JUSTIN DONALD: Investing in (and for) the Life You Want

26:42And I think that there's a common thread among people who have figured out how to succeed in different areas that they find mentorship regardless of whether they're able to be in person with someone. I mean, actually, that's one of the biggest things I think, Dad, I've learned from you. This is way before the internet, way before Amazon. But you always used to say when I was young, somebody somewhere knows how to do the thing you want to do. And all you have to do is find them. And oftentimes the way you found people was through books. True. That's right. And now it's so easy. Now you've got YouTube, you've got everything.

27:15Oh, it's right at your fingertips. I mean, you probably remember this. I used to go to the library and check out a book. And I had a timeline that I had to read that book by before I had to turn it in before I got a late fee. Where you had to pay your 25 cents. That's right. That's right. And so, I mean, those were all my early mentors, Richard Branson. I mean, many of these people I've gotten a chance to meet and spend time with, which is cool, but not early on. I mean, but, you know, reducing the risk is really what I learned from Warren Buffett. And there are a lot of ways that we can set up a deal so that it's a win-win situation.

27:50All parties win. But there's also a way you can set it up where you win even if the deal doesn't work out as planned. So, you know, there's structures that I've negotiated in deals like put options and not on the public side, even on the private side, where at any point in time, I can call my investment back and there's a personal guarantee backing that investment and I can pull it out. That would be a great way to reduce the risk. So if the deal's trending well, you keep the money in. If the deal's not trending well, you've got this little audible card that you can play and say, hey, I'd like my money back, you know, and they've got to pay that full amount.

28:33There's, you know, ways like there are several deals that I've done in some of these in funds where there's collateral that is often like in one fund that I'm in, there's collateral that's 10 times or more the value of the loan that's going out. So do you think someone's going to default if you give them a million dollar loan, but the recourse is a$10 million asset. Wow. Right. Makes it hard to know how to pray. Right. It puts pressure that you're going to honor the agreement. But if you don't, there's a scenario where it's easy to recoup what you lost. And so that to me is a great way. There's always a way to structure a deal that is safer than how it is laid out today or laid out on paper.

29:24And that's my goal because losing money, it is so hard. If you lose money, you got to work two, three, four times as hard. I mean, if we wrote out the math, you'd actually see how it worked out. But if you lose half of your money in an investment or all of your money in an investment, it actually takes years to get that back. So you're like way behind. Yeah. So this is a really important commandment. So I want to ask you to be vulnerable here. What was the dumbest investment you've ever made? Man, I've got it. I just want to feel better about myself. I've got a few. You know, and again, these are like, they're the most painful in the moment, but they're the single best or, I mean, these are truly the learning opportunities.

30:10I mean, I've learned the most from these situations. So one of them was the first home that I bought in the frenzy. It was technically a condo. And it was right before the housing crisis, right during the bubble, the highest prices. And then they came crashing down. And then I got this opportunity to move to another state. And so I rented this thing out. And it was negative cash flow because I never bought it to rent it out. and eventually it just weighed on me so much. And I finally sold it. I sold it. I waited as long as I could through the financial crisis, but I mean, prices did not rebound.

30:50So my very first condo, I had to come to the table, I think with like 125 or$130 ,000 to sell it. I mean, it was so painful. So painful. Underwater. Totally underwater. So, I mean, that was a big lesson. And I mean, that has shaped my investment decisions on a, if I'm buying something that is a residential asset, um, like, and I haven't run the numbers for it to be a rental, I probably shouldn't turn it into a rental, you know? And the other one is like, if I'm doing a rental, uh, I'm going to use a different type of asset. Like that one wasn't the best one. It had, you know, all, all different types of fees associated with it that, you know, it was just hard to cash flow.

31:35And then later on, years later, I invested in a Ponzi scheme. And it was hard to know that this was a Ponzi scheme because the company, I mean, through this whole core process, we actually figured out the company was legit for 28 years, but it became a Ponzi scheme at the end of that 28th year. Explain what a Ponzi scheme is for those that don't know. Yeah, so a Ponzi scheme is where you raise money, you raise new money from new investors to pay back old investors. So your business doesn't have the money to pay them back the way that they should. So you bring in new money to pay that back. And so you're just building, you're digging a deeper hole.

32:17And so, you know, that was a crazy story. In fact, my updated and expanded edition of the Lifestyle Investor is about to drop next week. and so I actually can tell this whole story that I wasn't allowed to tell before because I was actually working with federal agents and federal prosecutors and had to show up in court and testify in court on this because I had all the information that could incriminate this particular person. It's kind of like the opposite of passive income. Anytime you have to be in court and deal with federal agents, that's a fail. But here's the thing. My attorney warned me, and I felt like I knew better than my attorney.

33:00I was like, yeah, yeah, yeah. You specialize in law. I get it. You're super careful. You're super cautious. I'm the investor. I've got this. Don't worry. And he warned me several times on several things, and I looked past them. But this is what Murphy's Laws for the Lifestyle Investor, which is a chapter in my book is specifically designed from this scenario where I basically made a list of rules. It's like, these are the rules that I shall not break moving forward because I learned so much in that. It hurt. It hurt for a while, a long time. And then finally, when I pulled my head out of the hole, I said, okay, what did I learn here?

33:40And let's move forward and let's get better. And let's share it with everyone else so they don't have to make the same mistakes. Yeah. What you just said, I think is so key and has been my perspective all along. Making mistakes is very expensive and it's a lot cheaper to go to school on other people's mistakes than to make your own mistakes. Now I'm going to make my own mistakes, but I don't have to make the same mistakes that other people have made. So that's the value of reading a book like Lifestyle Investor or taking one of your courses or joining one of your masterminds. We'll get into that a little bit later, but you can shorten the learning curve and get to that green pasture faster.

34:15Yeah, certainly. And it's important, I think, also to learn enough from your mistakes that you don't make the same mistake again, right? So, you know, as long as you learn the lessons in time, it is going to be, you can make it good. There's a silver lining to it, but you have to learn the lesson. If not, then it's for not.

34:39Okay. So the last commandment that I'd like for you to talk about a little bit more is the idea of number five, create cash flow immediately. You've already talked about that a fair amount. One question I'd like to have you answer in that context is in our current economic environment where money is not as cheap as it used to be, how do you think about that as part of this creating cash flow immediately? Well, we were in one of the frothiest decades and investment environments in history, really. I mean, it was a crazy, crazy decade. People were doing things then that would not work today and likely won't work in the future.

35:24And a lot of people who were just a little too aggressive or a lot too aggressive in their projections and maybe in their optimism are going to pay for it here in the next few years. So it does exist. You can still do deals today, even with high interest rates, where it cash flows today. I've done several of them. But you've got to look harder. You've got to actually, commandment three is an important one in this specific instance, which is finding invisible deals. So I'm just going to tie this one in real quick, because if you can, you know, when I think about invisible deals, I think about, you know, A, future trends.

36:03So what is like a trend that maybe it's starting now or you recognize it's going to happen soon? Maybe, you know, you're paying attention to millennials since the largest wealth transfer in the history of the world is about to happen, you know, over the next 10 to 20 years. And baby boomers are going to pass down somewhere between 80 and 100 trillion dollars to millennials. So paying attention to their shopping habits, their recreational habits, the way that they like to work. I mean, these are all great ways to spot trends. And then another type of invisible deal is the one that's off market.

36:41When a deal's on market, there's a lot of competition. Price gets bid up. And this is what happened over the last 10, 15 years. Prices went through the roof. I would rather find a deal that's off market so there's no competition. And I can negotiate directly with the seller, even if it's not on the market. Even if they're not planning to sell it, maybe find someone, and I've done this a few times, where they weren't planning to sell, but I made an offer. The timing seemed okay, and we followed through, and they sold it to me. And so I share all that with you in the fact that if you want cash flow today, it's there.

37:19You may have to look harder. You may have to do better due diligence and vet deals stronger. And I would also say, be careful of the type of debt that you use to finance a deal like this. You know, seller finance exists on a lot of assets in a high interest rate environment. I've done a lot of those deals where the seller will actually be the bank and carry the note. But if you're using a bank and you're paying 7 % or 8 % or 9 % interest, you know, it's one of those things where you need to have the spread, you need to have a cap rate that gives you enough of a spread that in a worst case situation, you can still make money.

38:05And I think the last 12 years, people did not take that seriously. They just bought whatever they could buy, banks financed whatever people wanted. People had their different pro formas. You should stress test and kind of create a worst case scenario for a deal. Most people didn't do that or they didn't do a real worst case scenario. And so when this current scenario is in play, this current environment, their deal doesn't work. They're upside down. They're going to be foreclosed on. They're going to, you know, investors are going to get wiped out. This is happening a ton. Like, I mean, this is literally happening like crazy so far this year and more is to come.

38:50But if you can figure out how to get the right long-term debt in place, and you can avoid floating rates, and you can find a direct seller that's not on market, you can still make good money on cash-flowing deals. There are a lot of baby boomers that own these that want to retire and are willing to sell them. Yeah, and that's a huge thing, too. You were talking about the biggest wealth transfer in history. It's a lot of these baby boomers that are trying to retire. And if our mutual friend Cody Sanchez is right, most of those people will not be successful in selling their businesses. So lots of them are desperate and very creative in terms of what they will do for you to buy the business.

39:34Yeah, there's just, I mean, the world of opportunities is maybe one of the biggest it's been. So we could look doom and gloom and say, oh, interest rates are horrible and real estate's a lot tougher. And yeah, hey, you know what? These are true points. But I also think in these situations, some of the biggest opportunities come into play as well. You just have to be looking for those, not focused on what's not working. And yeah, there are tons of baby boomers that in some cases, they don't even think they can sell their business. They're just going to shut it down. So you can get it for a steal because for them to even get anything in their mind is a win.

40:09or they want a number that sometimes these baby boomers are very irrational in what they want for their business. It's not tied to a financial metric. It's just some random number in their head that they want. And so sometimes this happens where they want two or three or five times too much. It's like, all right, you're being very unreasonable. There's no way your business is worth this. But sometimes it's on the other side where they're like, I want$3 million, but the business is worth$5 million. And I've had that scenario happen.

40:48Let's turn the corner and talk a little bit more about the double win. Now, most of the guests that we have on this show, I know maybe a little bit, but I know you pretty well because we talk every couple of weeks. And I have had the privilege of having a front row seat to your life and your business. And I know that you take your faith seriously, your family seriously, all these things that are unrelated to work. I know you love to travel. You love, I hope this is okay to say, you're a wine connoisseur. Yes, yes. And so how does this perspective serve the double win? Sort of the lifestyle advisor or investor perspective.

41:30Well, I think it's a great question. And I don't know how closely knit most of your guests are on this double win, but I feel like, you know, with what we do and what, you know, I stand for what's important to me, it dovetails quite well into it because the whole business was created to support lifestyles, to support family. It was created to help other people, you know, other people in our network, other people have read the book, listen to the podcast that are part of the mastermind. do the same thing for their family. So my goal is to be really family and faith first and work beyond that. Relationships are really important to me.

42:10And in fact, one of the things that we do every year as a family, my wife and I, is we do this marriage and family planning outline that we created that we share with everyone in our community. And it's a walkthrough, like making sure we're in alignment in all the values that are most important to us. I mean, clarifying what our values are and figuring out what we want out of life, whether it be dreams, goals, faith, family, you know, education for, you know, kids, for us, for, you know, anything that we need to do to, you know, learn, grow, become inspired. So yeah, I think my, I, you know, the purpose for me in having a lifestyle investor is helping other people move from a life by default to a life by design with intentionality.

43:04And it's really served me and my family rewardingly well. So I just, I like sharing it with everyone I can. What I love about this is, you know, I think for a lot of our listeners, they totally buy into the concept of the double win. they are to the best of their ability pursuing winning at work and succeeding at life. But because of what work looks like for them, you know, if they're not working for themselves, or maybe they are working for themselves, but regardless, there are a lot of obstacles to freeing up the kind of margin they need to attend to the other domains of life outside of work that really matter to them.

43:44So, you know, functionally, they're out of alignment with their values, not because they want to be, but because there are inherent problems within the work domain that prevent the kind of alignment that you're talking about. And I love what you're doing and what you're teaching because it gives people another option that doesn't just look like find a different job that maybe has a less demanding or workaholic culture in it or something like that. It's really about how can you design the income generating part of your life to align with your other priorities. And I think that money creates freedom and it creates the ability to have choices and more congruence between our values and how we spend our time, money, energy, and so forth.

44:30So I think this is really exciting. You know, a friend and mentor once shared with me that you have these two balls. You've got a glass ball and you've got a rubber ball. And the glass ball is your family and the rubber ball is your business. And most people drop the family, the glass ball, to prop up and support this rubber ball. But with a glass ball, it's a lot harder to restore that. And in some cases, maybe you can't. The rubber ball, the business, you can drop that over and over and over and it's going to keep bouncing back. It may change shape. It may change form. But most people are protecting this rubber ball when they should be protecting this glass ball.

45:20And I think that resonates with me. And I think no matter what you do, you can create your own boundaries of whatever it is, whatever the family fun time is, family dinners, weekends, You know, you can you can do that. But if you have a job or a business that's not allowing it, first of all, it probably can try and get creative, try and figure out a way to do it. But secondly, if not, start working on building up that passive income so that the job becomes, it's not a have to, it's a like to, a want to. And you become a lot more courageous in massaging your role and responsibilities and how you show up when you don't need the income.

46:06That's fantastic. So good. Thank you for just expanding our sense of possibility on that. I love it. Yeah, me too.

46:22Okay. So we have a set of standard questions that we always ask our guests at the end, like a lot of podcasts do. And this is a lightning round, so we don't need a long, you know, explanation. You're very good at being succinct, but three questions. First one, what's your biggest obstacle in this season of your life for achieving the double win? Well, I think I have temptations just like anyone else where, you know, a big deal, a big opportunity, a big partnership, you know, creeps in. Or, you know, I'm also an Enneagram 7, so I love hanging out with people and I want to do everything under the sun.

46:58I want to travel everywhere and try every type of food. So I am constantly battling with what my wife so profoundly said to me that when I say yes to other things, I'm saying no to the family. And I never looked at it that way. And so I am trying to guard better to not say yes to too many things that would take me away from the family. It's really good. So hard to do. Okay, so how do you personally know today that you have gotten a double win? What are the signs of it? Yeah, like how do you know I'm on the right track? This is happening. Well, I think probably the best indicator, the best litmus test would be what my wife and what my daughter would say.

47:47And, you know, we do check in on this regularly, and they do have permission to speak into what I'm doing, business, hours, that sort of thing. And I would say right now, our cadence is great. People are feeling really good about it. That doesn't mean that it's always that way. I mean, it's almost like this ebb and flow. And sometimes my wife does take the time to say, hey, do you think that maybe you're putting too much into work or there are too many social events. So right now I'd say we're winning and we're doing a great job, but I actually think their voices for this matter more than whatever I think.

48:28I think you're right. I love that. Okay. Last question. What's one ritual or routine that helps you do what you do? Ooh, I, I know you have a lot of, there's so many. Yeah. It's hard to pick one. Well, I love my quiet time in the morning. What does that consist of for you? Well, quiet time for me would be prayer and reading and walking and just using my body, using my mind, using my spirit. That to me is really how I start every day, literally every day. I mean, I'm up hours before my family. So it's quiet and it's just a peaceful time and it gives me energy. It gives me focus. It's so enjoyable to me.

49:15I love to learn anyway. So that to me is probably it. And just to throw in a little extra one, I would say peer group matters more than just about anything. Peer group and mentorship and to put the right people around you with frequency is going to matter to the direction that your life is headed more than most people realize. Justin, thank you. I feel like we could interview you on most of the domains and you would be an expert because you've allowed yourself or you've created this space for yourself to pursue things other than work. You've done an extraordinary job with your work and buying assets and all that income production.

49:54But I just love the way that you pursue intentionally God, your family, friendships, travel, all the Enneagram seven fun things. I'm not Enneagram seven, but I want to be. But at any rate, I'm just proud of you. And I'm so grateful that you came on the show today. Thank you. Great to get to know you. Thank you for having me. And I'll just say to everyone, once you buy your time back, it opens up the world to all the things you want to learn and do and get better at. And I just, there's so much I want to get better at. And there's so much I need to get better at. Wow. Fantastic. Guys, you can find Justin and all that he does at lifestyleinvestor.com.

50:32And you definitely want to tune into his podcast by the same name. And he's got all kinds of resources, books, educational resources like courses, also his masterminds. Amazing. But something to check out. Just go to his website. You can find all that. Amazing. Thanks, Justin. Thanks so much.

50:55Okay, Megan, let's talk about our takeaways. And before we do that, I just want to mention two things. If this has been interesting, an interesting conversation to you, make sure you get the book, The Lifestyle Investor. Second, Justin has offered a free strategy session for anybody that's ready to kind of explore their options in investing. Like if you're ready to move beyond just traditional like mutual funds and stock market investing and do some kind of alternative things that, you know, admittedly have higher risks, but also much higher returns, then you want a strategy session with somebody on Justin's team.

51:30And you can get that by going to lifestyleinvestor.com forward slash consultation. Lifestyleinvestor.com forward slash consultation. It'll be well worth your time. I kind of feel like I want to do that myself. I know. Well, you can. I know. I might do it. This conversation I found so inspiring. Why? I mean, not that you shouldn't, but why? Well, I think first of all, Justin is very relatable and you don't look at him and think, oh my gosh, you're some kind of genius that I could never hope to do what you've done. He just makes it sound really simple, really straightforward, really doable. And I love that his focus is on cash flow investing so that you're really using the profits of the business to do a lot of the investing that you're doing.

52:20I mean, that just lowers the risk so much. The idea that you're going to be cash flow positive just seems fantastic. I like that too, because the kind of investing I don't like is where you buy a piece of property, you buy an asset, and then you get no return. Right. And you're investing in it again and again and again without a return. But these are investments that cash flow themselves. Right. And the whole goal is to build up enough passive income that it could replace your current income so you can basically do whatever you want. And that's what he's done. I mean, he works three days a week, Tuesday through Thursday.

52:51I love that. I love that plan. And I like that he starts with lifestyle first. I do too. I mean, I think that really goes along with our methodology and our philosophy of starting with the end in mind. He's not saying like, where's the biggest opportunity? And could I live with what that means for my lifestyle? He's really starting with, I mean, I think lifestyle is another way of saying your values. Like he's really starting with your values. And then he's moving on to how do you reduce the risk and create cash flow immediately? all of which I think enable you to be aligned with your values and looking for opportunity, but also the other ones to reduce the risk of what you're investing in.

53:29Well, and the fun thing for him is that he's able to spend a ton of time with his family, a ton of time in personal development. I mean, he is growing like crazy just at a personal development level, but all that's made possible because of his lifestyle. Okay. So I have a question for you. I don't think we talked about this on the show. So if you were going to invest in one of these sort of like boring cashflow positive businesses, what are one or two that you would be interested in? Well, I'm really kind of intrigued by his origin story about mobile home parks. Yeah. You know, those have like a pretty interesting investment.

54:11But definitely some real estate kinds of things. Also some hard money lending. You know, your sister, my daughter, Mary, is big into that. Yeah. And so there's just so many alternatives out there that typically financial advisors don't even bring to you. Right. Right? Yeah. So this is the thing I like about what he's doing and his mastermind sounds incredible, but it's a bunch of guys that get together and they brainstorm. Probably not just guys, right? Not just guys. Yeah. You know, I'm meaning that in a very sense. A bunch of people that get together and talk about alternative investments and Justin's team vets them.

54:46Oh, that's cool. Yeah, it's amazing. And gives them principles for tax strategies and investment strategies. It's almost like a family office. I know. It kind of is. And they have a very strict kind of grid that they use, a profile that they want for an investment so that they try to minimize the risk as much as possible. And they don't invest outrageous amounts of money. So if it doesn't work, it's not that big a deal. You've got a portfolio and you're looking at the performance of the entire portfolio. Okay, you want to know what mine are? Oh, is that why you asked me the question? Yeah, I wanted to tell you.

55:17Okay. First of all, laundromats. I don't know why, but I feel like, first of all, you could make it so cute. And like, it wouldn't take a lot to stand out. And I love that idea. Number two, nail salons for the same reason. And number four, this is going to surprise you, parking lots for truckers. Rick, you've given this some thought. I really have. Like those are the things I'm interested in doing. And the amazing thing about the truck parking lot, and this actually came because I saw an Instagram reel about this, but you pay whatever you pay for the lot, like the mortgage on the lot, but then people pay you to park their truck or their boat or their RV or whatever there.

56:03And it just seems like so straightforward and simple. And I don't know, like running a business that's not nearly as simple as any of the ones I just mentioned, I think it'd be cool to have just a very simple, you know, you got to do your laundry. Listen, ladies, you got to get your nails done and you got to have somewhere to park your truck. One of the things I did think about as an alternative investment was opening up a real high-end gym that would have all the crazy equipment and the biohacking stuff and all the stuff, but it would be for people over the age of 50. Okay. I like that. Okay.

56:35So fit after 50. Fit after 50. So I don't know. Don't steal that idea, folks. All right. Well, clearly we were inspired by this conversation. We hope you were too. Gosh, it's just so much to learn. I'm always inspired by people who are actually living it. Yeah. Who are practitioners. Yeah. And what Justin's lifestyle has made possible for him is, as I said, spending a lot of time with his family, but also traveling. Yeah. I mean, he travels more than probably anybody I know. But I think the thing that money does when you've got some extra margin is it affords you the opportunity to buy experiences, not just for yourself, but for the people that you love.

57:13Yeah. And there's a whole book I just learned about recently. I haven't read it, so don't send me mail about this. But it's called Die With Zero. Oh, yeah. I've heard of that. And the whole premise of the book is that you want to invest in experiences. Yeah. Instead of just kind of holding on to it, hoping that you have enough to make it to the end of life, and then you give what's left away. Yeah. So I don't know what I think about all that, but I definitely like the experience part. I love that too. Well, if you guys have enjoyed this episode, we certainly hope that you have. Just a reminder, if you want to schedule your consultation with Justin, I might be right in there with you.

57:47Just go to lifestyleinvestor.com slash consultation. And also, we would love to ask you to leave us a five-star review. We are so passionate about the double win, winning at work and succeeding at life. But guys, there are a lot of people that don't know anything about the double win. They're just out there hustling, burning themselves out, and they don't even know there's another option. We want to get to those people so they have the opportunity to get the double win themselves. So if you leave us a review, that helps us by making this show, the double win podcast, more visible to the people that need it most.

58:22And that we feel like helps us to fulfill our mission. So you can be right there with us, helping us fulfill our mission to make it nearly impossible for people not to get the double win. so leave us that five star review schedule your consultation with justin again lifestyle investor.com consultation and we will look forward to seeing you back here next week see you next week