In this Episode
- [00:26]Stephan introduces his next guest, Justin Donald, author of the #1 Wall Street Journal bestselling book The Lifestyle Investor: The 10 Commandments of Cash Flow for Passive Income and Financial Freedom. Entrepreneur Magazine calls Justin the “Warren Buffett of Lifestyle Investing.
- [02:11]Justin shares his beginnings on how he worked hard to build wealth and a lifestyle for himself and his family.
- [06:30]Stephan wants to hear Justin’s story, from being a successful subscription salesperson in high school to getting multiple eight figures in net worth.
- [12:17]Stephan asks for ways to diversify and not rely on one type of real estate.
- [14:43]Justin says that debt right now is the cheapest money we’ve ever seen in history and shares ways of getting a line credit for business or purchasing assets.
- [23:24]Stephan inquires about Justin’s methods of calculating or evaluating his net worth, considering that the bank or the creditors own a huge portion of the real estate.
- [26:51]Stephan asks Justin about the techniques from having a lot of credit card debt to having a seven figures net worth.
- [29:33]Justin shares his thoughts about cryptocurrencies.
- [31:39]Stephan and Justin discuss the importance of having an exit strategy that you’ve already set up, so you’re not relying on your emotions to make the decisions.
- [34:50]Stephan asks Justin to give examples of his strategies for getting equity-free.
- [37:32]Justin talks about the things that are not delegatable and other things that you can delegate.
- [41:27]Stephan wants to know Justin’s top three things that take the most time and have the highest return.
- [43:26]To learn more from Justin Donald, visit his website, and check out his master class and online courses. Also, grab a free copy of his book, The Lifestyle Investor.
Justin, it’s so great to have you on the show.
Thanks, Stephan. Glad to be here and excited to get a chance to hang out.
Awesome. You were able to build such an incredible wealth and lifestyle for yourself and your family. I imagine that it wasn’t just a silver spoon where it was handed to you. You had to work for it. Can you share your story with us?
Sure. I will tell you when I was younger, I wish that it was handed to me on a silver spoon. But in retrospect, it’s been so much better having that not been the case because I had to work hard for every dollar that I did earn. I think I really started gaining and learning a work ethic around sports. I played a lot of sports. I love sports and I really strive to be the best at everything that I do.
Sports really gave me an outlet to apply myself, work hard, go the extra mile, put in the hours, to be good. It was interesting to see how easy of a transition that was once I started working, to take that work ethic from sports and apply it to running my own business or getting into sales, which I did at a very young age when I was in seventh grade.
I remember my mom said, “hey, we’re not your bank. If you want to make money, go get a job.” I was like, “well, I don’t know if any place is going to hire me.” She said, “Well, you’re not going to know unless you try.” So I decided I would try to get a job and try to get my first job.
I found a company to hire me selling newspaper subscriptions door-to-door, which at the beginning, I’ve got to tell you, Stephan, I was horrible at it. I had doors slammed in my face. I had rude people, nonstop. People were telling me no. Keep in mind, this is a commission job.
After my first week, I had zero sales. I worked hard for many hours. This was just in the evenings at this point. It was after school. All to no avail at that point because I didn’t make any money. I knew if I was going to keep doing this job, I better figure out how to get good at it.
Just through some persistence, through trial and error, through systematizing my scripts, my answers, handling objections, and really a story about why I was working, I was able to figure out a way to get people to listen and get people to buy subscriptions from me, which was a really tough thing to do. I ended up becoming pretty good at it and that’s how I paid my way. Really, I’ve been afforded everything that I wanted to do in middle school and high school because of that job. I ended up doing that until I graduated.
Along the way, I ended up building my own crew of kids that would go out and they would sell newspaper subscriptions and coupon books underneath me. I would earn a piece of every single sale that they had. That was a cool experience to have during my high school years, running a team, being in charge of hiring and training, and the whole nine yards as a high schooler.
Yeah, that’s awesome. I remember a good friend of mine in high school. By the time he was 16, he bought himself a brand new Ford Mustang. He had his own lawn sprinkler installation business that he had been running for at least three years. I did some work for him. He was a hard-driving kid at the time.
It wasn’t that fun digging trenches, literally, for him. I didn’t last very long as an employee, but I realized that the money is not made working for somebody else. It’s building your own little empire.
How did you end up getting into all these big investments in your bio? It says that you got to eight figures in wealth and then you doubled it from there. I’d love to hear how you went from being a successful subscription salesperson in high school to getting multiple eight figures in net worth.
Sure. What ended up happening when I went to college, I knew I was going to have to pay for my own college. None of my family members ever graduated from college. I was the one that my parents were hoping was going to be the first one.
I went to the University of Illinois. It was an expensive school. I had to figure out how to afford it. They weren’t able to. They helped out as best they could wherever they could. My parents really wanted this for me.
As I got there, I really had fun in that environment and learning, but I ended up working with a job called Cutco, where I sold cutlery on an in-home appointment basis. That’s how I paid for all my college. I graduated from college debt-free by selling Cutco.
I ended up moving up with Cutco and becoming a manager. While I was a college student, I ran my own branch office for them, which is, in essence, running your own business where they take care of some of the logistics on delivering orders, delivering products, inventory, that kind of thing. But I did everything else.
It was really an eye-opening experience having employees, having independent contractors, and learning how to hire, train, fire, motivate, and just everything there. What I really learned while being there was how to create systems so that other people could step in and run a portion or all of my organization. That is where I really excelled.
I’ve always been aggressive with saving, investing, and living well beneath my means.
I did fine in sales and I did fine running things, but once I could figure out how to make things work and teach people a system for how to do it, I was able to remove myself and get tremendous results with the teams that I had built over the years. I ended up earning some pretty good income there. I’ve always been really aggressive with saving, investing, and living well beneath my means.
At that point, I had bought my own place in Chicago. I was about to start buying and investing in some apartment complexes, some three and four flats, some single family homes. One of my friends was pivoting from single family homes to mobile home parks. And I thought, that’s odd. I don’t know that I agree with that, but I’ll hear you out.
He said, “hey, do you want to go to this boot camp with me and learn how to buy mobile home parks?” I said, “no, I don’t. That does not sound great at all to me.” And he said, “well, I think this is going to be the thing and I think this is going to be better than anything we’ve ever talked about.” We had talked about buying real estate together.
I said, “all right, well, why don’t you go, you check it out, and you let me know what you think?” He ended up getting back and bought his first mobile home park and bought a second one. I just saw the success that he was having.
A couple of things. Number one, instead of buying a whole bunch of single family homes, which takes a long time and a lot of money, you can buy one property with multiple units. Then with an apartment complex, there’s generally a lot of turnovers. There’s a lot of rehab and maintenance that goes along with it. With mobile home parks, that doesn’t exist as much because people generally own their homes.
I started seeing the brilliance in this move. I started learning more. I started investing in this space. Eventually, with my first park purchase, I was able to cover my wife’s income at that time. She was a teacher.My goal is not to make the biggest return. My goal is not to make the most money. My goal is to make a good return and not lose money in a worst-case or bad scenario. Click To Tweet
It just made a lot of sense. Why not buy an asset that produces the same amount of income as it costs my wife to work and then she can spend a fraction of that time helping with some of the books? That was my start in investing, real estate, and ultimately what led to us having a big portfolio. I eventually replaced my income.
The second park that we bought basically covered our bare necessities—our mortgage, our utility payments, our car payments, our groceries, everything there, just the bare minimum. Then we bought our third park and that covered our current lifestyle. Then I did a 1031 on that one into two others and those two others covered the total amount that I was earning at that time for work. It just made sense. I can step away from my business and focus here on passive income because I’m getting an asset that’s appreciating in value while I’m getting cash flow at the same time.
You mentioned earlier that it’s a pretty big portfolio that you have. What’s big and how would you define big?
Right now, we’re at about 1000 units, which in multifamily apartment complexes, that may not be so big in the world of mobile home parks that would be a top 100 portfolio. Mobile home parks are your least consolidated real estate asset class. Really, once you get 750–800, right around there, you fall into the top 100. We’ve just steadily been adding to our portfolio over time.
That’s amazing. How do you diversify so that you’re not totally reliant on that one type of real estate?
I saw this as the way because mobile home parks are pretty recession-proof.
What ended up happening is for a while, I really saw this as the way because mobile home parks are pretty recession-proof. But in time and in studying, you have a few different approaches. You have the people that say, Warren Buffett says, hey, do your one thing, become great at it, and just keep doing it over and over again. He’s big on insurance companies and businesses. That’s his one thing and he just keeps doing it.
You’ve got other people that say, hey, diversify, get as many different opportunities to hedge whatever may happen so that you’re in a good situation. That for me is fun because I like learning about different things.
The one thing about mobile home parks is the more that you buy, the more cash flow that you’re going to have. This is going to be true of any cash-flowing real estate that truly gives you good cash on cash return. Every time I would buy another one, our total amount of profit increased.
There are two choices. I can either increase our quality of life and do more stuff, but we felt like we had a pretty awesome life. We didn’t feel like there was anything else we needed to really add to our lifestyle. The second thing is to take that surplus and invest it in other assets. That’s what we started to do.
Over the last 5–10 years, I’ve invested in businesses and unique opportunities there. I’ve done franchises. I’ve done senior secured debt on highly desirable real estate or senior secured debt on some other highly collateralized asset, sometimes even on intellectual property. I’ve invested in every type of real estate you can probably think of unless it’s super obscure.
What I wanted to do is become an expert at cash flow, long-term appreciation, and getting equity for free with some of the structures and strategies that I use. I didn’t want it to be a specific niche, but rather, the lifestyle investor brand is an all-encompassing brand of any investment that’s going to help support your lifestyle now.
Got you. First of all, maybe for our listeners who are not that familiar with the financial world, maybe you could define what hedging is. Why is it important or needed? How do you decide what is a good hedge given your guesses of where things are heading in terms of inflation, the economy, overheated markets, and so forth?
If the tide shifts, a hedge takes a different position that can produce a good return.
Great question, Stephan. Really, what a hedge is is it’s taking a different position that can produce a good return if the tide shifts. Let’s say that something happens with real estate and you buy real estate based on maybe something more subjective. If you’re buying single family homes, you’re generally buying them based on an appraised value, not based on the net operating income.
Let’s say that you’re buying real estate that doesn’t cash flow and the price tanks. Now you’re holding an asset that you still have to make a mortgage payment to in the cash flow may not cover it. You may have bought it for appreciation, which to me is the opposite of the way that I like to invest.
You may want to have money in something else that is going to offset that in terms of following what the economy does. In a market crash, you might have cannabis or you could have spirits, alcohol, or tobacco. That would just be like one category of something that really doesn’t dip much in hard times, and in many cases, it takes off.
Now you’ve got something that performs well in a bad economy when you’ve got this other asset that maybe isn’t. But part of the reason I like to buy cash-flowing assets is because they cash flow. That way, you don’t have to sell them if the price tanks because you are doing it based on cash flow. You can cover your mortgage or your note payments, however you have that structured.
To elaborate on what you’ve said or what you’ve asked, Stephan, we’re in a crazy time right now where the Feds are printing money. We’ve never seen this before. Forty percent of the money that is in circulation today was printed in the last two years. This is unprecedented. We’ve never seen this before.
Basically, the dollars are becoming worth less and less every single day. They just announced that the inflation rate for the month of December was 7%. That’s the most it’s been in 40 years. By the way, that’s a very conservative number. They’re picking some things that make it seem like inflation is not as bad as it really is. I can assure you it’s greater than 7%.
It’s funny because a while back, when they said inflation was transitory that they could, at any point in time, raise interest rates and they could stop inflation, but they can’t. That wasn’t true. We’re seeing today that that wasn’t the reality, it isn’t the reality, and we actually can’t control inflation.
If someone is saving money, they are losing purchasing power. The only way to keep up or to hedge against the devaluing dollar, since we’re talking about hedging, is to invest in an asset that’s going to appreciate at the same degree as monetary supply, the amount of dollars being pumped into our system. Real estate is a good example. Buying other assets, other businesses are good examples.
How do you own an asset that can, in tandem, increase that monetary supply increases? Because you have built-in appreciation in that instance. How on top of that can you get cash flow from it? And how on earth can you then find something in that investment that appreciates because of the value you give it, not just because of the dollars being printed?The lifestyle investor brand is an all-encompassing brand of any investment that's going to help support your lifestyle now. Click To Tweet
That’s where the magic is, where you’ve got these assets. They’re going to appreciate no matter what because the dollar is just becoming worth less. But there are certain things you can do to add value, so it appreciates more. Then it kicks off cash flow, so you’re never forced to sell it because prices tank.
Right. Is debt such a bad thing in this scenario and this environment? Because what you owe continues to be worth less and less. Maybe it is like the Zimbabwe dollar by the time your balloon payments come due or whatever, right?
Yeah. The debt right now is the cheapest money we’ve ever seen in history. It’s almost at all-time low interest rates depending on your relationship. I know some people right now that are borrowing against collateral that they have at 1%. I just locked in a bank loan for under 3% on a few different assets.
Money is truly the cheapest we have ever seen. It may be the cheapest we ever see again in history, in our lives. To use other people’s money when it is so easy to make a return that is greater than the 2.5% that you’re borrowing at, the 2.75%, or maybe you miss it and you get something at 3% or 3.5%, that’s incredible.
Right now, there are so many creative strategies to get money, but you can actually get stated income loans or similar to that like bank statement loans, where you can put 10% down and you can get 4% interest-only, fixed for 30 years. Just all kinds of unique products. This is just one example, where you might say, 4%, why would I ever do 4%?
I remember eight, nine years ago, when 4% was at an all-time low. That was the cheapest money that we’d ever seen. Now you can get it with specialty lending. We’re at a point in time where if you can borrow money, you can use other people’s money, and you can do so responsibly, then yeah, of course, you want to.
Right. I think the EIDL and SBA loans are no longer available. Where would a business owner go to get cheap money like that to use other people’s money (OPM) to buy assets, real estate, cryptocurrencies, what have you?
There are a few different ways to look at it. Number one is if you own a home, you can probably get a HELOC on that home. You can get a home equity line of credit on that home. That’s one way to get some extra cash.Part of the reason I like to buy cash-flowing assets is because they are cash flow. You don't have to sell them if the price tanks because you are doing it based on cash flow. Click To Tweet
You can also get a line of credit on your business. You might have other assets that you can get a line of credit on. You can do this in a way where you are collateralizing. It’s a secured line of credit.
Depending on your balance sheet, depending on the relationship you have, you might be able to get an unsecured line of credit where you have access to capital, but you don’t have to secure it with anything. You don’t have to pledge your assets in order to get this. Each of those is an option.
Let’s just say that none of those exists but you want to buy real estate. It’s easy to find a bank that wants to lend on real estate because they’re in first position on that real estate. If you’re getting it at a good price and it appraises, the bank is happy to lend you money at a good rate because to them, this is safe.
If you default, they take the asset and you’ve already given a down payment, you’ve already made additional payments. To them, this is a great deal. For you, you’re using other people’s money at a low interest rate. It’s really a win-win situation.
Got you. When you’re calculating or evaluating your own personal net worth, how do you take into account the fact that a huge portion of the real estate that you might own is actually owned by the bank or owned by the creditors?
What you get to count in your net worth is the value of that property minus the debt owed on it.
Anytime that you’re doing your net worth statement, I think it’s really important, there are a couple of things that I would always know and pay attention to on at least an annual basis, ideally, a quarterly basis. I know people that do this on a monthly basis and they reevaluate everything. But for your net worth statement, you’re going to take all of your assets minus all of your liabilities, and that’s going to equal your net worth.
If you have a real estate acquisition, generally, you’re going to put 20% down to buy a piece of real estate, an apartment complex, a home, a mobile home park, a storage unit, an industrial distribution center, whatever it is. You’re probably going to put 20% or around there down as your down payment. That’s your equity in the deal. Then you’re going to borrow 80%, so that’s going to be the debt.
What you get to count in your net worth is the value of that property minus the debt owed on it. Right now, for example, I’m buying a mobile home park. This mobile home park is under contract. I haven’t closed yet. I have it under contract for $4 million, but it’s actually worth closer to $8 million, probably like $7.8 million, so let’s just call it $8 million.
The value of this property is worth a lot more. The bank is excited because this thing appraises way more. It’s like, oh, yeah, this is a slam dunk. In that instance, I can take the value that was appraised at less the debt that I have on it and that’s what my net worth would be on that particular instance. You do that all across all of your portfolio, all of your assets, all of your debt, all of your liabilities.
You can’t have a true net worth unless you have removed the debt that you owe other people. By the way, let me also say that I think even more important than a net worth statement is a cash flow statement. People that own their own business, entrepreneurs that are running a business, they know that they need to show up. They need to be able to have profit and loss statements.
That’s like your bedrock, profit and loss statements, balance sheet, and cash flow statement because those are all the most important things in running a business. You’ve got to have that if you want to get a loan from a bank. For your business, you’ve got to have that for most of the things you want to do.
I would argue that your cash flow statement is the most important thing.
If you want to be a good business owner, you want those three numbers and you want to know them all the time. I would argue that your cash flow statement is the most important thing. Ironically, when it comes to people’s personal finances, people generally don’t know their cash flow statement. They don’t know what it costs them to live each month, how much surplus cash they have, or what they have in passive income.
In some cases, it fluctuates so much that people just have a hard time doing it. But I would argue this is the most important thing that you know and to know on, at least, an annual basis but realistically, at least quarterly in my mind where you are in terms of net worth and cash flow. That is imperative.
How do you get from, let’s say, a lot of credit card debt to having a net worth that is in the, let’s say, seven figures? How do you go from being in a hole like that to having all of your expenses covered by passive income and investing? I guess you must have a roadmap in your lifestyle investor book. How does that all play out?
Stephan, we talked a lot about this. Everyone shows up at a different point in time in life and in a different place. Sometimes people are in a tougher spot when they make the decision or realization that they should shift and the way that they’re living isn’t serving them the way that they want to be living. Is it serving them in a capacity that is beneficial?
Really, to me, it’s a numbers game. It’s creating a plan. It’s just knowing where the numbers are, knowing what it costs someone to live, and knowing what it costs someone to service the debt that they have. Because not all debt is bad.
Low-interest rate debt is amazing. I would get as much of that as humanly possible, especially if you have access to it in case there is a crazy situation that you endure where you need the extra capital. High interest rate debt is not as good and credit card debt is among the worst. I think figuring out which credit cards have the highest interest payment and what the balances are, that’d be first and most important, and making a game plan to pay off the highest ones first.
Everyone shows up at a different point in life and another place.
Some people have the strategy that you pay off the lowest balance first because it feels good to complete it. I totally get that. Other people feel like you should pay off the highest interest rate one first because that one’s going to suck up the most money.
There are also strategies where you can get other credit cards to roll it over at 0% interest for six months or one year period of time. There are ways that you can do it. But at a really high interest rate, if you’re paying 17%–25% on a credit card in interest, it’s going to be really hard to find an investment that’s going to outperform that.
To me, it makes sense to get your house in order. If someone really wants to, maybe they put part of their extra surplus cash into paying down debt and part of it into investments. But if it’s a really high interest rate, I would just want to pay that down as fast as I could.
What’s your position about cryptocurrencies?
I think crypto can be great if it’s used in a way that is productive. Let me put it this way. I know people that basically gamble in crypto and I know other people that make calculated moves and decisions based on a lot of research and based on the true utility of what they invest in.
I know people in both camps that have done well and I know people in both camps that haven’t done well. So you’ve got a speculative thing. I think there’s a place for cryptocurrency, but you’ve got a speculative thing here, that in many instances, isn’t fully proven. It might pump, it might not. If it does pump, do you get out or do you ride it out?
There are so many decisions that you have to make ahead of time. I almost think that people need to have this personal financial statement or personal investment statement is probably a better term where they make decisions ahead of time and have rules that they follow so emotionally, they can remove the biases that are going to exist.
Crypto can be great if it’s used productively.
I think that there are several cryptocurrencies that have tremendous utility that are going to do great things. I think more of them are going to crash and burn than not, but Bitcoin certainly has its place. Ethereum certainly has its place.
There are a lot of other great concepts that are out there, but most of what’s out there is unproven. That doesn’t mean you can’t make money. Sometimes people get in on a project that is destined to fail, but they got in at the right time and they got out at the right time. Other people, they research the heck out of stuff and they see what they believe has true utility, something they themselves would use, and they invest based on that.
I think it’s an interesting space, I think there’s a lot of money to be made, but there’s also going to be a lot of money lost there too, especially if people make decisions based on their emotions and not based on a plan in place ahead of time when emotionally you’re in a strong place. That I think is going to make all the difference.
Yeah. It’s important to have an exit strategy going in that you’ve already set up so you’re not relying on your emotions to make the decisions. When you’re either in fear or greed, you’re tending to make the wrong decisions because you’re driven by base emotions rather than logic and intuition.
Yeah, I would totally agree with that. I even put this in my book, Stephan, that I like to get to house money as fast as possible. The moment I can take enough chips off the table that I have reduced all my risk, I’ve got all my money out of the deal, now I’m playing with house money. If I lose it, it doesn’t hurt as bad as if I lose all my money, and this gives me a chance to still play the upside.
I’m not putting all my money and to play the upside, I’m taking my cash out. I’m taking my principal out. In some cases, I’ll take my principal and a profit depending on what I’ve profited so far, but I love keeping profit just in case just to see what happens. That strategy has been a very rewarding strategy for me because when things tank, I’m not losing the money I invested. That’s the worst.
You lose your principal, you got to work so much harder to get that back. It’s just going to take a lot more time, energy, and effort, versus if you’re just losing the profits that you’ve made, but you have your money out and you’re at least whole, that’s a whole different story and equation.You can't have a true net worth unless you have removed the debt you owe other people. Click To Tweet
Right. Yeah, that does lower the emotions to be playing with the house’s money, essentially.
Yeah. By the way, I may not make as big of a return as the person that’s willing to keep all the chips pushed in for a much longer period of time than me, but that’s not my goal. My goal is not to make the biggest return. My goal is not to make the most money. My goal is to make a good return and not lose money in a worst-case or bad scenario.
That’s the difference. I don’t need a home run. I just want a single, maybe a double. If I lucked out and got a home run, great. But I don’t want to go in trying to get a home run because generally if you do that, the risk profile is pretty aggressive.
Right, yeah. Warren Buffett’s rule number one is don’t lose money.
Yup, he’s a wise man. He just figured out that if you look over a period of time, let’s say that you lose money and you lose everything but your principal or you lose half of what you put in, if you look at the amount of time that it takes to get back to even, it’s so much greater the more you lose.
It’s not just like, hey, I lost half my money. Therefore, I’m going to make it back quickly. You got to literally make twice as much. That’s a big deal. You lose half of your money, now you get to actually work twice as hard and make twice as much to get back to even. Not to get ahead, just to get to even.
Yup. If we were to go through some example strategies that you have for getting, essentially, equity for free, what would one, two, or three of those strategies that you want to highlight in this episode be?
I like being in debt because it protects me in many ways.
The biggest thing is just to ask for it. I have a section in my book where I talk about income amplifiers. This is one of my favorite income amplifiers because it doesn’t cost anything. The way most people invest is they invest a certain amount of money for a certain amount of equity. That’s how most deals are.
Let’s say that you go into a syndication or a fund. You’re putting in a certain amount of dollars and you’re going to get a certain amount of equity in that deal. You’re going to be an owner. That’s one way to do it.
You’ve got another group of people that just want to be in debt because it’s a more protected position. If things go belly up, anyone who holds debt is going to get paid first before someone who holds equity. It’s safer and more secure, especially if it’s collateralized and especially if you have the senior position, senior secured debt.
What happens, though, if you have some debt plus some equity? That’s interesting. What happens if you can do that because you’re able to create the right situation where someone wants to give you both but maybe not charge you for both? One of the most common structures that I do is I’ll invest in debt on something. I like being in debt because it protects me in many ways.
Generally, you can structure a cash flow component to it so you’re paid out really just on the month or on the quarter, and I like that. But for using my money or for having access to my network, I’d also like to have a piece of equity that is a kicker. You throw it in for free because I’m going to help in other ways or because it’s a low hassle to come in and get my investment dollars. You can do it quickly.
My most common structure is, hey, I’d love to be the debt, I’d like to be in a position that’s really safe and secure. I’d also like to have a percentage of equity that’s thrown on that I get no matter what. As a balloon payment is made back to me for my debt at the end of the note term, I have equity locked in. I have all my money out of the deal, but I have a piece of equity.Profit and loss statements, balance sheets, and cash flow statements are the most important in running a business. Click To Tweet
A lot of companies and organizations are willing to do that if you ask. There are advantages in it for them in doing it for the right person or the right group.
That’s awesome. You mentioned how you’ve structured things so that you were able to remove yourself. You have all these systems that help you to delegate stuff or your workload to others. What are some of the things that you still do that are not really delegatable? What are some of the things that are part of the system that may be hard for some people to delegate but not for you because you’ve got such a great airtight system?
Some of this comes down to people—how skilled, how trusted are these people. I joke with people in my network and people I’ve spoken to that there are certain things you can’t delegate. You can’t delegate kissing your wife for me, in my instance. I have to do that, that can just be me.
I always get a good chuckle with that one. Virtually, everything else, you can delegate. You can train someone to do whatever the other things are. I think, often, for me, there are things like in my current business, I have not delegated interviewing people for my mastermind because (1) I love meeting the people and (2) I really trust my instincts on who I think is going to be a good fit and who’s not a good fit.
(1) I do it because I know I’m going to attract the right talent and only let the right people in. (2) I also like it. It’s fun for me to get to know the people that are going to be in my tribe. That would be an example of something I haven’t delegated, but I know I can delegate that. There are people that have approached me and asked me if they can do the interviewing. Even current members in my mastermind, they’re like, hey, I’d love to be part of that. That’s one example.
What I want to do is I want to honor what my expertise is and what I have figured out my genius to be.
I was just talking with someone today. Even on the financial side, I want someone that can go over all my finances and get a bank whatever a bank needs, get my CPA whatever my CPA needs. At one point in time in my life, I felt like I had to do that. I felt like I was the only one who would do it right or maybe I didn’t want anyone else to know that information.
The reality is, there are people much better than me at gathering that, at producing reports, getting things done in a timely manner, creating spreadsheets, and the whole nine yards. I feel like most things are delegatable. But vision, setting culture, relationships with the most important people, which really just equals time spent, that’s what it is, those are hard to delegate.
I really like to focus my energy on the 20% of activities that produce 80% of results. That’s really where I try to stay. What I want to do is I want to honor what my expertise is and what I have figured out my genius to be. Everyone’s got expertise and genius. They’re geniuses in something.
For me, I just really want to make sure that I’m spending my time there, not in the things that don’t matter as much, not in the things that can be delegated. My big catchphrase is if you can pay someone else to do it, you probably should and you shouldn’t ever be caught doing minimum wage work if you’re running a business.
Right. By the way, that minimum wage creeps. It doesn’t have to be specifically minimum wage, but figure out what you value your time. If your time is worth more than $50 an hour, you should pay someone to do $50 an hour of work. If you can charge more than $500 an hour, you should pay someone to do $500 an hour of work. You got to get clear on what you think your value is.
I think having people in place that can help support you, a strong team is just going to make you better. There are so many things that other people can do that you can’t and collectively, where you have many people working on different things at the same time. It just makes sense to create systems and find ways to remove yourself because you are the bottleneck to your own business.
How much time do you spend on technical analysis versus research versus just tuning into your intuition, developing strategies, and negotiating deals? I’m curious, what are, maybe out of that list, the top three things that you do that take the most time and get you the highest return?
Create systems and find ways to remove yourself because you are the bottleneck to your own business.
It probably depends on the season. I definitely have done all those things. I think I am regularly doing those types of things. I actually like negotiating deals, but I’ve taught other people how to do it, so I don’t have to do it. But if I have time, I like doing it. Especially if it’s a relationship with someone that I really enjoy, I think I might be able to get there a little bit faster, or maybe I can get some things that someone else can’t get.
With vetting deals, other people can do that too. I become smarter by engaging and empowering other people in that as well. But what I can’t do is completely remove myself from that. I can have a process where other people can vet info, send it to me, and give me their opinions, but I actually would like my own eyes on some of that just so I know, just so uncomfortable, especially since I’m responsible to a lot of people.
I love researching different things. If it’s a fascination of mine, if it’s an interest of mine, I really enjoy the research. By the way, if I don’t care for it, researching is like the biggest pain to me.
I just met with my tax strategist who doubles as my personal CFO, we just went through all kinds of fun strategies. I love picking his brain and there are all these things that I’ve researched. That to me is a blast. I’ll do that when I’ve got nothing else to do because it’s fun. If I can figure out a way to create a little more wealth, if I can figure out a way to help other people do the same, if I can figure out a strategy that can minimize taxes like, oh, this, that’s exciting for me.
Speaking of which, you have a mastermind. You have courses and ways for people to learn from you, grow with you, and build their wealth with your help. Where would our listeners or viewers go to become a part of your mastermind?
The best place to probably find me if you’re interested in my book, you could go to lifestyleinvestorbook.com. If you go there, what I’m going to do is just give you a free copy. You just pay for the shipping for anyone in your audience. That’s one way you can do it. You can go to Amazon, of course, and get it there.
All the proceeds in my book go to charity. They all go to an organization called Love Justice International, which stops human trafficking in over 20 countries around the world. They’re just incredible. I’m a huge fan of them. If you want to learn more about my programs and my products, I’ve got a podcast called The Lifestyle Investor, just like the name of the book.
I’ve got a blog on my website. If you go to justindonald.com, you’ll have access to that. I’ve got a master class. I’ve got some online courses. I’ve got another one that I’m rolling out on mobile home park investing. I’ve got the mastermind there, the application, and all the details.
Everything’s there, but as a disclaimer, we’ve had a closed group for a while. I just reopened it. I’ve got a very long waitlist. The mastermind is not the right fit for most people. It is a high-ticket type of program, but the group is just an incredible group.
Most people don’t get accepted. I just want to say that publicly, but we get a lot of engagement with some of our other products like our master class and our online classes.
Awesome. Thank you, Justin. This was a real treat and very inspiring. You’ve done some great things not just for your family, but for a lot of people and helped them create a lot of wealth and legacy. Thank you for that.
Thanks, Stephan. Great to be on. Great to spend some time together. I look forward to talking with you again soon.
Likewise. All right. Thank you, listeners. We’ll catch you in the next episode. I’m your host, Stephan Spencer, signing off.
Checklist of Actionable Takeaways
Be the best at everything that I do. There is no impossible task that can’t be done if I give my 100% and full positivity.
Create systems so that other people could step in and run a portion or all of my company. In addition, having the systems and processes will allow me to take more time off and spend more time on higher value-add activities.
Ensure that my investments represent passive income, where my earnings don’t depend on my time spent on it. My income should be fully independent and happens whether I’m asleep or on vacation.
Structure each investment deal to minimize risk so that a good return feels even better. For example, collateralize assets against investments so that my collateral is twice as much as the actual amount of the loan or investment.
Pay attention to emerging markets or unseen opportunities outside the mainstream, like new technology innovations or companies in a reinvention.
Create an investment plan. This provides direction and meaning to my financial decisions. In addition, this will allow me to understand how each financial decision affects other areas of finances.
Deconstruct the details of perks and terms to negotiate the best deal. There’s always room to lower my risk or create a higher return.
Make a game plan on what to pay off first. Figure out the loans which have the highest interest payment and their balances. Always pay off the highest ones first.
Create a strong support team. Other people can do so many things that I can’t. Find ways to remove myself so that I won’t be the bottleneck to my business.
Visit Justin Donald’s website to learn more about him and his services and courses. Also, check out and grab his free book, The Lifestyle Investor. (Note: Just pay the shipping and handling fee.)
About Justin Donald
Entrepreneur Magazine calls Justin Donald the “Warren Buffett of Lifestyle Investing.” He’s a master of low-risk cash flow investing, specializing in simplifying complex financial strategies, structuring deals, and disciplined investment systems that consistently produce profitable results. His ethos is to “create wealth without creating a job.
In the span of 21 months, and before his 37th birthday, Justin’s investments drove enough passive income for both he and his wife Jennifer to leave their jobs. Following his simple investment system and 10 Commandments of Lifestyle Investing, Justin negotiated deals with over 100 companies, multiplied his net worth to over eight figures, and maintained a family-centric lifestyle in less than 2 years. Just 2 years later, he doubled his net worth again.
He now consults and advises entrepreneurs, executives, and successful media personalities on lifestyle investing. Justin has also appeared on nearly 100 podcasts, including Entrepreneurs on Fire, The Mike Dillard Show, Making Bank, Achieve Your Goals, Capability Amplifier, Tractionville, Inside Personal Growth, Conscious Millionaire, Franchise Secrets, the Accelerated Investor, and Unbecoming.
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