaker 1: Six months, the 12 months reserve just sitting in a bank account doing nothing isn't helping anybody. So find that balance. If you knew you were going to spend that money this year, then maybe you would allocate it and you would put it there. But if you knew your business was profitable and every month that has a history of being profitable, then four months reserves is plenty.
Speaker 3: That makes sense. That's very interesting. Yeah, I've gone through. I've gone through all different left right up down, all across the board, with different cash positions, equity positions, And it's interesting right now. This is a pretty cool segue into the next question, which is about seasons of life and seasons of entrepreneurship.
Speaker 3: So I, when I started, I was buying single family houses and I did the co-living strategy. It got me out of my corporate job And now I've built up a cash flow machine in my media company to where now I'm focusing on cash flow and then the net free cash flow. So those two side dual And I have these single family homes that are a headache kind of to manage and nobody wants to manage them because they're Frankenstein's monsters of houses. You know, I had advice from mentors where it was just like such a headache and it was so much for me to manage and deal with these properties that they said, Hey, this small portfolio of single family isn't going to get you where you want to go.
Speaker 3: They're entering a new season where it's time to start doing bigger things. So what's your return on energy? What's your return on equity? What's your return on the effort here? So I'm selling them and I'm going to pocket probably, you know $300,000 in cash and use it into the next thing. So that's going from one season of my life to the next season. So I'm curious what are some lessons from the different seasons of your life, Cause you've reinvented yourself over probably about four or five times. From what I'm tracking, I'm sure you probably say more.
Speaker 1: I'm debating. If I want to argue with your logic on what you just said you were doing, tell me. If you don't want me to, but I'm tempted to go ahead and rip me apart, man.
Speaker 3: You got this twinkle in your eye, man.
Speaker 1: As one. If you had somebody in your world, that would be their problem and not yours. So is that? are the single family properties enough to have somebody else deal with that? and you don't have to. And maybe they're not, cause they don't generate enough cash flow. But I don't deal with any of my rentals. My personal assistant does and she manages all that and she always has, and she texts me updates and asks me questions if I need to. So, other than a few texts today, I don't have any problems managing a lot of single families and duplexes and commercials and all that kind of stuff, But maybe not in your scenario. But let's take a scenario of somebody else that calls and they say Ben, I have a $400,000 rental and I owe 300 on it and I paid 300 for it. So how much equity do I have? Well, you have a hundred thousand, Ben, It's the only thing that I own. So what is this person's net worth, Brian?
Speaker 3: It's just the difference between that, the equity position.
Speaker 1: Yep, it's a hundred thousand. So they said if I sold it I would have some cash to go do something else. And I said it depends on what you care about. If you care about your net worth, let's do the math on it. Today your net worth is a hundred thousand And if you saw it, you're going to pay real trophies, you're going to pay title and excise tax, you're going to pay capital gains or regular, normal income. So actually, when it's all said and done, you're not going to have a hundred thousand, they're going to have 60,000 or 50,000.
Speaker 1: And that is the downside of doing transactions like that. Like I think I love my low interest rates that I have right now and I like to sit on them forever and just let other people pay off my debt. Two comments One of my buddies said actually David from Bigger Pockets he said when I'm asked the secret to be a millionaire, he said I just buy a million dollars with a real estate and let somebody else pay it off, which is always resonated with me. So if I want to be worth a hundred million, i want to buy a hundred million dollars with a real estate and let somebody else pay it off.
Speaker 1: But here's the second line that I'm going to say to irritate you is the secret to stay in poor is selling shit that goes up in value over time. The secret to stay in poor is selling shit that goes up in value over time. So what is the secret to being rich? The secret to being rich is to never sell things that go up in value over time. Which leads me to another comment. Why do people sell things? Because they need cash to buy bigger things. Why do they need cash? Because their businesses aren't generating that enough. So when you do that and that might be the great right decision for you, brian, i've looked into it with you right Make sure that whatever you put it into makes up for the fact that your net worth is actually going to decrease by whatever that amount is 20 or 30 or 40 percent.
Speaker 3: I completely agree with you And I went back and forth on it because I 100% agree with you in everything that you say, and you're correct when it comes to net worth, especially because it's also people have these equity positions, like when they're looking at the real estate Okay, this is what for sure it's worth, is it really?
Speaker 2: Moment of time.
Speaker 3: Yeah, equity is such a kind of a flowing subject And I say this because I like stress testing my philosophies as well, and it's a benefit of having this podcast as well. But for me, winning was no longer managing those single families And it's also something that I'm growing at is hiring, recruiting. That's a hat that's new for me and it's uncomfortable to wear, and it's something that I'm growing into as time progresses. So I'm at that beginning stage where I'm going from an I do, we do, they do. So I'm going into the we do right now, and it's a stickier transition than people act like it is. They think it's just like the easiest thing ever. They say, oh, hire an operator, hire the perfect executive assistant, hire the perfect property manager. And then I'm just like, okay, these are skills I need to be learned. So that's where we are. That's what prompted the question. Hope that makes sense.
Speaker 1: I like the question And I think there's seasons of investing and there's seasons of wealth building and there's seasons of leadership and seasons of running a business. I've been through a lot of them And sometimes I have to go back and relearn them because I apparently didn't learn it the right way the first time.
Speaker 3: Get smacked with the same lesson over and over again. What are some examples of that?
Speaker 1: One example is I was building a software company which I still own today. It's called Brivity. We make CRM's, websites, tools for real sedations And it's a competitive space making software. Most of the software companies out there were private equity or VC backed or owned by China or different places, and mine was always self-funded. And one of the biggest mistakes that I made I'll tell you a funny story was I was told if you build a software company that's going to sell or have investors want it to be a Delaware C Corp. So I did as told.
Speaker 1: I went out there and I created Delaware C Corp and Brivity was owned by Delaware C Corp And but I had all these other businesses that made a lot of money real estate sales teams and real estate brokerages and training and that kind of stuff. So one year the software business needed $3 million to cover payroll not all in one month. Over the time of the year because I kept hiring to build more and do all the stuff that I wanted. I put $3 million from one business all the way into $3 million in another business, which is normally not a big deal because when you own an LLC or an S Corp, all the profits or losses roll back to you personally, but when you put money into a C Corp, those losses are retained and they don't go back to you personally.
Speaker 1: So the mistake that I made was having $3 million worth of income here and $3 million worth of losses here, that I couldn't write off the losses, so I had to pay taxes on $3 million, while I gave all the cash that I had to the other business that I was building and I actually didn't have the cash to pay the taxes. And it's just like those little lessons like that were. When people give you advice like that should be a C Corp, there's a lot of questions that you should go back and say but why And these are my plans and these are my thoughts and what are the benefits or not the benefits, or so on. I've got a lot of things that bit me in the butt by getting advice from people that didn't have enough information about me and my goals and where the money was coming from and how much it was going to lose or make, and that one hurt. It was stressful for me.
Speaker 3: Yeah, i can imagine, man. You hear them all the time. Problems never go away. They just look different. So it's like we have this fallacy that you're going to make some cheddar and you're going to stop having problems. that doesn't work like that. They just look completely different. They're way bigger, but that's why you get compensated.
Speaker 1: The other thing that happens is that we get better at handling them, We get more mature and we get more patient and we get less and less rocked by the drama. And one of my leaders, David, who runs our software companies, said I just continue to see you get calmer and calmer over time, And actually it was almost self-preservation, because the things that would have drove me crazy 10 years ago they happen 100 times more often now And if I couldn't handle it I'd actually explode. So getting better I think there's a great video out there about handle hard better. Getting better at handling hard is one of the biggest secrets of building your leadership or building a big business. Sorry, I interrupted your question.
Speaker 3: Hey, dude, it's your show. Buddy, i don't think anyone's worried about you talking more man. I think that's perfectly fine. I've got a specific question because there's another color quote that I really like. I've run my entire business and operating system off of color stuff, even though I've never been in the color organization.
Speaker 3: Plant trees, manage orchards, and that's something that you do really well, where you start your business and you plant that tree. You get that rental property, you plant that tree and then you protect it as it grows in its infancy and then it's strong enough to stand on its own And then you move away and you hire somebody else to manage the orchard And you do that really well. And so people maybe look at you right now and they say, okay, ben's got the software company, he's got this company, he's got that company, this one, and they may see this giant umbrella and they may think that the answer to wealth building is to do all of these things at once. I want to go build this bridge, build that bridge, build this thing, say yes to this person. But we go back to what we said before, where the millions are made from saying no to a thousand things and saying yes to one thing I'm curious if you could walk us back to a degree about your progression on what was your mindset when it was coming to stacking these businesses.
Speaker 3: So I know that you started in real estate, you started with Keller, then you built a team and then you branched off of that adjacent with the mortgage and home loan stuff And then you started doing the software on top. Keep walking us through that journey about what you decided to do at what moment, because I think that's really important that people realize it's not all at the same time.
Speaker 1: Sure, i do think there's this weird point in time where real estate podcasts are all focused on how many doors people have, not how much free cash flow and how much equity they have. And I also think the same thing in business. They have lots of people that walk up and say I have 17 businesses, or I have 10 or three or 50 or whatever it might be, it doesn't matter. Like it'd be way better to have, as you pointed out, one property that's amazing than 100 individual properties that suck, or one business that's amazing compared to 100 businesses that suck. Very cautious that I don't encourage people to do more. Whoever said the undisciplined pursuit of more is a genius, because that particular message is just something that resonates inside me, that I say to myself I'm I just doing more because? or how is this new business going to improve my life, give me more time, give me more energy, or compliment all the things that we're doing? I have a friend named Bob Pritchett who built a phenomenal software business called Faith Life. They make software for the faith, for churches, basically websites, payment process and CRM and all that kind of stuff. An amazing business owner and his software is really good. And one day we're out of this house and I said, bob, why don't you take your software and sell it into another industry like real estate or insurance or whatever? And he just kind of looks me square in the eyes and he says, ben, it'd be easier for me to sell my customers tacos than it would be for me to go into a brand new industry and sell them software. And as I took that in, i thought, all right, what are the tacos that my customers need and what is prior to real estate?
Speaker 1: I was a cable guy and I installed cable and I sold cable door to door. I telemarketed cable and internet and phone services and that gave me enough income that I could buy my first duplex. And when I bought that first duplex and rendered it out, i realized that through real estate that I could live for free. And yet I wanted better deals and access to deals and I didn't want to have a middleman. So I went and got my real estate license And as I got my real estate license I was able to buy a few more properties.
Speaker 1: But then the banks came and said, ben, you're not very financeable If we're going to give you more loans. You need to make more income. So I thought to myself how do I make more income when real estate, when you're just a solo real estate agent, you run into this limit called the number of hours in a day And I wasn't particularly organized so I could sell 24 to 30 homes a year on my own. I wouldn't hire an assistant and with that assistant who's still with me today, 17 years later, jolene she's phenomenal human and a big real estate investor. Her and I, we sold 84 homes the next year And then we hired an agent to work with the buyers, because a good real estate agent can work with 40 to 80 sellers at a time, or eight to 12 buyers. As that grew, the real estate team got bigger and bigger And we built that team through really generating internet leads and running specific processes and systems and telemarketing, like what I learned in my previous company. And when the market shift in 2008, we were doing okay because we had a heavy focus on generating buyer leads specifically through the internet And that was a place where you were killing it during that time.
Speaker 1: But other agents who were traditionally only work, their friends and family were struggling, so my business had enough profit that I looked up one day and the brokerage that I was affiliated with had run out of money And I thought, gosh, i got to switch brokerage or start my own or buy this one. So I went into the owners and said, hey, i'd like to buy this real estate brokerage and I'll buy 80%, and whoever wants to stay in the other 20% could stay, but I'm not going to work for owning less than 80%. So I bought the 80% and started building the brokerage. Once I got done turning that brokerage around, i realized it was the same as my real estate team. All you need is leads and people, and if you get good leads and good people in place and they have a process and assistant to run by, you could do more. So I bought seven more real estate brokerages And I turned all those brokerages around and made them all operate on the same kind of operating system, the same plan and process and system, and with that it gave me more excess income. So now I had excess income from my sales team, which I kept going, from my rental properties that I continued to buy and my real estate brokerages that I bought during the downturn, and I took that money to start building technology, and that's when we started our first tech company about 12 years ago. It was called Brividy and we still have that today, and we've acquired another seven or eight tech companies along the way, but they're all complimentary to what we do.
Speaker 1: We're building out the platform In order to In order to service our audience of real estate professionals and the agents that are in our brokerages and the agents that are on our sales team. We also added other ancillary services like virtual assistants for real estate agent or digital advertising or coaching and training or live masterminds, because I was selling tacos to the people that were already in my world And then, a couple of years ago, i decided that I wanted to take my my lifetime's work of building amazing things for real estate and combine it together into one platform. I remember when COVID happened this is the best analogy that I got is I was stuck at home and I was watching TV and a Peloton ad came on and the guy was handsome and he was wearing spandex and he was lean and all the annoying things right. And so I go there and I buy a Peloton and I get shipped to my house and I started riding this Peloton and it makes my butt hurt.
Speaker 3: But yeah, it's so, it's not.
Speaker 1: I didn't know, Oh yeah, spots I didn't know could hurt. So when I got done riding that bike which I haven't wrote since, by the way I realized I didn't need a Peloton. I needed a Peloton and a doctor and vitamins and to change my diet and to hydrate more and sleep better And if I had a personal trainer and a workout buddy, if I had all those things, I would actually get in shape. And selling software to real estate agents, I realized that they were basically buying a Peloton from me. They also needed the scripts, the listing, pres, the contract, the legal, the HR, the accounting, the bookkeeping, the payroll, everything and selling coaching. I realized they also needed the software and all kinds.
Speaker 1: So I looked up and said what would happen if I combined everything into one offering and I actually partnered with people in a way where if they lost money, I lost money, If they made money, I made money. And we actually created this business partnership platform called Place where we partner with the top real estate professionals in the US and Canada the number one agent at EXP, the number one agent at Real, the number one agents at Kella Williams they're all on the Place platform And when they win, we win. And what we found is we created a business that nobody leaves and where everybody makes more money when we follow the plan. And I think it's happening in all industries chiropractic, dentists, et cetera, Industries where they have tradespeople that are good at what they do but they've never taken the time to run an actual business.
Speaker 1: I have a friend who's a chiropractor and he's a great chiropractor, cracks me great. But he never sends out marketing emails, He doesn't do any advertising, He doesn't have a front desk person, So he's doing that. And you add all that together, man, he could be a great chiropractor and double his income if he simply had somebody else helping him run the business side of things And I think all industries the Place model could be applicable.
Speaker 3: All right, guys, you guys can do that. You can go buy a lottery ticket, pick which one you want to do, because he just gave you the entire playbook. Yeah, drink the water, man. That one was well deserved. Holy hell, man. That was fantastic Guys, that's the plan It was incremental right, correct Yeah, different seasons.
Speaker 3: And you had to become a new version of you in each one. So I guess my closing question because I want to let you get out here at the top of the hour Closing question is what are some of the major parts of you that you had to kill to become the new version of you that can handle all of this?
Speaker 1: Yeah, the first thing I'd say is, when I first started my career, being a guy that grew up pretty poor and didn't have a lot of help from people around me, i started off with this desire to prove to myself that I could build something that matters, that I could be safe and secure.
Speaker 1: And then, once I got there, i got into these kind of but whole years of my life where I wanted to prove to everybody else that I was successful And I wanted everybody else to see that I was successful, and that was very limiting on my world, and I finally transitioned into a place where my goal is to prove that other people could be successful in the way that I was.
Speaker 1: And I've left the ego stage of caring what people think and wanting people to know that what I've done into wanting to be most proud of showing here's 10 other people that have done what I've done. And it's a transition that we go into. Especially insecure humans like me or people that grew up with a hard world Like you, go through that stage of not believing in yourself. And then you go through this stage of wanting everybody to know that you made it And then, hopefully, we transition into this world where you say it's no longer about me, it's about me keeping my promises to the people that are in my world. And then you show up a little bit differently and you're driven by something a little bit differently.
Speaker 3: I love that man. What can people find you?
Speaker 1: I deleted my socials last week so that I could focus more. I guess I'm on LinkedIn and that's about it.
Speaker 3: I guess check out the WinMade Give podcast. Huh.
Speaker 1: Yeah, check out the podcast.
Speaker 3: Is there anywhere that people can go to help contribute to any charities that you're doing, anything like that?
Speaker 1: No, i want people to give to places that mean something to them and the communities that they live in, and I'm doing my best to make sure my community is taken care of, and I want all of us to do the same thing. There's a lot of problems in the world. Kids need school supplies and kids need clothing, and kids need food and kids need shelter. And us adults, we've screwed up our lives and in some ways I think we deserve it, but the kids don't. They need a fair chance to break this cycle of poverty and abuse and neglect and substance, and it only comes by good humans giving them a little bit of help, mentoring, coaching, money, clothing and food.
Speaker 1: And the hardest time is what's coming up here shortly It's summer. Kids starve in the summer. They don't starve at Christmas, they starve in the summer because they don't have those two extra meals a day that they get when they go to school. So maybe that makes an impact on somebody listening to the podcast and they do something in their community and make sure kids have breakfast and lunch during the summer.
Speaker 3: Well said, my friend, well said With that is Ben Kenney and Brian with The Action Academy Podcast signing off, hey, real quick. If you're still listening into today's episode, i'm assuming you got value from it, so I need your help. Specifically, my two-year vision with this show is to help over one million people do what they want when they want, with who they want, and I can only do that with your help. There are two main ways that a podcast grows. One is through ratings and reviews, and the other is word of mouth. If you could please leave me a five-star rating and a review on Apple Podcasts and Spotify, as well as send this to one or two friends that you think would get value from it, we can reach the people that we're looking to reach. Thanks and advance to talk tomorrow.
